Mexico has signed a free-trade agreement with Uruguay, its first such bilateral pact with a member of the Southern Cone Common Market (Mercosur).

The agreement, signed by the presidents of both countries at the Ibero-American Summit in Bolivia in mid-November, facilitates the removal of tariffs on 93 per cent of goods and services including footwear and woollen garments.

Bilateral trade currently stands at about US$200 million, but Uruguayan Foreign Minister Didier Opertti said the new agreement could easily double this figure.

Mercosur also comprises South American nations Argentina, Brazil and Paraguay.