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India-Mercosur trade agreement to be signed soon

By Our Special Correspondent

NEW DELHI June 7. India and the Mercosur group of countries in Latin America will sign a framework trade agreement later this month as a precursor to a preferential trading arrangement (PTA) and a free trade agreement (FTA).

The agreement is to be signed during the visit of the Minister of State for Commerce and Industry, Vidya Sagar Rao, to Paraguay on June 17 and 18.

The Mercosur, a regional grouping consisting of Argentina, Brazil, Uruguay and Paraguay, is likely to enter into a free trade agreement with India by August this year, according to an official release. With the signing of the PTA, both sides will get mutual tariff concessions in case of imports from either side. The agreement is expected to bring about a quantum jump in bilateral trade between India and Mercosur in particular and the Latin American region in general. Now, Indo-Mercosur trade is quite low with two-way trade being in the region of $ 1.4 billion in 2001-2002. Exports, however, have doubled over the three-year period from 1999-2000 to 2001-2002 from $ 317 million to $ 626 million.

Mercosur is a southern core common market in Latin America. An integration of the economies of Argentina, Brazil, Uruguay and Paraguay, was set up in 1991. In Mercosur, intra-regional trade is being gradually liberalised. Tariff on 90 per cent of intra-regional trade has been removed with common external tariff ranging from 0 to 20 per cent. Chile and Bolivia are associate members of Mercosur. The release says India's share now in Mercosur's global imports is 0.83 per cent.

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