External Policies
    There are three major points in Mercosur as a whole dealing with other countries.  First, is the institution of a Common External Tariff, then a common trade policy, and the renegotiation of agreements with ALADI countries.
 
    The Common External Tariff is a tax calculated as a percentage of imported goods, equally levied for each type of good for all four Mercosur countries.  These tariffs will be in the area of 0% to 20%, to be completely instituted by Brazil and Argentina in 2001, and Paraguay and Uruguay in 2006.
    The institution of this tariff means that each country will relinquish its individual ability to dictate which industries or sectors it wishes to protect from imports.  Countries are allows a "list" of around 300 to 400 products that are temporarily exempt from the Common External Tariff until 2001 and 2006.
    With the Common External Tariff, these three countries become, in effect, a unified regional customs union.  This permits goods in this territory to circulate freely, to facilitate trade and allow free enterprise to flourish.

    Mercosur countries will also institute a Common Trade Policy.  In order to maintain a unified customs territory, Mercosur as opted to share and synchronize all trade policy instruments.  These could include barriers such as the CET, or non tariff barriers like quotas, bans on imports or exports, or permits, taxation, negotiations powers, and any mechanisms against unfair trade practices.
    Unfair commercial practices, or "dumping," are classified as products imported to Mercosur that have received an unusually high amount of subsidization.  Mercosur will not permit the selling of products at artificially low prices to destroy competition.

    The ALADI countries, Bolivia, Columbia, Chile, Ecuador, Mexico, Peru, and Venezuela have had existing trade agreements with the Mercosur countries.  With the implementation of a common trade policy, all bilateral and multilateral agreements with these countries must be renegotiated.  The Mercosur countries may not have policies which are preferential to those of Mercosur as a whole.

BACK