WT/COMTD/RTA/6/2  
 
8 March 2016  
(16-1357)  Page: 1/4  
Committee on Trade and Development 
Dedicated Session on Re gional Trade Agreements  Original: English/Spanish  
 
 PREFERENTIAL TRADE AGREEMENT BETWEEN MERCOSUR AND INDIA  
(GOODS) 
QUESTIONS AND REPLIES 
 The following communication, dated 3 March 2016,  is being circulated at the request of the 
Parties to the Preferential Trade Agreement (PTA) between MERCOSUR  (Argentina, Brazil, 
Paraguay and Uruguay) and India.   The document reproduces the questions a ddressed to the Parties and the responses 
submitted. 
  
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Questions from the delegation of Ecuador 
 
Question 1 
 
Paragraph 4.3 (Accession and Withdrawal) st ates that there is no provision for 
accession by third parties to the Agreement.  
Has consideration been given to the possib ility of Venezuela, as  a MERCOSUR member, 
acceding to the Agreement? What would be the procedure to follow?  
The signatories Parties to India-MERCOSUR PTA ar e Brazil, Argentina, Paraguay and Uruguay, and 
India as per Article 1 of Chapter 1 of the Agreem ent. Venezuela is a member of MERCOSUR but is 
not a signatory Party of this Agreement. So far it has not expressed any interest to join the PTA. In case, Venezuela evinces any interest in joining the PTA, the conditions of accession shall be 
subject to the understanding between India and MERCOSUR members who are Parties to the 
Agreement.  
The procedure would be, first of all discussing the issue in the Joint Administrative Committee of 
the Agreement which is responsible for the administration of this Agreement (as contained in Chapter XII: Administration of the Agreement). This Committee is composed of the MERCOSUR 
Common Market Group or their representatives and the Secretary of Commerce of the Republic of 
India or his representatives.  As mentioned in paragraph 4.3 of the Factual Pr esentation, the Agreement MERCOSUR-India does 
not include accession clauses of third Party. Ther efore, the conditions of accession should be 
subject to the Agreement of India as counterparty.  As this is a fixed preference Agreement with 
limited coverage in terms of products, it is expected that a new member of MERCOSUR who wish 
to join the Agreement of this block with India,  respects the terms of the Agreement entirely. 
 Question 2 
 Paragraph 3.13 (MERCOSUR's liberalization schedu le) states that "[c]hart 3.2 illustrates 
the average tariff reduction, and the equivale nt MOP, by HS Section and by MERCOSUR 
member country (…). Overall, the highest MOP is provided by Brazil, followed by WT/COMTD/RTA/6/2 
 
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  Argentina, Uruguay and Paraguay, with the average effective MOP varying from 0.64% 
to 0.48%."  Could you please explain to us how the di fferent MOPs between the MERCOSUR member 
countries were determined if the Ag reement was negotiated as a bloc? 
 The Agreement was negotiated effectively in block and preferential margins that MERCOSUR 
granted to India in the PTA make up a single list (preferential margins of 10%, 20% or 100% of 
the MFN rate applied to 452 tariff lines).  The indicator "margin of preference equivalent" is the difference between the preferential tariff and 
the MFN tariff applied by each country and is built  based on preference margins established in the 
Agreement (single list), the MFN applied by each  country and national tariff lines of each 
MERCOSUR member corresponding to 452 tariff codes MERCOSUR Common Nomenclature (MCN). 
 
The variation in these preferential margins by count ry is associated with the MFN tariffs applied by 
different countries members of MERCOSUR in 2009 and to the difference in the number of tariff 
lines in the national nomenclatures associated with the 452 MCN codes (8 digits of SA). 
 Paragraph 3.6 of the report provides information on this point. 
 
It should be considered that the Common External Tariff (CET) is not the same for all positions to 
the tariff applied by countries members of MERCOS UR since there are exceptions to the CET on 
some products.  
Question 3 
 
According to paragraph 4.11, (Relationship with other agreements concluded by the 
Parties), "Article 8 provides that, in case of the conclusion of preferential agreements by 
the Parties with third parties, the other Party shall upon request afford adequate 
opportunity for consultation on any additi onal benefits granted therein; as of 
August 2015, no consultations were requested." 
 
What is the purpose of the consultations on additional benefits granted in agreements 
with third parties? Has there been any thou ght of harmonizing the additional benefits 
from other agreements for the benefit of the Preferential Agreement MERCOSUR – 
India?  
Both paragraph 3.4 and paragraph 4.11 mentions about Article 8 of the PTA which provides that if 
a Contracting Party concludes a preferential Agreement with a non-Party, it shall upon request from the other Contracting Party, afford adequate opportunity for consultations on any additional benefits as granted therein. The PTA does not pr ovide an MFN clause regarding the preferential 
treatment granted in other agreements signed by the members of PTA MERCOSUR-India due to 
which there is no real obligation of any of thes e Parties to extend to each other the preferences 
granted to third countries.  
 
Question 4 
 
Regarding Table 4.1 – India and MERCOSUR: Pa rticipation in other RTAs (notified and 
non-notified in force), as of 18 August 2015:  Why is the Economic Complementarity Agre ement between the Andean Community and 
MERCOSUR not included in the mentioned table? 
 In Table 4.1 is included the Economic Complementation Agreement CAN-MERCOSUR appearing as 
Economic Complementation Agreement No. 59. In addition, also in the table is the Economic 
Complementation Agreement No. 58 MERCOSUR-Peru. WT/COMTD/RTA/6/2 
 
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  Questions from the delegation of the United States1 
 
Question 1 
 
Paragraph 2.2 on page 5 of the Factual Pres entation notes that Venezuela, which later 
acceded to MERCOSUR, is not party to the Agreement. Does Venezuela plan to become a party to the Agreement? Are there plans in th e future to expand the Agreement to other 
MERCOSUR to the associate member countries  including Bolivia, Chile, Peru, Colombia, 
Ecuador and Suriname?  No response provided by the Parties. 
 
Question 2 
 
Paragraph 3.1 on page 6 of the Factual Presen tation states that "Preferential treatment 
under the Agreement is granted through margins of preference (MOP) on applied customs duties". How do the Parties approa ch the variety of taxes and custom fees 
imposed on imports by India such as landin g charge, countervailing duty, CEX, and CESS 
that are excluded from the Agreement bu t can be manipulated to marginalize any 
preferential/liberalization gains from the Agreement?  
No response provided by the Parties. 
 Question 3 
 Paragraph 3.1 on page 6 of the Factual Presen tation notes only very limited concessions 
on market access, 452 lines (at HS-8 digits) in the case of MERCOSUR and 450 lines in 
the case of India, and limited number agricu ltural products are included in this 
Agreement. What is the volume and value of  two way trade in agricultural products 
between the Parties? What's the percentage of agricultural products in the bilateral 
trade between the two Parties? How do the Part ies anticipate that the agricultural trade 
will be liberalized in the future? 
 No response provided by the Parties. 
 
Question 4 
 
Section 3.4 on page 14 of the Factual Presen tation states that the Parties agreed to 
cooperate in the areas of animal health and plant protection, food safety, mutual 
precognition of SPS measures. It also note s cooperation in the area of standards, 
technical regulations and conformity asse ssment procedures and that the Parties 
endeavor to conclude mutual equivalence ag reements. When do the Parties anticipate 
completing agreements in each of these areas?  
No response provided by the Parties. 
 Question 5 
 Paragraph 3.5, page 6 of the Factual Presenta tion states that 3,111 HS 8-digit lines for 
India and 1,287 HS 8-digit lines for ME RCOSUR are under review for further 
liberalization. Which HS lines or product categories are under review? When do the 
Parties anticipate completing the next round of liberalization?  
 No response provided by the Parties. 
 
                                               
1 Questions were submitted to the Parties on 17 February 2016, 5 weeks before the meeting.  WT/COMTD/RTA/6/2 
 
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  Question 6 
 
Table 4.1 on pages 19 and 20 list over 30 RTAs  that have not been notified to the WTO, 
as required under WTO rules. When do th e Parties plan to notify each of these 
agreements so that the required transp arency process on them can begin? 
 No response provided by the Parties. 
 
Question 7 
 Paragraph 28 of the Nairobi Ministerial Declarations states that: 
 
We reaffirm the need to ensure that  Regional Trade Agreements (RTAs) 
remain complementary to, not a substi tute for, the multilateral trading 
system. In this regard, we instru ct the Committee on Regional Trade 
Agreements (CRTA) to discuss the syst emic implications of RTAs for the 
multilateral trading system and their relationship with WTO rules. With a 
view to enhancing transparency in, and understanding of, RTAs and their 
effects, we agree to work towards the transformation of the current 
provisional Transparency  Mechanism into a permanent mechanism in 
accordance with the General Council Decision of 14 December 2006, without 
prejudice to questions related to notification requirements. 
Given that this language was proposed in Na irobi by Brazil, could Brazil please explain 
how WTO Members will be in a position to "dis cuss the systemic implications of RTAs for 
the multilateral trading system and their relati onship with WTO rules" when such a large 
number of Mercosur’s RTAs have not been no tified to the WTO, and thus WTO Members 
are unable to evaluate the contribution of  these non-notified RTAs to the system? 
 
No response provided by the Parties.  Question 8 
 According to Table A1.4 on page 26, und er the Agreement MERCOSUR received no 
preferential treatment for their 25 top expo rts and India only gained preferential 
treatment on a few lines. What is the overarching goal, in te rms of economic benefit, if 
the products with the greatest competitive ad vantage from either party is excluded from 
the Agreement and, thus, liberalization?    
 
No response provided by the Parties.   
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