Learn about the advantages of exporting to Mercosur
In today's content we will present the main benefits of exporting to Mercosur, which is the economic block that Brazil is part of. Check it out!
But first, how about a better understanding of the concept of economic bloc? Then let's get to it!
An economic bloc is an agreement between countries in the same or a nearby region that aims to integrate their economies. This happens through the free movement of goods and people between member countries.
Each treaty has its own rules, but usually they have some in common, such as the reduction of import tariffs between those involved, reduction of customs duties, facilitation of the movement of their citizens in these regions, and the possibility of negotiation between other blocks.
Blocs can create a free trade zone, for example, which is when countries decide to simplify trade between themselves by eliminating tariffs and encouraging each one to buy more from the other. It is important to note that Brazil is one of the founders of the bloc, which was created in 1991 in the treaty of Asunción, signed by Brazil, Argentina, Paraguay and Uruguay.
Information you need to know about Mercosur
If the Gross Domestic Products (GDPs) of all member countries were added together, Mercosur would be the fifth largest economy in the world, with a GDP of approximately US$ 2.79 trillion, according to the World Bank. The bloc is the main recipient of Foreign Direct Investments (FDI) in the region, resulting in 47.7% of all FDI flow directed to South America, Central America, Mexico, and the Caribbean in 2016 alone.
In Mercosur the integration of the countries occurs in a customs way, popularly known as Customs Union. In other words, it refers to customs, and whenever we refer to it we are talking about the circulation of goods and services between countries. In the case of Mercosur, there is the free internal movement of goods between member countries and an External Tariff with countries outside Mercosur (TEC), practiced by the members of the block with those that do not belong to it.
But what does this mean in practice? Relax, we'll explain! It means that when a country within the bloc trades with a country outside the bloc, there is a standardized import tariff. This rate is the same for all countries that are part of the trade group and varies according to the type of goods.
Basic inputs, for example, have lower rates, while products with a high level of elaboration will have higher rates. And why is it important to talk about this?
Well, because this ends up making imports from other countries to those in the bloc more expensive, thus encouraging trade between the countries in the bloc itself.
Benefits of exporting to Mercosur
The Mercosur blocks are relevant tools for the economy, and since joining the block Brazil has frequently imported and exported several products. After all, as we explained previously, the agreement guarantees the commercial circulation of products freely, eliminating bureaucratic processes and export taxes, making certain Mercosur products among the most traded among the group's countries.
Therefore, belonging to this group provides several benefits for those who wish to export, besides those already mentioned. See the main ones:
Logistics made easy
That's right! As the countries in the block are close, exporting to Mercosur makes the logistical processes easier, generating, even, a reduction in expenses in this sector.
Taxes
Besides the geographical advantages, exporting to Mercosur also becomes more accessible due to the fact that taxes are lower, or often practically null, and is considered an advantageous and attractive transaction for the companies involved.
Financing
Whenever a company exports to the Mercosur countries, the possibility of getting credit lines with reduced rates or longer payment terms is high.
Using the local currency
When exporting products to countries that are part of Mercosur, trades can be paid for in the local currency and not only in dollars.
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