Pakistan has officially requested to resume negotiations with Mercosur for a free trade agreement, with discussions expected to begin in early 2019. Islamabad believes it is an opportunity to bridge the trade deficit with countries of the South American bloc.
The Pakistani request and negotiations agenda was announced by Commerce Secretary Secretary Younus Dagha and a Mercosur delegation headed by Argentine Ambassador Ivan Ivanissevich. Argentina currently holds the rotating chair of Mercosur.
The Commerce secretary pointed out that Latin America was one of the most important non-traditional markets where Pakistan’s market share was negligible despite a huge potential for exports by both traditional and non-traditional sectors.
In order to achieve greater market access to the region, the Ministry of Commerce signed a Framework Agreement on Trade with Mercosur in 2006 with a view to inking a preferential trade agreement (PTA) leading to a free trade agreement (FTA), the secretary added.
Younus Dagha said Pakistan has an annual trade of US$1 billion with Mercosur countries, adding trade with Argentina stood at US$200 million, which had the potential to rise to US$ 800 million.
The FTA would provide an opportunity to bridge the trade deficit with Mercosur countries, the secretary Pakistani emphasized and called Argentina and Brazil lucrative markets. Mercosur currently includes Argentina, Brazil, Paraguay and Uruguay.
“A FTA with Mercosur will provide Pakistan an opportunity to diversify exports of products and markets as well as enhance trade with Latin American countries in order to introduce new products in pharmaceutical, information and communications technology, auto part and light engineering sectors,” said the Commerce Secretary who underlined that the accord will also benefit the textile industry which is currently Pakistan’s biggest exporter.