The progress report after the 23rd round of talks in Montevideo from 4 to 8 June, published by the European Commission on Friday 22 June, sums up by saying that, in addition to tricky haggling over the agricultural and industrial market, talks on the trade chapter of the association agreement between the EU and Mercosur (Argentina, Brazil, Paraguay and Uruguay) are stumbling over three key issues: - geographical indications (GI), maritime services and public procurement.
On the subject of intellectual property, parties focused on outstanding matters in sections relating to objectives and principles, biodiversity, the transfer of technology, as well as copyright and enforcement measures. However, on geographical indications “considerable work remains to be done” to find solutions relating to products that the EU wants to protect on the South-American market, the Commission points out.
Regarding services and establishment, the parties settled the chapter on telecommunications and found a compromise on the remaining provisions for interconnection and roaming but there was no discussion on maritime transport, “a key question for the EU”, the Commission deplores.
As far as public procurement is concerned, the parties tackled unresolved issues regarding market access, such as the prohibition of offsets in procurement procedure and requests by Mercosur for special and differential treatment. Progress was made on exceptions and reservations to the agreement and on Mercosur’s request to apply offsets. However, convergence is still necessary on such matters. The parties clarified their requests for further improvements of market access offers.
On the subject of market access for goods, discussions mainly covered the tariff treatment of imports from Paraguay. This remains an outstanding issue, as does that on domestic support and tariff treatment for Paraguay. The parties agreed on the text relating to export competition and agricultural cooperation. They also engaged in technical discussion on the management of tariff rate quotas.
The parties made headway on the annex relating to wines and spirits but the EU underlined its concern with regard to restrictions imposed by Mercosur on the maximum size of wine bottles and sugar content labelling.
On rules of origin, the Commission states that good progress was made both on the general text (especially on the origin of fishery products) and on product specific rules.
Regarding sanitary and phytosanitary measures, the parties reached agreement on key issues such as animal welfare, procedures for the swift exchange of information and notifications between the parties, as well as recognition of the EU as a single entity.
A further round of talks is to be held in Brussels before the summer break at a date still to be specified by the Commission but probably during July.
Both parties are on course for reaching an agreement before, in the medium term, the general elections in Brazil in October (see EUROPE 12040).
German industry hikes up pressure for an agreement
During a moment of high trading tension with the United States, which is mainly targeting German exports, German industry called on the government under Chancellor Angela Merkel to hike up pressure in order to reach an agreement as soon as possible. Tariff liberalisation would allow European companies to save over €4 billion a year, the federation of German industry (BDI) underlined, urging both parties to show the political resolve needed to seal an agreement now, after 20 years of negotiation. (Original version in French by Emmanuel Hagry)