MercoPress. South Atlantic News Agency

Mercosur-China talks in Montevideo.

Mercosur and China will be holding this Wednesday in Montevideo the fourth round of bilateral talks with the purpose of increasing integration and facilitating trade between the South American block and Asia's largest economy.

Mercosur experts began this week to prepare the agenda for the last quarter of the current year which should culminate with the signing of a trade agreement with the Community of Andean Nations, CAN, (Bolivia, Peru, Ecuador, Colombia and Venezuela). Another point is an implementation strategy to consolidate full integration of the two blocks by 2006.

However Mercosur experts will also be targeting China and some form of integration strategy with the Asian giant that has rapidly become one of the region's main clients particularly regarding agriculture commodities. Although experts admit it's difficult to reach an overall trade agreement, they are working in bilateral agreements in specific areas and mechanisms to facilitate trade and communications with Asia.

A Chinese delegation of government officials and private businessmen is currently in Montevideo and will be participating in the talks. A Mercosur trade delegation visit to Shangai is scheduled for the first half of 2004. Chinese purchases in Mercosur member countries have not ceased to grow in spite of the regional difficulties.

The meeting of experts in Montevideo will be followed by two days of political definitions when the Mercosur ministerial summit convenes in Montevideo during the first week of October. This includes Foreign Affairs, Economy and Finance, and Foreign Trade ministers plus Central Bank presidents.

That week former Argentine president Eduardo Duhalde is scheduled to formally take office as president of the block, a post agreed in the last summit and that seeks to consolidate for Mercosur a supranational institutional space, besides becoming the representative of the area in international negotiations.

A controversial issue to be addressed by the technical and political rounds is the result of the recent World Trade Organization Cancun meeting in Mexico that ended in failure. This will be the first time Mercosur gathers to consider the issue and try to agree on new venues or alternatives for international multilateral negotiations. The debate could turn thorny since Mercosur did not have an only position in Cancún: Brazil and Argentina played leading roles in the Group of 22, or G 22, that demanded from the developed countries a specific time table for the elimination of agriculture subsidies and farm support.

Uruguay on the other hand was more flexible, believing that confrontation would make the talks collapse and was willing to accept some of the developed countries initiatives regarding agriculture.