EU trade Commissioner Cecilia Malmström said on Monday (17 June) that a trade agreement with Mercosur countries could be concluded by the end of this mandate but “not at any price” as other trade partners await the outcome with “great attention”.
The EU and Mercosur countries (Argentina, Brazil, Uruguay and Paraguay) agreed that substantial progress has been made over the past few months, including on some of the stickiest points.
But Malmström explained that some difficult areas remain unsolved, notably in agriculture.
“Always in a trade agreement, when you are approaching the end, there are these really tricky issues on both sides, and very often they relate to agriculture, but not only exclusively,” she said.
Wary of the outstanding issues, and how close to an agreement both sides were in the past, Commission President Jean-Claude Juncker said last week that it would be “difficult” to conclude the talks by the end of this mandate in October.
Malmström, an “optimistic person” in her own words, was more positive and said that “there is a good chance that we can finish this under this mandate”. The next Commission is expected to take over in November.
The EU-Mercosur agreement would be the largest trade deal to date, covering 750 million people. It would tie off progress made by this Commission, which has concluded trade deals with Canada, Japan, Mexico and Vietnam.
Malmström stressed that a trade deal with the South American bloc would send “a very strong signal to the world” about the support of both regions for free trade.
But the Swedish Commissioner warned that the EU executive would not conclude the negotiations “at any price”.
“Many people are watching this with great attention,” she said.
A European official told EURACTIV that concluding the process by the end of this mandate would depend on the “political willingness” of both sides.
In order to finalise the outstanding issues, at least an additional round of talks should be scheduled, most likely before the summer break. A round of technical talks would precede the political meeting.
Although both sides are in contact, EU officials explained that no new talks have been planned with Mercosur representatives yet.
EU officials did not want to detail the list of remaining obstacles but some of the EU’s complaints last year included geographical indications, dairy products, maritime services and industrial goods.
On the Mercosur side, access for its farm products, especially beef, continues to be the main bone of contention.
A European official highlighted the progress made on technical issues and on geographical indications.
On this issue, the same source added that both sides had made headway and that a solution was found for many of the Europe’s protected quality food and drink products.
Progress was made also on technical specifications, for example in regards to the rules of origin for the automotive sector (the degree of processing that must be carried out in a country for the product to claim originating status), or market access for some industrial goods, the European official explained.
But still, many loose ends have to be sorted out on market access, the official added.
Asked about the concerns raised by various NGOs about the risk of deforestation once the EU-Mercosur deal is passed, Malmström responded that the agreement will contain “an ambitious trade and sustainable development chapter,” with a reference to deforestation.
[Edited by Sam Morgan]