South America’s largest trade bloc, Mercosur finalised its customs code recently.
After years of negotiation, Mercosur (which consists of Brazil, Argentina, Uruguay and Paraguay) will become a genuine customs union with elements being be phased in over the next year and a half before fully taking effect in 2012.The long standing sticking point was that Uruguay believed that the Mercosur block should impose export duties but Argentina, Brazil and Paraguay argued that each country should apply duties as they see fit. Uruguay eventually relented and each country will set its own rate.
It was also decided to eliminate by 2012 the double recovery of the common external tariff (AEC). Previously, non-Mercosur products were charged a tariff both when they entered the bloc and when they were re-exported to another Mercosur member.
Also agreed was a mechanism for the redistribution of customs revenue among members.