Sigma Capital

16-09-2024

Customs issues a circular on the eighth phase of reductions for goods imported from the Mercosur group

Source: MIST

Al Mal-


The Egyptian Customs Authority issued Agreement Circular No. 24 of 2024 regarding the percentage of customs reductions decided upon with the Mercosur countries.

The circular came based on a letter from the Director General of the General Administration of Agreements and International Cooperation, Dr. Amal Ahmed, at the Egyptian Customs Authority.

The Customs Authority official indicated that with reference to the text of Article 11 of the Free Trade Agreement Protocol between Egypt and the Mercosur countries, which entered into force as of September 1, 2017, and announced in Agreement Circular No. 37 of 2017, the percentages of customs reductions decided upon for the eighth phase for goods imported from the Mercosur countries, which include (Argentina, Brazil, Uruguay and Paraguay), which will be implemented as of September 1.

She stressed that for products listed in category (C), the reduction rate will be raised to 100% of the import duty instead of 87.5%, for products listed in category (D), the reduction rate will be raised to 80% of the import duty instead of 70%, and for products listed in category (E), Nawaf has not issued any instructions regarding it yet.

The Mercosur Agreement is a free trade agreement between Egypt and the Mercosur countries, which is an economic bloc for the Common Market for South American Countries, and this bloc includes Argentina, Brazil, Uruguay and Paraguay. According to this agreement, Egyptian products enter these countries with a customs reduction for some goods, reaching complete freedom from customs, and vice versa.

On August 14, 2006, the Ministers of Trade of the Mercosur countries and the Egyptian Minister of Trade and Industry agreed to activate the framework trade agreement signed in 2004 between the two parties. The ministers agreed to start forming committees to negotiate between the two parties to conclude a free trade agreement. After that, the first round of negotiations was held in Egypt on October 16, 2008, followed by four rounds of negotiations during the period July 12-15, 2010 in Argentina. During the five rounds held between Egypt and the Mercosur countries, the two sides reached a final form of the agreement and it entered into force after the Argentine Parliament signed it. The customs exemption began to be implemented in September 2017.

The Mercosur countries include more than 250 million people with a gross domestic product of one trillion US dollars, or about 76% of the gross domestic product in Latin America, which means that it is a giant consumer market, which Egypt can exploit and penetrate with its exports to those markets, and benefit from Customs reduction, which has a positive impact on the export sector, improves the trade balance, and increases demand for Egyptian products.

The terms of the agreement included removing restrictions on mutual exports and imports between the two parties, technical barriers to trade, anti-subsidy and dumping measures, preventive measures, and the customs assessment process, to be carried out in several stages that include lists of goods and their reduction rates.

The first list includes an immediate exemption upon the entry into force of the agreement and began in September 2017, the second list: a 25% annual reduction from the date of entry into force of the agreement, and the third list: a 12.5% ​​annual reduction from the date of entry into force of the agreement.

The fourth list includes a 10% annual reduction from the date of entry into force of the agreement, while the fifth list includes sensitive goods, the method of which will be determined through the work of the joint committee.

The two parties to the agreement agreed to adopt a maximum foreign component rate of 45% of the factory gate price, and to grant Paraguay exceptional treatment where the foreign component rate does not exceed 55%, in addition to adopting detailed rules of origin.