MercoPress. South Atlantic News Agency

Mercosur resumes EU talks; signs with India

Mercosur and European Union negotiators resumed Monday in Brussels discussions with the purpose of reaching a much delayed free trade agreement between the two blocks. Meantime in New Delhi a framework trade understanding was signed with India.

The technical meeting with the EU was agreed following the parameters established last October in Lisbon during a full ministers meeting, and confirmed December in Rio do Janeiro.

According to Mercosur diplomatic sources, "negotiators from Argentina, Brazil, Paraguay and Uruguay met with their EU counterparts to exchange ideas on the parameters that will rule in the new negotiation round".

EU sources indicated that "we're preparing the foundations for the launching of negotiations", although there's no fixed date for the full ministerial meeting which both sides have anticipated should take place during the first half of 2005 in Asunción, Paraguay which currently holds the Mercosur chair.

Argentina's Foreign Affairs Deputy Secretary for Economic Integration and Mercosur said Mercosur had already presented the basic proposals for the coming negotiation and added that "a reciprocal gesture should be coming from the EU to avoid reiteration of frustrations and to enable the advancement towards a balanced agreement".

The terms of the Mercosur proposal apparently refer to goods, services and investment; government procurement; export subsidies and intellectual property.

In spite of recent failures to achieve a bilateral understanding, EU sources insist that the agreement with Mercosur is a political and economic strategic priority. The last top level meeting the two blocks representatives took place in January during the Davos Economic Forum, Switzerland, when Brazilian president Luiz Inacio Lula da Silva held talks with EU Trade and Agriculture Commissioners, Peter Mandelson and Mariann Fischer-Boel.

In related news Mercosur and India signed in New Delhi a first trade understanding involving tariff reductions for 900 products, which will be followed by a wider preferential agreement. The agreement was signed in the framework of the New Delhi meeting of the Group of 20, which includes developing countries contrary to farm subsidies, and operates inside the World Trade Organization.

"The trade treaty based on reduced customs taxes will be expanded, consolidating our current relations with Mercosur members, involving reciprocal tariff reductions and market access", said India's Trade Minister Kamal Nath.

The first Mercosur-India frame accord was signed last year in Paraguay.

India and Brazil are the leaders of the G-20 created in the WTO Cancun meeting of September 2003 with the purpose of lobbying for access to rich countries markets.

All Mercosur full members belong to the G-20. Uruguay under a new administration made its incorporation official during the New Delhi meeting.

India's economy has been expanding at an average 7/8% for the few last years and is expected to keep that rhythm this coming fiscal year.

IMF Director General Rodrigo Rato who recently visited New Delhi said India was in a turning point of history, ready for a "sustained economic takeoff", becoming one of the main engines of the world economy. However India "must create a more attractive atmosphere for domestic and foreign investment" if it's to boost manufacturing helping to create a hundred million jobs in the next ten years.