A new round of negotiations between the Southern Common Market (Mercosur) and the European Union began Monday in Montevideo, Uruguay as the two groups attempt to close a Free Trade Agreement (FTA) that has been almost 20 years in the making.
EU representatives and representatives of Brazil, Argentina, Uruguay, and Paraguay arrived at the meeting with the task of solving the issue of agricultural quotas and tariffs on wine. There have been no public announcements detailing the outcome of the first meeting, however, analysts believe that the EU is not interested in providing concession in the agricultural sector.
Farmers throughout the EU have mounted resistance to the FTA due to fear that cheaper produce from South America could hurt their position in local markets.
Last week, Phil Hogan, Agriculture Commissioner for the EU said the regional group “made a clear and explicit offer (and) the countries of Mercosur delayed an answer.” Hogan also warned that if Mercosur wanted to close the agreement it “must fulfill the agreements of automobile parts, maritime services, dairy products, and geographical indications.”
The automobile sector is a particularly sensitive issue for Brazil and Argentina because opening the markets for European imports could have negative effects on industrial employment.
Negotiations are scheduled to continue this week.
Analyst Marco Soto said Mercosur does not seem to be a priority for the EU, which has to solve England's withdrawal from the EU.
According to Welber Barral, Brazil’s secretary of commerce under Lula da Silva, who participated in the negotiations when they were restarted in 2010, said that the South American bloc had already provided concessions to the EU by including wine, the automobile industry, and dairy products in the negotiations.