MercoPress. South Atlantic News Agency

Emerging China “interferes” with EU-Mercosur talks.

European Trade Commissar Pascal Lamy admitted that the emerging attraction of China for Mercosur exports is showing a “misbalancing effect” on the South American block “political equilibriums” when it comes to negotiating a free trade agreement with the European Union.

Talking with the press in Lisbon, Portugal, Mr. Pascal argued that the increase in demand for commodities as a consequence of China and Southeast Asia strong economic performance has had an "enormous positive impact" for Mercosur, from minerals to wood pulp generating growing expectations among those countries business community.

"This kind of misbalances the political equilibriums with which my Mercosur negotiators have to manage. This is a political reality that must be present at all times", added Mr. Lamy who this Wednesday began in Lisbon yet another round of trade talks with Mercosur hoping to reach an agreement by October 31.

Mr. Lamy suggested it would be helpful if Mercosur representatives (the four countries Foreign Affairs ministers) "looked a bit ahead and imagined what the situation will be in five, ten years when Chinese growth won't necessarily be as robust as it currently is".

As to the actual Lisbon round Mr. Lamy indicated that the "minimum target is to stabilize negotiations at a more adequate level" than that of the latest proposals on the table "which anyhow we're wiling to discuss with the improvements anticipated".

"This is the least I could do for my successor in the job", indicated the EC trade negotiator who next November 1 will be handing the post to Peter Mandelson from the United Kingdom.

Mr. Lamy is participating in the talks with EC Agriculture Commissar Franz Fischler.

The EU and Mercosur after negotiations were suspended on several occasions agreed on a self imposed deadline, October 31 when Mr. Lamy will be replaced, which in spite of the good spirit of negotiators seems hard to achieve, according to diplomatic sources from both sides.

According to Brazilian sources the Lisbon round will most probably agree to continue negotiations in the first quarter of next year. Co-ordinators from both sides would meet sometime before December to set a date.