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Mercosur Agrees Customs Code

by Mike Godfrey,, Washington

05 August 2010

After six years of difficult negotiations, the Mercosur trade bloc has reached agreement on a common customs code which is to be phased in by 2012.

Mercosur members Brazil, Argentina, Uruguay and Paraguay met in San Juan, Argentina under the chairmanship of Argentina’s president, Cristina Fernandez, to thrash out an agreement on the redistribution of customs revenue between the countries. Also present were representatives from associate Mercosur countries Bolivia, Chile, Colombia, Ecuador, Peru and Venezuela.

Under the current rules, the common external tariff (AEC) is imposed on goods produced outside Mercosur at each border crossing, but the elimination of double impositions of tariffs was stymied by failure to agree a system of redistribution of the tariff proceeds.

Agreement was made possible with a formula for compensating land-locked Paraguay with a share of other countries' tariff proceeds, as its own revenue would be drastically reduced.

“These are the basic steps needed to promote free intra-zone trade and perfect the customs union,” Argentine Foreign Minister Hector Timerman said.

Venezuela also moved closer towards full membership of Mercosur, but approval of the Congress in Paraguay is still needed. The chairmanship of Mercosur now moves to Brazil, which will host a meeting next December in Foz do Iguazu, a city close to the borders with Argentina and Paraguay.

TAGS: free trade agreement (FTA) | Chile | Paraguay | Uruguay | Venezuela | tariffs | Colombia | Ecuador | Bolivia | Brazil | Peru | import duty | trade | Argentina

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