Bolsonaro announces free trade agreement, Brazilian products will have tariffs of up to 2% with release until 2022, creating jobs and leveraging the country's economy

With this agreement, more job vacancies may arise for Brazil. Under the agreement, parts and vehicles sold by both countries will have minimum or zero tariffs, but the interval for free trade will vary between the two countries.

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Parts and vehicles will have immediate free trade in Brazil. Brazilian products will be taxed up to 2% in Paraguay. Tariffs will gradually fall, through the application of preference margins, until the total liberalization of trade at the end of 2022. The agreement had been signed in December, at the Mercosur Summit meeting, in Bento Gonçalves (RS). However, it was only made official today (11).

About the Free Trade Agreement

Under the agreement with Paraguay, trade will be released more quickly than with Argentina, which provides for free automotive trade only from 2029. Signed in 2015, the agreement with Uruguay eliminated sales quotas and allowed exports without tax of all cars with a minimum of regional content, with 55% content manufactured in Mercosur for cars sold in Brazil and 50% for cars sold in Uruguay.

According to the Ministries of Economy and Foreign Affairs, trade in automotive products between Brazil and Paraguay is low, but has grown considerably in the last decade, mainly due to Brazilian exports of automobiles and Brazilian imports of auto parts (mainly electrical harnesses). . Last year, Brazil exported US$ 415 million to Paraguay and imported US$ 235 million in automotive products.

On Twitter, President Jair Bolsonaro highlighted that the agreement will stimulate production and increase the generation of new jobs.

“We signed the Automotive Agreement between Brazil and Paraguay for immediate free trade for Brazilian automotive products taxed with tariffs between zero and 2% . Increased production and jobs. @MinEconomia and @ernestofaraujo.

Trade in automotive products between Brazil and Paraguay has grown. In 2019, the trade flow totaled US$ 650 million, with exports worth US$ 415 million and imports worth US$ 235 million, which resulted in a surplus of US$ 180 million for use”. Reports President Jair Bolsonaro on his twitter.