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Brazil Hoping to Sign a Mercosur-EU Agreement by 2006

Given the discouraging prospects of the coming trade liberalization negotiations in the framework of the World Trade Organization, Mercosur and the European Union decided in Brussels to resume the interrupted talks.

Since 1995 Mercosur and EU have been holding talks to create the world’s largest free trade area with 680 million people, which currently has an annual bilateral trade of US$ 40 billion.


“We did a sincere and realistic review of the situation and agreed on a road map to advance,” reported Argentine Economy Minister Roberto Lavagna who headed the Argentine delegation to the ministerial meeting in Brussels last Friday.


The original plan not only includes trade but also a political and cooperation association, which should have been signed by the end of 2005.


However in the Brussels summit no deadline was established but rather a calendar of technical and ministerial meetings to be held between next November and early 2006 to advance “towards an ambitious and balanced” agreement.


“The most important outcome of the meeting was that the EU accepted the concept of a “special and differentiated” treatment for Mercosur, said Mr. Lavagna’s office.


This basically means that since the European block is so much more developed and integrated, they should liberate trade at a quicker pace than the South American block, emphasizing on those areas of greater interest for Mercosur such as agriculture and agro-industry.


Before the meeting Mr. Lavagna had anticipated he would be requesting the agreement helped to “reduce socioeconomic differences” between both blocks.


Brussels is demanding greater protection for investments; participation in government procurement and liberalization of financial and telecommunication services, as well as a reduction in industrial goods’ tariffs, which is considered a sensitive area for Brazilian and Argentine industry.


“There’s substantial progress to be achieved”, said Benita Ferrero-Waldner EU Foreign Affairs Commissar.


Brazilian Development Minister Luiz Fernando Furlan admitted that with this new focus “there are great possibilities of signing an agreement in 2006”.


Mr. Lavagna who arrived in Brussels suggesting that Mercosur-EU trade relations had to be “rebalanced” incorporating new items such as “differential treatment”, before returning to Buenos Aires said two objectives had been achieved, “relaunch politically the negotiation and ratification of the strategic interest” in the discussions.


EU Trade Commissar Peter Mandelson was head of the EU delegation.


This article appeared originally in Mercopress – www.mercopress.com.

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