Argentina and mutual respect for commitments. The dispute with Argentina which has been widely covered in our newsletter serves to demonstrate the EU's tougher attitude with regard to equal rights and responsibilities in its relations, in particular - though not only - trade relations. Europe is not looking for any unfair advantage but is demanding that other countries abide by the obligations that result from international agreements and bilateral commitments. The case in question, of course, relates particularly to the decision by Buenos Aires to expropriate Spanish oil company Repsol's Argentinean subsidiary, YPF, which has been nationalised. Foreign investments are not untouchable but nationalisation of such investments has to be negotiated.
The reaction of European Trade Commissioner Karel De Gucht was unequivocal: Argentina must negotiate a settlement with Repsol that is acceptable to both parties and, more generally, must respect its obligations on EU investments (EUROPE 10600). This course of action would certainly be in Argentina's own interest if it wants to avoid sending a very negative signal to all foreign investors. De Gucht had already criticised the whole swathe of Argentinean protectionist measures, which were manifestly in breach of WTO rules; and the European Commission, even before the Repsol case, had begun drafting a complaint to be lodged with the WTO. A dozen or so other countries, including the United States, have signed a statement criticising the measures Argentina had previously taken, which create barriers to the import of a large number of goods. The WTO will shortly consider these cases. Buenos Aires, however, continues to argue that the restrictions introduced are in line with WTO rules (EUROPE 10601).
The European Parliament also reacted robustly to the nationalisation of YPF, with the exception of a handful of far-Left MEPs who believe themselves to be generous and avant-gardist in taking up a position that is unhelpful to a member state which has done nothing wrong and which is going through a particularly difficult period.
I would point out that Brazil has given its support to the European position, indicating its willingness to provide Spain with more of its biofuel and giving assurances that Petrobras would have to think long and hard before investing in Argentina.
The fiction of the EU-Mercosur association. I lay great emphasis on this Argentinean affair for two reasons. The first is that it proves that the proposal for an EU-Mercosur association agreement does not stand up to scrutiny. It is no more than a tribute to the most spurious rhetoric, responsibility for which lies, collectively, with European parliamentarians, who feign belief (and are quite happy to go on pleasant trips), the European Commission which, for years, has been marking time in negotiations on an imaginary association, and the member states which are going along with this costly farce. Has the time not come to replace this bluff with negotiations with those South American countries, first and foremost Brazil, which want serious talks? We have had to wait for this affair for the foreign minister of an EU member state (Spain, of course) to ask whether it makes sense to continue to negotiate an association agreement with Mercosur as a bloc, calling for Brazil, and, indeed, other willing countries in the region, to be sounded out on bilateral agreements (EUROPE 10601).
In both Brussels and Paris. The second reason why the Repsol affair merits special attention is that trade relations between the EU and third countries are of political significance in the final phase of the election of president in France. A firm attitude in defence of European interests against third countries has often been cited in the current electoral campaign as an objective to be pursued. The above observations show that this is as much an issue for Brussels as Paris and that the Community institutions - in particular, the European Parliament and Commission - had no need of the French spur to take action.
(FR/transl.rt)