Push for EU/Mercusor Free Trade Agreement

By Eric Donald

A summit of heads of state from the European Union, Latin America and the Caribbean will take place towards the end of next month in Mexico. The EU objectives are to make progress on regional integration and social cohesion, but from an Irish farmer's perspective the focus is likely to be on any discussions that take place on achieving a Free Trade Agreement between the EU and the Mercusor countries.

There are some concerns that increased access to the EU market for beef, sugar and dairy products from these countries may be granted in return for concessions in other non-agricultural areas. South American beef, particularly Brazilian beef, is extremely competitively priced and any increased access for this product would undermine any potential price benefits from decoupling EU beef production.

The EU are working towards concluding FTA negotiations with the Mercusor countries by October of this year, and the summit meeting in Guadalajara on 28 May will provide both sides with the opportunity to give the talks a ‘political' push before the summer.

EU Trade Commissioner Pascal Lamy has already begun the rhetoric. Last week he said: "The summit could ring the bell for the last lap of the EU Mercusor negotiations if both sides are ready to run the extra mile''. From a personal perspective, Lamy will be anxious to conclude a deal with the Mercusor countries, as his term as EU Commissioner will be over towards the end of this year when the entire Commission is being replaced. The Frenchman would like to leave something tangible in place.

He is also anxious to push the Doha world trade talks, but progress here will be harder to achieve. Pascal Lamy said in Guadalajara: "We want to send a clear signal that the EU and Latin America-Caribbean are working together to push the WTO Doha round of trade talks, while we continue strengthening our trade and economic relations.''

The Commission attaches great importance to the success of the Guadalajara summit next month as it's the first in which the enlarged EU of 25 states participates.

The EU hopes to open negotiations on free trade agreements with Central American countries, while talks on an EU-Caribbean economic and partnership agreement will be launched on 16 April.

So while the main WTO talks trundle along at there own unique slow pace, negotiations on bilateral trade agreements between different trading blocks around the world are continuing apace.

These EU Latin American summits don't come around too often so the political leaders will be hoping to build on the progress made at the previous summits in Rio de Janeiro, Brazil in 1999 and in Madrid, Spain in 2002.