Mercosur Current Affairs

Union Cabinet approves Agreement between India and Uruguay for Cooperation in Customs Matters

The Union Cabinet has approved signing and ratifying an Agreement between India and Uruguay for cooperation and mutual assistance in Customs Matters.

The Agreement will help both countries in the availability of relevant information for the investigation and prevention of Customs offences.

Key Facts
  • The Agreement is also expected to facilitate trade and ensure efficient clearance of goods traded between both countries.
  • It also takes care of concerns and requirements of Indian Customs particularly in area of exchange of information on correctness of the Customs value declared, description of the goods traded between the two countries and the authenticity of certificates of origin of goods.
  • It will provide a legal framework for sharing of information and intelligence between the Customs authorities of the two countries.
  • It will also help in the proper application of Customs laws, prevention and investigation of Customs offences and the facilitation of legitimate trade.
Background

Uruguay is one of the important trading partner of India among members of the MERCOSUR, a trading block in Latin America. India has signed a Preferential Trade Agreement (PTA) with the MERCOSUR which came into effect in June, 2009.  Trade between India and Uruguay has been expanding gradually.

About Mercosur

Mercosur is a sub-regional political and economic bloc of South American countries. It calls itself the common market of the South America. At present, it is a full customs union and a trading bloc. Its full members are Argentina, Brazil, Paraguay and Uruguay. Its purpose is to promote free trade and the fluid movement of goods, people, and currency. It was established in 1991 and its headquarters are located at Montevideo (Uruguay). Its associate countries are Chile, Bolivia, Peru, Colombia, Ecuador and Suriname. Besides, New Zealand, Mexico are observer countries.

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Mercosur revokes membership of Venezuela

The South American economic bloc Mercosur has suspended Venezuela from it for violating the bloc’s democratic principles and failing to meet its basic standards.

The membership was revoked by the Foreign Ministers of the four founding members of Mercosur — Argentina, Brazil, Uruguay and Paraguay.

Why Venezuela was suspended?

Venezuela was blocked after it failed to comply with its commitments given when it had joined the group in 2012. It also failed to meet December 1, 2016 deadline to adopt certain standards and rules required for membership of the bloc. The bloc considered Venezuela as burden for the economic group due to its poor performance of the economy, colluding with the goals of the bloc. It is also suffering from broken economic system (world’s highest inflation and crumbling currency), corruption problem and is close to civil unrest. Since 2015, tensions between Venezuela and its Mercosur partners had exacerbated. Earlier in 2016, the bloc had stopped Venezuela from assuming the rotating presidency.

About Mercosur

  • Mercosur is a sub-regional bloc of South American countries. Its purpose is to promote free trade and the fluid movement of goods, people, and currency.
  • It was established in 1991 and its headquarters are located at Montevideo (Uruguay). It calls itself the common market of the South America.
  • At present, it is a full customs union and a trading bloc. Its full members are Argentina, Brazil, Paraguay and Uruguay.
  • Its associate countries are Chile, Bolivia, Peru, Colombia, Ecuador and Suriname. Besides, New Zealand, Mexico are observer countries.

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