MercoPress. South Atlantic News Agency

Mercosur FMs agree to expand exceptions to CETs

The meeting was good, albeit tense in some environments

Southern Common Market (Mercosur) foreign ministers meeting in Buenos Aires on Friday agreed to temporarily expand the National List of Exceptions to the Common External Tariff by up to 50 codes per member state in response to global trade tensions, following US President Donald Trump's barrage of import surcharges.

The ministers emphasized unity, highlighted recent trade agreements with Singapore and the European Union (EU), and aimed to conclude negotiations with the European Free Trade Association (EFTA) and the United Arab Emirates (UAE).

Despite gestures of cooperation, underlying strategic differences persist, with some members cautious and others, like Brazil, more assertive against external trade pressures.

The meeting set the stage for further discussions ahead of the July 2025 Mercosur Summit.

Brazil's Mauro Vieira seized the opportunity to stress that there was no crisis with Paraguay despite tensions over a 2022 espionage operation targeting Asunción officials. Vieira emphasized the strong friendship between the two nations and discussed bilateral issues, particularly the Itaipu dam treaty after Paraguay suspended negotiations on the deal's Annex C pending satisfactory explanations.

Itamaraty admitted the espionage operation but is conducting an investigation and plans to share findings with Paraguay. Both countries aim to resolve the matter and advance their bilateral agenda, focusing on infrastructure and security projects.

From a broader angle, Friday's encounter helped reflect on the state of affairs of the regional bloc, in addition to the prospects of integration. The foreign ministers pledged Mercosur's unity and to explore, “in a coordinated manner” the possibilities of “a changing and challenging situation”.

They also highlighted the agreement with Singapore, the closing of negotiations with the EU and admitted they were looking ahead at negotiations with EFTA (the trade bloc made up of Iceland, Liechtenstein, Norway, and Switzerland) as well as those with the UAE.

In a joint statement, they highlighted the importance of facing the challenges posed by the current international context and agreed on the need to temporarily extend the National List of Exceptions to the Common External Tariff of each State Party up to 50 tariff codes.

Trade in the bloc founded in 1991 by Argentina, Brazil, Paraguay and Uruguay is governed by a Common External Tariff (CET), with rates ranging from 0 to 35%, but each Mercosur member has a National List of Exceptions (LNE) to the CET on a limited number of products that may change every six months, after notifying its partners. Currently, Argentina and Brazil can incorporate up to 100 codes in their respective LNEs, while Uruguay can list up to 225 products and Paraguay 649. Bolivia is adapting its procedures not to conflict with those of the bloc.

Vieira told reporters that the meeting had been “very good” and in a “climate of friendship and understanding.” He added that the gathering was key to analyze the measures to be taken “to make Mercosur stronger, more active and have better results in this moment of great instability in the world.”

“In some environments, there was a tense scenario, and the truth is that it was a very frank meeting, strong as frank meetings should be,” Uruguay's Mario Lubetkin admitted. He also noted that Mercosur must modernize and “adapt to the dramatic changes that have taken place in the last weeks and months nobody foresaw.”

Argentine President Javier Milei holds the bloc's rotating presidency. Far from encouraging regional integration, he has repeatedly threatened to pull his country from the bloc if it hinders a Free Trade Agreement (FTA) with the United States. Mercosur rules ban one-on-one arrangements by any of its partners with other countries or blocs.