MercoPress. South Atlantic News Agency

EC report on trade and investments criticizes Mercosur protectionism

Karel De Gucht, EC Trade commissioner: open trade is needed to promote growth and jobs

The European Commission in its latest report on trade and investments complains about Mercosur protectionist policies, restrictions to maritime transport and to the export of commodities particularly from Brazil and Argentina.

The second EC Trade and Investment barriers report refers to six strategic partners, Mercosur, China, India, Japan, Russia and the US which together represented in 2011, 45.7% of trade in goods and 44.8% in services. Besides they represented 47.7% of all direct EC investments in 2010.

“With protectionism as an ever present threat, we need to ensure that trade continues to be open to promote growth and jobs”, pointed out Karel De Gucht, EC Trade commissioner.

Regarding identified trade barriers in 2011, the report points out “there were no improvements” in Mercosur countries, some of which continued with its protectionist tendencies.

In the case of Brazil the report claims fiscal discrimination to cars manufactured overseas and the stiffer customs controls for the imports of textiles.

Specifically on Argentina the report criticizes the introduction of new restrictions on insurance companies so that only domestic or established agents can provide certain services.

Nevertheless the report says that the obstacles imposed by Brazil and Argentina to maritime trade and export of commodities “could be overcome with a free trade treaty, which currently remains stalled or with minimum advances”.

As to other regions, China imposes barriers which impact on investments and the security of information technology, something similar happens with India and Japan.

But there has also been some success stories in the removal of certain trade barriers, such as in India, which includes the elimination of cotton exports’ restrictions and the security elements for telecommunications and sanitary measures.

The EC is also satisfied with the World Trade Organization, WTO, which confirmed the incompatibility on commodities’ exports restrictions and advances in combating US protectionist policies such as the campaign “Buy American”.

Regarding Russia, the latest entry to WTO, the report underlines the elimination of barriers which affect car and auto parts trade, some customs practices, intellectual property issues and sanitary and phyto-sanitary measures.