MercoPress. South Atlantic News Agency

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

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.