Brussels/Sao Paolo, 14/06/2004 (Agence Europe) - Free trade negotiations between the EU and Mercosur are still at deadlock, due to a lack of progress on public procurement from the Mercosur side, and on the size of agricultural quotas on the European one. Negotiations on investments, on the other hand, are very close to being concluded. The negotiators on both sides decided to extend their talks until Wednesday 16 June, after an unproductive session of technical negotiations in Buenos Aires last week.
"We have made progress on investments and industrial tariffs. We have a timetable to reduce these tariffs. But there is still much to be done on services and there are problems on tendering for public contracts", said Commissioner Pascal Lamy after his meeting with the Mercosur Foreign Ministers on Sunday, on the sidelines of the meeting of UNCTAD. The Brazilian Foreign Minister, Celso Amorin, on the other hand, said that "we made a lot of progress on services, but not enough on agricultural subsidies". "Public procurement is causing the most obstacles to moving forward, as are some of the services, including financial and maritime services", said the Uruguayan Minister, Didier Opertti. These problems relate notably to limits imposed by Brazil on investments in the aviation sector, and on foreign banks settling on its territory. The Brazilian constitution states that a foreign bank requires authorisation from the President. "Our offer cannot translate into five constitutional amendments and 23 legislative changes in order to keep the Europeans happy", said Celso Amorin. The Argentinean Minister, Martin Redrado, said that the most important thing is that any improvement in Mercosur's offer be "clearly reciprocated". "We have clarified our proposals, and have concluded that the offers are not satisfactory to either party", he commented.
Despite these patent difficulties, both sides spoke of their willingness to conclude negotiations in October 2004. "The good news is that the desire to negotiate is on both sides. I am reasonably optimistic", said Didier Opertti. The fact that the Commissioner and the Ministers met for over three hours shows that "we want to reach agreement and that despite the technical problems, there is the political will to make progress", said Celso Amorin.