Mercosur freezes the principle of sliding export taxes

The principle of sliding export taxes, which applied to grains and oilseeds, triggered a 100-day conflict in Argentina between farmers and the administration of President Cristina Fernandez de Kirchner reached the current Mercosur summit in Tucuman and was rejected. Argentina wanted to include the principle in the Mercosur Customs Code currently being drafted by member countries, but Uruguay objected arguing that such “intra” taxes should be decided by the whole block. “They must be regulated within the community, consensually and not unilaterally” said Uruguayan Economy minister Danilo Astori underlining they have an impact in the economic development of other country members since they increase the value of imports. Although Brazil made no official presentation given the “sensitivity” of the issue, off the record Brazilian diplomats agreed that the export taxing system applied by Argentina distorts prices. The objection was a blow to Argentine diplomacy which was intent in closing the six months Mercosur chair with the signing of the group’s Customs Code.