India-MERCOSUR Preferential Trade Agreement: MEA Jaishankar to urge Brazil to fast track the negotiations next week

By: |
July 19, 2019 8:08 PM

External affairs minister S Jaishankar in his meeting with the foreign minister of Brazil is expected to raise the issue of delay in talks for the expansion of India-MERCOSUR PTA next week.

India-MERCOSUR, S Jaishankar, Brazil, india brazil ties, india brazil trade agreementExternal affairs minister S Jaishankar

India is expected to ask the MERCOSUR countries to fast-track negotiations for the expansion of the India-MERCOSUR Preferential Trade Agreement (PTA).

External affairs minister S Jaishankar in his meeting with the foreign minister of Brazil is expected to raise the issue of delay in talks for the expansion of India-MERCOSUR PTA next week.

In his first engagement with the BRICS Foreign Ministers since assuming office, the minister is going on a two day visit to Brazil from July 25-26, to participate in the meeting of BRICS Foreign Ministers.

Among other issues, for the minister this is also a preparatory meeting for the 11th BRICS (Brazil, Russia, India, China, and South Africa) summit to be held in Brasilia in November.

A top senior officer requesting anonymity confirmed to Financial Express Online that there has been no progress on the expansion of India-MERCOSUR PTA.

Also read: Govt in talks with foreign lenders to boost small businesses

Countries including Brazil, Argentina, Paraguay and Uruguay (MERCOSUR) have been in talks with India for expanding the tariff lines in an effort to boost the trade volumes. This expansion of the agreement is expected to enhance trade relations between the countries involved, and to achieve a trade target of $30 billion in 2030.

Not only is the expansion in line with the government’s policy of expanding the trade basket but also efforts to expand the existing trade ties with the countries in the region.

The two sides have agreed that a significant increase in the number of tariff lines in the existing India-MERCOSUR PTA is required as that would help in covering a major portion of bilateral trade.

The delay in expansion talks has been due to differences amongst the members of the groupings, especially Brazil and Argentina.

As has been reported in 2017, a list of 484 tariff lines were handed over to Brazil which was holding the presidency of the grouping at the time. While MERCOSUR had offered the same number of lines to India and New Delhi is keen to have negotiations on Margin of Preference (MoP) on the tariff lines which are to be offered by each side.

According to Gustavo Rojas, Researcher of the Center of Analysis and Dissemination of the Paraguayan Economy (CADEP), the member countries of Mercosur share with India the condition of having a limited number of trade agreements concerning only trade in goods.

The expanded agreement must take into account that in most cases the rules of origin of trade agreements no longer respond to the reality of global value chains. And these value chains require rules that are able to regulate trade in goods, services, and investments all at the same time.

Do you know What is Cash Reserve Ratio (CRR), Finance Bill, Fiscal Policy in India, Expenditure Budget, Customs Duty? FE Knowledge Desk explains each of these and more in detail at Financial Express Explained. Also get Live BSE/NSE Stock Prices, latest NAV of Mutual Funds, Best equity funds, Top Gainers, Top Losers on Financial Express. Don’t forget to try our free Income Tax Calculator tool.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Fuel, base effect : WPI inflation hits series high, CPI at 6-month peak
2Schism in GST Council out in the open
3UN Trade Forum event: Decouple trade policy from green goals: Goyal