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Mercosur | Brussels, 13 September 2010

EU Trade Commissioner Karel De Gucht travels to Argentina and Brazil to discuss EU-Mercosur trade negotiations

EU Trade Commissioner Karel De Gucht will make a key visit to Brazil, which currently holds the presidency of Mercosur, and Argentina on 13-16 September. The Commissioner will explore with his counterparts how to advance the ongoing EU-Mercosur trade negotiations and how to seize the potential export opportunities in these markets.

"Given Mercosur's economic growth, I see important opportunities for EU exporters, investors and service providers in this region in the coming years", said Commissioner De Gucht. "A balanced and ambitious free trade agreement between the EU and Mercosur could therefore bring substantial economic benefits to both sides and contribute to the economic recovery."

The Commissioner will meet high-level political representatives in Brazil on 14 September, notably Foreign Minister Celso Amorim and Trade Minister Miguel Jorge. During his visit to Argentina on 15 September, the Commissioner will meet with the Chancellor Hector Timerman and with Industry Minister Deborah Giorgi.

In both countries, the Commissioner will address the ongoing negotiating process between the EU and Mercosur as well as key bilateral trade issues. The Commissioner will also meet with business leaders and European industry representatives.

The EU began free trade negotiations with Mercosur (Argentina, Brazil, Paraguay and Uruguay) in 1995. There were suspended without agreement in 2004.

The European Commission decided to relaunch the negotiations with Mercosur in May 2010. This was endorsed by the EU-Mercosur Summit in May. Since then, one negotiating round took place in Buenos Aires in June 2010. The next round will take place in October 2010 in Brussels.

Mercosur is:

  • A large market, with high growth potential. Total GDP of the region reaches €1300 billion, superior to that of countries like South Korea, India or Russia. The growth rate over the last years has averaged 4-6% for Brazil and 6-9% for Argentina.  
  • An increasingly important partner for the EU. In terms of EU exports, Mercosur ranks on par with India and ahead of both Canada and Korea. Over the past four years until the crisis hit, EU exports to Mercosur increased by more than 15% annually. EU investments in Mercosur amount to more than €165 billion, more than EU investments in China, India and Russia together.  
  • A relatively protected market, both in terms of tariffs and non-tariff barriers. The average rate of applied tariff protection is around 13% (average bound protection is above 30%), but protection in sectors of particular interest to EU exporters is even higher (e.g. 35% for cars). For the EU, the economic benefit could be an increase of around €4.5 billion of exports per year. Mercosur is expected to benefit from a similar increase of exports to the EU.

The EU-Mercosur trade part of the Association Agreement aims to:

  • be comprehensive and ambitious, going beyond the respective WTO obligations of both sides.
  • extend coverage of products and services to be liberalised. Product and sectoral sensitivities on both sides will be taken into account.
  • cover not just goods, but issues such as services, investment, government procurement or trade and sustainable development.
  • ensure an adequate protection of intellectual property rights and geographical indications, effective competition policies and a special agreement on sanitary and phytosanitary standards.
  • establish an effective and binding dispute settlement mechanism to help resolve trade frictions in the EU-Mercosur relationship. 

For further information
On the re-lauch of negotiations with Mercosur
On the EU's trade relations with Mercosur
On the EU's trade relations with Brazil
On the EU's trade relations with Argentina