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Mercosur Authorises Members to Increase Duties on Up to 100 Tariff Lines

The four members of the Southern Cone Common Market (Mercosur) approved on 20 December 2011 a resolution that authorises Argentina, Brazil, Paraguay and Uruguay to temporarily increase their import duties on up to 100 tariff lines above the levels established in the Mercosur common external tariff. The new duties may not exceed the bound rates agreed by Mercosur at the World Trade Organisation. While the products that may experience a duty hike as early as January 2012 are unknown, Argentina and Brazil will not be able to increase their duties on such products as apparel of Chapters 61 and 62, textile made-ups of Chapter 63 or textile floor coverings of Chapter 57 because those duties are already at their bound rates of 35 percent.

Any of these four Mercosur member states that wishes to increase its import duties must submit a request to the other member states, which will have 15 working days to consider that request and raise any objections. If no objections are raised during the stipulated period, the member state requesting the duty increase may implement it immediately for up to 12 months, with the possibility of annual renewals. Member states will be able to utilise this mechanism through 31 December 2014.

Mercosur also authorised Brazil to continue to apply through the end of 2012 a 35 percent most-favoured-nation duty on toys classified under NCM 9503.00.10, 9503.00.21, 9503.00.22, 9503.00.31, 9503.00.39, 9503.00.40, 9503.00.50, 9503.00.60, 9503.00.70, 9503.00.80, 9503.00.91, 9503.00.97, 9503.00.98 and 9503.00.99.Brazil originally increased this duty from 20 percent to 35 percent on 28 December 2010 in an effort to shield domestic producers from mainland Chinese competition. Toy parts and accessories suitable for use solely or primarily with toys of subheading 9503.00.99 will continue to be subject to a reduced duty rate of two percent. Argentina has also been authorised to increase its duties on toy imports if it so desires but Paraguay and Uruguay have committed to maintain their current duties on toys.

In a separate decision, Mercosur agreed to extend through the end of 2012 a 14 percent to 35 percent increase in the common external tariff for preserved or otherwise prepared peaches classified under NCM 2008.70.10 and 2008.70.90 that was originally adopted on 1 April 2011.Mercosur also agreed to consider a request by Ecuador to become a member of the trade bloc. On the other hand, Venezuela’s accession remains blocked as a result of the Paraguayan Senate’s refusal to endorse the accession.

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