EU Trade Talks with Mexico, Mercosur Press Onward

8 March 2018

Negotiations to clinch a trade deal and association agreement between the EU and Mercosur are slated to be extended further, though officials say they hope an agreement in principle can be wrapped up in the short term. Separate talks to update a decades-old trade deal between the EU and Mexico have also been prolonged, with another round planned within weeks.

Delegations from the EU and Mercosur, the Latin American trade bloc composed of Argentina, Brazil, Paraguay, and Uruguay, concluded two weeks of talks in Brussels in early February, and met again in Asunción for another series of negotiations which ended last week.

A pact between the European group and the four South American countries has been long in the making, with negotiations beginning 19 years ago and recently resuming in 2016.

Reports suggest that the two sides are continuing to haggle over market access for key agricultural goods, such as beef, as well as major manufacturing outputs such as automobiles and their component parts. Since the end of the Brussels exchange in February, several reports have claimed that the EU offered to increase beef quota from 77,000 tonnes to 99,000 tonnes. That number has been deemed by Mercosur members to be insufficient. (See Bridges Weekly 18 January 2018 and 1 February 2018).

Partly in exchange for opening its market to Mercosur beef imports, the EU hopes to benefit from cars and auto part sales within the bloc’s domestic retail economies. However, the debate has also sparked protests by thousands of farmers in EU member state France, according to the Fédération National des Syndicats d’exploitants Agricoles’s (FNSEA). The FNSEA is France’s largest agriculture workers’ union

The FNSEA argues that increasing market access for South American beef might displace thousands of French farmers, introduce beef produced under allegedly lower sanitary, social, and environmental conditions, and allow rural concerns to be swept aside in support of larger interests.

French Minister of Agriculture Stéphane Travert spoke on France 24 to reassure farmers, saying, “there will be no reduction in our social, quality, and environmental standards that arrive on French territory,”  according to an informal translation of his remarks. He added that negotiations are still ongoing over beef import quotas.

Phil Hogan, EU Agricultural Commissioner, told French-language outlet Ouest-France on 24 February that “I can assure farmers that there will be balanced results in this agreement that will reflect our sensibilities on beef and ethanol in particular.”

He also said that a final deal would be contingent on beef imports from the South American bloc meeting EU environmental and health rules.

In remarks reported by France 24, Paraguay’s Foreign Minister Eladio Loizaga set the stage for the talks in Asunción, Paraguay, that began on 20 February and concluded this past Friday. “We still need to conclude sensitive pending items,” he said, while adding that there was agreement on “90 percent” of the issues.

Pressure for the parties to come to agreement is rising as the Brazilian presidential elections approach. However, officials said that talks in Asunción did not make sufficient headway towards a conclusion, despite showing solid political momentum.

“These negotiations are not easy. We are advancing slowly, we believe that we will come to a satisfactory conclusion for both blocs, as much for Mercosur as for the European Union,” said Loizaga to journalists last week.

Edita Hrdá, Managing Director of Americas of the European External Action Service (EEAS), similarly highlighted the importance of political will going forward and welcomed the advances seen to date, according to a press release from the Paraguayan Foreign Affairs Ministry. 

“There are always advances if there is the will, and here we see willpower from both parties,” Hrdá said, according to an informal translation of her remarks.

Paraguayan officials noted that although an agreement had not been reached at the end of the round on 2 March, an agreement could be reached in two to three weeks through extending the Asunción meetings. A more formal timeframe was not public at press time. 

EU, Mexico trade negotiators prepare for tenth round

European and Mexican negotiators have also met repeatedly through the month of February to bring their efforts to update their free trade agreement closer to the finish line. (See Bridges Weekly 27 July 2017 and 18 January 2018)

The talks, which began in 2016, have reportedly hit stumbling blocks in areas such as geographical indications, a type of intellectual property protection typically used for food and drink products. It is a type of marker tied to the product’s region of origin and denotes certain reputational characteristics. Examples include manchego cheese, which is reportedly one of the sticking points between EU member state Spain and Mexico. Spain wishes to see the manchego designation protected, while Mexico has said that it produces a cheese that should qualify for the same name.

After a round in Mexico City which concluded on 16 February, the Mexican Secretary of Economy reported in a press release that significant advances had been made in other areas, such as technical barriers to trade, anti-corruption, state-owned enterprises, and trade in services.

Negotiators had hoped to reach an agreement in principle last month. However, they will advance to a tenth round of negotiations in the coming weeks. “Consensus is pending on specific issues in the chapters on goods, rules of origin, and intellectual property,” the Mexican Ministry said in their press release.

ICTSD reporting; “EU, Mercosur to resume talks on trade deal Wednesday,” FRANCE 24, 19 February 2018; “Stéphane Travert: ‘Les standards de qualité ne seront pas abaissés pour les viands qui entreront en France,’” FRANCE 24, 26 February 2018; “EU-Mercosur trade talks close with key gaps remaining,” REUTERS, 9 February 2018; “Consommation. L’Europe promet qu’il n’y aura pas de viande aux hormones sur nos tables,” Ouest-France, 25 February 2018; “EU, Mexico say progress made after trade talks, deal not yet finalized,” REUTERS, 20 February 2018; Paraguay dice que la negociación entre Mercosur y la UE va lenta pero hacia un óptimo final,” AGENCIA EFE, 28 February 2018; “EU, Mercosur extend trade talks, Paraguay sees deal soon,” REUTERS, 2 March 2018; “Inicia novena ronda de negociación del tratado de libre comercio con UE,”NOTICIEROS TELEVISA, 13 February 2018; “Mexico aims for EU free-trade deal by end of February,” 7 February 2018; “Cheese is the beef as EU-Mexico trade talks resume,” EUROACTIV, 9 January 2018.

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