Brazilian international trade strategy increasingly prioritizes negotiation of agreements on rules and tariffs
In a closing speech at the LI Summit of Heads of State of MERCOSUR and Associated States last week, President Michel Temer praised the engagement of Brazil on customs and trade negotiations in the past year in a more openly approach.
Brazil has been seeking to conclude agreements that are mutually advantageous, in search of possible new economic partners, and to expand existing ones in order to deepen the trade relations with other countries. Among the initiatives are the following: the imminent agreement between MERCOSUR and the European Union, the expansion of existing agreements such as MERCOSUR-India and Brazil-Mexico (ACE-53) and, in Asia, with Japan and South Korea. The country is also open to dialogue on trade with Canada, Lebanon, Tunisia and EFTA (the European Free Trade Association between Switzerland, Norway, Iceland and Liechtenstein).
In addition, in the beginning of December, Decrees No. 9,229/17 and 9,230/17 were published, incorporating, respectively, into the national legislation the MERCOSUR-Egypt Free Trade Agreement (ALC-Egypt) and Economic Complementation Agreement No. 72 (ACE-72), between Argentina, Brazil, Paraguay and Uruguay, and Colombia. The latter shall replace, in all its provisions, the mutual relations between the Contracting Parties to the ACE-59 (which included the same parties, as well as Ecuador and Venezuela).
Both ACE-72 and ALC-Egypt provide for progressive tariff reductions for imports and exports of various products.
The agreement between MERCOSUR and Egypt will establish, at the end of ten years, the total relief of tariffs for the majority of products in both imports and exports. The ALC-Egypt affects many product lines exported by Brazil, such as beef, cereals, ores and Brazilian inorganic chemical products. The Brazilian imports from Egypt covered are mainly fertilizers, vegetables, cotton and textiles.
In the same way, ACE-72 improves the access of Brazilian exports to the Colombian market, as well as of products coming from Colombia to Brazil, allowing that products, including the ones from the textile and steel sectors, enter the countries without paying import taxes. A highlight of this agreement for the Brazilian industry is the automotive sector, which will also have its import tax rates in Colombia reduced to zero.
The new trade policy for negotiating agreements benefits export and import companies with tariff preferences for various products, as well as establishes new rules that can benefit trade. In addition, the negotiation of agreements offers an opportunity for Brazilian companies to communicate with the government about their priorities in tariffs, trade rules, as well as technical and sanitary matters, intellectual property, services, rules of origin, trade defense, and other issues that can increase competitiveness.
Therefore, the private sector has an opportunity to improve its demands on international trade.
The International Trade and Customs team monitors the negotiations with the purpose to assist its partners. We remain available for any clarification.
Demarest Advogados | Comércio Internacional e Aduaneiro