Brussels, 06/05/2004 (Agence Europe) - The European Commission has, orally, presented an additional market opening offer to Mercosur for processed farm produce, representing a value of one billion euro, European sources say. The offer comes in addition to agricultural offers already sketched out recently by the Commission and to the initial offer presented at the end of 2001. The offer can only be confirmed if there is an equivalent offer from Mercosur for services (banking, insurance, telecommunications), public procurement and investment as well as customs duties on manufactured products and on agri-food products.
The formal exchange of improved offers should be held before the EU/Latin America summit in Guadalajara (28 and 29 May), it was hoped by Arancha Gonzalez, spokesman for Trade Commissioner Pascal Lamy. According to Mercosur diplomats, the exchange could be held on 20 May.
Brazil's Ambassador to the EU, José Alfredo Graca Lima, welcomed this stance, noting that it is "precisely about the products for which we are competitive". He said: "Good will was complete on the EU side, which shows that it hopes to conclude negotiations in October. At present, Mercosur must make an effort to define its priorities and make a counter-proposal allowing for the European offer to be improved", she said.
According to data obtained by the Brazilian economic daily Valor Economico, the European offer concerns 295 agri-industrial products in the form of quotas or customs reductions. The quotas are said to be 100,000 tonnes for beef and veal, one billion litres of ethanol, 40,000 tonnes of rice, 30,000 tonnes of bananas. Still according to the Brazilian daily, customs duties would be reduced by half for olive oil, tobacco, fruit juice, canned fruit and ham. There would also be a reduction of rights over ten years mainly for quality corn, corn gluten, barley and wine. In the fisheries field, the EU is said to be ready to make further concessions on tuna, sword fish and hake in particular.
The opening that EU could make for ethanol is still met with reserve on the European side. After COPA (see EUROPE of 30 April, p.11), the European Renewable Energy Federation (EREF) sounds the alarm. Brazil's request for market opening for ethanol, produced from sugar and other agricultural products would, it says, "undermine the European Union's production". The "biofuel sector is still young in Europe. Most Member States have still to create a market on the basis of the directive on biofuels", EREF President Peter Danielsson recalled. COPA estimated the European biofuels market would stand at 140 million hectolitres in 2010 (compared to 4 million at the present time).