ISLAMABAD, July 11: MERCOSUR — a trading zone of South American countries has agreed to initiate a preferential trade agreement (PTA) with Pakistan. Commerce Secretary Tasneem Noorani told reporters here on Monday that the MERCOSUR members took the decision in a summit held recently.

He said the MERCOSUR chairman had now communicated their willingness to start negotiations for a PTA with Pakistan based on the decision taken during the summit.

Mr Noorani said that this would lead to a free trade agreement (FTA) between MERCOSUR and Pakistan. MERCOSUR is a trading zone of Argentina, Brazil, Paraguay and Uruguay for a bilateral trade agreement. Bolivia, Chile, Colombia, Ecuador, Peru and Venezuela have associate member status.

He said that MERCOSUR was an important grouping of South American countries representing a combined market of 210 million people with a GDP of $1 trillion and imports of over $65 billion. Pakistan’s exports to the region, however, are only $27 million.

The government’s initiative has been very successful given that MERCOSUR was already stretched in their negotiation capabilities and has declined such requests from other countries.

It was one of the outcomes of President Pervez Musharraf’s visit to Latin American countries that the MERCOSUR members have agreed to accede to Pakistan’s request for the PTA with Pakistan, Mr Noorani added.