RIO DE JANEIRO, Feb. 11 (Xinhua) -- Brazil and Paraguay signed on Tuesday an agreement to boost trade of autos and auto parts between the two countries.
The agreement was announced during the most recent Mercosur Summit held in December 2019. Brazil had signed similar agreements with both Argentina and Uruguay before. The four countries are the four founding members of Mercosur, or the Southern Common Market.
Under the agreement, Brazil will grant free trade treatment to Paraguayan automotive products immediately and Paraguay will allow Brazilian products to enter the country with lower taxes, which are of up to 2 percent and will gradually decrease until free trade conditions are met by 2022.
According to the Brazilian government, the agreement does not have an expiration date and will be valid for an indeterminate length of time.
The agreement is regarded as a positive signal for the Brazilian automotive sector, which has been suffering from an decrease of vehicle exports, mainly due to the prolonged economic crisis in Argentina, the sector's main market.
Last year, Brazil's vehicle exports fell 31.9 percent to 428,200 units, according to the National Association of Vehicle Manufacturers.