Brussels, 05/05/2010 (Agence Europe) - At the end of a debate at the Commission on Tuesday 4 May, and despite reservations expressed by certain commissioners - Dacian Cioloº (agriculture), Michel Barnier (internal market) and Maire Geoghegan-Quinn (research), the president of the European Commission, José Manuel Barroso said that he was in favour of relaunching negotiations for a free trade agreement between the EU and Mercosur (Argentina, Brazil, Paraguay, Uruguay, in addition to Venezuela, which is currently in the accession process). These negotiations were launched in 1995 but have been suspended since 2004. The relaunch of the negotiations has been something that both the South American countries involved and the Spanish Presidency have sought, and it will be made official at the EU/Mercosur summit. The summit takes place the day after the EU/Latin America and Caribbean summit on 18 May in Madrid. There is concern about this development for two reasons: on the one hand, because the agricultural sector will carry the burden for the advantages obtained by the European economy with an agreement; on the other hand, because bilateral talks will have an impact on WTO Doha negotiations. These risks have been taken into account by the Commission, which is erring on the side of caution. In a press release, Barroso provided assurances that “through its decision to relaunch these negotiations, the EU has seized a significant opportunity … an agreement can provide real opportunities in terms of growth and jobs for both parties … this decision should be subject to certain conditions, ranging from sustainability to intellectual property and geographical indications. We will respond to any damaging impact on the different sectors, agriculture in particular, by introducing specific measures”. Karel De Gucht, the commissioner for trade, stated that “any agreement must be ambitious and lead to increased Mercosur market access for EU companies, particularly in agriculture. If these negotiations are to be successful, it is essential that the EU's key demands are taken into account”.
The Commission resumed informal contact with Mercosur a year ago in an effort to evaluate what the South Americans really wanted, who had appealed for negotiations to be relaunched for an ambitious and balanced free-trade agreement with the EU at the Lima conference in 2008. During these discussions, Mercosur displayed a willingness to open up in areas considered important by the EU: trade in goods, public procurement and services (the EU 27 would obtain substantial benefits from such an agreement). Trade in goods alone would help increase EU exports to Mercosur, worth several billion euros a year. In comparison, a WTO agreement would lead to a gradual increase in these exports of only €800 million because the degree of liberalisation would be much less (obviously, the overall benefits of the Doha Round for the EU would be higher due to the fact of the concessions granted by around 35 key partners, including China). If an agreement is to be included, the EU will undoubtedly have to make an ambitious offer in agriculture, the main area in which the South American bloc would like to launch an offensive. Mercosur has already warned that its demands in this sector are as ambitious as those previously made for agriculture.
In a letter to the Commission, EU agricultural organisations, Copa-Cogeca, voiced their opposition to a relaunch of negotiations, which they claim would lead to a very high increase of imports into the Community of bovine meat, pork, poultry, wheat, citrus juices and fruit and a significant erosion in the EU agricultural sector, which would jeopardise 28 million jobs. Copa-Cogeca also accuses Mercosur products of not conforming to the same high standards as those of EU producers in the field of food safety, animal welfare and the environment.
In a letter addressed to the College of Commissioners, Cioloº and De Gucht warned that an agreement with Mercosur could have a severe impact on EU agriculture, given the export potential of South American countries. This impact could prove more critical in certain sectors such as meat and would have no benefits for European agro-foods or for the EU in areas where it is at an advantage, such as wine and spirits, olive oil, meat, certain milk products, fruit and processed vegetables.
The EU's agricultural trade deficit with Mercosur reached €21 billion in 2008. (E.H./transl.fl)