Brasília, April 16, 2004 (Agência Brasil) - By the end of this week, the European Union (EU) and the Mercosur should put the finishing touches on their more conciliatory offers for the creation of a free trade area. With the two proposals in hand, the blocks should sit down at the negotiating table on Sunday (18) in Buenos Aires.

The Brazilian Ministry of Foreign Relations informed that, although the Mercosur will not satisfy "100% of the European pretensions," the bloc made "a serious and substantial move to meet the European request." The proposal that the Mercosur considers feasible represents an improvement in its offer concerning investments and industrial and agricultural goods.

In the Ministry's assessment, the fact that the Mercosur is negotiating a bilateral agreement with the EU prior to the conclusion of a multilateral accord in the World Trade Organization (WTO) "does not harm the G-20's negotiations, because each agreement is negotiated separately, and the Mercosur will only sign [the agreement with the EU], when there exists an equilibrium between what the bloc is offering and what it receives in return."

The G-20 is formed by developing countries that argue in the WTO for greater liberalization in agricultural trade and the end of agricultural subsidies in developed countries.

Last week the Minister of Foreign Relations, Celso Amorim, reiterated that he "will not sacrifice Brazil's interests in the WTO nor undermine the G-20 for the sake of obtaining a satisfactory agreement with the European Union."

EUROPEAN UNION

For the European Union's Ambassador to Brazil, Alberto Navarro, the bilateral agreement between the blocs prior to a plurilateral accord in the WTO bears "positive results." "If a free trade agreement complies with the WTO's rules, it contributes to the creation of greater trade and market opportunites for other countries, which is the aim of the organization. Anything that helps to liberalize trade is important for other countries and is positive for the Doha Round," Ambassador Navarro affirms.

The Ambassador considers absurd an article that appeared in the British newspaper, "Financial Times," suggesting that the European Union is trying to "buy" the Mercosur with offers in the agricultural sector in order to win the WTO Round. "The Mercosur is not so cheap as to be bought with agricultural concessions. We shall not make a free offer; rather, we expect concessions from the Mercosur in services, government purchases, and investments," he said.

Navarro believes that the offer will be favorable to Brazil and that Brazil needs to open its markets. He recalls that Brazilian exports to Europe grew over 20% in 2003 and have risen 30% this year in comparison with last. According to the EU Embassy in Brazil, the bloc is the destination of 40% of Brazil's agricultural exports. "There is great interest on the part of both blocs to conclude the negotiations. In Latin America, Mexico and Chile already have agreements with the European Union."

BUENOS AIRES

Negotiations over a free trade agreement between the Mercosur and the European Union have been underway for four years, and the biggest obstacle to a consensus is the question of agricultural concessions. The deadline to conclude discussions is set for October. According to the Ministry of Foreign Relations, the Brazilian offer is all ready, but the meeting in Argentina will only occur if both sides have proposals to place on the negotiating table. In case the debate is not held this weekend, the next official meeting between the EU and the Mercosur is scheduled for May 3, in Brussels.

Translator: David Silberstein