Why in news?

• India and Brazil have initiated talks to expand and deepen the existing trade pact between India and the MERCOSUR group.
• The aim is to transform the current Preferential Trade Agreement (PTA) with limited coverage (only 450 tariff lines) into a more comprehensive trade agreement that covers a broader range of products and services. 

About MERCOSUR Group

• The MERCOSUR Group, also known as the Southern Common Market (Mercado Común del Sur in Spanish, Mercosul in Portuguese),
• It is a South American regional economic and political organization established by the Treaty of Asunción in 1991 and the Protocol of Ouro Preto in 1994.
• It aims to facilitate free movement of goods, services, capital, and people among its member countries to create an integrated regional market and promote economic development.
• Headquarters is located in Montevideo, Uruguay.
• Official working languages are Spanish and Portuguese.
• The group has a combined population of over 285 million and a GDP nearing $3 trillion.

Member Countries

• Full members: Argentina, Bolivia, Brazil, Paraguay, and Uruguay.
• Venezuela is a full member but has been suspended since December 1, 2016.
• Associate members include Chile, Colombia, Ecuador, Guyana, Panama, Peru, and Suriname.

Main Objectives and Structure

• The organization facilitates free trade and a customs union with a common external tariff on imports from non-member countries.
• MERCOSUR aims to become a common market similar to the European Union, enabling more integration of member economies.

Challenges and Trade Agreements

• The bloc has faced challenges such as political disagreements, uneven economic development, and reduced intra-bloc trade at times.
• It has worked on trade agreements outside the bloc, including recently clinching a trade deal with the European Union in late 2024 after long negotiations.
• Other negotiations with the US and China remain ongoing as of 2025.
• The bloc aims to protect regional industries but has also expanded trade opportunities within the region and beyond.

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