MercoPress. South Atlantic News Agency

EU/Mercosur trade accord to counter “political events”

A Spanish Conservative member of the European Union Parliament insisted this week in the need to advance the negotiations for a free trade agreement between the EU and Mercosur to help counter current “political events” in the region.

Addressing the EU Parliament Foreign Affairs Committee MEP Daniel Varela said it was of "strategic importance for European corporations, and in a crucial moment for political events in the Latinamerican continent", to have a trade understanding with Mercosur.

Argentine and Brazilian delegates who also participated in the Committee's hearings underlined that Mercosur is "looking forward" and "willing" to reach an agreement with the EU "as soon as possible".

Jorge Ramos Lenicov, Argentina's ambassador before the EU and Brazilian Embassy Economic Affairs Attaché Carlos Cozendey insisted in the South American block's willingness but also cautioned that the EU "should match Mercosur's proposals".

However during the recent EU-Latinamerican leaders summit in Viena (May 11/13), both blocks had to admit that negotiations which begun in 1999 remain stalled since September 2004 and contacts have been limited to ministerial meetings.

Both sides implicitly admit it's hard to advance on the agreement until the World Trade Organization, WTO, Doha round talks have concluded, which are also stagnant because of growing differences mainly regarding agriculture, between developed and developing countries.

MEP Varela argued that in spite of the Doha round and some specific issues within Mercosur, such as the Uruguayan/Argentine pulp mills dispute, trade talks between the two blocks could advance and even "help resolve some of those differences".

"An EU/Mercosur free trade agreement would certainly help Spain and Spanish corporations that hold massive investments in Argentina, Brazil and Uruguay", pointed out Varela adding that having access to homogeneous markets with 230 million people, 45% of Latin America's population, and with expanding economies "is crucial for our corporations".

"Good evidence of this are EU free trade agreements with Mexico and Chile" highlighted Varela.

Varela underlined that a free trade agreement "could become an adequate framework to guarantee investments which could be exposed to political fluctuations in the region".

Ambassador Lenicov argued in favour of the coming incorporation to Mercosur of Venezuela which he described as a "good opportunity" for the block and downplayed the relevance of the pulp mills dispute which he compared to the recent budget discussions among EU members.

Brazilian attaché also discarded possible "political turbulences" or influence from the coming Brazilian presidential election next October.

"We could sign the agreement well before then", he said.