Brussels, 22/07/2004 (Agence Europe) - Due to total stalemate on the issue of market access, the EU and the four Mercosur countries (Brazil, Argentina, Paraguay, Uruguay) decided on Wednesday- after three days of talks in Brussels, which were initially planned to go on until Friday- to suspend their negotiations on the conclusion of a free-trade agreement. They are planned to start again at negotiator-in-chief level in the second week of August in Brasilia, then in Brussels again in September- one month before the deadline (end of October) that both sides had set to reach agreement. This week's failure is due to the deadlock on market openness: Mercosur thinks the EU's offer on opening up its market to agricultural products is "unacceptable", and the EU is calling for an improved Latin American offer in the field of telecommunications, banking, maritime transport and public procurement.
Neither side managed to "move forward on the market access section", explained the spokesperson to Pascal Lamy, Commissioner for Trade. "We were expecting to make more progress this week, but it was not possible", she said. The European Commission, which negotiates on behalf of the Member States, only has a very small amount of leeway. "It would be extremely difficult for us to ask the Member States to make extra efforts in the field of agriculture, if Mercosur does not do more on services, public procurement and investments", said a Commission source. Its position is further complicated by the fact that certain countries (such as France) are reluctant about the idea of concluding an agreement with Mercosur before the end of multi-lateral negotiations at the WTO.
"Considerable differences" exist, agreed the Uruguayan negotiator, Gustavo Vanerio: "Mercosur is not happy with the European offer [on agriculture], but technical negotiations continue". Talks are taking place within a kind of "vicious circle" in which each side expects the other to improve its offer, explained Mr Vanerio. "Two months off the deadline [October], negotiations should be going forwards, not backwards, as is the case with the EU's proposal", said Mercosur's negotiator-in-chief, the Brazilian Regis Arslanian. "We came here in the hope of an improved agricultural offer from the Europeans, but we found a retreat".
The EU has made three offers from agricultural products, two on customs duties for the least sensitive products, with reductions in taxes between 50 and 100%, and another for more sensitive products, providing access quotas to the European market. The gradual increase (10% a year) in these quotas over ten years, as offered by the EU, is, however, "unacceptable" to Mercosur. Despite everything, Mr Arslanian said that the differences in opinion could be resolved, and that a free-trade agreement still remains "doable" by the end of October.