Mercosur: trade agreement with EU is “closer than ever”, said Spanish President Rajoy

The European Union and Mercosur should intensify talks to advance in theirs trade agreement this year, Spanish Prime Minister Mariano Rajoy said on Tuesday (25/04), urging after 18 years of negotiations.

Rajoy’s comments at a trade event in the city of São Paulo reinforced a 2017 target proposed on Monday (24/04) by the Argentinian Foreign Minister Susana Malcorra and EU Ambassador to Brazil João Cravinho, who said a deal could be ratified in 2018 and implemented in 2019.

Rajoy said an accord is “closer than ever” and highlighted opportunities for Spanish investments in Brazilian infrastructure, energy and transportation sectors. Spain has been the second-largest source of foreign investment in Brazil after the United States.

Brazilian Foreign Minister Aloysio Nunes said that Mercosur must focus on lowering its internal trade barriers to ease talks with Brussels, questioning disparate price schemes for Brazilian and Argentinian produce, for example.

Mercosur founding members, which also includes Uruguay and Paraguay, began negotiations with the European Union in 1999, broke them off in 2004 and resumed talks again in 2010.

Malcorra suggested on Monday that a United States retreat from global trade talks had opened a window for the European Union to become a strong player in multilateral accords between regions.

Sources: Agência Brasil, Mercopress Agency, Itamaraty

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Mercosur and EU feel 2017 as a "window of opportunity” to push ahead the idea of "irreversibility" of a trade agreement

Negotiations for an ample trade and cooperation agreement between the European Union and Mercosur are strategic, essential and must be urgently concluded, said Ramon Jauregui, head of the Euro-chamber for Latin America delegation, following on the recent accords signed by the EU with Ecuador and Cuba.

 “Mercosur is of enormous significance for Europe and we are entering a context of uncertainty with the arrival of Donald Trump to the White House”, pointed out Jauregui, a member of the European Parliament who added the urgency of signing the agreement which is pending since 1999 and was re launched in 2010.

Jauregui admitted that items such as beef, rice and sugar are considered “vulnerable” for Europeans and non-negotiable for Mercosur, despite the fact that the EU Agriculture Commissioner Phil Hogan last November called on the South American block to moderate its aspirations.

However Mercosur sources indicate that the three are part of an EU ten-item sensitive list and argue the accord has a raft of benefits for Europe regarding manufacturing, auto-parts, the chemical industry, among others.

Nevertheless Mercosur sources indicate that 2017 represents “a window of opportunity”, not necessarily to conclude the accord but to advance and give the talks credibility and a sense of irreversibility.

In effect and looking ahead to the new round of talks scheduled for next March in Buenos Aires, both sides have agreed to leave for further on the “sensitive lists”, which includes in effect beef and ethanol. Argentina is one of the world's leading exporter of ethanol.

But EU has its own problems: France is holding presidential and legislative elections in the first half of this year and has expressed concern about agriculture, a decisive sector for any aspiring political force wanting to reach Paris. Jauregui feels this is clear evidence of a lack of unity among the 28-member EU when they have to face a Trump administration in Washington.

Mercosur has a more positive approach according to statements from Brazilian foreign minister Jose Serra, “with Brexit and Trump's victory, friends must unite”. In effect Jauregui has pleaded EU Foreign affairs commissioner Federica Mogherini “to take advantage” of the current situation when all indicates that a Trump administration might very well emphasize a protectionist policy.

Likewise a potential vacuum in Latin America could be occupied by China, despite the close historic and cultural roots with Europe, and not forgetting that most of manufactured goods or with added value from Latam are exported to Europe, thus “Europe should stop looking at its belly button and concentrate in Latin America”.

Finally Jauregui recalls that 2017 took off with the EU trade agreement with Ecuador, and joins Colombia and Peru, and in coming months a similar scenario will take place with Cuba, conditioned to cooperation in human rights issues.

“Let's not forget the significance of these latest moves, since Trump has anticipated he will turn back all the agreements reached by the US with Cuba, under the Obama administration”.

Source: Mercopress Agency

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Macri sees future integration of Mercosur with the Pacific Alliance

Argentine President Maurício Macri argued that Latin America needs greater economic integration and a merger of Mercosur and the Pacific Alliance should be the objective. In an interview with the Japanese agency Nikkei, Macri insisted in loosening trade restrictions in his country and the region.

“First, we have to boost Mercosur,” Macri said, suggesting he was ready to take the lead in breaking down tariffs and other barriers to trade within the bloc.

Mercosur members cannot unilaterally sign free trade agreements with outside countries unless there's a full consensus on the issue. Nevertheless Macri said Mercosur is “ready for negotiation with Japan.”

Attempts to build broad economic zones in the region are nothing new. The proposed 34-nation Free Trade Area of the Americas was to span North and South America and the Caribbean, excluding Cuba, and produce a functioning bloc by the end of 2005. But the effort foundered amid resistance by then-Venezuelan leader Hugo Chavez and other opponents, including Nestor Kirchner and Lula da Silva.

After that failure, free trade proponents Mexico, Chile, Peru and Colombia formed the Pacific Alliance. The bloc seeks closer ties with Asia, having given observer status to Japan, China, South Korea, India and other nations on the continent.

Argentina became one of the 49 observer countries to the Pacific Alliance in June, with Macri's government apparently trying to show that his country is open for business.

Macri described observer status as the first step toward market integration. Together, the two blocs would have a combined gross domestic product of roughly US$4.5 trillion, about the size of Japan's GDP, creating a more powerful magnet for investment.

Source: Agencia Mercopress

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