Mercosur and European Union closer to establish trade agreement

The idea of a trade agreement between the European Union and Mercosur has been discussed for many years, and 2013 was expected to mark the time when both blocs would have presented their respective offers for a free trade deal. Brazilian and European authorities are hopeful about the long-running trade negotiations between the two regions after the EU – Brazil Summit held in Brussels on February 24th, 2014.

Brazil's President Dilma Rousseff, European Council President Herman Van Rompuy and EU Commission President Jose M. Barroso.  Photo: Francois Lenoir/Reuters - All rights reserved

Brazil’s President Dilma Rousseff, European Council President Herman Van Rompuy and EU Commission President Jose M. Barroso. Photo: Francois Lenoir/Reuters – All rights reserved

The two trade blocs want to make sure the deal includes everything from industrial goods and agricultural production to services and intellectual property, although some old disputes may still be delaying the process. Argentina has filed a formal complaint at the World Trade Organization (WTO) about the EU’s decision to slap anti-dumping tax on biodiesel imports from the South American country. The EU, on the other hand, filed a complaint against the Brazilian taxes on imports on a large range of products.

The EU is notably engaged in talks with Washington on a wide-ranging free trade deal. European Commission President Jose Manuel Barroso said the agreement with Mercosur would affect more than just trade.

“It will allow for the completion of an economic area in the long run between Europe and South America. Europe is working on a number of different bilateral agreements, and it would be a shame not to have an ambitious agreement such as this with our friends in Brazil and Mercosur,” said Barroso.

The EU is Brazil’s most important trading partner, receiving more than 20% of the country’s exports and accounting also for a similar share of its imports. Brazil is the EU’s eighth largest trading partner. Brazilian business leaders want the EU to open its agricultural markets and lift domestic subsidies, while the EU wants better market access for its industrial goods.

Brazilian President Dilma Rousseff said she believes such agreement can contribute to the world economy recovery. She used the opportunity to address the accusations of granting unfair tax advantages to the free trade zone in the Amazonian city of Manaus.

Rousseff brought attention to the fact that the Manaus industrial zone creates jobs and revenue to the local population, therefore avoiding deforestation. She highlighted how profitable cutting trees can be, underlining the importance of such program, as it contributes to the sustainable development of the Brazilian economy.

The two trade blocs will meet again on March 21st for a technical meeting. On this occasion, both parties intend to establish a date for exchanging offers.

Common understanding of the need for internet governance

In parallel, the European Union has discussed with Brazil a plan to establish a communications network including an undersea cable to circumvent the USA as a result of recent discussions on information security.

Brazil and the EU welcomed on Monday a German proposal to create a European network to avert US surveillance. The cable would connect the two continents from the Portuguese capital Lisbon to Brazil’s northeastern city Fortaleza.

Brazilian telecom provider Telebras and Spain’s IslaLink plan major shares in the cable project priced at $185 million (135 million euros). European and Brazilian pension funds intend to put up the remaining value.

Mrs. Rousseff invited all nations members of the trade bloc to take part in this discussion in April 2014, when the Global Multistakeholder Meeting on the Future of Internet Governance will take place in São Paulo, (April 23rd to 24th). The meeting will focus on crafting Internet governance principles and proposing a roadmap for the further evolution of the Internet governance ecosystem.

Innovation Norway is responsible for promoting the Norwegian industry abroad. Our office in Rio de Janeiro manages Innovation House Rio, our business incubator office, and helps Norwegian companies in their efforts towards the Brazilian market.

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