Mercosur fails to reach agreement on double taxation

Special Report:Global Financial Crisis

COSTA DO SAUIPE, Brazil, Dec. 15 (Chinese media) -- Brazilian Foreign Minister

Celso Amorim announced Monday that member countries of the Common Market of the

South (Mercosur) failed to reach an agreement on ending double taxation of

products from countries outside the bloc.

During his opening speech at the Mercosur Council Summit Monday, Amorim

said he regretted that the bloc leaders did not manage to find a solution to one

of the most pressing problems to be discussed in the upcoming summit.

The products from non-Mercosur countries currently pay a tariff every time

they enter a Mercosur country, even when transported from one member country to

the other, which contradicts the principle of free trade inside the bloc.

According to Amorim, the double payment of tariff makes it hard to trade

with other blocs, such as the European Union, as it makes imported products more

expensive.

The difficulties on ending the double tariff are related to the absence of

a mechanism of distribution of the tariffs' revenues and of unified customs

laws. Without the distribution, the tariffs' revenues would go only to the first

country of the bloc to receive the imported product.

Amorim said Mercosur leaders would hold an extra meeting to discuss the

double taxation and other trade and custom issues. The meeting has not been

scheduled.

"That is not a drama, what is important is to go ahead," Amorim said at a

press conference Monday.

Brazil is hosting a series of Latin American summits in Costa do Sauipe, an

upmarket resort on the country's tropical coast. Presidents and top-level

officials from 33 Latin American and Caribbean nations are gathering to discuss

ways to promote trade, integration and development Tuesday.

The first of the series of summits, on Monday and Tuesday, gathers the

leaders of the Mercosur trade bloc, which comprises Brazil, Argentina, Paraguay

and Uruguay.

Despite the failure on ending double taxation, other negotiations among

Mercosur countries were successful and several agreements are expected to be

signed Tuesday by Mercosur presidents, Amorim said.