INDIA-MERCOSUR PTA
MERCOSUR is a trading bloc in Latin America comprising Brazil, Argentina, Uruguay and Paraguay. It has Chile and Bolivia as its associate members. MERCOSUR was formed in 1991 with the objective of facilitating the free movement of goods, services, capital and people among the four member countries. MERCOSUR has become a successful market of about 200 million people, representing about 1 trillion dollars of GDP and 190 billion dollars of trade. It is the fourth largest integrated market after the European Union (EU), North American Free Trade Agreement (NAFTA) and ASEAN.
2. India had a total trade of US$ 1416.65 million with MERCOSUR during 2003-2004. Our exports to MERCOSUR were approximately US$ 566.96 million during 2003-2004 and our imports from MERCOSUR were around US$ 849.69 million during the same period. The region still has a huge potential for Indian exports as our share is just 0.83% of the global imports of MERCOSUR. Our major items of exports to MERCOSUR are drugs, pharmaceuticals and fine chemicals, transport equipment, inorganic/ organic/ agro chemicals, cotton yarn and cotton and manmade fabrics, made-ups, readymade garments, dyes, intermediates and coal tar. The major imports into India from MERCOSUR are edible oils (primarily soya), metalliferous ores, metal scrap and non-electrical machinery.
3. A Framework Agreement had been signed between India and MERCOSUR on 17th June 2003 at Asuncion, Paraguay. The aim of this Framework Agreement was to create conditions and mechanisms for negotiations in the first stage, by granting reciprocal tariff preferences and in the second stage, to negotiate a free trade area between the two parties in conformity with the rules of the World Trade Organisation.
4. As a follow up to the Framework Agreement, a Preferential Trade Agreement (PTA) was signed in New Delhi on January 25, 2004. The aim of this Preferential Trade Agreement is to expand and strengthen the existing relations between MERCOSUR and India and promote the expansion of trade by granting reciprocal fixed tariff preferences with the ultimate objective of creating a free trade area between the parties.
5. The India-MERCOSUR PTA provides for five Annexes. These five Annexes had been finalized during six rounds of negotiations in order to operationalise the PTA. These have been signed between the two sides on March 19, 2005, upon the conclusion of G-20 Meeting in New Delhi. The five finalized Annexes are following.
Annex I to the PTA- Offer List of MERCOSUR for tariff concession on Indian products in MERCOSUR. It contains 452 products.
Annex II to the PTA- Offer List of India for tariff concession on MERCOSUR’s products in India. It contains 450 products.
Annex III to the PTA- Rules of Origin
Annex IV to the PTA – Safeguard Measures
Annex V to the PTA – Dispute Settlement Procedure (DSP)
6. The PTA would be operational immediately on the ratification by the legislatures of the MERCOSUR countries.