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01/10/2016

Paraguay warns against ‘two speed’ negotiations

Development Policy

Paraguay warns against ‘two speed’ negotiations

Donald Tusk and Horacio Cartes on Wednesday (10 June). [European Council]

On the eve of the EU-CELAC summit opening today (10 June), Horacio Cartes, the president of Paraguay warned in an exclusive interview with the Spanish news agency EFE, a partner of EurActiv, that stalled negotiations between the EU and Mercosur shouldn’t have “two speeds”.

Cartes, whose country takes over Mercosur’s rotating presidency on 1 July, after three years of exclusion as a member of the bloc, stressed that Paraguay will do its best to revive the negotiations. The Mercosur bloc is formed by Argentina, Brazil, Uruguay, Paraguay and Venezuela.

“We are trying to accelerate this relationship with Europe, some speak of two speeds. We want to give a single speed,” Cartes said on the occasion of an official visit to Spain, prior to the EU-CELAC (Community of Latin American and Caribbean States) summit opening today in Brussels.

The president of Paraguay stressed that one of the priorities for Mercosur should be to “give impetus” to the stalled negotiations, as other regional neighbours like Chile have already strong bilateral trade relationships with many more countries, which Mercosur currently has.

Cartes said a trade agreement between the EU and Mercosur is still in sight, an agreement “useful for both sides”, not just for one party, he stressed.

To facilitate negotiations, the president of Paraguay asked Brussels, among other measures, to reduce the “excessive protectionism in (EU) agricultural products”, he said, referring to the EU’s Common agricultural policy (CAP).

Strangely, it was Paraguay’s foreign affairs minister, Eladio Loizaga who said days ago that Mercosur could consider the possibility of a “two-speed” system in trade and cooperation negotiations with the European Union.

Paraguay is scheduled to take the pro tempore chair of Mercosur in the second half of the year.

Mercosur and EU negotiations date back to 1999/2000, but have yet to reach an agreement; they were completely paralysed in 2004 and only restarted in 2010. However the suspension of Paraguay (June 2012) from Mercosur for 18 months again delayed the whole process. With the election and swearing in of president Horacio Cartes last 15 August, Paraguay returned in full to the bloc, which is to be formalised in the Caracas summit.

Uruguayan foreign minister Luis Almagro last year that indicated that the Mercosur negotiations with the EU could leave Argentina behind.

The EU’s relations with Argentina are complicated. The Union takes the view that certain conditions which Argentina introduced for firms wishing to import goods into the country break WTO law.

>> Read: Argentina to appeal WTO ruling on import restrictions

>> Read: EU-Argentina disputes escalate

This is not the first time there is talk of a divided Mercosur in trade negotiations with the EU. A few months ago, the Brazilian government, spurred by the strong industrial lobbies from the country, first floated the idea of a ‘two-speed’ Mercosur converging in time with the group.

Despite its “strategic patience” regarding Argentina, Brazil is anxious to reach an agreement with the EU following the fall of a long list of tariff benefits which ceased as of January first because all Mercosur members (Argentina, Brazil, Venezuela, Uruguay) with the exception of Paraguay, are now considered high middle-class countries.

Background

The EU will hold a high level summit with the Community of Latin American and Caribbean States (CELAC) on 10 and 11 June under the theme “Shaping our common future: working for prosperous, cohesive and sustainable societies for our citizens”. The summit, which brings together European, Latin American and Caribbean leaders, is the main forum for dialogue and cooperation between the two regions. 61 Heads of State or Government from CELAC and EU Member States are expected to attend.

The Community of Latin America and Caribbean States – CELAC – is the regional bloc of Latin American and Caribbean States. It encompasses all 33 sovereign Latin American and Caribbean countries, representing roughly 600 million people.

Further Reading