MercoPress. South Atlantic News Agency

Mercosur-EU to resume talks first quarter of 2005.

Mercosur and the European Union finally were unable to reach the free trade agreement self imposed timetable of October 31, but decided to keep talking when the new officials of the European Commission take their posts.

The last minute efforts this week in Lisbon, Portugal, at ministerial level could not come to grips with an understanding in the most controversial of the three chapters which make up the political association, cooperation funds and free trade EU-Mercosur agreement.

Contrary to the Free Trade Association of the Americas, FTAA negotiations sponsored by the United States, the EU-Mercosur talks are considered to be still "alive" and this was what the Lisbon meeting, suggested by the Portuguese Prime Minister, attempted to show with EU Trade Representative Pascal Lamy smiling in spite of the renewed stall.

Actually the Lisbon meeting between Mr. Lamy, EU Agriculture Commissar Franz Fischler and ministers from the four full members of Mercosur (Argentina, Brazil, Paraguay and Uruguay), reiterated the "priority which the strategic relation" has for both blocks.

The coming agenda indicates that a meeting at technical level will be held before the end of 2004 and sometime in the first quarter of 2005, talks will resume.

A few months ago both sides had agreed on an October 31 timetable because the following day November 1, Peter Mandelson from the United Kingdom takes over as the new Trade Commissar, and a period of "familiarization" is expected from him and the other officials.

However in Lisbon Brazil said it was willing to consider a greater liberalization of the insurance sector, and the EU that the "sensitive" products quota system could be reviewed.