Índia-Mercosul: Perspectivas de um Acordo de Preferências Comerciais

In 2004, India and the Mercosur signed a preferential-trade agreement, aiming atforming a future free-trade area. In March 2005, the new partners exchanged listscontaining about 250 products for which the tariffs should be reduced. The highlevel of the import tariffs, the small participation of the bilateral trade in the total andthe comparative advantage indicators point to the possibility of a substantial increasein the trade flows between the two partners.This study shows that the offers made include a large number of products withno comparative advantage on the part of the other partner and that the reductionsproposed in tariff rates are insignificant. Thus, it?s not expected any major impact onthe bilateral trade. Therefore, it is necessary that the new offers incorporatecompetitive products and higher margins of preferences.So far, the India-Mercosur trade negotiations, as well as other "South-South"initiatives, have not revealed themselves easier than the "North-South" ones. Inparticular, the increase in the "South-South" preferential trade can imply high costsof adjustment in intensive labor sectors due to the similarity of the comparativeadvantages of both parts.