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Brazil blames Argentina for delaying EU trade accord

July 8, 2013 at 1:36 PM   |   Comments

BUENOS AIRES, July 8 (UPI) -- Brazilian agribusiness leaders are blaming Argentine government policies for delays in concluding a free trade deal with the European Union -- an accusation has come from Brussels as well.

EU negotiators reported frustration in attempts to advance negotiations that both sides see as timely, leading to a deal that will benefit both sides.

German Chancellor Angela Merkel pushed for EU-Latin America free trade talks. A free trade deal with Latin America's largest trade bloc, Mercosur, is seen in Brussels as a potential way out of recession for some of the EU's hard-pressed economies.

Mercosur's impressive demographics and cumulative growth figures are strong stimulants for EU nations seeking new business opportunities. The region has a population of about 276 million and total earnings of $3.47 trillion. An average per capita income of $12,599 translates into a burgeoning consumer market with unrivaled potential, analysts said.

Mercosur founding members are: Argentina, Brazil, Paraguay, Uruguay. Venezuela, Associate Member since 2008, became a full member in July 2012. Bolivia and Chile are associate members and Colombia, Ecuador and Peru want to join.

Paraguay's membership is suspended because of Mercosur diplomatic wrangles over a June 2012 government change the regional bloc denounced as a coup. Other regional organizations including the Organization of American States in Washington, disagree over Mercosur's diplomatic isolation of Paraguay.

Brazilian National Agriculture Confederation President Katia Abreu attributed the delay in advancing the Mercosur talks to politics rather than procedural issues although both sides recognize those, too, are behind the slow progress.

Abreu, a senator, visited Brussels to push for bilateral deals that could lead to free trade between Brazil and the EU independent of Mercosur.

Several EU member states remain leery of free trade with Brazil, fearing the Latin American commodity giant's produce will flood and stifle domestic industries and markets in Europe. EU negotiators in Brussels have tried to reassure member nations that won't happen if a deal -- bilateral or multilateral -- was negotiated properly.

The confederation has opened an office in Brussels as part of Brazilian strategy to increase the Brazilian agriculture industries' presence in Europe.

In a reference to Argentina, Abreu said, "How are we going to advance, how are we going to open markets if one of our members wants to lock us in and slap tariffs on imports?"

Brazil is among neighborly nations that frequently complain Argentine President Cristina Fernandez de Kirchner is not averse to slapping new protectionist curbs on Mercosur member countries. Argentina denies its agriculture trade policies are protectionist.

Abreu said Brazil was keen to advance talks on setting up free trade with the EU outside the Mercosur framework.

EU has had more success with negotiating similar bilateral trade deals with Latin American states while continuing to show interest in an overall free trade package with Mercosur.

Abreu said Brazil was keen to offer Europeans products that are "reliable and safe." The federation opened a similar office in Beijing last year.

Despite the confederation's keen interest in boosting exports to Europe, analysts said Brazil was struggling to ease congestion at its ports, affecting its trade. President Dilma Rousseff's government wants more private sector involvement in the ports.

This year's major soybean crop has compounded problems at Brazilian ports.

The U.S. Department of Agriculture forecast Brazil will harvest a record 82.5 million tons of soybeans, up 24 percent from the 2012 production. Brazil is expected to export 38.4 million tons of the oilseed, up from 36.3 million in 2012.

European concerns over free trade with Latin America are centered on livestock, and processed and unprocessed food products.


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