Por: Pontes – ICTSD
The sixth round of negotiations between the EU and the South American trade bloc Mercosur marked limited progress towards the goal of a free trade and co-operation agreement, with both sides reaffirming their commitment to the talks. Even before the latest round of discussions began, however, Brazil openly expressed frustration at the slow pace of talks and began lobbying support from fellow Mercosur members to consider strengthening other trade ties.
Advancements were made in the political dialogue and co-operation pillars of the agreement at the 4-8 July discussions, but no final texts emerged.
In the area of the agreement that pertains to trade, the two parties made “considerable progress in the regulatory texts,” according to the joint statement by the trade blocs, particularly on the subjects of dispute settlement and services-investment. Another topic addressed at the Brussels gathering was sustainable development.
Amongst the eleven working groups discussing trade arrangements between the 27-member EU and Mercosur – which is comprised of Argentina, Brazil, Paraguay, and Uruguay – agriculture and intellectual property continue to be the two most contentious issues (See Bridges Weekly, 22 June 2011).
The exchange of agriculture proposals during this sixth round of discussions had to be deferred due to EU members still awaiting an agricultural impact assessment report by the European Commission.
Once the impact assessment is released, all EU countries and the European Parliament must have time to consider the report. Given the economic recession and deepening euro crisis, the plausible impacts of inexpensive South American agricultural products entering the European market are highly sensitive issues for EU farmers.
Belgium, France, Ireland, and Poland are four of the EU nations who have exhibited reluctance in accepting any trade concessions in certain agricultural sectors. One of these sectors is beef, where Mercosur is the largest global exporter. These EU countries are demanding that all imports be in compliance with EU sanitary and environmental regulations.
Mercosur remains at odds with EU over agriculture Frustration has mounted over deadlocks on agricultural goods, primarily over EU farm subsidies and the lack of European market access for less-expensive Mercosur products. EU regulations on genetically modified (GM) organisms are also a source of contention in the agriculture talks, as Argentina and Brazil are forerunners in world production of GM crops (see Puentes Bimestral, May 2011).
Europe, on the other hand, has one of the most rigid and protective systems against GM crop cultivation and labelling in the world; just last week, the European Parliament voted in favour of a Commission proposal that would permit individual EU member governments to decide national policy on GM crops, under such grounds as environmental, land use, and socio-economic concerns (see Bridges Trade BioRes, 11 July 2011).
Brazil urges Mercosur partners to broaden horizons Before EU-Mercosur talks began, Brazilian president Dilma Rousseff tried to rev up support for a swift conclusion to the EU-Mercosur negotiations at the 41st Mercosur presidential summit on 29 June. But she also made a point of reminding her peers that South-South relations, along with strengthened commercial ties with Africa, Middle East and Asian nations, are essential to the health of Mercosur economies.
“We must always keep in mind that markets must be useful for the enrichment of our peoples,” Rousseff said while noting the overall state of the EU and US economies. “Let us be on the lookout because some outer region partners are trying to sell us those products they can’t sell in the rich countries.”
On 24 June, Mercosur and Canada came to an agreement to host exploratory discussions to strengthen their own relationship. In a statement, Canadian International Trade Minister Ed Fast said that Mercosur offered opportunities in areas such as aerospace, life sciences, infrastructure, information and communications technology, clean technology, mining, and oil and gas for Canadian companies.
ICTSD reporting. “Brazil Seeks Higher Tariffs for Mercosur Imports, Official Says,” BLOOMBERG, 30 June 2011; “Brazil calls for conclusion of EU/Mercosur trade talks and warns about cheap imports,” MERCOPRESS, 30 June 2011; “Canada to explore trade talks with Mercosur,” REUTERS, 24 June 2011; “Mercosur pushes for early EU trade pact,” UPI, 30 June 2011; “EU waiting for farm-impact assessment to advance in trade talks with Mercosur,” MERCOPRESS, 8 July 2011.