Mercosur-EU Trade Agreement Not Likely This Year

By Lise Alves, Senior Contributing Reporter

SÃO PAULO, BRAZIL – Although representatives from both Mercosur and the European Union (EU) continue to say they hope for an ample economic accord between the two blocs by the end of the year, the non-agreement on the trade of two agricultural products have practically stalemated negotiations.

“I again ask the Mercosur countries to moderate their expectations about their sensitive products,” European Commissioner for Agriculture and Rural Development Phil Hogan stated earlier this year.

The sensitive products Hogan refers to are ethanol and beef, multi-million dollar markets that Mercosur representatives want the EU to open to them. The EU, however, offered the South American bloc the possibility of quotas of 70,000 tons of meat and 600,000 tons of ethanol.

Mercosur states that these quotas are less than those offered during the beginning of negotiations, back in 2004, of 100,000 tons of meat and one million tons of ethanol.

The two blocs, which have negotiated an ample trade agreement for the past two decades, met for a new round of talks last week in Brasilia. Officially representatives from both sides say that they are still confident that an agreement on the main negotiation lines will be signed this year.

“At the moment, I am strongly committed, together with the other foreign ministers of the founding nations, to conclude an agreement with the European Union,” wrote Brazil’s Foreign Relations Minister, Aloysio Nunes Ferreira in an article published by daily Estado de S. Paulo over the weekend.

But local media reported over the weekend that without a ‘better’ proposal by the EU on these two agricultural products, the long-awaited trade agreement between the two giant trade blocs will be delayed.

“Access to the market is decisive, without access to the market the rest is useless” news agency Reuters quoted a source close to the negotiation as saying.

For the full picture, see our Mercosur EU Trade Deal: Complete Guide.