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Mercosur meeting ends without deal on import tariff cuts -Breaking

by Mike Robinson

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© Reuters. General view of the Common Market Council’s (CMC), meeting during Mercosur trade bloc Summit, Bento Goncalves Brazil, December 4, 2019. REUTERS/Diego Vara

By Lisandra Paraguassu

RIO DE JANEIRO – The summit of South American trade bloc Mercosur came to an abrupt halt on Friday. This was due to a failure to come to an agreement among the member countries to cut import tariffs, despite a dramatic rise in inflation.

Mercosur members, which is Argentina, Brazil Paraguay, Uruguay and Paraguay’s common market, have long discussed the possibility of lowering the common external tariff in order to boost trade among them. As inflation rose, so have the calls for a reduction.

Brazil’s government made a announcement in November that it would reduce import tariffs by 10% on 87% of its goods. It was expected this move will increase the pressure on Mercosur members and signal an agreement for the common external tariff.

After Uruguay’s refusal to sign, other member countries had to agree to allow Uruguay to make its unilateral trade deals free of Mercosur approval.

Mercosur rules forbid this kind of negotiation. Paraguay and Argentina are also against it. Brazil seems less averse according to Pedro Miguel da Costa e Silva (Brazilian’s leading Mercosur negotiator).

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