The Association Agreement between MERCOSUR and the European Union, dated July 4, 2019, will have a significant impact on the countries, since these are two large economic blocs that together represent approximately 251 Tbp of the world's GDP.

The agreement addresses issues ranging from tariffs to regulatory matters, and also enables the promotion of free trade between the countries of the blocs.

It is known that foreign trade has specific interests such as tax collection, preventing capital flight, balancing the trade balance, and competition between products. Therefore, the agreement "will streamline and reduce the costs of import and export procedures for goods, reducing bureaucracy and increasing transparency for economic operators.".

There will also be “a commitment to review and improve regulations and practices for clearing goods, continuously and in consultation with the business community, as well as to make use, to the extent possible, of electronic processes in customs operations. According to the OECD, an improvement in the notification process for customs requirements alone has the potential to generate a reduction of between 2.4 and 2.8% in the costs of foreign trade operations.”.

However, the agreement is a political announcement, which will go through internal processes in each State Party for ratification. In Brazil, for example, it will require review, signature by the President of the Republic, approval by the Senate, and then authorization from the Executive Branch to ratify the agreement.

Source: ITAMARATY.GOV

Put Anna Gabriela, Lawyer, graduated in Law in 2012 from the Professor Damásio de Jesus Law School. Area of Expertise: Customs Law and Tax Law, OAB (Brazilian Bar Association): 348.552.