Non-tariff Protectionism in Mercosur: Analysis and Recommendations on the Last Three Decades

Lauria, Lucas Baggi de Mendonça

doi:10.1590/S0102-8529.20234501e20210067

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RESEARCH ARTICLE • Contexto int. 45 (1) • Jan/Apr 2023 • https://doi.org/10.1590/S0102-8529.20234501e20210067 copy

Non-tariff Protectionism in Mercosur: Analysis and Recommendations on the Last Three Decades

Protecionismo Não-Tarifário no Mercosul: Análise e Recomendações Sobre as Últimas Três Décadas

Authorship SCIMAGO INSTITUTIONS RANKINGS

Abstract

This paper aims to discuss and demonstrate the non-tariff challenges to Mercosur’s trade integration. Its Common External Tariff (CET) and exceptions will be discussed, as well as the evolution of its non-tariff protectionism framework in the last three decades. This is an unprecedented exploratory exercise on all 5019 non-tariff measures (NTM) notified by Mercosur members to the WTO from 1995 to 2020. As main results, we see that (i) members with fewer exceptions to the CET are the ones that most use NTMs to protect their markets; (ii) the stock of NTMs targeted at members and non-members varies accordingly; (iii) of the 10 countries most targeted by NTMs imposed by Mercosur members, its own members figure in the 3rd, 4th, 7th, and 8th positions; (iv) the bloc lacks deep regulatory harmonization, especially with regard to sanitary and phytosanitary barriers in 11 sectors. Based on these results, two critical policy action plans are suggested to the bloc.

Keywords
Mercosur; WTO; non-tariff measures; protectionism; common external tariff

Imposing member	Trade partner affected
	Group 1	Group 2	Group 3	Total
	From Mercosur to Mercosur	From Mercosur to Mercosur and beyond	From Mercosur outwards	Total
Brazil	48	2966	470	3484
Argentina	58	662	305	1025
Venezuela	0	182	20	202
Uruguay	2	152	2	156
Paraguay	2	149	1	152
Total	110	4111	798	5019

Most affected trade partners	NTMs notified to WTO
World (all members)	4095
China	224
United States	61
Brazil	55
Argentina	46
South Korea	38
Chile	34
Uruguay	28
Paraguay	28
Taipei	30
Mexico	24

Type	Trade partner affected
	Group 1	Group 2	Group 3	Total
	From Mercosur to Mercosur	From Mercosur to Mercosur and beyond	From Mercosur outwards	Total
Sanitary and phytosanitary measures	41	2022	134	2197
Technical measures	0	1881	0	1881
Anti-dumping measures	69	0	646	715
Export subsidies	0	91	0	91
Tariff quotas	0	63	0	63
Quantitative restrictions	0	44	0	44
Compensatory measures	0	0	18	18
Safeguard measures	0	10	0	10
Total	110	4111	798	5019

Country	Institution	Area
Brazil	Ministry of Agriculture, Livestock and Supply	Agriculture
	National Health Surveillance Agency	Health and food regulation
	National Institute of Metrology, Quality and Technology	Technical standards
	National Mining Agency	Mining
Argentina	Ministry of Agriculture, Livestock and Fisheries	Agriculture
	National Administration of Drugs, Food and Medical Technology	Health and food regulation
	National Institute of Metrology	Technical standards
	Mining and Energy Secretariat	Mining
Paraguay	Ministry of Agriculture and Livestock	Agriculture
	Dirección Nacional de Vigilancia Sanitaria	Health and food regulation
	National Institute of Technology, Standardization and Metrology	Technical standards
	Viceministerio de Minas y Energía	Mining
Uruguay	Ministry of Livestock, Agriculture and Fisheries	Agriculture
	Ministry of Public Health	Health and food regulation
	Technological Laboratory of Uruguay	Technical standards
	Dirección Nacional de Minería y Geología	Mining

NCM chapter	Recurrence	%	Pareto	Description
72	20	10%	10%	Cast iron, iron and steel.
44	14	7%	17%	Wood, charcoal and wooden works.
82	14	7%	25%	Tools, cutlery and cutlery, and parts thereof, of base metal.
51	13	7%	31%	Wool, fine or coarse hair; horsehair yarns and fabrics.
80	13	7%	38%	Tin and his works.
10	12	6%	44%	Cereals.
39	12	6%	50%	Plastic and its works.
85	12	6%	56%	Electrical machines, apparatus and materials, and parts thereof; sound recording or reproducing apparatus, television image and sound recording or reproducing apparatus, and parts and accessories thereof.
69	10	5%	62%	Ceramic products.
20	8	4%	66%	Preparations of vegetables, fruit or other parts of plants.
73	7	4%	69%	Works of cast iron, iron or steel.
84	7	4%	73%	Nuclear reactors, boilers, machinery, mechanical apparatus and instruments, and parts thereof.
63	6	3%	76%	Other made-up textile articles; assortments; second-hand textile articles and similar articles; rags.
40	5	3%	78%	Rubber and its works.
70	5	3%	81%	Glass and its works.
Others	37	19%	100%	Others

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[1] Lucas Baggi de Mendonça Lauria is an Institutional Relations professional with experience working in the Brazilian private sector. He holds a master’s degree in International Relations from the University of Brasília (UnB). He has expertise in international trade and lobbying. He has worked for institutions such as the Ministry of Economy, the National Confederation of Industry, and the Prospectiva consulting firm. He is currently a Ph.D. candidate in IR at the University of Brasília.