Tough talks ahead on EU-Mercosur accord

Date: 30/03/2000

By Gareth Harding

TALKS between the EU and the Mercosur group of countries on a new accord begin in earnest next week, with negotiators warning of tough discussions ahead before the world's biggest free-trade area sees the light of day.

Trade Commissioner Pascal Lamy says the negotiations with the agriculture-rich Mercosur countries will be more complicated than those with Mexico, which were concluded earlier this year. "Mercosur needs to identify a number of priorities because freeing trade is not just a question of tariffs," he said after a visit to Brazil earlier this month.

With an economic output of almost €1 trillion, the South American trade bloc - which groups together Brazil, Argentina, Uruguay and Paraguay - is the world's third largest. However, the viability of the group, which also counts Bolivia and Chile as associate members, was put in doubt last year after a high-profile trade war broke out between Brazil and Argentina which has yet to be fully resolved.

Commission officials say that one of the problems in negotiating with the Mercosur group is that the customs union is "still not very well developed".

However, one thing that all Mercosur members are agreed on is the need for the EU to open up its heavily-subsidised agricultural market to the rigours of free trade. At the last ministerial meeting between the two sides in late February, Argentine Foreign Minister Adalberto Rodriguez Giavarini said: "We are not asking rich countries for charity, but rather to abide by the rules of free trade."

Officials admitted that the EU will adopt a "very defensive" line on farm produce at next week's meeting of top trade officials in Buenos Aires. The Union has already persuaded Mercosur countries to postpone talks on tariff cuts until July 2001 and stresses that there will be no deal on liberalising its farm trade until an agreement has been reached within the World Trade Organisation. However, the South American grouping fears that this could delay the signing of any free-trade accord by years, given the time it took to conclude the last round of WTO negotiations.

The two sides will aim to make rapid progress on non-tariff issues such as intellectual property, anti-dumping and rules of origin over the course of the year. They also hope to wrap up an agreement aimed at boosting political cooperation by then.

At last month's ministerial meeting in Portugal, Mercosur countries presented a draft programme for strengthening political ties which has been cautiously welcomed by EU officials. As well as promoting human rights and the peaceful resolution of conflicts, the draft action programme for political cooperation stresses the need for the two sides to work more closely together in the United Nations and other international bodies.

Talks between the EU and the Mercosur group of countries on a new accord are due to begin in earnest, with negotiators warning of tough discussions ahead before the world's biggest free-trade area sees the light of day.