MercoPress. South Atlantic News Agency

Brazil finishes trade liberalization proposal for Mercosur/EU negotiations

EC Industry commissioner Tajani is expected this week in Brasilia

The Brazilian government National Trade Council, Camex, approved the contents of a proposed trade liberalization offer to be made by Brazil involving negotiations for a wide ranging cooperation and trade agreement between Mercosur and the European Union.

The proposal will be submitted to the remaining Mercosur member countries (Argentina, Paraguay, Uruguay and Venezuela) so a common proposal may be drafted, according to information released by the official news agency, Agencia Brasil.

Mercosur is expected to hammer out a draft on time to be presented before the end of the year, as was understood in the latest of a round of contacts between the blocs.

Brazilian officials have said they are hopeful that a broad Mercosur/EU trade liberalization pact can be reached in 2014. Brazilian officials have said that as much as 90% of Brazil’s annual trade with the EU could end been being covered by the pact.

Bilateral trade between Brazil and the EU reached 96bn dollars in 2012.

According to Brazil’s Agriculture minister, Antônio Andrade, who attended the meeting, “a level of tariffs has been reached which is acceptable to the European Union”.

“We must reach a consensus with the other Mercosur members, and we are well aware that Argentina is one of the most delicate items”, admitted Andrade.

The announcement was made just hours before the European Commissioner for Industry, Antonio Tajani arrives in Brazil to meet with President Dilma Rousseff and some of her ministers to talk about “problems” faced by European corporations in the country and ‘deepen’ dialogue EU/Mercosur despite the current paralysis.

“We have dialogue with Mercosur but since it does not advance, we have decided to go ahead and begin talks with Brazil” said Tajani who is scheduled to arrive in Brasilia for a two day visit, October 10 and 11.

Tajani has meetings scheduled with Fernando Pimentel, Industry and Trade minister; Education, Aloizo Mercadante and Foreign Minister Luiz Alberto Figuereido.

When asked about the possibility of speeding negotiations for a free trade agreement only with Brazil, Tajani excluded such option and admitted to ‘internal debates’ about the convenience to continue with negotiations.

“There’s a principle of discussion with Mercosur, but it’s not Europe that has problems: debate is among Mercosur members and we are waiting for a decision, to keep advancing”, pointed out the EU Commissioner.

While Uruguay and Paraguay, and Brazil to a certain extent want negotiations to advance, Argentina is reluctant and more interested in defending its re-industrialization process and domestic market, besides the political challenges given the medical condition of President Cristina Fernandez and the coming mid-term election on 27 October.

Brazil and Uruguay have held talks to consider a ‘two-speed’ Mercosur that would enable the two countries advance in trade negotiations with the EU and other potential candidates. However Brazil considers Argentina a ‘strategic partner’ and wants to consolidate the cohesion of the Mercosur group.