BUENOS AIRES, June 17 (UPI) -- With weeks to go before the start of new Mercosur-EU talks on creating a free trade zone, the two sides clashed as they met in the Argentine capital to advance cooperation in mining trade.
Officials said the clash occurred as ministers from Mercosur -- Argentina, Brazil, Paraguay and Uruguay -- pointed out potential obstacles to trade created by new EU regulations on mining imports.
The European Parliament is debating regulations that aim to phase out all cyanide content in mining products and raw materials to protect European water resources and biodiversity.
Mercosur delegates argued current mining processes in South America made that unattainable and the new rules would potentially block South American exports to Europe.
Chile and Ecuador, associate members of Mercosur, said the new environmental regulations for the mining sector under consideration in European Parliament could practically bar their exports to the European Union.
An EU parliamentary initiative passed in May calls for a ban on all cyanide in European mining market by the end of 2011 and calls on the European Commission to eliminate any direct or indirect support to mining projects that entail the use of cyanide.
Cyanide compounds are widely used by the mining industry to assist in the extraction of metals, especially gold, from rock.
A Mercosur statement after the talks left no doubt about the trade bloc's position on the use of cyanide. "Given the latest restrictions sponsored by the EU Parliament which propose impediments to the industrialization and commercialization of products from productive sectors, such as the mining industry of our continent, countries of the region reject such measures which are considered restrictive and harmful for the development of our productive activities."
The Mercosur statement said South American industrial processes adhered to strict safeguards that took into account both the environment and the communities.
Substitutes to cyanide that are less hazardous are in use in mining industries in other parts of the world.
Jorge Mayoral, Argentina's minister of mines and host of the meeting, called the EU initiative "an attack on the normal development of the mining industry" in the South American region.
He said the proposed ban on the use of cyanide in mining processes was an assault on the autonomy of South American industries and could be a real barrier to international trade."
Analysts said both sides would likely seek further discussion on the topic to make sure the argument didn't sink into the semantics of cyanide use. The EU is unlikely to soften its position on the cyanide issue as any compromise would be unpopular with the European electorate.
The mining talks showed that Mercosur-EU contacts are still marred by deep differences over understanding of issues. The two sides are due to start formal talks in July on forging a new trade pact, although that is opposed by European farming communities fearful of cheap South American products driving them out of business.
EU officials are interested in pursuing the talks because it sees vast new opportunities in a free-trade zone representing 750 million people with annual commerce worth nearly $123 billion.
The officials said European industries stand to gain from any preferential trade deals in South America. Agriculture representatives say the gains would be outweighed by losses to farmers' communities in Europe.