|
The concept of a triangular trade alliance between India, MERCOSUR and the South Africa Customs Union (SACU) – leapfrogging the existing trade alliances in the region to form a bigger trade cooperation partnership – was mooted at the India, Brazil, South Africa (IBSA) meeting held here on Saturday evening which was co-chaired by Shri Kamal Nath, Minister of Commerce & Industry; Mr. Celso Amorim, Minister of External Relations & International Trade, Brazil and Mr. Mandisi Bongani Mabuto Mpahlwa, Minister of Trade & Industry and Ms. Angela T. Didiza, Minister of Agriculture, South Africa. Meanwhile, India and MERCOSUR – a trading bloc in Latin America consisting of Argentina, Brazil, Paraguay and Uruguay, with Bolivia and Chile as its associate members – signed on the same day an Agreement to operationalise the Preferential Trade Agreement (PTA) between the two sides. While MERCOSUR represents the Latin American nations of Argentina, Brazil, Paraguay and Uruguay with a combined population of 220 million, a combined GDP of more than a trillion dollars and 200 billion dollars of trade, is the fourth largest integrated market in the world after the EU, NAFTA and ASEAN, SACU consists of Botswana, Lesotho, Namibia, South Africa and Swaziland.
Mr. Amorim described the India-MERCOSUR Agreement as a path-breaking pact of extreme importance which would open new doors to trade among member nations, besides continuing trade with the North. Shri Kamal Nath described it as a very important milestone in the economic history of the five signatory countries and said “the countries of MERCOSUR and India would now be looking forward to increasing the coverage of products as well as deepening the preferences in their PTA, so that they make the transition from a PTA to a Free Trade Area a reality in the very near future”.
The aim of the Agreement, which operationalises the PTA which was signed in New Delhi in January last year, is to expand and strengthen the existing relations between MERCOSUR and India and to promote the expansion of trade by granting reciprocal fixed tariff preferences with the ultimate objective of creating a free trade area between the parties. The Agreement was signed by Shri Kamal Nath, Union Minister of Commerce & Industry, on behalf of the Government of India; and on behalf of MERCOSUR by Mr. Celso Amorim, Minister of External Relations & International Trade of Brazil; Ms. Leila Rachid de Cowles, Minister of External Relations of Paraguay; Mr. Ernesto Agazzi, Vice Minister of Livestock, Agriculture & Fisheries of Uruguay; and Mr. Alfredo Chiradia, Secretary of State of Commerce & International Economic Relations of Argentina.
India-MERCOSUR PTA of last year provided for several annexes to the Agreement. These annexes have been finalized in the Agreement signed today to operationalise the PTA. They cover 450 products at 8-digit level on which India has given tariff preferences and 452 products on which MERCOSUR has given tariff preferences; tariff concessions ranging from 10% to 100%; Rules of Origin providing for 60% value-addition; and safeguard measures and dispute settlement procedures available to members on fast-track which will be in addition to the redressal mechanisms available in the World Trade Organisation (WTO).
India had a total trade of nearly US $ 1.5 billion with the MERCOSUR during the calendar year 2004. India’s exports to MERCOSUR were approximately US $ 566.96 million during 2003-04 and imports from MERCOSUR were around US $ 849.69 million during the same period. The region still has a huge potential for Indian exports as India’s share is just 0.83% of the global imports of MERCOSUR. India’s major items of exports to MERCOSUR are drugs, pharmaceuticals and fine chemicals, transport equipment, inorganic/organic/agro chemicals, cotton and cotton manmade fabrics, made-ups, readymade garments, dyes, intermediates and coal tar. The major imports into India from MERCOSUR are edible oils (primarily soya), metaliferrous ores, metal scrap and non-electrical machinery.
Background
MERCOSUR was formed in 1991 with the objective of facilitating the free movement of goods, services, capital and people among the four member countries.
The South Africa Customs Union (SACU) was formed in April 1998.
SB/MRS
|
