Trade facilitation - Brazil
Trilateral cooperation with Brazil, Germany and Mozambique on strengthening INNOQ (from September 2010 to July 2017 (see Trade Facilitation) also included:
- Support to the Mozambican Enquiry Point for the WTO at INNOQ to work according to international rules;
- Enabling INNOQ’s Standardization Department to give advice to relevant sector commissions to adopt minimum quality requirements (food, agribusiness, electronics and civil construction);
- Definition and execution of efficient management structures and procedures inside INNOQ; and
- Expanding the services of Legal and Industrial Metrology, as well as the Certification of Systems and Products.
In 2007, Decision 25 of Mercosur's Common Market Council allowed the establishment of the SML between the members of Mercosur as voluntary bilateral agreements between central banks. In October 2008, Brazil and Argentina signed the agreement establishing the SML between the central banks of Brazil and Argentina, allowing for trade settlements in local currency to be conducted through the mechanism. The proposed development of a winding mechanism using national currencies aimed to promote financial integration and consequently increase trade among Member Countries, mainly encouraging micro and small entrepreneurs to participate in foreign trade by providing the infrastructure that allows for trade settlement in local currencies at minimal cost.
The SML allows Brazilian and Argentinean exporters to set their price in their local currency and allows importers from both countries to pay exporters in their local currencies as well. The SML has a direct interface with the national payment systems in Brazil and Argentina, with the central banks of both countries acting as clearing houses, and it does not demand additional requirements from financial institutions. The SML rate is published daily, and it is a cross rate between the Brazilian PTAX rate (BRL/US$) and the Argentinean Refer¬ence Rate (ARS/US$) used by the central banks to settle daily the total net value of the transactions. Currently, the SML allows the settlement of trade transactions in goods, including services related to them, to pay up to 360 days. The possibility of incorporating other kinds of operations is foreseeable.
Since the launch of the system until October 2012, the SML registered more than 14,800 operations, with 75 per cent of the transactions having an individual value below US$50,000. Total transactions amounted to R$5 billion (or US$2.5 billion). The establishment of an SML with other countries and the inclusion of other types of operations are the next challenges, including the establishment of an SML between Brazil and Uruguay.