SHOULD ONE EXPECT A HAPPY ENDING OF MERCOSUR-EUROPEAN UNION ONGOING NEGOTIATIONS? THE ROLE PLAYED -OR THE THREATS PLACED BY TRADE AND FISCAL ISSUES

Bournemouth

Seminario; XVI ARNOLSHAIN SEMINAR; 2018

Arnolshain Seminar

By considering the fiscal matters highlighted above and their responsibility in making any reached agreement sustainable in time, the paper´s declared objective is to revise the set of used tax and spending tools, both in MERCOSUR and the EU and suggest the necessary corrections or changes in case they are likely to bring about negative effects or distortions upon trade and investment flows. In responding to the objective, the paper critically surveys national, sub-national and local fiscal structures of Argentina, Brazil, Paraguay and Uruguay and of six European countries selected on the basis of their greater economic links to MERCOSUR (France, Germany, Italy Portugal, Spain and the Netherlands); the analysis involves the scrutiny of specific tax instruments as well as the existence of spending packages in so far as these could impact on the trade of goods and services or upon investment flows, for what this review permits to ascertain whether a fair fiscal treatment of export of goods and services (in either direction) prevails or whether determined tax and spending tools should be eliminated, modified or replaced in order to avoid the possibility of creating artificial advantages or disadvantages which may, in turn, discourage free trade among the parties; in addition to the above mentioned revision, presented stylized facts help to show the actual reach of integration.