EU confident of an early Mercosur free trade deal
23 September 2010
BUENOS AIRES, Sept. 23 (UPI) — Spurred on by its recent trade deal with South Korea, the European Union is pursuing an early conclusion of talks with Latin America’s Mercosur trade bloc as part of its strategy to expand its economic prospects.
The EU is fighting for economic recovery after the shocks it received from the Greek debt crisis, the resulting pressures on the euro and draining of resources. The community is in urgent need of new markets to stimulate exports.
Last week the EU and South Korea signed a free trade agreement that is set to generate about $25 billion in export revenues for EU producers. Combined EU-South Korea trade in goods topped $70 billion in 2009.
In contrast, EU sees the potential of trading with Mercosur’s enormous market, currently estimated to have a gross domestic product of $1.7 trillion. The EU has staked about $214 billion in investments in the Mercosur region, more than in any one member of the BRIC group — Brazil, Russia, India and China.
EU faced resistance while negotiating the deal with South Korea, mainly with Italy, a direct rival to the East Asian country in the low-price car market. EU faces tougher hurdles while finalizing a Mercosur deal because of stiff opposition from farmer lobbies backed by France and other EU member countries.
EU Trade Commissioner Karel De Gucht said he now felt confident a Mercosur deal could be reached within "a reasonable time span, ideally before the next summer holidays (July 2011)."
The EU and Mercosur have been talking on and off about a free trade agreement for 15 years. EU partners resisted the deal for fear cheaper Latin American commodities and agricultural produce would hurt European farmers and producers. As Latin American economies grew EU exporters’ perception of the region changed, too, with renewed interest in Mercosur’s market potential.
Both sides see a free trade agreement as the key to speeding economic recovery and boosting growth.
Moves to resume Mercosur-EU trade talks began in May under the Spanish presidency as European and Latin American leaders gathered there for a summit conference. After the initial accord in Madrid, the first round of EU-Latin American talks took place in Buenos Aires in June but was marred by bilateral disputes over Argentine attempts to block EU exports.
The next round of EU-Mercosur talks is due to be held in Brussels in October. EU officials said they would seek tentative accords on key issues before a possible deal next year.