MercoPress. South Atlantic News Agency

EU-Mercosur resume trade talks in Lisbon.

The European Union and Mercosur will resume this Wednesday in Lisbon, Portugal, stalled trade negotiations and decide whether the association agreement can be reached before November 1 when a new team of European Commission commissars takes over in Brussels.

Mercosur anticipated it will be taking to Lisbon an improved proposal and Europeans have made it clear that "our associates are well aware of which are EU interests" and the outcome of the meeting will much depend on "that improved proposal". "We know how far we can go; EU will be present in Lisbon with a positive attitude with the clear purpose of re-launching negotiations", said Arancha González, EU's Trade spokesperson.

The meeting will be officially opened by its sponsor, Portuguese Prime Minister Antonio Monteiro with EU Trade representative Pascal Lamy and EU Agriculture Commissar Franz Fischler, and Mercosur four Foreign Affairs ministers as the main negotiators.

Both sides considered last September trade liberalization proposals "insufficient" and hope to improve them so reaching an agreement which was originally co-ordinated should be before October 31 when the mandate of the current European Commission expires.

In Lisbon EU representatives believe there are two possible scenarios: both sides are determined to comply with the self imposed timetable even if this means a "less ambitious agreement", which is considered quiet difficult given scarce time, or decide "to leave the doors of the current process open", given the imminent changes in the European Commission.

Next November 1, Mr. Lamy will be replaced as Trade representative by British born Peter Mandelson, who is expected to need some time to familiarize with his new agenda even when he anticipated that "Mercosur was among the priorities".

But Mercosur feels that the familiarization period could take momentum from the negotiations and is intent in agreeing before November on a timetable of future meetings which will ensure the process.

European sources said that no further suspension of the negotiations is contemplated since a trade association with Mercosur is an "utmost geo-strategic and commercial interest" for Brussels.

Mercosur is anxious to reach the EU market with expanded quotas for farm produce particularly beef (112,000 tons), but also other meats, cereals and sugar, which apparently Brussels is prepared to extend. However Europeans expect from Mercosur greater access to sectors such as services, investments and government procurement plus respect for EU origin denomination in several of its products.

EU delegates anticipated they would like to see Denmark with greater access to maritime transport; Italy and other countries able to protect their origin denominations; Spain's participation in the services sector contemplated in the framework of the rule of the law (avoiding a repeat of the Argentine experience).

Europeans sources point out to three main "obstacles" in the current EU-Mercosur trade negotiations: Brazilian protectionism which is strongly supported by certain sectors of government; Mercosur' boom in exports to other large markets such as China and parallel negotiations with the United States for a Free Trade Association of the Americas and in the framework of the World Trade Organization.

However the EU does not want to be "left behind" and loose potential markets to United States, therefore its willingness to keep advancing in trade talks with Mercosur