MercoPress. South Atlantic News Agency

Mercosur/India sign tariff reductions.

Next December Mercosur and India will be signing a first tariff reduction agreement extensive to 900 products which will open the way to further advance in expanding bilateral trade.

The 900 products agreement, after almost eleven months of negotiations was reached last week in Rio do Janeiro. India will be reducing tariffs between 10 and 100% for 450 Mercosur products that are currently exported to the twelfth world economy including wool, hides, fruit, refined petroleum and light industry, totalling almost 300 million US dollars.

Mercosur excluded from the agreement textiles, chemicals, pharmaceuticals, auto parts and tyres, and Delhi most agriculture commodities to protect the vast majority of Indian peasants and small farmers.

India will have a fluid access to Mercosur with certain chemicals and pharmaceuticals not produced in the area, tools, pumps, compressors, textile machinery, electric apparel, telephone equipment, scanners and carburettors among others.

Actually India and Mercosur last January agreed that out of a list of 8,000 products the minimum target was 1,200, but this was finally reduced to 900.

"We're opening in those areas which do not affect our production lines. It's not a free trade agreement, rather a gradual reduction of tariffs 10,20,50 or 100%", said Eduardo Sigal, Argentine Economic Integration Secretary.

Mercosur' basic common tariff is 12,5% and India's 20%.

However Brazilian Development Secretary Marcio Fortes said the Mercosur proposal was too limited and demanded an improvement "so as to have a reciprocal greater access to the Indian economy".

Uruguay also is holding back until a proper definition of "origin norms" is clearly defined, that is the norms which determine if a product with different imported components can be described, or not, as "local industry".

This apparently will be sorted out between Mercosur and Indian negotiators in Belo Horizonte next December 14/15, before the block's presidential summit.