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The European Union and the Mercosur bloc of South American countries will re-open stalled negotiations toward a free trade agreement, officials said last week. The two sides hope to conclude the talks before the end of the year.
“Negotiations such as these are challenging but the moment is right to take a fresh look at the state of discussions so far,” EU Trade Commissioner Karel De Gucht said in a statement.
Talks toward a trade deal between the EU and the four Mercosur countries - Argentina, Brazil, Paraguay and Uruguay - were launched in 1999 but hit an impasse in 2004, when negotiators clashed over liberalising trade in agriculture.
Re-launching the talks with Mercosur is a priority for Spain, which holds the EU’s rotating presidency until the end of June.
EU officials say that a deal could boost European exports to the four Mercosur countries by roughly €4.5 billion each year. The European Commission also noted in a statement that the South American bloc “has not yet concluded any free trade agreements with any major competitor of the EU.”
The European Union - the South American bloc’s biggest trading partner and largest investor - accounts for just over one fifth of all of Mercosur’s international trade. Trade between the two regional groupings totalled US$ 84 billion last year alone.
In addition to trade in goods, the proposed deal would also cover services, investment, government procurement and sustainable development.
The negotiations could hit a few bumps as negotiators turn their attention to liberalising trade in agriculture - the subject on which the talks broke down six years ago.
Copa-Cogeca, a major European farmers’ association, warned last week that a trade deal with Mercosur “would lead to a substantial contraction in the EU agriculture sector, threatening 28 million jobs.” The group also argued that producers in Mercosur countries “do not have to comply with the same high food safety, animal welfare, and environmental standards that EU farmers do.”
“We will address any adverse impact on certain sectors with specific measures, in particular in agriculture,” European Commission President José Manuel Barroso said in a statement.
The talks will be officially re-launched at an EU-Mercosur summit in Madrid on Monday. That meeting will also witness the signing of a trade deal between the EU and Colombia and Peru. Negotiations toward that agreement were finalised in March.
ICTSD reporting.
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