MercoPress. South Atlantic News Agency

Mercosur agrees, but?..

In an extraordinary meeting held in Buenos Aires the Mercosur Council finally agreed to accept Argentina's "exceptional and temporary" tariff increase applicable to third countries, and also scheduled another assessment meeting for June. The implementation by Argentina of the anticipated 21 points tariff increase, from 14 to 35% for consumer goods, and the reduction to zero for capital goods, originally caused great irritation among Mercosur members but now apparently, differences have been ironed out. Mercosur Council, which consists of the Economy and Foreign Affairs Ministers from the four member countries, agreed to accept Argentina's initiative and limited its enforcement until December 31st. 2002, as long as "is doesn't represent restrictions to trade within the group, nor have distortionate effects for competitiveness in the region". It was also agreed to hold a meeting in June in Asunción, to monitor and assess the impact of the Argentine measures for Mercosur members and any possible foreign reaction or countermeasures. Another factor to consider in June is the floating of the Brazilian currency that since the beginning of the Argentine situation, together with domestic problems, has experienced a 15% depreciation which also hinders other Mercosur members competitiveness. Previous to the Mercosur Council meeting, Argentina had to back step with the zero tariff regarding cellular phone and other communications components, since Brazil is the main supplier of those goods.