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EU, Mercosur countries work to speed up trade talks

Feed lot in Brazil

ICTSD | 23 March 2017

EU, Mercosur countries work to speed up trade talks

Talks on a potential trade deal between the EU and Mercosur have reportedly been gaining renewed traction, with diplomats from both trading partners affirming their commitment to bringing the long-running negotiations closer to a successful conclusion.

Efforts to reach a region-to-region trade pact between the EU and Mercosur, the South American economic bloc comprising Argentina, Uruguay, Paraguay, and Brazil, have had a long history.

While talks kicked off in 1999, they have faltered, stalled, or been re-started on numerous occasions in the many years since, particularly due to disagreements on topics such as agricultural market access.

The talks were most recently re-launched in 2010, but were again put on hold two years later. (See Bridges Weekly, 19 May 2010)

The negotiations began to pick up again last year, with the exchange of market access offers last May and a negotiating round in October. (See Bridges Weekly, 9 February 2017)

While Venezuela is also a member of Mercosur, it is a relatively recent addition to the group and is not part of the trade talks with the European Union. It is, however, an observer to the talks.

The planned trade deal would cover topics such as goods and services market access, public procurement, intellectual property, sustainable development issues, and food safety, among others.

Buenos Aires meeting, global context

A fresh round of talks between parties is taking place this week in Buenos Aires, Argentina. Foreign ministers from the four Mercosur countries involved in the EU trade talks met ahead of this week’s discussions and reportedly reached a common negotiating position from which to negotiate.

Officials have credited current events in other major trading partners, including the United States, as providing an additional impetus for concluding a pact between the blocs in the near term.

Speaking to the Reuters news agency, Brazilian Foreign Minister Aloysio Nunes said that developments such as “the US withdrawal from agreements like the Trans-Pacific Partnership” have provided further fuel for advancing the negotiations.

“We will sign a wide political accord this year and later negotiate more delicate issues," the Brazilian official added, suggesting that both sides are now ready to make some of the crucial decisions to help bring the talks closer to the finish line.

The window for advancing a Mercosur-EU trade deal has similarly been cited by Argentina’s foreign minister, Susana Malcorra, as “one of those opportunities that cannot be lost,” according to comments reported by EurActiv and echoed by fellow Mercosur officials.

Malcorra asserted that a “well-defined strategy” was necessary before engaging with EU negotiators in this next phase.

While the recent news in Brazil of a contaminated meat problem in various domestic companies raised questions among some trade watchers over whether these might affect the talks, EU officials have said that they are confident the negotiations will proceed smoothly and note the planned food safety measures that would be included in a future accord.

In the interim, those companies implicated in the contaminated meat situation will not be able to export to the 28-nation bloc.

The EU made up nearly one-fifth of the Mercosur bloc’s total trade in 2015. Bilateral merchandise trade has steadily increased over the past decade, according to the European Commission, with the South American group primarily exporting agricultural, mineral, wood, paper, and machinery products to the EU.

Meanwhile, the European Union’s top sales to those four countries include goods ranging from machinery to medicines.

Both sides have also been looking to deepen trade and economic ties with various other partners, including another South American group known as the Pacific Alliance, which is made up of Chile, Colombia, Mexico, and Peru.

ICTSD reporting; “Mercosur trade bloc agrees common position ahead of EU talks,” EURACTIV, 10 March 2017; “Brazil meat scandal: Temer tries to reassure partners,” BBC, 19 March 2017;“EU to block any firms involved in Brazil meat scandal,” REUTERS, 20 March 2017; “Fresh impetus for Europe-S America trade pact,” FINANCIAL TIMES, 19 March 2017; “France’s Hollande says EU to talk trade with Pacific Alliance,” REUTERS, 23 January 2017; “Macri and Bachelet agree on a Mercosur-Pacific Alliance meeting in first half of 2017,” MERCOPRESS, 20 December 2016.

 source: ICTSD