Paraguay to gain from progressive tariff cuts in Europe

By BKM | Berkemeyer

On 23 August 2019, Member States of the European Free Trade Association (Iceland, Liechtenstein, Norway and Switzerland) and of Mercosur (Argentina, Brazil, Paraguay and Uruguay) concluded in substance the negotiations on a comprehensive Free Trade Agreement.

"It is a very important negotiation because with this not only Paraguay, but also the Mercosur, completes commercial agreements with the entire territory of Europe, after the conclusion of negotiations with the European Union," said Paraguayan Foreign Minister Antonio Rivas Palacios.

As a comprehensive and broad-based Free Trade Agreement, the EFTA-Mercosur Agreement covers trade in goods, trade in services, investment, intellectual property rights, government procurement, competition, trade and sustainable development, legal and horizontal issues including dispute settlement.

Mercosur is an important trading partner for EFTA and will allow EFTA companies to benefit from privileged access to a market of over 260 million consumers. Current EFTA bilateral trade in goods with Mercosur totalled €5,8 billion in 2018, with EFTA exports worth €3,7 billion and Mercosur imports for €2,1 billion. Thus, the new Free Trade Agreement will allow Mercosur exporters to gain from progressive tariff cuts and ensure a level playing field with its main competitors in this important market.

Paraguayan Minister of Industry and Commerce, Liz Cramer, also highlighted the country's opportunity to export premium products, such as the possibility of exporting organic sugar to Switzerland with the benefits of the Generalized System of Preferences, or GSP, a preferential tariff system which provides tariff reduction on various products.