MercoPress. South Atlantic News Agency

EU-Mercosur talks stalled

The European Union this week offered Mercosur to open its government purchasing markets as part of the ongoing free trade association talks. However agriculture which is Mercosur main interest and the main stalling point, did not even figure in the EU proposal.

"It will give Mercosur companies access to a lucrative market that represents 2,4% of the EU GDP, equivalent to approximately 200 billion Euros annually", said a spokesperson for the European Commission.

But Mercosur sources indicated that in spite of the "tempting" offer, "European companies have the necessary infrastructure, access to cheaper credit and therefore are in better conditions for any bidding process".

The opening of the government purchasing markets is contemplated in the World Trade Organization, WTO, rules.

Italy that presides over the EU during the second half of 2003 and is committed to achieving a Mercosur-EU agreement during its term, has proposed a full ministerial meeting at the end of August to address the issue.

But EU representatives have made it clear that no offer regarding agriculture will be forthcoming before the WTO meeting in Cancun, next September.

"For the next round of talks with Mercosur (August) we won't have completed our agriculture offer, but will rather discuss with the Ministers the framework of such an offer", underlined Paul Lamy, EU's trade representative.

Argentine Foreign Affairs sources commenting of Italy's intention of materializing a trade agreement with Mercosur in the coming six months said that given Mr. Berlusconi's lack of popularity among his continental allies, "it's hard to see how it will happen unless the EU makes specific agriculture trade liberation proposals".