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  1. Negotiations

EU-Mercosur

Late 1995, the European Union initiated negotiations on a bilateral free trade agreement with Mercosur (common market between Argentina, Brazil, Paraguay and Uruguay) as a reaction to the US’ push for a Free Trade Area of the Americas (FTAA). A political agreement was reached in June 2019 but the deal is yet to be signed.

The EU-Mercosur FTA — which could be termed an inter-regional agreement, or more accurately a bilateral agreement between two common markets — was slated to be completed in October 2004. But the two sides failed to agree on each other’s final offers. Among other things, Mercosur was not satisfied with the EU’s agricultural market access provisions while the EU complained of the lack of Mercosur proposals to open their telecommunications sector and to upgrade protection of European geographical indications. More generally, commentators blamed the failure of the talks on mutual lack of political will.

Discussions resumed in 2005 and the EU planned to reach an agreement by 2006; however, the resumption of negotiations has been put off indefinitely due to the resistance of South American countries to opening up certain markets and to the European rejection of demands to cut agricultural subsidies.

In 2010, negotiations began again, although with many ups and downs. With political changes in Latin America, the negotiations sped up, as the Mercosur countries gave up some of their “red lines” in the negotiations, allowing the EU to lower its beef and ethanol quotas. Eventually talks took place without substantial results.

Negotiations were relaunched in 2016 and they seemed to be on the verge of closing in 2017 and 2018. Talk about a “trade war”, especially between US and China, hurried parties to conclude the talks. Following the leak of draft texts (February 2018), civil society organizations from both sides of the Atlantic were critical of the deal’s impact on jobs, small and medium enterprises, access to public services (such as medicines), public-interest regulations and on the environment.

On 28 June 2019, the EU and Mercosur inked a political agreement, days after more than 340 social movements from both sides demanded the negotiations be halted on the grounds of deteriorating human rights and environmental conditions in Brazil, under new far right president Jair Bolsonaro.

Even though the final text has not been finalized yet, it is known that the agreement will open the EU market to 99,000 tons of beef and 180,000 tons of poultry produced in Latin America, which has attracted the ire of Irish and French farmers. 355 European and 220 Mercosur geographical indications of food, wine and spirit products will be protected. The deal has been criticized for benefitting agribusiness.

The latest released version of the intellectual property chapter requires parties to join either UPOV78 or UPOV91 Conventions, a set of plant variety protection patent-like rules that promote the privatization of seeds and prevent farmers from saving seeds. It doesn’t extend medicines patents beyond TRIPs (Trade-Related aspects of Intellectual Property rights) standards, unlike other modern trade deals such as the new NAFTA (North American Free Trade Agreement).

Some groups in Latin America blasted the agreement, saying that liberalizing the public procurement market will hinder domestic efforts to implement regional development policies and trade rules that include stronger environmental and social standards.

Supporters of the agreement claim it would force Brazil to replant 12 hectares of trees in the Amazon rainforest. But in August 2019, as wildfires were devastating the area, France, Ireland and Luxembourg threatened to block the agreement, unless Brazil honoured its environmental commitments.

The texts that have been released so far by:
• Uruguay (July 2019): https://www.bilaterals.org/?eu-mercosur-fta-texts-jul-2019
• the EU (July 2019): https://www.bilaterals.org/?eu-mercosur-fta-texts-eu-jul-2019
• Argentina (September 2019): https://www.bilaterals.org/?eu-mercosur-fta-texts-argentina

The leaked EU negotiating mandate (in French): https://www.bilaterals.org/?ue-mercosur-directives-de

Luciana Ghiotto (Attac Argentina) contributed to this text

last update: September 2019
Photo: Stop TTIP Italia

Ireland anticipates rejection of EU/Mercosur trade accord on beef
8-Jul-2011
The Irish government is expecting a report from the European Commission setting out the economic impact on Eire of a potential trade agreement between the EU and Mercosur.
Mercosur pushes for early EU trade pact
2-Jul-2011
Latin America’s Mercosur trade bloc is impatient for progress on free-trade talks with the European Union to lead to an early agreement, Brazilian President Dilma Rousseff said.
Exclusive: EU-Mercosur trade talks nearing stalemate
15-Jun-2011 Reuters
Talks to create a massive free trade zone between Europe and South America are in danger of falling apart, hit by the euro zone debt crisis and differences over agricultural subsidies and other core issues.
EU threatens to file lawsuit against Argentina over ’protectionism’
16-Apr-2011 Buenos Aires Herald
The European Union’s top trade negotiator, Karel de Gucht, accused Argentina of being “the great obstacle” in an association agreement between the EU and the Mercosur, and threatened to take the case before the WTO.
Developments in the EU-Mercosur Association Agreement
16-Apr-2011 CAP 2020
With EU-Mercosur FTA talks expected to conclude by July 2011, there are significant concerns being raised about the impact, not only on the EU’s agricultural sector, but also what this might mean environmentally.
HAI Europe on EU-India & EU-Mercosur trade agreements
19-Mar-2011
All eyes are on the EU-India trade agreement, and the repercussions it will have on access to medicines in India and other developing countries. At the same time, the EU is in the process of negotiating other trade agreements that could harm or hinder access to medicines, such as this week’s negotiations between the EU and the Mercosur countries.
EC tries to downplay impact for farmers of an EU/Mercosur trade agreement
9-Mar-2011 MercoPress
On Monday the European Parliament passed a highly critical report rejecting the EU/Mercosur FTA negotiations arguing that they may imply “farming concessions damaging to European agriculture”. The Commission counter-attacks.
EU keen to secure an early Mercosur deal
9-Feb-2011 UPI
EU officials visiting Latin America have given the clearest signal yet they are keen to seal a wide-ranging economic collaboration pact with Mercosur regional trade bloc.
Accord commercial avec l’UE: «une priorité» pour le Mercosur
18-Dec-2010
Les pays sud-américains du Mercosur ont déclaré vendredi que la conclusion d’un accord commercial avec l’Union européenne était une «priorité», mais n’ont pas fixé de délai, à l’issue de leur sommet à Foz de Iguaçu.
Strong support from the European Parliament to trade talks with Mercosur
22-Oct-2010 MercoPress
Members of the European Parliament expressed strong support for expanding trade with Mercosur but subject to clear “red lines” to ensure food security and prevent further environmental damage, said a resolution adopted on Thursday.