Brazil confirmed this week that for the end of May or early June, Mercosur will be presenting its joint tariff-reduction proposal to the European Union for the conclusion of an ambitious, but long delayed, cooperation and trade agreement.
The statement belongs to Development, Industry and Foreign Trade minister Mauro Borges who has been very active in convincing Argentina to join the common proposal to advance trade negotiations with the EU, which the administration of President Dilma Rousseff considers 'strategic' for the countrys and the block's economies.
Borges also confirmed that the Mercosur proposal will cover a universe of 90% of bilateral trade with the EU and also supported discussing similar agreements with other regions and countries to diversity trade opportunities.
”It would be most interesting to have a free trade area in the whole of the South American continents, or a wide ranging trade agreement with Mexico (Latam's second largest economy behind Brazil), that goes beyond the current auto industry understanding.
However Borges underlined that this kind of agreements can't be implemented only to increase the trade surplus of other countries
In related news Uruguay's Vice-president Danilo Astori said it was crucial and very important” for the region to reach a Mercosur/EU trade agreement. An agreement with discussions started in 1999 but that have yet to materialize after several attempts and freeze periods.
However the fact that the US and the EU are on a similar process after a multi trade understanding, (which was started over two decades later), and with the emergence of the Pacific Alliance and its dynamism, Mercosur is forced to double efforts and move forward, explained Astori addressing the powerful Sao Paulo industries federation, FIESP, at the financial and trade capital of Brazil.
We're very much alert. The agreement with the EU is a priority, essential even for improving the functioning of Mercosur which is facing many problems, including institutional ones, distant from the Asuncion Treaty spirit, which created Mercosur back in 1991, indicated Astori.
Brazil which traditionally has tended to defend its market and industries, now must face the challenge of the Pacific Alliance (Chile, Peru, Colombia and Mexico) which have an open markets attitude, a policy to attract foreign direct trade and promote the private sector.