What is the Mercosur Rules of Origin?
Rules of origin are part of trade agreements and ensure that specific goods will indeed benefit from tariff reductions or eliminations, if they actually come from the member countries of the bloc.

In the case of Mercosur, products deemed to originated from the bloc can circulate among members (Brazil, Argentina, Paraguay, and Uruguay) without import duty.

What has changed?
1- Substantial Alteration Rule
There has been a 5% increase in the maximum threshold of imported inputs for a product to be considered of 'Mercosur' origin.

The flexibilization of the Mercosur Rules of Origin involves different percentages of national or regional inputs for a product to be considered from Mercosur. This impacts 100% of industrial products and 80.5% of agricultural products, while the remaining 19.5% of agricultural products maintain a 40% threshold.

2 - Proof of Origin
Another change brought by the new rules consist of is the simplification of proof of origin. The Certificate of Origin may be waived if a self-declaration of origin is provided, on the same model as the European Union and the European Free Trade Association (EFTA).

What are the impacts of the new rules?
More stringent and prescriptive rules of origin, which require numerous premises, override the positive effects of preferential tariff concessions, according to a 2023 study on the World Bank's recently launched Deep Trade Agreement (DTA) database, which covers specific product rules of origin at HS6 level from 1990 to 2015.

In this regard, this simplification of such rules has great potential to promote trade and regional integration. Even so, it requires greater attention from foreign trade operators to adapt their operations, especially in the use of self-declaration of origin, in order to avoid future fines and sanctions.