28th February 2014
Businesses in South America with interests in Europe could be closer to seeing a potentially lucrative trade deal become a reality. Negotiations between the European Union (EU) and its counterpart in South America could progress quickly after a technical meeting takes place in March, officials have said.
The deal between Mercosur and the EU could have a large impact on exporters in Argentina, Brazil, Paraguay, Uruguay and Venezuela - the nations that make up the economic and free trade bloc.
Brazil has been pushing for closer ties with the EU and an agreement would be a major coup for Brazilian president Dilma Rousseff. The announcement on potential progress was made after she met European Commission president Jose Manuel Barroso for bilateral talks.
Any agreement between the two rests squarely on Brazil’s shoulders. The country represents over 70 per cent of Mercosur’s GDP and four-fifths of its population.
According to the Wall Street Journal, Mr Barroso said the March meeting would allow both sides to see whether necessary conditions are in place for a formal exchange of offers, suggesting that such an agreement “could take place very quickly afterwards”.
Mr Barroso added: "It would be a shame not to have an ambitious agreement such as this with our friends in Brazil and Mercosur."
Talks between the EU and Mercosur started in 2000 and, while suspended in 2004, were re-launched in May 2010.
The EU is Brazil's main trading partner, with 20 per cent of its exports heading to the 28-nation bloc. Meanwhile, 21 per cent of Brazil imports come from the EU.
“It is in Brazil's interest, other countries in Mercosur also have an interest in completing this process,” President Rousseff was quoted by the MercoPress news agency as saying after the meeting.
For EU firms the potential is just as large. Total GDP of the region amounts to €1,800 billion, more than South Korea, India or Russia. Bolivia is in the process of becoming a full member of Mercosur, while Chile, Colombia, Ecuador and Peru are associated.