As an influential member of the Southern African Customs Union (Sacu), SA will, together with India, begin preliminary negotiations this year with South America’s biggest regional trading bloc, Mercosur.

Brazil, Argentina, Paraguay and Uruguay make up the full membership of Mercosur. Other South American countries, such as Bolivia, Chile, Colombia, Ecuador and Peru, have been granted associate membership. Oil-rich Venezuela has signaled its intention to become a full member.

Speaking at the opening of the India Show yesterday, Mr Davies said the balance of economic forces favours developing countries and this development is the major factor that has influenced Sacu’s decision to pursue this agreement.