It is assumed that by the end of this year the EU and Mercosur will exchange
their offers for the access to markets. That is the goal agreed at the
last bi-regional meeting held in January in Santiago de Chile. Official
signals originating in Mercocur member countries -by case, recent statements
by Chancellor Patriota form Brazil- feed the idea that, this time, it
would be achievable. Other signs, not always public, originating in businessmen
and the academics linked to them -especially in Brazil and Uruguay and,
sometimes, in the EU itself- contribute to raise some doubts.
These are founded doubts if we take into account both the fifteen years
since the negotiations were launched and the ups and downs that have been
observed on its way; the changes introduced in the map of incentives to
negotiate -especially on the European side after the ghost of the FTAA
disappeared--, and the emergence of new factors that may adversely affect
the interest to continue using the format originally proposed -in particular,
the effect on Mercosur countries of the idea of the mega-interregional
preferential trade agreements, both on the side of the Pacific and the
Atlantic.
It is relevant then to consider the options open in the event that the
goal for this year is not achieved.
The first option would be to continue negotiating as before, setting
new deadlines. It happens frequently in international trade negotiations
as evinced, among other recent experiences, with the EU-India negotiations
or those of the Trans-Pacific Partnership (TPP). A variant could be to
agree on a modification of the self-imposed goal of achieving a high percentage
of trade coverage included in the trade liberalization program. Nothing
would prevent it, at least with a correct interpretation of GATT rules
(Article XXIV). It implies however a strong political will to generate
sufficient flexibility in the technocratic terms.
A second option would be to abandon the goal of a free trade agreement
between the two regions. A variation of this option could lead to negotiate
free trade agreements between the EU and those Mercosur member countries
that were interested -eventually with several, but not all. It would involve
formally abandoning the commitment to establish a customs union in Mercosur,
taking it back to a free trade area. Business institutions and experts
have sometimes proposed this. Of course such a variant would require previously
amending the Treaty of Asuncion. It is not hard to imagine the difficulties
that this would entail and the effects it could have on the quality of
the relationship between Mercosur partners and, most notably, between
Argentina and Brazil. Thus, this would not seem an option that the respective
governments would want to favor.
Another more sophisticated variation of this second option would be that
each Mercosur member country is able to negotiate strategic partnership
agreements with the EU that, in their development, include instruments
and commitments on a wide number of issues related to bilateral economic
relations (for example, all those issues that can affect trade and investment
flows, productive integration and technological cooperation) excluding
tariffs. The advantage of this option, which at times seems to be the
preferred one among business sectors especially of Brazil, is that it
could be presented as consistent with the rules of Mercosur (Article 1
of the Decision CMC 32/00) and therefore with the apparent preservation
of the strategic idea of sub-regional integration. Its disadvantage is
that it would be very difficult to explain why such variant could not
be carried out with the participation of Mercosur as a whole and, in that
case, it would imply a strong weakening of the distinction "us-them"
which is the basis of Mercosur's foundational strategic idea, especially
in what has always been its main core, namely the Argentina-Brazil relationship.
Finally, a third option could be to bring back the idea of a bi-regional
negotiation to its original formal framework. Its seems the most advisable
in case that the goal set for this year is not achieved or that it is
not possible to set a new deadline to achieve it. It would imply activating
an instrument that seems to have fallen into oblivion, by dint of not
using it. We are referring to the Framework Agreement of Cooperation between
the EU and Mercosur signed in 1995 and still in force (see the text at
http://eur-lex.europa.eu/).
In Argentina it was approved by Law 24.694 enacted in September 1996.
The negotiations for the bi-regional free trade agreement were launched
within its framework. But a simple reading of the text helps appreciate
the breath of its coverage, which far transcends the idea of a simple
free trade area. Its subject-matter matches the main issues on the EU-Brazil
bilateral agenda. It also contains a review clause (Article 23) which,
if used well, would even enable to move forward with variable geometry
formats. And it creates a Cooperation Board with broad powers to become,
eventually, the forum in which to design a new stage of the bi-regional
relation. It could even foresee those flexibilities and multiple speeds
that may be required by the new global realities, those of each of the
two regions and those of the bi-regional space.
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