And now what? Mercosur and the EU

Mercosur – European Union: the day the Parties unified their movements?

Source: La Nación, Buenos Aires, May 20, 2014

[We thank PCRAM, Argentina, for their making this article available]

We found it was necessary to translate part of this article by Florencia Carbone into English, because readers from beyond Mercosur ought to have a chance to understand how Mercosur experts view this protracted negotiation with the European Union. The people cited here have been either involved or following closely the proceedings and know what they are talking about. To listen to the other side is a wise attitude if one expects to, finally, be able to cross this turbulent stream.

Mauricio López Dardaine

Fifteen years after the negotiation to reach a commercial agreement begun, the block formed by Argentina, Brazil, Paraguay and Uruguay is moving forward vigorously to present their technical offer: a message for the EU [here it is worth mentioning that even if today Venezuela is a member of the block, they do not participate in this negotiation].

“The process is in its last phase”, said a view days ago the Brazilian Minister of Foreign Affairs, Luiz Alberto Figueredo, and he even dared adding: “the offer will be ready in weeks, not months”.

The question is that after fifteen years since the formal beginning of the talks, with a strong re-launching in 2010 followed by yet another paralysis, doubt prevails.

What has changed to make this announcement believable?

“It’s not enthusiasm, it is realism”, says expert consultant Raúl Ochoa of Argentina.

“Now Argentina [we wish to point out that, lately, Argentina had been the reluctant party] wants to conclude this business, essentially because through the discussions with Brazil, we have reached the conclusion that it is convenient and, also, time is running out. The cost of not having an agreement is greater than the opposite alternative”, he says.

“The world is changing”, adds Ochoa, “and today commercial agreements have significant impacts in a country’s development. As an example, China is installing eight car assembly plants, and an agreement with the EU would mean a rather interesting tool for automobile production investment of EU terminals in Mercorsur countries [such as Brazil and Argentina, where automobile markets have grown considerably in the last decade]”

“If we cannot sign an agreement with the EU, who would Mercosur negotiate with instead?”,Ochoa goes on to ask himself, “With the US there is a kind of ideological debate [in these countries] that is not the case with regard to the EU. And most of the other countries in the Latin American region have already signed agreements with the EU; if Mercosur does not, we will be isolated trade-wise”.

… A few days ago, the Brazilian Minister of Foreign Affairs made things rather clear: “We are in contact with the EU in order to make sure that once our offer is ready, they in turn have theirs. Which the EU have still not completed. So it’s not a case of a delay on the part of Mercosur.”

The offer exchange had been scheduled for December 2013, but the EU requested it be postponed until January 2014.

… Gustavo Idígoras, five years agricultural attaché of Argentina in the EU, estimates the offer exchange might take place at the end of May. However, he adds, one must take into consideration that the consultation to the EU Member States will mean not less than six months. To close the negotiation at least a year will be required, for more than 9,000 tariff positions need to be analyzed in the process.

Let us hope that, for once, political will at the top of both regions is able to bridge the gaps that over-conscientious officials tend to create when all seems to be finally ready. I have personally never seen a negotiation closed without that inevitable top level thrust. MLD

NOTE: We need to add that not all readers of this blog agree with what was said by these people, which is quite logical in view of the many frustrations suffered by those who have been part of the various aspects of this protracted negotiation. MLD