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Ten “Grumpy” Countries Challenge Resumption of EU/Mercosur Trade Talks

Thursday, May 13th 2010 - 11:09 UTC
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Madrid is hosting the Latam-Caribbean/EU leaders’ summit Madrid is hosting the Latam-Caribbean/EU leaders’ summit

Ten European countries, fearing the impact on agriculture, are openly challenging the EU decision to resume trade talks with Mercosur which is to be officially announced next Monday when the opening of the Latin America, the Caribbean and the European Union Summit in Spain.

Nine countries have joined the original French initiative to protest the launching of negotiations for an association and trade agreement—stalled since 2004—arguing that “it is a very bad signal for European agriculture.”

Next Monday, when Mercosur (Argentina, Brazil, Paraguay and Uruguay) and the European Union leaders are scheduled to launch the resumption of trade and cooperation talks at the Madrid Latin America, the Caribbean and the European Union Summit, a council of agriculture ministers in Brussels will officially express their disapproval of such an initiative.

However, sources from the European Commission said on Wednesday that there is no turning back, “we’re going to resume talks,” adding that “this is by far the most significant economic project” for Europe in Latin America and “we are planning a strong political signal to that commitment.”

Leading the protest pack is France, which argues that negotiations should be conditioned to the development of the Doha Round talks for global trade liberalization, and that a side agreement with Mercosur “would endanger European farm subsidies.”

France is the main beneficiary of Common Agriculture Policy (CAP) and is supported in the protest by Ireland, Greece, Hungary, Austria, Luxembourg, Poland, Finland, Romania and Cyprus. These countries feel that the crossed interests of both blocks do not anticipate “advances” in the negotiations, unless Europe accepts “new concessions” in agriculture, which is considered “unacceptable.”

The European Commission—representing the 27 EU members since 1999—has been in negotiations with Mercosur. Spain—as the host of the Madrid summit and pro tempore president of EU, plus its close links with Latin America—has given full political support to the resumption of the bilateral talks. Furthermore, it is planned as the great achievement of Spanish foreign policy during its EU presidency.

However, the pro-tempore presidency will “take note” of the ten countries stance but a meeting of agriculture ministers is not the “competent” place to address the issue, said diplomatic sources in Madrid, according to the local press.

A non official EC paper indicates that a potential association agreement with Mercosur could mean an annual increase of exports to the tune of 4.5 billion US dollars. This position is strongly supported by Germany and UK.

Mercosur members already supply 82% of all beef imported by the European Union and 64% of all chicken, according to EU 2009 statistics. Before the 2008 crisis, EU exports to Mercosur members increased an average 15% annually during the previous four years and investments added to 165 billion Euros, a sum which is higher than that invested in China, India and Russia, points out the paper.

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  • Idlehands

    At a guess I'd say Latin America has 0% chance of getting the European agricultural industry to give up or even change the CAP. However I wish them the best of luck with their efforts. It's an anachronism that should have been abolished years ago.

    May 13th, 2010 - 11:42 am 0
  • Rhaurie-Craughwell

    Let me guess the countries who are protesting are the ones with the most unproductive useless agriculture sector and thus will suddenly have to find themselves competing with cheaper better products from South America coming into their markets and thus lose those ridiculous subsidies they receive every year?

    May 13th, 2010 - 07:01 pm 0
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