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Uruguay: CFK must improve EU trade offer

Foreign Minister Héctor Timerman speaking with his Uruguayan counterpart, Luis Almagro, last year.
Montevideo says Argentina must make concessions if Mercosur is to present joint proposal

Argentina must improve its offer if it hopes to reach a free trade agreement between the Mercosur trade bloc and the European Union (EU), Uruguay Foreign Minister Luis Almagro said yesterday, asking President Cristina Fernández de Kirchner’s administration to work on a better offer that would allow the bloc to present a joint offer to the EU.

“Argentina’s offer covers fewer areas than the rest of the offers presented by the other countries in the bloc,” Almagro said. “We have been working for a long time to improve Mercosur’s offer for the trade agreement but to achieve that we need Argentina to improve its offer.”

Negotiations are currently in a lull, after the EU moved to postpone a critical meeting until January. Argentina has harshly criticized the delay, but the EU insists the postponement was merely a pragmatic decision that had to do with the holidays and should not be interpreted as hesitation to seal the deal.

“Our idea is that all the countries that are part of Mercosur should negotiate together with the EU. But if in the future we have a unique offer with national complements, we will have to analyze that,” Almagro said. “Nevertheless, we have always tried to present a joint offer and since the EU has delayed its offer we now have more time to work together.”

Almagro’s statements came after Secretary of International Economic Relations Carlos Bianco expressed on Monday high hopes of achieving an agreement with the European Union and justified the delay in the negotiations by saying “the UE has not yet closed its final offer due to pressures from the agricultural sector.”

“The EU decided to postpone until January the exchange of offers with Mercosur without consulting us, even though we already had our offer ready. They have not finished their offer yet due to pressures from the agricultural sector in Poland, Ireland and France,” Bianco said. “The agricultural sector is the most competitive one in Mercosur and with it we would be able to increase our exports.”

Bianco also revealed that in the upcoming Mercosur summit in Venezuela the bloc members will start discussing a possible new “economic exclusive zone” with the ALBA and the Petrocaribe blocks.

A LONG STORY

The Mercosur and EU officially relaunched trade negotiations at a summit in Madrid on May 17, 2010 and since then the objective has been to negotiate a comprehensive deal. Negotiations have been hard-fought because the two trade blocs want to make sure the deal includes everything from industrial goods and agricultural production to services and intellectual property.

Nine negotiation rounds later, talks continue. Argentina’s protectionist policies have long been seen as an obstacle to any agreement but Brazil’s strong interest in a deal has led the government to change its mind and express a willingness to present a joint proposal.

Even though officials on both sides highlight their willingness to seal a deal, old disputes have come to the forefront over the last months. The EU and Argentina both filed formal complaints at the World Trade Organization in a move that shows the not-so-rosy relations between the trade blocks. Argentina is seeking redress at the WTO for what it has characterized as the EU’s illegal decision to slap anti-dumping duties on biodiesel imports from Argentina. For its part, the EU launched a case at the WTO against Brazil over the country’s taxes on imports on a range from products, from cars to computers.

Ensuring preferential access could be a big boost to Mercosur’s economies, considering the EU is the bloc’s first trading partner, accounting for 20 percent of its total trade. According to an independent study touted by the European Commission, Mercosur would experience an overall GDP growth of up to 3 billion euros and a 40 percent increase in exports.

Mercosur is the EU’s eighth most important trading partner, accounting for 3 percent of the EU’s total trade. EU’s exports to the region have steadily increased over the last years, rising from 28 billion euros in 2007 to 57 billion euros in 2012.

—Herald with Reuters, AP

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