EU defers talks on Mercosur free trade deal

Dec. 12, 2013 at 8:28 PM   |   0 comments

RIO DE JANEIRO, Dec. 12 (UPI) -- EU negotiators have told Latin American trade partners they aren't in a rush to negotiate a free trade deal, a now-on and now-off conversation that has gone on for years.

Senior Brazilian officials returning from World Trade Organization consultations said they were told of EU deferment request but not the specifics of the Europeans' reasoning behind the postponement.

Until recently EU leaders including German Chancellor Angela Merkel appeared to be steps ahead of Latin American counterparts, pushing for talks on closer cooperation and eventually a free trade agreement.

Now EU officials aren't so keen, Brazilian diplomats who received EU messages on the talks' future direction said. Brazilian officials told national media they believed agriculture was still the main stumbling block.

EU member countries' heavily subsidized farmers feel threatened by a trans-Atlantic free trade zone they fear will flood European markets with cheaper farm produce and other consumer products from Latin America.

Unlike EU agriculture businesses, Latin American counterparts on the whole are rated to be more efficiently run despite having few subsidies.

Latin America is also seen to be faring better economically than the EU. Economic indicators cited by Brazilian and international media showed Latin American growth and national earnings ratios would likely outstrip Europe's continuing sluggish performance.

Brazilian Foreign Minister Luiz Fernando Figuereido received a formal EU request for talks to be put off till some time in 2014, Brazilian media reported.

Figuereido told Folha de Sao Paulo newspaper Mercosur members "have not lost our impetus to reach an agreement with the EU for the creation of a free trade and cooperation space."

Until recently this year, EU officials were pressing for bilateral deals if multilateral arrangements between EU and Mercosur trade bloc were delayed.

Mercosur officials say the EU wants free rein in trade with Latin America's lucrative markets but isn't so keen on giving Latin American goods similar incentives in EU markets.

Some EU member countries see Latin America as a lucrative market, almost a panacea for its many economic ills, including lack of overseas customers for its manufactures and services.

Mercosur's $3.47 trillion annual income is seen by EU exporters as a market ripe for exploitation, joint ventures and other deals. The trade zone comprises full members Argentina, Brazil, Paraguay, Uruguay, and Venezuela, Bolivia awaiting confirmation, six associate members and two observer nations.

Mercosur's 276 million population is a vast consumer resource that EU sees as a major opportunity for future trade and economic activity.

EU officials told Brazil they needed more time to expand on their proposals for economic cooperation, including a free trade pact.

Mercosur officials say members countries within the regional pact may also need more time to prepare for EU trade ties and some states, particularly Brazil, Uruguay and Paraguay, may join deals with Europe earlier than Argentina, which has faced difficulties in EU trade talks, and other Mercosur member states.

The economies of Latin America and the Caribbean will expand by 3.2 percent in 2014, data from the U.N. Economic Commission for Latin America and the Caribbean shows. The economic outlook formed part of a U.N. presentation made in Santiago, Chile, this week.

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