Prime Highlights
- India seeks to expand its PTA with MERCOSUR beyond the current 450 tariff lines through fresh negotiations.
- Talks will also address the ongoing India-Brazil sugar trade dispute pending at the WTO.
Key Facts
- MERCOSUR comprises Brazil, Argentina, Paraguay, Uruguay, and Bolivia, holding a $2.94 trillion combined economy.
- Brazil and Argentina are reportedly looking to reduce economic dependence on China and the US.
Background
Commerce Secretary Rajesh Agrawal will travel to Latin America in the last week of August to strengthen India’s bilateral trade ties with the region. The visit aims to boost economic engagement with Brazil and Argentina during his five-day tour.
Government sources said the Secretary will attend Joint Trade Committee meetings with both countries. Talks are also underway to upgrade the existing Preferential Trade Agreement with the MERCOSUR bloc.
Officials said discussions will likely focus on finalising the Terms of Reference to begin negotiations to expand the PTA. The sugar trade dispute between India and Brazil at the World Trade Organisation will also feature in the talks.
Brazil has argued that India’s domestic support to sugarcane growers and export subsidies for sugar go against the WTO’s Agreement on Agriculture and the Agreement on Subsidies and Countervailing Measures. India has maintained that its support to domestic cane producers and export schemes falls within its rights under WTO commitments.
Sources highlighted the strong presence of Indian diaspora and companies in Brazil and Argentina. Both nations are reportedly seeking to reduce dependence on China and lower their reliance on the United States, sources noted.
India has held a PTA with MERCOSUR since 2004. The bloc includes Brazil, Argentina, Paraguay, Uruguay, and Bolivia. Initiatives are being taken to broaden the agreement beyond its present limit of 450 tariff lines.
The MERCOSUR member countries constitute more than 67% of the total economic activity of South America. The regional economy amounts to 4.38 trillion dollars, with MERCOSUR making a contribution of 2.94 trillion dollars to it.
