Mercosur Seeks to Restart Trade Negotiations with European Union

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Countries of the Southern Cone Common Market (MERCOSUR) have met with European Union (EU) officials to set a timeline for renewing failed negotiations for a free-trade and political-association agreement. Ministers from Argentina, Brazil, Paraguay, and Uruguay met with EU commissioners in Brussels on Sept. 2 to develop an "action plan" for an agreement that would create a common market encompassing 700 million people.

Early 2006 meeting set for "world's largest free-trade zone"

Previous efforts to create an agreement between the two trade blocs came to a standstill in late 2004 (see NotiSur, 2004-10-15), with Latin American negotiators complaining that the EU was not willing to make enough concessions on agricultural matters. Negotiations have been underway since 1999, but an agreement proved impossible before the Oct. 31, 2004, deadline that had been set. The agreement would contain chapters on political dialogue and cooperation but would above all set up a free-trade treaty.

A MERCOSUR-EU deal would come on top of a common market that MERCOSUR set up with the Comunidad de Naciones Andinas Nations (CAN), an agreement that covered about 350 million South Americans (see NotiSur, 2004-04-23). If the South American and European blocs joined, it would create the world's largest free-trade zone, allowing the movement of products virtually free of tariff barriers.

The Sept. 2 meeting brought together technical-level and ministerial representatives from the two blocs in the EU capital of Brussels to set up further meetings for later this year and early 2006, including another ministerial-level meeting at an "early date in 2006." Carlos Amorim, MERCOSUR's general director from Uruguay, which currently holds the rotating presidency of the bloc, says that "it is a little bit early" to set a time limit for the conclusion of the process.

The meeting brought together Argentine Economy Minister Roberto Lavagna; the foreign relations ministers of Paraguay and Brazil, Leyla Rachid and Celso Amorim, respectively; and Brazilian Minister of Development, Industry and Foreign Commerce Luiz Fernando Furlan. On the European side, Trade Commissioner Peter Mandelson, Agriculture Commissioner Mariann Fischer Boel, and Foreign Relations Commissioner Benita Ferrero-Waldner were in attendance.

"After a period of 'impasse' in our negotiations, the fact that this meeting may take place is in itself a very significant step," said Ferrero-Waldner in a release.

"MERCOSUR is one of the biggest trade partners of the EU," said Mandelson. "I hope to use this meeting to reinforce our common objective of reaching an ambitious and broad agreement to create the world's largest free-trade zone."

Fisher Boel hoped that the two parties would be able to keep up "useful conversations" on the agricultural section of the agreement. "In these negotiations, agriculture is an issue of greatest importance for both sides and I hope to have fruitful discussions" on the issue, she said. …