MercoPress. South Atlantic News Agency

EU suggests Argentina’s import restrictions could delay Mercosur trade talks

Joao Aguiar Machado, EU Deputy Director-General for External Relations

Negotiations for a trade agreement between the European Union and Mercosur, re-launched this week in Buenos Aires, could not have a second chapter if the Argentine government insists in restrictions to food imports, said the head of the EU delegation.

Speaking on Thursday with the Argentine media, Joao Aguiar Machado, EU Deputy Director-General for External Relations said the problem is that “this kind of measures besides their direct impact on trade, erode confidence in the development of negotiations”.

Aguiar anticipated that next week the EC could address its concern with the World Trade Organization during one of the WTO council meetings, which he added “I wouldn’t be surprised if other countries who feel impaired by those measures join in, as could be the United States”.

The EU has decided to increase the tone of its complaints following on the restrictions implemented by Argentina’s Domestic Commerce Secretary, Guillermo Moreno, on food imports. Statements to that effect were first aired in Brussels and Luxembourg, but now the issue was put directly on the negotiation table in Buenos Aires where a new round of talks begun this week after six years.

“We fear this issue could contaminate the spirit and atmosphere of discussions”, insisted Aguiar.

Argentine Secretary for International Trade Alfredo Chiaradia said the Mercosur/EU talks were not the appropriate environment to address a bilateral issue, but “I explained the process must be open and transparent since the bilateral problem could have regional implications”, revealed Aguiar.

Industry Secretary Eduardo Bianchi replied that the EU “is king when it comes to farm and other subsidies and masters in forging hurdles to normal trade”.

The European delegation also met with Agriculture minister Julian Dominguez and Minister of Industry Deborah Giorgi, but Moreno refused to receive them.

But the Argentine restrictions on food imports as such do not exist on paper and President Cristina Kirchner and several ministers have denied its existence.

However Aguiar admitting there is no decree or law he did reveal the existence of a communication, “an internal communication and we have a copy. It does not have legal force but we are talking of impairing devices. For example containers are blocked in the port and there is no way denying this”.

“We know the list of ‘problematic EU food imports’ includes Italian pasta, olive oil, rice, high quality cheese, different infusions and the famous Greek peaches” added Aguiar.

The EU official mentioned the case of a local Argentine company that has over a hundred containers blocked in the port for more than 45 days, with a monthly storage cost of 5 million US dollars. Apparently imports are not food products but inputs for industry and they are equally blocked because of delays in the so called non automatic licences.

The first round of talks which is taking place in Buenos Aires, since Argentina holds the rotating Mercosur chair is scheduled to end Friday.

But Aguiar anticipated it is not clear when the next meeting will take place, --scheduled in Brussels--, “because much depends on a solution to this issue (imports’ restrictions). If this is not addressed, the next round could be really complicated”.

But not only on the Mercosur side there are problems. At least ten EU countries, led by France, strongly oppose talks with Mercosur currently, because of the Euro crisis and the belief that any understanding would have a direct impact for European farmers fearful of the more efficient, cheaper Mercosur agriculture production.

Losses for EU beef, hog and poultry farmers, who are already squeezed by the lower subsidies program, are estimated between 4 and 5 billion Euros according to French, Belgian and Irish unions.