European business firms urge EU to seal Mercosur trade deal this week

A sign reading
A sign reading "Mercosur = a gift to multinationals" is pictured on a tractor during a protest by Belgian farmers outside a meeting of European Union agriculture ministers in Brussels, Belgium on Monday. Photo: REUTERS/Francois Lenoir

Bruno Federowski and Marcela Ayres

European companies are urging the European Union to accelerate trade negotiations with South America’s Mercosur bloc, in a sign of concern that the 20-year talks could once again fall dormant if they do not reach an accord this week.

In a letter, the head of industrial lobby BusinessEurope Pierre Gattaz urged European Commission President Jean-Claude Juncker to seal a deal before the campaign season for general elections in Brazil begins.

“BusinessEurope is becoming increasingly concerned that we may miss the opportunity to conclude the negotiations for what would be a breakthrough trade agreement,” the letter said. “In the many years of the negotiating process, never have we felt so close to the objective as in the last weeks. We hope that the final step of the journey will be made shortly.”

The letter highlights efforts by businesses and policymakers to keep alive an agenda of multilateral free trade agreements at a time when the United States is turning more protectionist, escalating trade tensions with its allies and China.

Representatives for the Mercosur group of Argentina, Brazil, Paraguay and Uruguay have gone to Brussels this week, seeking to iron out the final details of the accord before European summer recess in August. A group of Mercosur ministers will follow next week, in the hopes of sealing a deal.

Should talks fall flat next week, there would be no clear calendar for the window to reopen, a source following the negotiations on behalf of Mercosur told Reuters, as the Brazil vote is followed by European Parliament elections in 2019.

EU-Mercosur trade talks picked up in the last two years, but they have yet to reach consensus on key topics.

Mercosur has resisted a European proposal for a proposed tariff of 98 euros per tonne on sugar imports and a quota on ethanol imports that they say is too small. In turn, the EU has yet to rule on Mercosur’s offer to halve auto import tariffs before gradually reducing them during a transition period lasting as long as 15 years.

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There are also disagreements remaining in areas such as Latin American beef and European dairy products, as well as regulations over intellectual property, geographical identification and rules of origin for several products.

Still, debate on “central themes are now mature,” the source said, asking for anonymity since the talks are still ongoing.

IFA President Joe Healy has said EU Commission President Jean Claude Junker and Agriculture Commissioner Phil Hogan must deliver on their commitment to put Ireland first in Brexit and ensure that there is no Mercosur deal on beef while Brexit remains unsorted.

He said, "In view of the lack of progress on Brexit and our critical dependence on the UK market for beef exports, the EU cannot agree to increased beef imports from Mercosur."

Joe Healy said removing the UK market in Brexit will leave the EU beef market 116% self sufficient. 

"Increasing EU beef imports makes no sense whatsoever and the EU Commission should instruct Commissioner Malmstrom to withdraw beef from the Mercosur negotiations,” he said.

IFA National Livestock Chairman Angus Woods said the latest EU report from the FVO on Brazil shows that they continue to fail to meet EU standards on beef imports.

He said the FVO report is very clear that Brazil is in total breach of the EU regulations and standards in allowing the factories to carry out post mortem inspections on carcases. 

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