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Montevideo, February 28th 2024 - 13:40 UTC

 

 

Mercosur members challenge Argentina toll fee on Parana/Paraguay waterway

Saturday, July 1st 2023 - 10:49 UTC
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The Parana/Paraguay with its barges is crucial for the foreign trade of landlocked countries such as Paraguay and Bolivia The Parana/Paraguay with its barges is crucial for the foreign trade of landlocked countries such as Paraguay and Bolivia

Delegations from Paraguay, Bolivia, Brazil, and Uruguay recently convened a meeting to challenge Argentina’s imposition of a toll fee on the Paraná-Paraguay Waterway. The neighboring countries argued that the evidence presented by Argentina did not provide enough services to justify the charge.

Argentina’s decision to implement the tax at the end of last year has been a major point of contention. Argentina justified the fee by citing the need for investments in dredging, signaling, and technology. However, this measure faced opposition, particularly due to its significant impact on imports and exports from landlocked Paraguay. This country relies heavily on barge transportation along the waterway, which transports over 90% of its grain exports and foreign trade.

Echoing the sentiments of the neighboring nations, the Permanent Commission for the Transport of the Plata Basin (CPTCP) and several organizations of the Argentine industry supported their position, emphasizing that the river’s geographical conditions allowed safe navigation without requiring major dredging interventions.

The Argentine delegation admitted that the toll fee was unrelated to dredging but instead focused on signaling, frequent route changes, and installing an Automatic Identification System (AIS) for real-time ship monitoring. However, these justifications were not substantiated and were deemed ineffective by the delegations and waterway users.

After eight months of discussions within the Agreement Commission, it was decided to bring the matter to the Intergovernmental Waterway Committee (CIH) after satisfactory solutions could not be reached at the commission level.

The Argentine delegation opposed this decision and insisted on continuing the discussion at the technical level without suspending the application of the fee, as requested by the other countries.

The debate took place during the 59th Meeting of the Agreement Committee in Buenos Aires. The Paraguayan delegation, led by the Ministry of Foreign Affairs, consisted of experts from the Ministry of Public Works and Communications, the National Administration of Navigation and Ports, and the Navy Command.

No agreement was reached at the end of the meeting. Nations affected opted to escalate the matter to the next jurisdiction level at the CIH. Invoices for the toll fee will continue to be issued, but there will be no risk of vessel retention or passage prohibition in case of non-payment.

This marks a significant development in the ongoing management challenge of the Paraná-Paraguay Waterway, underscoring the importance of dialogue and cooperation among Mercosur countries. While Argentina remains steadfast in its decision, resolving this controversy will depend on how the CIH will address the issue in future discussions.

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