MercoPress. South Atlantic News Agency

Mercosur-EU trade talks to resume March/April

Mercosur-European Union trade negotiations will resume during the first half of 2005, according to the latest report from Spanish Foreign Secretary Miguel Angel Morentinos.

During his recent tour of Mercosur countries Spanish president Jose Luis Rodriguez Zapatero promised Argentina and Brazil he would press for the issue to be included in this year's EU agenda's.

The new date for negotiations, including the irritating issue of farm subsidies will de decided when the two sides sit again in the coming days, but Argentine diplomatic sources estimate the kick off meeting will be held before April either in Brussels or Asuncion, Paraguay, the current Mercosur chair.

Mr. Morentinos informed the Argentine Foreign Affairs Minister Monday that after talking with the European Foreign Affairs Commissar Benita Ferrero-Waldner it was decided the resumption of negotiations will take place "without exclusion of content".

Mr. Morentinos successful lobbying apparently will also introduce changes to Mercosur negotiators agenda which was concentrated in "an open markets" policy plus discussions with China and resumption of Free Trade of the Americas Association talks.

EU-Mercosur negotiations stalled last October when the self imposed timetable was unable to reach an understanding. Mercosur is demanding greater access to the European market and is targeting farm subsidies, while the EU is pushing for further liberalization in government procurement, investments and services.

Argentine diplomatic sources said the news was "most encouraging", since the EU will now have to accept talking about processed agriculture produce such as cooking oil, juice, beef, flour, sweets, tomato sauces and beverage which they have so far refused to address.

A tentative target date for the signing of a final agreement is March 2006 when the scheduled EU-Latinamerica presidential summit in Vienna, Austria.

However an additional obstacle has emerged concerning Argentina and Italy following the conflict with Italian Argentine sovereign bond holders who flatly refused to accept the president Kirchner administration bond exchange proposal with an average face value cut of 70%.

With this in mind Foreign Affairs minister Rafael Bielsa is scheduled to meet his Italian counterpart Gianfranco Fini next March 18.