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Argentina/Brazil propose higher external tariffs for Mercosur

Tuesday, December 20th 2011 - 07:21 UTC
Full article 37 comments
Minister Debora Giorgi proposed substituting 460 billion dollars in imports Minister Debora Giorgi proposed substituting 460 billion dollars in imports

Argentina supported by Brazil has proposed increasing Mercosur Foreign External Tariff to better defend the group when country members are being flooded with cheap imports.

“Let’s be friends and partners”, said Argentine Foreign Affairs minister Hector Timerman during the first day of the Mercosur summit in Montevideo previous to the presidential meeting. “Let’ not allow the foreign crisis to be a reason to move back our social and economic development”.

Brazilian Economy minister Guido Mantega had anticipated that at the current Mercosur summit he would support adding 100 new products to a list of 100 products that can be charged a 35% import tariff.

“The tariff will protect industries in the region from cheaper imports” said Mantega at the Finance ministers and Central bankers meeting in Montevideo. “With this we can make a better defence at a moment when every country in the region is being flooded by foreign goods” Mantega told reporters.

However Argentine sources revealed that the tariffs’ increase proposal did not have that immediate acceptance from Mercosur junior members, Uruguay and Paraguay.

Apparently the governments of Presidents Cristina Fernandez and Dilma Rousseff during a bilateral meeting a couple of weeks ago agreed to increase the external tariff to safeguard the home market from cheap Asian imports. The idea is that the average tariff currently at 14% be increased considerably.

However Uruguay and Paraguay are also claiming for market access to Argentina and Brazil, which to a significant degree remains weakened by the non automatic import licences system implemented by both countries to ‘cool’ imports.

However even with this back-of-the-scene mistrustful framework, Argentina’s Industry Minister Debora Giorgi proposed a “more industrialized Mercosur” with the purpose of substituting the 460 billion dollars in manufacturing that the region imports annually, thus helping to strengthen local production complementation among country members.

“We must make Mercosur more industrial oriented to generate better and more jobs and development without asymmetries”, said the Argentine minister.
Giorgi said that implementing added value to exports through innovation and design should be the production goal.


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  • GeoffWard2

    If Mercosur is to mean anything at all it MUST listen to the minnows.
    Protectionism by the WHOLE bloc needs serious and publically transparent debate that considers its effects on ALL member states.

    Dec 20th, 2011 - 10:38 am 0
  • eteega

    Two comments: I would have thought that an economist like Dilma would know about the ruinous inflation brought on in the 50/60s when Brazil implemeted such laws as the “law of the domestic equivalent”: if you could make anything in Brazil at any price that was higher than the import price then Brazil would impose an import duty on those products to protect the incompetence and lack of productivity of the domestic producers: result encouraging bad productivity practices, protecting incompetence in industry and guaranteeing masssive inflation. Look back at the history of inflation in Brazil (or Argentina) Companies in South America in general have too many people and not enough productive equipment. The productivity levels are abysmal. These countries should give tax breaks for industry to upgrade equipement and better train workers. Kristina's solution to unemployment appears to be to hire an extra 10,000 (tax payer funded) public workers a year.

    Dec 20th, 2011 - 10:46 am 0
  • wesley mouch

    Dilma the idiot will soon crash the Brazilian economy. Brazil was lucky with the commodity boom but they confused luck with genius. Kind of like Obama who confused being black with brains. Both Obama and Dilma will crash their respective economies (Obama has already done a pretty good job of destroying the US economy).

    Dec 20th, 2011 - 11:28 am 0
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