MercoPress. South Atlantic News Agency

EU/Mercosur round of talks agree negotiations remain stalled

Representatives from Mercosur and EU met during three days in Lisbon

The European Union and Mercosur closed on Friday a three-day round of talks unable to re-launch the stalled trade negotiations, although both sides were quick to point out to the “advances” of the last five years.

“The round helped to identify those issues which still need to be analyzed before the formal launching of negotiations”, according to a brief release following the meeting in Lisbon.

Apparently according to sources from both sides which talked on condition of no names said that the informal conversations continue to clash over farm produce import quotas demanded by the EU and the sale of EU manufactured cars to Mercosur.

At technical level the talks were “fruitful” and both sides ratified their commitment “to continue negotiations for a free trade agreement in the framework of the EU/Mercosur association treaty”.

The objective is an “ambitious and balanced agreement for both regions”, pointed out the EU release, which anticipated another round of talks in the near future.

The negotiations were first launched in 1999 but were suspended in 2004 pending the results of the Doha round talks to further liberalize world trade.

Mercosur, particularly Brazil, is currently insistent in decoupling both processes given the fact that the World Trade Organization Doha round remains seriously stalled in spite of all the efforts to advance.

The European Community on the other hand continues to believe that the Doha round is “very, very important”, although according to the EC spokesperson Lutz Guellner there has been flexibility since “the Lisbon meeting went ahead with no pre-conditions”.

Overall Brussels remains cautious about decoupling and a new calendar of talks, but Spain which takes over the presidency of the block next January has promised to push hard to reach an agreement with Mercosur in the first half of 2010.

“It’s an ambitious target. The fact the Spanish presidency ends next July first, are indicative of the limited margin of time available”, said Guellner.

Mercosur also has its differences: while Argentina has adopted a policy of defending local jobs and industry, Brazil is anxious to reach a trade agreement with the EU even if a “double track” system must be applied.

The Brazilian government has the support of the powerful Sao Paulo Industry Federation, possibly the strongest lobby in the country for this option which basically means Brazil cuts loose from Mercosur and continues to advance while the other members can join in the future.