On July 21, 1991, the Legislative Power passed, by Law 16,096, the Treaty for the establishment of a Common Market (MERCOSUR) among Argentina, Brazil, Paraguay, and Uruguay.

The purpose of this Treaty and its annexes is to achieve a significant change in the factors of production of these four countries. It mainly aims at the integration of these countries, creating a common market of 250 million people, thus expanding the supply and improving the quality of goods and services available.

The MERCOSUR implies: the free movement of goods, services, and factors of production based on the reciprocity of rights and duties between the States Parties; the adoption of a common commercial policy in dealing with third countries; the adoption of a trade liberalization program; the coordination of macroeconomic policies and policies by sector among the States Parties; and the commitment to coordinate their legislations.
Since the date this Treaty entered into force, the parties have gradually reduced their tariffs, and by December 31, 1994, they reached zero tariff, with no restrictions over the whole tariff universe.

Therefore, since January 1, 1995, the four member countries agreed on a Common External Tariff, and eliminated customs duties, non-tariff restrictions on the movement of goods, and any other equivalent measure within the Mercosur borders.
This Tariff is applied on imports from non-member third countries, and from Free Trade Zones of the member countries.

Regarding taxes, fees, and other internal assessments, products original from the territory of a State Party shall be entitled, in the other States Parties, to the same treatment applied to national products. In order to be considered original from a State Party, at least 60% of the cost of the product, including labour costs, must have been incurred in a State Party. All goods introduced in the country under a temporary admission regime can, depending on the transformation they suffered and considering the abovementioned percentage, become original goods.

The Common External Tariff for capital goods has been gradually reduced until it reached 14% in 2001. In the cases of Paraguay and Uruguay, the term was extended until 2006.

The Common External Tariff for telecommunications and IT goods was gradually reduced until it reached 16% in 2006.

Imported products coming from countries that are not members of the Mercosur must pay a Global Duty Rate (0% - 35%), depending on the case. Although Chile is not a member country, it is entitled to a maximum rate of 13.9%.

All goods corresponding to capital projects declared of national interest, as well as raw materials and goods introduced under the temporary admission regime, pay 0%.

For the admission and compulsory registration of import operations, there is a Rate for the Control of Imports of 1.25% that has to be paid to the state bank taking part in the operations.

Likewise, final import of goods into Uruguay is levied with a V.A.T. at a rate of 22%, notwithstanding the existing tax holidays.