The Cabinet has allowed Commerce Ministry to initiate negotiations for Preferential Trade Agreement (PTA) with Mercosur, a common market of the Southern Cone of the Americas, which has declined such requests from other countries, official sources told Business Recorder.
They said that during President Musharraf's visit to Latin American countries, one of the initiatives taken was to float the idea of negotiations with Mercosur for bilateral PTA. Subsequently, Minister for State for Commerce, along with Secretary Commerce, visited Paraguay on April 19 and met with the Vice Minister of Foreign Affairs and officials of Paraguayan trade ministry as a follow-up of President's visit, and reiterated their earlier proposal for Mercosur to enter into a trade agreement with Pakistan.
According to sources, Mercosur members deliberated Pakistan's proposal in their recently held summit, after which the Chairman of the organisation communicated willingness to start negotiations for a PTA with Pakistan, based on the decision taken during the summit.
"We are in ready to initiate dialogue with the aim to negotiate a PTA in conformity with the rules and disciplines of the World Trade Organisation (WTO)," said, Ruben Raminez Lezcano, Brazilian Foreign Minister, in a letter to Pakistan's Embassy in Brazil, a copy of which was made available to this scribe.
Sources said that Commerce Ministry recently took the proposal to the Cabinet which approved the proposal, allowing the ministry to initiate negotiations.
Mercosur is a free trade zone comprising Argentina, Brazil, Paraguay and Uruguay put in place on December 31, 1994, and known as 'the common market of the southern cone'. Bolivia, Chile, Colombia, Ecuador, Peru and Venezuela have associate members status.Mercosur is a market of 200 million people, one trillion dollars GDP and 150 billion dollars trade. The members of the organisation maintain common external tariff and common trade policy in relations to 'third' States or groups of States. It is the fourth largest integrated market after EU, Nafta and Asean.
The organisation has recently concluded a PTA with India and is currently negotiating FTA/PTA with Mexico, Caribbean community, Central American, Free Trade Area (Cafta), South Korea, Canada, South African Customs Union (Sacu) and European Union (EU).
Sources said that Pakistan's current trade volume with Mercosur countries is modest but there is enormous potential to increase exports to the region provided Pakistan's products are granted preferential market access.
Pakistan's exports to Mercosur region during 2003 amounted to $31.7 million while Mercosur global imports were $65.7 billion.