Pakistan-Mercosur Preferential Trade Agreement

A constructive outcome to this solution – although unlikely given the Argentine government`s anti-trade stance – would be to transform Mercosur into a free trade agreement rather than a customs union. A free trade agreement can maintain the current zero tariff for domestic trade, while providing members with flexibility in negotiating their own trade agreements with other countries. The United States should follow this path by actively pursuing a free trade agreement with Brazil, which would have the added benefit of diversifying its supply chains. I hope that there will be a more open and flexible bloc that will give the citizens of Argentina, Brazil, Paraguay and Uruguay hope for a more prosperous future. If Brazil, Paraguay and Uruguay decide to continue their ambitious trade negotiations and sign new free trade agreements, but Argentina does not accompany them, there will inevitably be a point on which the three countries will have to decide whether they want to break Mercosur or if they want to make it more flexible. For example, if a trade agreement is concluded with Canada, but Argentina remains outside the agreement, it would mean that Canada`s exports to Brazil would be preferential tariffs, but Canadian exports to Argentina would still face the high level of common tariff (CET) that all imports to Mercosur must pay today. The more Mercosur`s trade agreements sign that Argentina does not comply, the less meaningful the CET is. In fact, the customs union would be dismantled. To do so, either the Mercosur rules must be relaxed so that members can sign trade agreements without unanimity, or the founding treaty of Asuncion must be violated, which means the end of Mercosur. ISLAMABAD: Mercosur`s „External Relations“ group will take up Pakistan`s request to sign a free trade agreement (FTA) in early 2019, which will be an opportunity for Islamabad to close the trade gap with the countries of the Latin American trade bloc.

„The PTA with Mercosur will allow Pakistan to diversify its exports of products and markets and improve its trade with Latin American countries in order to introduce new products in the fields of pharmaceutical technologies, information and communication, auto parts and light construction,“ he said. At the end of April, Argentina announced to its Mercosur partners, Brazil, Paraguay and Uruguay, that they would withdraw from trade negotiations already concluded with the European Union and the European Free Trade Association.

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