EU-Mercosur: project without a future. Negotiations for the EU-Mercosur association agreement for creating a vast free-trade zone are blocked. Is this a disaster or bad news? Not at all, on the contrary, it is a sign that both frankness and wisdom have finally arrived. For years, this column has asserted that as this project currently stands it is untenable, but the rhetoric and lack of political courage continued to create this make-believe. A few home truths have also become quite apparent. Firstly, Mercosur is not a real common market. Recent conflicts on automobile trade between Argentina and Brazil confirmed this and no supranational power that currently exists is able to overcome the divergences on this question between the two countries. If the free movement of goods is not even guaranteed within Mercosur itself, how could this free movement operate between Mercosur as a whole and the EU?
Free trade between the two blocks is not a realistic objective. At the very most, the EU could envisage bilateral agreements with these different countries, starting with Brazil. It could subsequently leave the relationship between the two groups to parliamentarians who are quite happy to attend solemn ceremonies that praise their fraternity, historic ties and their common objectives of democracy and freedom. This is in fact what has already happened. Inter-parliamentary meetings proliferate but are also costly. EU-Brazilian trade relations are discussed at length by the Commission and Brazilian authorities but with a certain qualification - several parliamentarians are beginning to have misgivings and are becoming particularly more vociferous about the opening up of Europe's borders to Brazilian agricultural products. The truth is that free trade negotiations are not really making any progress. Beyond the agricultural chapter, the most deep-seated disagreements focus on public procurement and a large number of other issues. This has all been discussed for a number of years but the barriers appear to be increasing. In the agricultural arena, several member states are demanding standards to cover animal welfare, the sustainability of production and other issues.
It also applies to the Asian countries… I chose the case of Mercosur, particularly Brazil, because of the historic, linguistic, cultural and racial links between Europe and South America but the situation is the same in the relationship between the EU and Asian countries, even if we momentarily leave aside the issue of the Chinese and Indian giants. The European Commission has given up on the idea of a comprehensive EU-ASEAN agreement. This would have been impracticable due to the different countries' objectives and the fact that a single negotiator on the behalf of the ASEAN community as a whole did not exist (EUROPE 10373). The commissioner for trade, Karel De Gucht, is examining bilateral agreements, which take into account the specific situation and intentions of the different Asian interlocutors, beginning with Singapore and Malaysia. Certain problems are specific to one or other of the different countries, for example, pharmaceutical products. Block negotiations would not have made sense.
New demands. Two far-reaching developments have in fact transformed the liberalisation of world trade:
1) Extending the conditions for opening up the borders. These conditions will now include more ecological requirements, effective respect for intellectual property, equal treatment for public procurement, the liberalisation of the services industry and other areas. The EU is taking a very tough line on public markets and Commissioners Karel De Gucht and Michel Barnier are preparing a mechanism, which would automatically restrict access to the EU's public markets for the countries that apply restrictions. The European Parliament is also calling for social standards on, for example, child labour.
2) Progress of the so-called emerging countries which, according to Mr De Gucht, “have to understand that, to a large extent, they have emerged” and have to give their special concessions up and accept reciprocity. These comments are just as valid for the bilateral agreements and the hypothetical relaunch of multilateral negotiations at the WTO.
Support for fair trade. What is described above proves that the EU remains loyal to the line already outlined by Mr De Gucht in March (EUROPE 10327) - compliance with a less naïve variety of free trade; reciprocity on public markets, services, investment, etc. The end of a certain European naïveté, however, should not be confused with a weakening in the EU's determination to work towards building free trade throughout the world. On the contrary, all the different requirements are oriented towards expanding international trade but on an equal footing. This column will return to this issue tomorrow. (F.R./transl.fl)