Paulo Guedes calls Mercosur tariff cut ‘correct,’ but temporary

mercosur Economy Minister Paulo Guedes. Photo: Washington Costa/Ascom/ME
Economy Minister Paulo Guedes. Photo: Washington Costa/Ascom/ME

In a webinar organized by the United Nations Economic Commission for Latin America and the Caribbean (CEPAL) this morning, Brazil’s Economy Minister Paulo Guedes said the country’s decision to reduce import tax rates among Mercosur countries was “correct,” though he sees the measure as moderate and temporary.

Last week, Brazil got out ahead of a joint Mercosur decision and unilaterally announced a 10-percent cut in the Common External Tariff (TEC) on goods and services traded among the bloc. The measure, made official by Brazil’s Foreign Trade Chamber (Camex), is valid until December 31, 2022. The government announced the move as an emergency measure to contain spiraling inflation in Brazil.

In this morning’s event, Mr. Guedes called for the bloc’s modernization process to speed up, saying that Mercosur has been “left behind” in negotiations with other countries and trade blocs. He said that while Brazil is slowly recovering from the economic crisis caused by the pandemic, the country’s digital development is advancing “at a very fast pace.”

As an example, Mr. Guedes mentioned the system, which since 2019 has gathered all of the federal government’s official digital channels, facilitating citizens’ access to services offered by the administration.

He also presented data suggesting positive changes in the customs process of clearing goods entering and exiting Brazil. Mr. Guedes says that average clearance time at Brazilian ports has fallen from 17 days to nine for imports, and from 13 to five days for exports.