EU, Mercosur Hope To Sign Trade Accord By October

Officials from the European Union and South America’s biggest nations said Thursday they still expect to sign a broad free-trade agreement by October despite major technical obstacles yet to be overcome, reports Dow Jones.

Following a four-hour meeting IN Guadalajara, Mexico, top negotiators from the EU and Mercosur bloc told reporters there is a great deal of political will to work out their differences. The trade agreement is expected to phase out tariffs on nearly 10,000 products over the course of the next 10 years between Mercosur’s four full members – Argentina, Brazil, Paraguay and Uruguay – and the 25 members of the EU. Trade between the EU and the Mercosur amounted to about EUR40 billion last year. Talks for a trade agreement between the two blocs started in 1999, but concrete progress has only been made this year after talks to form a pan-American free-trade area stalled.

EU negotiator Pascal Lamy’s term ends in November, after which Mercosur would have to pick up the discussions with a new commissioner. The EU is interested in providing more services and products to the Mercosur countries and their governments, while the Mercosur’s focus is on increased access for its agricultural goods in Europe. Another barrier to the deal is that Mercosur still isn’t a fully integrated common market. While the EU is offering to lift or lower tariffs for certain Mercosur agricultural products such as eggs, corn flour and fruit juice, the EU will only negotiate the reduction of subsidies paid to their farmers during global trade talks, said Franz Fischler, EU commissioner for agriculture and fishery.

The Associated Press notes EU trade commissioner Pascal Lamy said while the EU and Mercosur remained committed to the much wider WTO process, he will ask EU governments to implement the deal with Mercosur by the end of this year if the WTO negotiations remain at an impasse. EU officials said regardless of an acceleration of an EU-Mercosur deal, liberalizing farm trade remained an essential part of the WTO talks.

EFE adds that South American leaders are concerned that the incorporation of 10 new member states may lead to a diversion to former East bloc countries of EU economic aid that otherwise would have made its way to their part of the world.

In other regional news, Dow Jones notes Colombia’s President Alvaro Uribe will urge his counterparts from the European Union to commit themselves to broader economic integration with the Andean nation, including the creation of a free trade agreement. Uribe will also ask the EU to extend duty-free status for Colombian exports for another ten years under the General System of Preferences agreement.

Separately, Dow Jones reports Argentine Economy Minister Roberto Lavagna said Thursday that European officials are laying off the subject of his country’s roughly $100 billion in past-due debt during multilateral meetings this week. Lavagna said that the subject of Argentina’s debt wasn’t even mentioned during a four-hour meeting Thursday between the 25-member EU and Mercosur, of which Argentina is a member. „The subject of the debt doesn’t have anything to do with these negotiations,“ Lavagna said.

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