EU and Mercosur return to negotiate free-trade agreement

Geneva - For the first time in twelve years, Mercosur and the European Union back to negotiate practically a free trade agreement between the two blocs.

Since Monday, 10, negotiators on both sides are in Brussels for a week of dialogue, something that has not happened since 2004. On the table, the Europeans presented a plan for zero import tariffs for Mercosur goods within ten years.

In May, Mercosur presented its offer of liberalization, offering tariff reduction to 87% of commercial lines. The remaining 13%, however, of great interest to European items - as part of the automotive sector - remained closed.

The South American bloc indicated on Monday, 10, intends to make such liberalization gradually and within 15 years.

In response, the EU also presented its opening project, with 89% of tariff lines which would be exempt from tax also gradually within ten years.

But, in the European case, the Mercosur interest sectors were also targets of limitação.Carnes, for example, only enter the EU market with quotas. But the sugar was completely deleted, which producers in Mercosur already indicated that they will not accept.

For diplomats, however, the week will serve to "place the mechanism to finally work." On the first day of meetings, progress was considered the main leaders of the negotiation as "better than expected".

After years suspended, the process distanced the two blocks. Now the meeting is so that negotiators can be presented. "Do not know the most," he admitted a representative of Mercosur.

services

In the coming days, each group will make a reading of all supply points, explaining what they represent in terms of opening. In addition to trade in goods, they include the liberalization of services, investment and government procurement.

Both Mercosur and the EU have indicated that the proposals on the table are not enough. But for the South American bloc, we have not yet arrived at the point of remaking the offers. "We will first do our homework and explain what is on the table," said one of the European negotiators.

But the European side also faces challenges. Brussels has yet to convince Ireland, France and ten other countries to accept gaps in agricultural trade. Last month, the commissioner of EU trade, Cecilia Malmstrom, sent a letter to meat producers in Ireland to explain the bloc as a whole will gain with the agreement with Mercosur, including the Irish economy.

Only in tariff reduction European estimate ¤ 4 billion per year would disappear of the accounts of EU exporters by not having to pay taxes to enter the Mercosur market.

EU companies could still compete for a market worth ¤ 150 billion in government procurement and tenders made by Brazil.

In the service sector, Europe also insists it has competitive advantages and that the end barriers could represent real gains. Today, 24% of all EU exports to Mercosur are in the form of services. The information is the newspaper O Estado de S. Paulo.