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Mercosur, EU may set aside agriculture to reach trade deal

EFE | 17 February 2010

Mercosur, EU May Set Aside Agriculture to Reach Trade Deal

By Maria Luisa Gonzalez

MADRID – Brazil’s foreign minister suggested Tuesday that the thorniest subject in Mercosur’s negotiations with the European Union to reach an association agreement – agriculture – might be left aside for the moment until the general outlines of a pact are concluded.

Celso Amorim said in an interview with Efe that he is convinced it will be possible to sign a basic accord in mid-May when the countries of the EU and Latin America have a summit meeting in Madrid.

To be able to make progress and finalize the pact, given that the Doha round of international trade talks has hit a stone wall, Amorim mentioned the possibility of putting aside the subject of agriculture for the moment, since “the central problem of eliminating agricultural subsidies can only be resolved with a global plan” within the framework of the World Trade Organization.

But to take that approach it would be essential to “avoid (EU) subsidies attacking our markets directly,” he said.

Mercosur’s agricultural powerhouses, Brazil and Argentina, are firmly aligned with other developing nations in demanding an end to the lavish government subsidies received by farmers in the EU and the United States.

Amorim said that changes occurring around the world in recent years indicate that negotiating an association agreement between the EU and Mercosur – whose other members are Uruguay, Paraguay and Venezuela – should be undertaken with a more flexible attitude.

An accord is possible, he said, “as long as we have the perception that the world has changed, and perhaps the dogmatic manner with which these agreements were handled previously has to change accordingly, and that applies to both sides.”

Brazil and the Mercosur countries want advantages, above all in agriculture, “but one has to have a notion of possible limits,” nor can the other party think “that in the area of industry, everything that the EU wants it will get,” he said.

Because “all that was true before, but now with the economic crisis and the paralysis of the Doha round, the advantages that can be obtained may not be 100 percent of what one wants, but the 80 percent or 70 percent that can be obtained is more valuable today than it was three or four years ago,” he said.

After conceding that the framework agreement that could be reached in May might not have “all the details,” he said that it will in any case be “more than just the willingness to reach an accord.”

“I believe that it could have the basis of an accord and even some numbers, some indications, perhaps some technical element to wrap up before the end of the year,” he said, though he added that perhaps it would not get into technical matters like, for example, what access to European markets Brazilian beef will have, but “the general outlines can be defined.”

He reached this conclusion because now there is “a more flexible outlook on both sides.”

The foreign minister said he detected the “political will” to reach an agreement when he met Monday in Madrid with Spanish Prime Minister Jose Luis Rodriguez Zapatero and the EU’s top foreign policy official, Catherine Ashton.

He also mentioned the support of Brazilian President Luiz Inacio Lula da Silva and leaders of other Mercosur countries.

During the first half of this year, Spain holds the rotating EU presidency, while Argentina is in the same position with Mercosur, a circumstance considered favorable for promoting the pact that both blocs have been negotiating for 10 years.

The negotiations reached an impasse in 2006.

 source: EFE