Brazil’s plan to end import tariffs upsets partners

SAO PAULO, Brazil (Reuters) — The Brazilian government is mulling temporarily removing import tariffs on rice, corn and soybeans, the agriculture ministry said Aug. 27.

The move is aimed at staving off inflation, the statement added. Prices for rice, soybean and corn have risen recently in the domestic market.

While the ministry said there is no sign of a potential shortage of these products, Brazil has exported almost all its soybeans, and imports are expected to rise this year.

Brazil’s partners in South America’s Mercosur trade bloc, which are already exempt from import taxes, were taken by surprise by Brazil’s move and said it could not be carried out unilaterally.

Argentina and Paraguay stand to gain from higher Brazilian soybean imports, and Uruguay from rice imports, but they will lose out, mainly to the United States, if Brazil lowers its tariffs for other countries.

“Brazil cannot unilaterally change its tariffs. It has to do it through talks with the other Mercosur countries,” said Paraguay’s deputy agriculture minister, Santiago Bertoni.

“Any reduction in the common external tariff must be negotiated within Mercosur,” said Gustavo Idigoras, head of the CIARA-CEC grains exporters and crushers chamber.

The tariff exemption is expected to be discussed by Brazil’s trade management committee, known as Gecex and presided over by the economy ministry, in September.

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