Mercosur pushes for early EU trade pact

Latin America’s Mercosur trade bloc is impatient for progress on free-trade talks with the European Union to lead to an early agreement, Brazilian President Dilma Rousseff said.

Brazil has been in the forefront of Mercosur pronouncements on the increasingly contentious talks for reaching a free-trade pact. The negotiations are snagged on European farm industries’ fears about a flood of Latin American produce and Mercosur partners’ often mercurial behavior toward European exports to the region.

Argentina drew angry rejoinders from Europe over what EU officials called restrictive trade measures that led to imports from Europe being blocked, delayed or made more expensive by stinging taxation, all of which Brussels branded as running counter to the spirit of the according being negotiated.

Rousseff, too, said Latin America wanted an early pact with Europe but not at the expense of its own markets being inundated with cheap merchandise.

Latin American nations, in particular Argentina and Brazil, already have a running feud with China over what they see as dumping of Chinese goods in their markets.

The talks with EU have fueled fears the deluge will rise and also hurt Latin American industry that cannot compete with advanced but comparable European manufactures.

However, the Mercosur-EU pact is a crown that both Latin American and EU partners want to don as soon as possible to extract domestic or regional political gain in tough conditions.

EU negotiators assuaged their outraged farmers’ feelings with pledges they won’t be hurt by Latin American rivals and promised cash-strapped European businesses the pact would open for them lucrative and vast consumer and investment markets in the Mercosur region.

Mercosur data are drool-worthy for most European entrepreneurs. The region commands a population of 267 million sharing a $2.895 trillion gross domestic production, with a growing middle class.

Mercosur includes Argentina, Brazil, Paraguay and Uruguay as full members, Bolivia, Chile, Colombia, Ecuador and Peru as associates and Venezuela as a full member awaiting ratification. There are moves afoot to upgrade some associates to full membership to strengthen the customs union and make the region even more attractive to Brussels.

Addressing the 41st Mercosur leaders’ summit in Paraguay’s capital, Rousseff cited the region’s economic recovery and growth as a good opportunity to forge European links. But, she warned this could not be at the expense of Latin America’s “south-south” exchanges with Africa, Asia and the Middle East.

Rousseff said the Latin American model had preserved the constituent nations’ sovereignty and promoted social inclusion.

“We have a region free of nuclear arms and free of ethnic conflicts, but we still have to elaborate an effective strategy for social development and to overcome asymmetries between Mercosur members.”

Independent human rights organizations have frequently appealed to Latin American governments to do more to reduce poverty and discrimination against native communities.