During a recent meeting with the President of Paraguay, the Prime Minister of India expressed that both nations could collaborate to further strengthen and broaden the existing Preferential Trade Agreement (PTA) with MERCOSUR, the South American trade bloc.
Overview of MERCOSUR
The Southern Common Market, commonly known by its Spanish acronym MERCOSUR, is a regional economic group in South America established in 1991 through the Treaty of Asunción.
Purpose:
The organization aims to promote the free movement of goods, services, capital, and people among member countries.
Member States:
The founding members include Argentina, Brazil, Paraguay, and Uruguay. Bolivia and Venezuela joined later, although Venezuela’s membership has been suspended since December 1, 2016.
Additionally, Chile, Colombia, Ecuador, Guyana, Peru, and Suriname hold associate member status.
Headquarters:
Located in Montevideo, Uruguay.
Languages:
Spanish and Portuguese serve as the official languages of the bloc.
Governance Structure:
The Common Market Council is MERCOSUR’s top decision-making authority, comprising foreign and economic ministers from each member state. The Council operates on a consensus-based model, and its presidency rotates among full members every six months.
Significance:
MERCOSUR is considered the world’s fourth-largest economic bloc after the European Union (EU), North American Free Trade Agreement (NAFTA), and the Association of Southeast Asian Nations (ASEAN).
India’s Engagement:
India and MERCOSUR entered into a Preferential Trade Agreement in 2004, aimed at enhancing trade relations through reduced tariffs on select products.