EU and MERCOSUR (Argentina, Brazil, Paraguay and Uruguay) negotiators will meet in Asunción from 20 February to try to lift the remaining obstacles to a political agreement before the start of general election campaigning in Brazil next month.
The negotiators will try to iron out divergences on the technical level and leave ministers to settle the trickier political issues. EU Commissioners Cecilia Malmström (Trade) and Phil Hogan (Agriculture) will travel to the Paraguayan capital when the talks have made enough progress.
Political agreement hoped for in early March. An agreement in principle could be announced in Asunción on 2 March if enough progress is made, according to a South American source.
The EU wants concessions from MERCOSUR on access to the market for European cars and car parts (in addition to rules of origin and related transition periods) and dairy products, along with the protection of European geographical indicators and access to public markets and maritime services.
MERCOSUR wants further concessions from the EU on access to the agricultural market for beef, ethanol and sugar.
In order to facilitate the reaching of an agreement, the EU proposed a recalibrated offer on sensitive farm products that made significant concessions to MERCOSUR at the end of January.
It was based on a tariff import quota from the EU for South American beef that would rise from 70,000 to 99,000 tonnes.
The EU may also improve its offer for ethanol over and above the quota of 600,000 tonnes proposed at the end of 2017 and for rice (over and above the quota of 45,000 tonnes).
For sugar, however, for which the EU is offering a quota of 120,000 tonnes at the tariff of €98 a tonne, MERCOSUR is no longer demanding higher quotas due to its lack of competitiveness due to falling sugar prices on the European market since the end of the production quotas in the autumn of 2017, but is demanding the scrapping of intraquota customs duties.
The EU farm sector refuses to be sold off. In a letter to the president of the European Commission, Jean Claude Juncker, EU farm cooperatives (Copa-Cogeca) call for EU agriculture ‘not to be sold off in EU trade talks with Mercosur, opposing the EU move to give further concessions on agriculture in return for gains in other economic sectors’.
Trade concessions must be minimised for our more sensitive sectors, namely beef, sugar, poultry, ethanol, rice and orange juice imports to the EU. We already import substantial amounts of agricultural produce from these countries and get no reciprocity from them. We need balanced trade agreements which respect our production methods.’
Hungary circumspect. ‘Hungary does not favour the free-trade agreement the EU is negotiating with MERCOSUR,’ said Hungarian Agriculture Minister Sandor Fazekas on state radio station Kossuth on Friday 16 February.
Fazekas said Hungary would not support a trade agreement that leads to dumping and the import of often lower-quality food products than found on the EU markets. he stated that producers of pork and poultry, bee-keepers, producers of sugarcane and producers of ethanol and biofuels would face greater competition from imports from South America, adding that he hoped that other countries would join Hungary.
Canada prepared to negotiate with MERCOSUR. We learned on Friday 16 February that Canada is preparing to begin negotiations, starting the day after the expected signature in Santiago on 8 March, on a new Transpacific Partnership including eleven countries from around the Pacific (without the United States). This will be a free-trade deal including the MERCOSUR countries. This process shall begin during a trip to Asunción on 9 March by Canada’s trade minister, François-Philippe Champagne. (Original version in French by Emmanuel Hagry)