The Mercosur-EU bi-regional negotiation is changing. The key to promote the long expected Association Agreement was found on the 49th Presidents’ Summit of Mercosur on December 21, 2015. On that occasion, President Macri defended the reactivation of the Free Trade Agreement with the EU besides a wide interest in the Pacific Alliance. The Summit concluded with the intention of granting greater dynamism under a pragmatic focus rather than an ideological one.
As of its creation (1992) the Mercosur-EU Cooperation Agreement was executed by two blocks with great differences in their economic development. The offers exchange failed to conclude successfully. The EU closed its doors to the agricultural exports of Mercosur and Mercosur refrained from opening its government purchases.
In this year, on May 11, the first offers exchange to access the markets of goods, services and the establishment and government purchases took place.
Likewise, on September 15 and 16, a meeting took place between the National Coordinators of Argentina, Brazil, Uruguay and Paraguay before the negotiations round which will take place during the 24th Session of the Bi-Regional Negotiations Committee (CNB, after its wording in Spanish) in Brussels on October 10-14. Venezuela is not a party thereto whereas the process had been subject to negotiations even before it joined Mercosur. The Venezuelan Ministry of Foreign Affairs expressed its utter disagreement due to its exclusion from the bi-regional negotiations: “… to disrespect the attributions of the temporary Chair… results in an unsustainable infringement of the block’s regulation system…”.
On the other hand, together with the meeting, a Declaration was issued on September 18, signed in New York by the Ministers of Foreign Affairs Susana Malcorra (Argentina), José Serra (Brazil), Eladio Loizaga (Paraguay) and Rodolfo Nin Novoa (Uruguay). Therein, the importance of supporting the negotiations of the Mercosur-EU Bi-Regional Association Agreement was stressed out - considering the traditional bonds of historical, cultural, commercial and investments nature. The expectations are high: to reach a “…balanced, ambitious and wide agreement”.
Notwithstanding the fact that the EU embraced the different products from Mercosur by reaching 90% of the historical trade rates, some fundamental products for the block were excluded: food and agriculture, bovine meat and ethanol – which is particularly important for Brazil. Part of these exclusions would still make it to the EU under the quotas system. Mercosur is not against the quotas but requires them to render more benefits for the block: at least 3% of the European consumption. Despite the foregoing, the quotas offered by the EU barely reached 1% of the entire consumption. Considering that this minimum percentage is to be divided between the four member states of Mercosur, the Agreement is inconvenient.
France, Ireland and Poland are within the thirteen European countries (Austria, Cyprus, Estonia, Greece, Hungary, Latvia, Lithuania, Luxembourg, Romania and Slovenia) who filed a document before the Eureopan Council of Agriculture Ministers rejecting the quotas proposal on “sensitive” agricultural products, such as dairy products and meat. National and sector interests are at stake in each case due to the high competitiveness that the European agricultural sector must address before Mercosur.
The weighing scale is one: bi-regional economic integration. But the plates are different. The EU pursues access to the services trade and public hiring. Mercosur, on the other hand, expects an expansion of agricultural trade and manufactures. “There is a time for everything, and a season for every activity under the heavens” (Ecclesiastes 3:1). Formerly, the argument was that Mercosur was grudgingly making the offer. Today, the EU can no longer elude the conflict of interests within the community block which, by the way, is suffering from multiple cracks.
* Translated by WordCheck Traductores