Bridges Weekly Trade News Digest • Volume 9 • Number 5 • 16th February 2005
Mercosur ‘4+1′ Proposal Meets Cool Response In US, Canada
Attempts by the members of South America’s largest trade bloc to individually engage the US and Canada in separate market access negotiations met with a lukewarm response in both Washington and Ottawa earlier this month. Both North American countries told representatives from the Common Market of the South (MERCOSUR, comprised of Argentina, Brazil, Paraguay, and Uruguay) that their preferred forum for pursuing hemispheric trade liberalisation was the Free Trade Area of the Americas (FTAA). However, Canada appeared more open than the US to the possibility of signing some sort of separate commercial agreement with MERCOSUR.
Elsewhere, the EU and MERCOSUR agreed to accelerate their free trade agreement (FTA) talks, with an aim to conclude negotiations by the end of the year.
US uninterested in FTAs without IPRs, investment; will promote FTAA
Brazilian trade officials met with Deputy US Trade Representative Peter Allgeier at a conference in Washington earlier this month to discuss trade between the two countries. Allgeier said that Brasilia’s proposed "4+1" initiative, which would have the MERCOSUR bloc negotiate reciprocal market-opening directly with the US, "is something which does not interest the US." He described "intellectual property, transparency and legal protection for investments" as "essential to any negotiation," and said that instead of pursuing a restricted market access accord, the US would try to rekindle the stalled FTAA process.
Canada: FTAA priority, but willing to explore other possibilities
Canada was less categorical in its views on the 4+1 initiative. During their 9 February meeting in Ottawa, Canadian International Trade Minister Jim Peterson told Paraguayan Foreign Affairs Minister and acting MERCOSUR chair Leila Rachid that negotiating with MERCOSUR alone was not something that the Canadian government had considered, since it had continued to focus on the FTAA.
However, Canada and the MERCOSUR countries did agrees to start a process of consultations to evaluate the possibilities of negotiating a trade agreement in the future, although the scope and the extent of the agreement would still have to be agreed. Both parties agreed to meet in April in Asuncion, Paraguay where they will try to assess whether or not it is feasible to start negotiations. Gustavo Vanerio, a Uruguayan foreign ministry official working on MERCOSUR issues, wrote in the Montevideo daily El Pais that Canada insisted that any 4+1 negotiation would have to be compatible with the FTAA. He also wrote that MERCOSUR-Canada discussions would likely focus on market access for agricultural as well as industrial goods, services, and investment. The latter two are of greater interest for Canada.
EU, MERCOSUR agree to accelerate FTA talks
Brazilian President Lula da Silva met with European Commission President José Manuel Durao Barroso during the World Economic Forum in Davos at the end of January. They agreed to accelerate current negotiations of the EU-MERCOSUR FTA with a view to concluding the talks by the end of 2005.
Negotiations for the FTA began in 1998. The EU’s most recent proposal, in September 2004, included a gradual liberalisation of MERCOSUR’s exports of industrial and agricultural goods to the EU, opening of the EU’s services market, access to the EU government procurement market and non-discrimination for MERCOSUR’s investments in Europe.
Sources in the Brazilian delegation indicate that negotiators from the two parties are expected to meet on 4 March, and a ministerial-level meeting is likely to take place at the beginning of April.
Adpated from PUENTES QUINCENAL, el 16 de febrero 2005; "US reject 4+1 agreement with Mercosur," MERCOPRESS, 9 February 2005.