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Montevideo, July 4th 2022 - 05:45 UTC

 

 

Brazil cuts down Mercosur external tariffs yet again

Thursday, May 26th 2022 - 10:40 UTC
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Brazil continues to negotiate with Mercosur partners Argentina, Uruguay, and Paraguay “to make this measure permanent” Brazil continues to negotiate with Mercosur partners Argentina, Uruguay, and Paraguay “to make this measure permanent”

In a move to contain inflation ahead of this year's Oct. 2 elections, Brazil's Chamber of Foreign Trade decided to cut down the Mercosur Common External Tariff (TEC) by 10% on items such as beans, meat, pasta, cookies, rice, and construction materials, the Ministry of Economy announced.

These items had already had a 10% reduction in November last year, according to and with the new measure more than 87% of the tariff codes were chopped off. However, Foreign Trade Secretary Lucas Ferraz warned this step was “temporary” and “of exceptional nature.”

Brazil had its highest inflation since 1994 for the months of April and March and a yoy projection of 12.3%, three times the Central Bank's (BCB) target. The BCB had already raised the interest rate in an attempt to contain domestic demand.

According to the Ministry's statement announcing the measure, “the objective is to alleviate the negative economic consequences of the pandemic and the war in Ukraine, mainly the high cost of living of the lower-income population and the increase in the cost of the companies that consume these inputs in the production and commercialization of goods.”

Secretary Ferraz stressed that since 1994 “the revision” of the Common External Tariff governing Mercosur “has not been so extensive”.

Meanwhile, Brazil's government continues to negotiate with Mercosur partners, Argentina, Uruguay, and Paraguay, “to make this measure permanent,” it was explained.

This decision goes beyond electoral times since the next government will take office Jan. 1, 2023.

Opposition candidate and former two-time President Luiz Inácio Lula Da Silva has 40% of voting intention, against Bolsonaro's 32%, according to a CNN poll released Wednesday. Ciro Gomes of the Democratic Labor Party (PDT, center-left) came in third with 9%, while another 9% said they would annul their votes.

The CNN/Real Time Big Data poll was conducted by telephone to 3,000 voters between May 23 and 24 with a margin of error of 2%. CNN also announced that it planned to host the first presidential debate Aug. 6.

Categories: Economy, Politics, Brazil, Mercosur.

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