Seeking to improve the competitiveness of Brazilian companies, the Federal Government decided not to renew the Brazilian bilateral agreements on maritime transportation with Argentina and Uruguay, which limited cargo accessibility for bilateral trade flows.
The Federal Government, through Decree n.º 10.786/2021, decided not to renew the Brazilian bilateral maritime transport agreements with Argentina (Decree n.º 99.040/1990) and Uruguay (Decree n.º 78.621/1976), related to the nationality requirement in respect to ships carrying cargo between the signatory countries (obligatory transportation under one of the agreeing party’s flags). The discontinuation seeks to improve the access of Brazilian companies to cargo transport alternatives, in relation to bilateral trade flows.
According to the Ministry of Economy, the maritime transport market restriction harmed the competitiveness of Brazilian exporting and importing companies, by limiting sector competition and access to competitive maritime transport alternatives. Therefore, the discontinuation of the agreements seeks the entry of new players in the cargo transport sector, hence increasing competition, and lowering freight costs. It also aims at promoting domestic cabotage navigation.
According to the ministry (Comexstat), maritime transport accounted for 69% of bilateral trade flows in volume between Brazil and Argentina in 2020 (circa 11.2 million tons), and 48% of bilateral trade in value (FOB, circa US$7.9 billion). Concerning the maritime transport between Brazil and Uruguay, it accounted for 36% of bilateral trade flows in volume (circa 1.3 million tons) in 2020, and 29% of bilateral trade in value (FOB, circa US$834 million).
The discontinuation of the Brazil-Uruguay agreement is already in force, while the revoking of Decree n.º 99.040/1990 comes into force on February 5, 2022.
