EU, Mercosur Agree New Route Map

Given the discouraging prospects of the coming trade liberalization negotiations in the framework of the World Trade Organization, Mercosur and the European Union decided in Brussels to resume the interrupted talks.

Since 1995 Mercosur and EU have been holding talks to create the world´s largest free trade area with 680 million people which currently has an annual bilateral trade of 40 billion US dollars.

“We did a sincere and realistic review of the situation and agreed on a route map to advance”, reported Argentine Economy minister Roberto Lavagna who headed the Argentine delegation to the ministerial meeting in Brussels last Friday.

The original plan not only includes trade but also a political and cooperation association which should have been signed by the end of 2005. However in the Brussels summit no deadline was established but rather a calendar of technical and ministerial meetings to be held between next November and early 2006 to advance “towards an ambitious and balanced” agreement.

This basically means that since the European block is so much more developed and integrated, they should liberate trade at a quicker pace than the South American block, emphasizing on those areas of greater interest for Mercosur such as agriculture and agro-industry.

Brussels is demanding greater protection for investments; participation in government procurement and liberalization of financial and telecommunication services, as well as a reduction in industrial goods´ tariffs, which is considered a sensitive area for Brazilian and Argentine industry.