Brussels, 24/02/2014 (Agence Europe) - In addition to moving towards an association and free-trade agreement between the EU and the Mercosur blocs, the EU and Brazil hope to increase their multi-sectorial cooperation.
As anticipated, the chapter on commercial relations between two closely-linked economies - the EU is Brazil's largest commercial partner (an outlet for 20% of the exports of the South American giant, and the source of 20% of its imports), which, in turn, is its eighth-largest commercial partner - dominated the agenda of the seventh EU-Brazil summit, in Brussels on 24 February.
The European leaders - the Presidents Herman Van Rompuy (Council) and José Manuel Barroso (Commission) - and their Brazilian guest, President Dilma Rousseff, provided clarifications over bilateral friction on tax incentives (selective tax cuts and exonerations) granted by Brasilia to national industry, a dossier which the EU recently brought before the WTO, where consultations were launched in December 2013 (see EUROPE 10988). On Monday, Rousseff spoke in support of the free zone of Manaus and the tax incentives used to give the Amazonian region alternative economic resources to the exploitation of the rainforest. The Brazilian president said that she was “astonished” by the European action against an initiative which “respects the criteria of sustainable development”, and the only aim of which is to prevent the mass exploitation of a forest which is considered to be one of the world's greatest biodiversity reserves. “The EU has no objection in principle to the free zone of Manaus. We understand the need for positive discrimination to preserve the Amazonian rainforest. But we have doubts over an instrument used”, explained Barroso, adding that he was confident that the EU and Brazil would reach a technical solution on this dossier.
Still on the trade chapter, the European and Brazilian parties on Monday reiterated their support for the negotiation process for an association agreement between the EU and Mercosur (Argentina, Brazil, Paraguay, Uruguay and Venezuela), which will include a free-trade agreement. Even better, Barroso and Rousseff gave the date - 21 March - for a technical meeting to assess the possibility of an exchange of offers on market access over the coming months. “This meeting will allow us to ensure that the conditions for exchanging offers have been met (…), and to verify the level of ambition on each side”, Barroso said. Following some ten sessions of technical discussions since the negotiations were relaunched in 2010, the exchange of offers on market access, which was initially scheduled for autumn 2013, has been interrupted by the temporary suspension of Paraguay from the South American bloc (following the parliamentary putsch in 2012), by trade tension between the EU and Argentina and by difficulties within the South American bloc on agreeing its offer. On Monday, however, Rousseff, who said she was very committed to the process, reaffirmed on a number of different occasions Brazil's eagerness to conclude a trade agreement with the EU, which would help the country compensate for the loss of trade preferences resulting from the new GSP, in force since the beginning of 2014. The Brazilian president emphasised that, “for the first time, we are ready to conclude an agreement. The moment has now come to reach it”. Barroso said that “this agreement will be strategic because it provides for an economic area between Europe and Latin America”. In addition to tariff liberalisation, this agreement will also cover non-tariff barriers, services, investment and public procurement. As a new arrival in the South American bloc, Venezuela is in its adaptation phase and is not part of the negotiations.
In addition to the trade chapter, European and Brazilian leaders asserted on Monday that they were keen to enhance cooperation between the two economies that have been linked since 2007 through a strategic partnership that already covers 30 different domains. In this context, the EU and Brazil signed a joint action plan on competitiveness and investment. The two sides also affirmed their support for the consortium project for a fibre-optic undersea cable running between Lisbon and Fortaleza. The two parties welcomed the progress made in science, technology and education cooperation (the “Science without Borders” exchange programme and Brazil's participation in the EU's Horizon 2020 programme). The two sides also welcomed the first steps taken in the dialogue on peace and international security and narcotics. They agreed to extend this dialogue to the fight against corruption, money laundering and drug trafficking.
On international issues, the EU and Brazil agreed to launch an international dialogue on cyber-security, which could be initiated during the next internet governance conference in Sao Paulo on 23-24 April. European and Brazilian leaders reaffirmed their commitment to the G20 process, as well as to the fight against climate change and support for an international climate agreement in 2015. They also reaffirmed their commitment to stability and security in Haiti, their support for the peace process in the Israeli-Palestinian conflict and peacekeeping in Syria and Africa (Sahel/West Africa, Mali, Guinea Bissau, CAR and South Sudan). (EH/transl.fl)