India is soon going to launch negotiations to have a comprehensive economic cooperation agreement (CECA) with Latin American trading bloc MERCOSUR even as it looks to “expedite” the talks to have a preferential trade agreement with the South African Customs Union (SACU). In order to boost South-South trade, India, SACU and MERCOSUR are also planning to have a trilateral trade agreement soon.
MERCOSUR, comprising Brazil, Argentina, Uruguay and Paraguay, was formed in 1991 with the objective of facilitating free movement of goods, services, capital and people among the four member countries. It is the third-largest integrated market after the European Union (EU) and North American Free Trade Agreement (NAFTA).
“SACU and MERCOSUR already have trade agreement. We are now looking at completing the talks to have a PTA with SACU expeditiously. SACU countries — Botswana, Lesotho, Namibia, South Africa and Swaziland — are fully sensitive to the need and urgency to have this agreement concluded. We are also planning to have a CECA with MERCOSUR. Moreover, we have now got the mandate to fast-track our negotiations to have a deal with the COMESA countries. With the conclusion of these deals, we will complete the IBSA (India, Brazil, South Africa) triangle,” Commerce and Industry Minister Anand Sharma told reporters on the sidelines of the ‘India Show’ organised here by the Confederation of Indian Industry (CII).
Sharma said he would also explore the possibility to have a trilateral trade agreement between India, SACU and MERCOSUR. “This would help Africa emerge as a shipping hub, connecting South Asia and Latin America,” Sharma said.
India and MERCOSUR would set up a joint study group (JSG) to determine the feasibility of having CECA between them which had been given a mandate to prepare the report in the next one year. India and MERCOSUR signed a PTA on January 25, 2004, which came into effect in June 2009. Now both sides want to take the relationship to the next level.
“The JSG have been asked to come out with a report within the next one year. It can be sooner. We will fast track the talks,” Sharma added.
Sharma said India would also launch talks to have a similar trade deal with COMESA, or Common Market for Eastern and Southern Africa countries.
In order to boost exports from Africa, India announced a duty-free tariff preference scheme (DFTP) for 33 least developed countries (LDC) in Africa, which covers 94 per cent of India’s total tariff lines.
“This would enable the LDCs in Africa to take advantage of increased market access to the large Indian market.”
On Saturday, Sharma would be having a ministerial meeting with trade ministers all the African countries. A joint statement on the outcome of the meeting would be released after the meeting. This is likely to be annual exercise which would take place alternatively in India and Africa.