ANNEX B
EU-MERCOSUR NEGOTIATIONS
B1. Negotiations for an inter-regional Association
Agreement between the EU and Mercosur (Brazil, Argentina, Paraguay,
Uruguay) began in November 1999. Venezuela joined Mercosur as
a full member on 4 July 2006. The agreement under negotiation
aims at establishing a comprehensive and balanced political and
economic partnership between the two regions, going beyond the
respective obligations in the WTO. It covers three pillars: a
political dialogue, a co-operation pillar and a trade chapter.
The trade negotiations aim to create a free trade area between
the regions covering goods, services, investment and public procurement,
as well as rules and disciplines for all sectors subject to negotiations.
B2. The political and co-operation chapters
are almost concluded, but negotiations have been stalled since
October 2004 pending progress on the trade dossiers. The trade
offers put on the table to date have not reached the degree of
ambition that both parties expect from this agreement. This is
principally due to both parties awaiting the outcome of the Doha
Round before pressing for further negotiations. With Brazil about
to take over the Chair of Mercosur the DDA remains the "only
game in town" though this may change depending on the future
course of DDA negotiations which are currently in suspension.
There is no clarity over when the situation may become clearer.
B3. Agriculture remains the key to the agreement,
with Mercosur (Brazil and Argentina) concerned at the continued
protection of some Mediterranean Member States. This will not
be resolved entirely in the EU-Mercosur negotiations, and will
depend on the market access achieved through the DDA. Conversely,
Mercosur will need to increase their level of ambition in NAMA
and services liberalisation to attract the concessions they are
looking for from the EU. It remains to be seen whether the political
will exists on either side to make the concessions required to
move the negotiations forward.
B4. At the EU-Latin America (EU-LAC) Summit,
held in Vienna on 11-13 May 2006, EU-Mercosur Ministers reaffirmed
the strategic priority they attach to concluding an ambitious
and balanced Association Agreement as an instrument to reinforce
political, economic, trade and cooperation relations and to contribute
to the reduction of existing socio-economic disparities.
B5. The Parties supported the further advance
of discussions with the aim of convening a new meeting of trade
negotiators at Ministerial level, and stressed the importance
of high-level contacts between senior business representatives
of the two regions, encouraging continued dialogue between the
EU and Mercosur. While at the Vienna EU-LAC Summit there had been
a good range of political discussions with Mercosur, and general
discussion on the nature of trade negotiations nothing specific
had been discussed due to on-going negotiations in the DDA. Mercosur
had put great emphasis on the need for asymmetric negotiations.
We now await the outcome of the DDA before it is possible to make
any further substantive progress.
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