MercoPress. South Atlantic News Agency

Mercosur and EU planning post-Doha trade negotiations

Mercosur Headquaters in Montevideo

Mercosur and the European Union could resume trade talks in two months time because “we're interested in having an open discussion next September or October” according to the EU commissioner for Latinamerica Stefano Saninno who this week visited Buenos Aires.

Mr. Saninno said that sometime in the next three months it will be known if there is an agreement on the Doha Round to liberalize global trade which has been stalled over farm subsidies and market access. Next week a ministerial mini summit is scheduled in Geneva to try and advance of an amended agenda. "If there's a Doha agreement, there will be a plus-Doha negotiation with Mercosur", said Saninno in reference to a bilateral agreement of the two blocks no matter what is achieved at multilateral level. "If there's no Doha agreement we will negotiate with Mercosur a substitute agreement", added Saninno. The second option would include protection of investments and industrial property, and opening of government purchases to international bidding, according to the EU representatives. The two blocks bilateral negotiations were suspended in 2004 because the EU was reluctant to further open its agriculture market and Mercosur had a similar attitude regarding industrial goods, particularly automobiles. Saninno admitted that currently there are no negotiations between the two regions but "abundant informal contacts", in spite of the fact Argentine president Cristina Fernandez de Kirchner and European Commission president Durao Barroso clashed over subsidies and open markets during the May EU-Latinamerica summit held in Peru. However the automobile industry chapter has already caused concern. EU manufacturers want an open market for cars and spares but the Argentine auto-part industry fears for its survival. US manufacturers are also concerned because they feel their medium sized car plants in Mercosur could be exposed. But EC ambassador in Buenos Aires, Gustavo Martin Prada, de-dramatized the situation. "As has happened with agriculture which has changed dramatically because of soaring international prices (which favors Mercosur and means lesser subsidy payments to EU production) the Mercosur market for cars has ample space for growth. We should attempt a reasonable solution for both industries", said the EC ambassador.