Mercosur and the EU will resume negotiations in 2008

The countries of the South American Common Market (MERCOSUR) and the European Union agreed to resume the stalled negotiations on a free trade trade agreement at the Mercosur summit in Uruguay.

“We (the EU and MERCOSUR) agreed to resume next year negotiations on a trade agreement at the level of economic ministers, which are now almost interrupted due to a divergence of parties,” Joaquin Almunia, EU Commissioner for Economic and Financial Affairs, said at a press conference (Joaquin Almunia).

“We have serious disagreements, but I’m sure that we can overcome them,” he added.

Mercosur unites 250 million people and more than 75% of the total GDP of the Latin American continent. It includes Argentina, Brazil, Paraguay, Uruguay and Venezuela, and as associate members – Chile, Bolivia, Colombia, Ecuador and Peru.

Over the past few years, the countries of the South American common market have put forward the abolition of subsidies to European agricultural producers as the main condition for concluding a free trade agreement with the EU. This will, in their opinion, facilitate the access of agricultural products from South America to the European market.
The European Union, for its part, insists on providing them with equal conditions when implementing investment projects in the MERCOSUR countries, as well as the possibility of participating in the privatization of state-owned enterprises and the services market.

Joaquin Almunia called on MERCOSUR countries to pursue a “predictable, clear economic policy with clear guarantees and not change the rules of the game depending on the political situation.”

The European Union has allocated Mercosur 50 million euros, which are planned to be used as part of the integration processes of the two largest economic blocks in the world. In 2006, the trade between them amounted to 60 billion euros, of which 36 billion euros accounted for the export of Mercosur countries.

EU investments in the economies of the countries of the South American common market in 2005 amounted to over 3 billion euros.

Uruguayan Foreign Minister Reinaldo Gargano said signing an agreement on the allocation of 50 million euros is an important step towards signing a free trade agreement.

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