Brazil wants to rush no-tariff deal with neighboring countries

Brazil will recommend bringing a zero tariff policy forward for imports between Mercosur and Colombia, Peru and Chile. The proposal will be announced during the 46th Mercosur Summit in Caracas, Venezuela, this Tuesday (July 29).

According to Antônio Simões, Deputy Secretary-General for South and Central America and the Caribbean at the Foreign Ministry, Mercosur already has reduced import tariff agreements in place with the three countries. Now Brazil wants to make full exemption effective as of the end of this year, a move that was not expected until late 2019.

Simões went on to explain that Brazil's interest in rushing its plans is due to an increase in the flow of trade with the three countries and the fact that it involves manufactured products. In 2002-2013, trade has grown 300% with Colombia, 389% with Peru, and 200% with Chile. “This trade is strategic because it involves manufactured goods, which are highly value-added and lead to more formal jobs,” he said.

As soon as Mercosur approves the proposal, the next step will be calling meetings with each of the three countries, which have already hinted that they are interested in pursuing such trade liberalization, Simões said. Since Colombia, Peru, and Chile are part of the Pacific Alliance trade bloc – which also includes Mexico and Costa Rica – the issue of tariffs will be discussed in a meeting with the Alliance before December. Mercosur also has trade liberalization agreements in force with Bolivia and Ecuador.

The 46th Mercosur Summit also marks Paraguay's return to the regional bloc following its suspension in 2012. At that time, the other Mercosur members (Argentina, Brazil and Uruguay) objected to the rush ousting of then president Fernando Lugo, who was allowed only two hours to argue his case over allegations of poor job performance.

It was in this political setting that Venezuela gained entry into Mercosur. The admission was pending only an endorsement from the Paraguay Congress, but the suspension canceled Paraguay's right of say and vote.

Bolivia President Evo Morales will also attend the Mercosur Summit. Bolivia is an associate member of the regional bloc in the process of getting full membership.

Translated by Mayra Borges