MercoPress. South Atlantic News Agency

Insipid EU-Mercosur round

European Union and Mercosur delegates ended in Brasilia their eighth round of negotiations for the creation of an association agreement with not much hopes of convergence in the controversial issue of agriculture.

Basically it was agreed that the final round of negotiations will begin next year, but with no fixed closing date, since the European Union position is that the agriculture issue be included in the current World Trade Organization Round scheduled to end in 2005.

In the previous round held last May in Madrid EU diplomats were concerned about the future of Mercosur given Argentina's political uncertainty and the possibility of Luis Inacio Lula da Silva winning in Brazil. Mr. Lula overwhelmed and publicly committed his future administration to Mercosur as the top foreign policy priority. However in Argentina one of the presidential hopefuls with greater chance, former president Carlos Menem anticipated his goal will be a bilateral trade agreement with the United States.

The ninth negotiation round is scheduled for next March in Brussels, followed by another meeting in Asunción, Paraguay in May, and in the second half of 2003 a ministerial meeting will assess progress and commence the drafting of an association project.

However since EU is currently involved in the absorption of ten new members, mainly from the former Soviet block, and how to finance the process, and Mercosur must wait for the Argentine election and the beginning of economic recovery, analysts believe not much progress beyond formalities will be achieved in the coming months.

The original idea of the EU-Mercosur association is an overall political and economic association based on three pillars: political dialogue, cooperation and trade. The first two chapters were considered achieved in the Madrid negotiation round, but trade and particularly agriculture and EU's Common Agriculture Policy, CAP remain the thorniest issue.

The EU position is that CAP can't be dismantled until United States and Japan put an end to subsidies to agriculture.

In the Brasilia meeting Argentina floated the idea of finding mechanisms to help neutralize or compensate the most harmful effects of CAP on Mercosur agriculture exports. In Madrid Argentina failed to convince Mercosur associates to target negotiations in tariff reduction and import quotas.