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The EU-Mercosur trade negotiation flies to Asunción to save “remaining differences”

Ⓒ AFP – EVARISTO SA – | The President of Brazil, Michel Temer (D), and his Paraguayan counterpart, Horacio Cartes, shake hands during the 51st Summit of Heads of State of Mercosur and Associated States, at the Itamaraty Palace, in Brasilia, on December 21, 2017 .

After the Carnival, the negotiation to achieve a commercial agreement between Mercosur and the European Union (EU) will be transferred from February 19 to Asunción to try to solve the “remaining differences” after two decades of discussions.

“We are making good progress (…), but there is still work to be done for a positive result,” European Commission spokesman Daniel Rosario told a news conference on Friday, reporting on the latest round of negotiations in Brussels.

After failing to reach a political agreement in Buenos Aires in December, the foreign ministers of Paraguay, Uruguay, Argentina and Brazil met last week with the European Trade and Agriculture Commissioners to try to unblock the negotiation.

During the meeting, which gave way to 10 days of discussions, Europeans indicated their willingness to improve their commercial offer, such as bovine meat up to 99,000 tons compared to the 70,000 currently on the table, according to several sources.

This offer, which must still be reflected in a formal offer, was the solution to an “important obstacle”, in the words of a South American diplomatic source, especially when Mercosur expected improvement during the meetings in Argentina.

“In Asunción, we expect clarification on the offer,” the source told AFP, for whom, “if the negotiations are on track,” there could be an announcement of a principle of agreement in the Paraguayan capital on March 2.

– Meat for cars –

Exports of agricultural products, especially beef and ethanol, to a European block of 500 million inhabitants are crucial for Mercosur, but they also represent a sensitive issue in Europe, especially in France.

In Buenos Aires, “we reactivated a coalition of eleven countries [of the EU] that want the firm respect of a certain number of agricultural sensitivities,” French Secretary of State for Foreign Affairs Jean-Baptiste Lemoyne said recently.

But as a European diplomatic source indicates, the “hypothetical” improvement of the EU’s agricultural offer to the South American countries depends on what they put on the table in return. “Mercosur has not yet responded” to the proposal, he added.

In exchange for increasing their offer, the Europeans asked for new concessions to the South American bloc, especially in dairy products, in the protection of European geographical indications, in the automotive sector or in maritime services.

These points are part of the “pending issues” for Europeans, acknowledged a source from the European Commission, who said he hoped to “save the remaining differences” during the upcoming negotiations in the Paraguayan capital.

For a Mercosur source close to the negotiations, the last round of negotiations in Brussels served to have both parties have “a clear understanding of what can be expected to be included in the agreement and what is not.”

– ‘80% ‘of indications –

On geographical indications of products that the EU wants to protect, such as cheeses and wines, the negotiators reviewed the results of a consultation held in Mercosur on which names will be more or less problematic to recognize, according to this source.

The Latin American bloc can “recognize 80% of the geographical indications” proposed by the EU, said the South American diplomatic source, stressing that the conflict focuses on those names that became common to identify a product, such as Parmesan cheese. .

The sources consulted reiterated the commitment of both parties to reach an agreement in the coming weeks and avoid a possible break that could occur due to the elections in Brazil in October, before the European elections scheduled for May 2019.

“The agreement will come out because there is a political will on both sides,” said the Latin American source, for whom both sides should take advantage of the current window of opportunity, beyond the upcoming elections.

Both blocks seek since 1999 to close an Association Agreement, which also includes political and cooperation chapters. The arrival of the protectionist Donald Trump to the White House was a boost for the negotiators, who tried in vain to close a political agreement by the end of 2017.

In 2016, European exports of goods to the South American block rose to 41,500 million euros, slightly higher than imports from the Mercosur countries (40,600 million euros), according to figures from the European Commission.

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