EU and Mercosur ‘committed’ to reach deal by end of year

Susana Malcorra and Cecilia Malmstrom, before their meeting started on Thursday. [European Commission]

Argentina’s Minister of Foreign Affairs, Susana Malcorra, met with Trade Commissioner Cecilia Malmström on Thursday (20 April), to discuss the long-awaited trade deal between the EU and Mercosur (Argentina, Brasil, Uruguay and Paraguay).

The European Union and Mercosur are entering the final stage of the negotiations. They expect to reach an agreement by the end of this year or early 2018, the latest, she said.

Meat, agricultural products and geographical indicators are the outstanding issues between the two blocs.

The Argentinian minister admitted that the “mutual scepticism” between the two sides led to an “unsatisfactory” exchange of offers last year.

But once the initial doubts passed, and after having built “mutual trust” agreeing on the “simplest parts” over the last few months, Malcorra emphasised that the “commitment” exists to seal a deal.

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A planned free trade deal between the EU and South American bloc Mercosur could double Europe’s exports to the region within five years, according to EU sources close to the negotiations. EURACTIV Spain reports.

The election of Donald Trump is also helping to narrow the gap between the South Americans and the Europeans.

Although the US president was barely mentioned during the meeting, Malcorra said that the “winds of protectionism and the questioning of multilateralism” coming from his administration open a new space for Mercosur and the EU to take the lead, not only on trade but at the highest political level.

A live deal

This trade agreement would not be the end of the process, as both sides want to continue deepening their relationship with new chapters, the Argentinian diplomat commented.

“These agreements have to be alive,” she emphasised. Malcorra said that it could be enriched and updated with new parts, including an investment chapter.

Merkel hopes for 'fair' EU-Mercosur trade deal

German Chancellor Angela Merkel said Saturday (4 February) that she would work toward securing a “fair” free-trade deal between the EU and Mercosur, the South American economic bloc.

If these agreements are not revised, “they may be questioned”, she warned.

Once both sides already agreed on a “very important” part of the draft text, they expect to exchange their offers on the remaining issues in time to reach a deal by the year’s end, or during the first quarter of 2018. However, no deadline has been set.

Bone of contention

But Malcorra is aware of the differences among EU member states on “very complex topics”, such as quotas and tariffs for meat, and the difficulties progressing on such sensitive issues given that the largest member states have elections this year.

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A Free trade agreement between the EU and Mercosur, the South American regional organisation is under preparation, but agricultural issues still remain as one of the major obstacles, Kinga Brudzi?ska told EURACTIV Poland in an exclusive interview.

“Sensitive issues have an impact on EU member states that you need to take into account, otherwise instead of facilitating an accord you make it more difficult,” she told reporters.

Malcorra conceded that Mercosur also has to do its homework on topics such as geographical indicators and phytosanitary certifications.

Geographical indicators

The four South American states are finalising its own list of geographical indicators. “We are committed to speeding up the process, as it requires a very detailed analysis,” she said.

Their proposal will be compared with the EU’s list. The final compilation of products subject to protection will be done according to fact-based criteria, but in some cases as a result of political tradeoffs, the minister explained.

This topic sparked controversy in the past between the EU and Mercosur. Spain’s winemaking region, La Rioja, clashed with Argentina’s Rioja, over the use of the name for its wines.

“Being part at some point of the Viceroyalty of the Rio de la Plata made us inherit some names that today represent a compensation for having been a colony in the past,” Malcorra joked.

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