INDIA SIGNS FRAMEWORK TRADE AGREEMENT WITH MERCOSUR

AGREEMENT TO FACILITATE QUANTUM LEAP IN EXPORTS TO LATIN AMERICA

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India has signed the Framework Trade Agreement with MERCOSUR (a regional grouping consisting of Argentina, Brazil, Uruguay and Paraguay). The Agreement was signed recently during the visit of Shri Satyabrata Mookherjee, Minister of State for Commerce & Industry, to Paraguay (Asuncion). This Agreement between India and MERCOSUR will pave the way to negotiate a Preferential Trading Arrangement and a Free Trade Agreement (PTA/FTA) with MERCOSUR. PTA with MERCOSUR is likely to be concluded by the end of August 2003. With the signing of PTA both the sides will get mutual tariff concessions in case of imports from either side. This Agreement is expected to facilitate a quantum leap in bilateral trade between India and Mercosur in particular and Latin American region in general, Shri Mookherjee said while signing the Agreement on behalf of India. "We view the Mercosur commercial grouping as a prospective close trade partner of India and expect to rise in bilateral trade to the extent of more than US $ 3 billion within the next 5 years from the present level of US $ 1.3 billion", the Minister said.

The Indo-MERCOSUR trade for the last three years is as under:

(Figures in US$ Million)

YEAR	EXPORTS	IMPORTS
1999-2000	317.60	732.85
2000-2001	476.52	603.11
2001-2002	626.49	765.74

 

 

 

It will be seen that India’s exports to MERCOSUR region have doubled since 1999-2000.

MERCOSUR is a Southern Core Common Market in Latin America. An integration of the economies of the four countries of Argentina, Brazil, Uruguay and Paraguay, it was set up in 1991. In MERCOSUR, intra-regional trade is being gradually liberalised. Tariff on 90% of intra-regional trade has been removed, with Common External Tariff (CET) ranging from 0-20%. Chile and Bolivia are associate members of MERCOSUR.