CARACAS, Saturday December 15, 2012 | Update

"Mercosur tariff is merely symbolic for Venezuela"

Expert warns about Venezuela's risks under a free-trade zone with southern neighbors

The Venezuelan agricultural sector is vulnerable against powerhouses like Argentina, Brazil and Uruguay (File photo)
Saturday December 15, 2012  12:00 AM
On December 7, Venezuela took part in its first Mercosur summit as a full member of that South American bloc. In the city of Brasilia, Venezuela agreed to adopt a common external tariff (CET) applied to member countries in four phases and ending in the first half of 2016.

The initial phase, currently under way, entails payment of the common external tariff at a rate of 28% on all Mercosur products.

Nevertheless, the haste and manner in which the Venezuelan government has handled the country's entry into the Mercosur bloc cast more than "a shadow of a doubt," according to expert on international affairs and professor of the Central University of Venezuela Félix Gerardo Arellano.

"All of the information we have been able to access has been obtained through Brazil or Argentina. The only thing we know so far is that Venezuela filed a list of observations regarding the common external tariff. It would make sense for the agricultural and other like sectors to feel affected, but we do not really know much else. In fact, we do not even know if the production sector has been consulted," said Arellano.

But the issue of a common tariff is merely "symbolic" in the eyes of this expert on international affairs, who points out that "Venezuela's large-scale importer is its own government, and it will not actually have to pay that tariff. Products coming from India, China and Russia will not be subject to that tax and will be processed as government purchases. It will apply solely to countries that are not deemed ‘friends' of the government."

Free Trade

In addition, Arellano believes that "the most sensitive issue is the Free-Trade Zone. Venezuela had already entered into an agreement with Mercosur, namely the AC59 treaty, which had certain aspects that could have proven beneficial for Venezuelan private enterprises and had been signed by this government."

AC59 included exceptions, safeguards and blockages in sensitive areas. "None of those aspects apply to Mercosur, and we have no way of knowing what decisions have already been made and can only hope for the best," complains Arellano. Under AC59, not all of the products involved were exempt, and Andean Community price ranges were applicable.

Arellano believes that the Venezuelan government "should be gearing up to face tax-free products originating from Brazil, Argentina and Uruguay."

Translated by Félix Rojas Alva
The end of a cycle

Hundreds of thousands of demonstrators took to the streets of Brazil on March 13 to demand the ouster of embattled President Dilma Rousseff, carrying banners expressing anger at bribery scandals and economic woes. A banner read "We don't want a new Venezuela in Brazil."

fotter Estampas
fotter Estampas