The European Union has formally requested that the exchange of tariff proposals with Mercosur for the creation of a cooperation and free trade zone, originally scheduled for next week, be delayed until 2014. The message was received by the Brazilian delegation at the recent WTO Bali discussions.
Yes, we were surprised by the request, but officially we don't know what is delaying the tariff proposals from the EU, admitted the Brazilian delegation headed by Foreign minister Luiz Fernando Figuereido that attended the world trade talks in Indonesia last week.
However unofficially Brazil believes that the main obstacle for the EU to reach a common tariff list from the 28 members is agriculture, which is vital for Brazil and its Mercosur partners, probably some of the most efficient, non subsidized farmers in the world.
However Minister Figuereido declared on Wednesday to Folha de Sao Paulo that despite the delay we have not lost our impetus to reach an agreement with the EU for the creation of a free trade and cooperation space
The EU said it had some pending details in the elaboration of its proposal and promised to have it ready in January 2014, but with no specific day, which some Brazilian officials believe it could anticipate further delays.
But Industry, foreign trade and development minister Fernando Pimentel said he was 'disappointed' with the EU decision and revealed that Mercosur has virtually finished negotiations for the group's common tariff list proposal, but why should we urge with our proposal if they won't have theirs on the table.
The bilateral agreement with the EU is considered a 'priority' by the Brazilian government even after the Bali agreement which gave some extra life to the weakened WTO.
Cutting on global trade bureaucracy is an advance, but eliminating global trade tariffs or gradually reducing them is still a long uncertain path, and that is why it is so important to advance with the EU, argue officials from President Dilma Rousseff administration.
That is one of the main reasons why Brazil is prepared to support an ambitious proposal with zero tariff for 87% of all products in the trade list with the EU. This percentage is very close to the 90% of products the Europeans had proposed originally.
Apparently according to Brazilian sources Mercosur members Uruguay and Paraguay have already completed the common proposal with Brazil and the more reluctant Argentina has presented a proposal with 80% of the items suggested by Brazil.
Brazilian sources do not discard a 'different speeds' negotiation with the EU for the gradual elimination of tariffs on a 15-year timetable with Brazil, Uruguay and Paraguay on the fast lane, while Argentina moves at its own pace.