MercoPress. South Atlantic News Agency

Mercosur takes a step towards free trade pact talks with India.

Mercosur foreign ministers have signed the draft of a negotiating protocol they hope will eventually lead to a mutually beneficial free-trade pact between the South American trade bloc and India.

Signed late Tuesday on the eve of the summit of Mercosur heads of state in the Paragauyan capital, the document calls for the creation of "clear-cut, reliable and enduring ground rules to further the development of trade and investment".

"This framework represents a milestone in relations between our two regions and we now have to establish the commitments to get negotiations underway as soon as possible on a free-trade accord," said India's Minister Commerce and Industry, Shri Satybrata.

Paraguayan Foreign Minster Jose Antonio Moreno Ruffinelli was no less enthusiastic about prospects for stepped up trade ties and a flow of Indian investment to Mercosur members Argentina, Brazil, Paraguay and Uruguay, with Bolivia and Chile as associate members.

"India is a significant point of reference for Mercosur, and not solely on account of the extraordinary growth that we have witnessed in some sectors, such as information technology and specialty chemicals," the Paraguayan foreign minister said.

The trade flow between Mercosur and India "has been extremely dynamic, with our exports rising from $468 million in 1999 to $728 million in 2001", added Moreno Ruffinelli.

At the same time, Mercosur imports from India climbed from $316 million to $700 million over that same two-year period.