Mercosur gaining momentum

Mercosur gaining momentum

Reports from South America suggest that there is a focus among members of Mercosur to bring the long running negotiation with the EU to a close with a deal with a Ministerial meeting planned to take place in the last week of June. A Ministerial is called when the negotiating teams have dealt with the technical side of business and political direction is required to either go to the next level of give direction on resolution of sticking points.

Close before

A deal was very close in December 2017 and the main reason that it didn’t happen then was division among the South American countries on what access they would offer to the EU on their major interests of cars, car parts, dairy produce and recognition of GI’s.

Now with a new president elected in Brazil there is a focusing of minds that hasn’t been in place since then. One of the barriers in the negotiations that have been ongoing since 1999, is that Mercosur is a looser collection of the South American countries than the EU who negotiate as a block led by the Trade Commissioner Cecelia Malsmstrom with the Agriculture Commissioner also closely involved as agricultural access is usually the final issue in any negotiation.

Beef exposed

Mercosur is a particularly difficult trade deal for EU beef producers as it will give huge access to the EU market at a time of particular uncertainty caused by Brexit. Beef interests are particularly isolated by the fact that a deal is wanted by just about every other sector of the EU economy apart from sugar producers on the continent who are as exposed as the beef sector is to a liberalisation of access for South American supplies.