Mercosur speeds up negotiations with EU

The South American bloc led by Brazil and Argentina are looking for a free trade agreement with Europe by October. Washington’s obstinacy not to dismantle agricultural protections led the pan-American deal into a standstill last week in Buenos Aires.

Shortly after negotiations on a Free Trade Area of the Americas agreement became abruptly interrupted last week in Buenos Aires, the Mercosur bloc, South America's leading trading zone led by Brazil and Argentina sped up its own deal with the European Union. Brazil’s daily O Globo, citing unnamed Foreign Ministry sources, said "the failure of the informal FTAA consultative meeting in Buenos Aires leads the Brazilian government to want to strike an accord with the EU as soon as possible."

PRAVDA.Ru found similar reactions from the Buenos Aires as, during the launching of the 2004 trading program, Foreign Ministry officials confirmed EU talks as “top priority” for this year. However, contacts with the EU are not new: Mercosur -- including core members Argentina, Brazil, Uruguay and Paraguay, and associate members Chile and Bolivia -- has been negotiating a free trade accord with the EU for four years. In November, the EU and Mercosur agreed in Brussels to wrap up free trade talks by October.

The entrance into the European Union of large commodities and raw material producers as Poland and Hungary due to May 1st , took the attention of the South American negotiators as they could see their position seriously deteriorated if cannot place their products at competitive prices. That is the main reason why Argentina and Brazil want to reduce tariffs to agricultural products on their way to EU ports as soon as possible.

On the other hand, officials in Buenos Aires announced Thursday a second postponement of a meeting that was intended to take place April 22-23 in Puebla, Mexico, to lay out the basic framework for a pan-American free trade agreement. No new date for the meeting was set.

According to Argentine sources, the failure to lay out a basic framework to resume FTAA talks was due to US obstinacy to propose a reasonable offer to dismantle the overwhelming agricultural protection programs that does not allow South American farmers to export to NAFTA countries. However, it is not clear whether or not the EU has a more generous proposal to offer, as countries like France, UK and Italy to maintain similar barriers.

Mercosur is also leading similar talks with countries like India, South Africa and China, which became one of the most important trading partners of the bloc in the last two years. Last week, it wrapped up a new agreement with Andean countries (i.e. Colombia, Venezuela and Ecuador).

Latest developments show that deals with India and South Africa are advancing at great speed, something that could encourage both Brazil and Argentina to hold serious conversations with the Russian Federation in the short term.