Buenos Aires Times

economy NEGOTIATIONS OVER ACCORD

EU-Mercosur free-trade pact supporters renew push for deal

Reports emerge suggesting South American trade bloc representatives will offer European Union faster cuts in import tariffs to push accord through.

Saturday 25 November, 2017
Former foreign minister Susana Malcorra.
Former foreign minister Susana Malcorra. Foto:AFP.

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Supporters of a free-trade pact between the EU and the Mercosur, under negotiation for nearly 20 years, are seeking to swim against the current and secure a deal by the end of the year. “At a moment when the Anglo-Saxon world is in retreat on both sides of the Atlantic ... we should take advantage of that opportunity to reinforce cross-Atlantic ties between the EU and Latin America,” said former Spanish foreign minister Josep Pique, in reference to Brexit and the election of Donald Trump as president of the United States.

The two events are seen as partially due to a rising tide of public opinion against free-trade deals, but numerous agreements are still in the works. With the free trade deal with Canada provisionally entering into force in September and an agreement in principle reached with Japan in July, the EU is now trying to reach a deal with the Mercosur.

Given the size of the Brazilian and Argentine economies, the deal is estimated to be worth four times as much as the deal with Japan for the EU and would represent an important victory for supporters of multilateral trade deals.

After the latest round of negotiations was completed on November 10 in Brasilia, the EU said a deal was at hand. Holding his index finger and thumb just slightly apart, Jyrki Katainen, an EU Commission vice-president, said: “We’re that close to having a new association and trade agreement between EU and Mercosur.”

Argentina’s former foreign minister, Susana Malcorra, who will preside over the WTO’s ministerial meeting, set to take place in Buenos Aires on December 10-13, hopes the EU and Mercosur will be able to reach a preliminary agreement at the session. “In a context where global trade has been called into question, it is fundamental that two such considerable markets announce they are ready” to seal a new deal, Malcorra told AFP. She insisted it was not “a response to anyone”, especially not the US president.

Trump threw a massive spanner into the works when he pulled the US out of the Trans-Pacific Partnership (TPP. He has threatened to do the same with the North American Free Trade Agreement (NAFTA). Against this background, an EUMercosur deal “will be a political symbol”, said Malcorra, adding that the announcement of “concrete decisions” was needed to counter the growing protectionist trend and public opinion against trade deals.

Reports emerged on Thursday suggesting that the Mercosur will offer EU representatives faster cuts in import tariffs in order to smoothe a deal. Talking to Reuters, Argentina’s chief negotiator Horacio Reyser said he would seek a higher level of beef imports from EU negotiators in exchange.

The Mercosur “is prepared to gradually reduce tariffs on imports of European goods over a period of 10 years on a majority of products,” down from 15 years or more in the current proposal, Reyser told Reuters, adding that he would seek a “substantial increase” in the EU’s beef in return.

Negotiations between the two sides will continue in Brussels next week.

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