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Brazil Sees Bad Faith in EU’s Proposal

The new European Union proposal with regard to “market access,” received on September 29th by the Itamaraty (the Brazilian Foreign Office), was a bucket of cold water to the Mercosur negotiators who are working for the signature of a free trade agreement between both blocs.

“The offer received, in general terms, is not up to par with what had originally been offered to the Mercosur (by the EU) last May,” says a Ministry of Foreign Relations statement.


The “expanded offer” by the EU came in response to a proposal, also expanded, made by the Mercosur, the customs union between Brazil, Argentina, Uruguay, and Paraguay, on Friday, September 24th.


Last week, the Europeans showed that they also believed that the South American bloc’s document was below expectations. The span for conclusion of the negotiations ends on October 31.


However, according to the Itamaraty, the South American bloc’s offer contained concessions that “had never been seen in any foreign negotiation by the bloc.”


The statement accuses the European Union of having maintained the same import quota system for agricultural products that had been presented before, whereas it also “introduces new conditions.”


According to the Itamaraty, the Europeans have maintained the system through which, in the first phase, the Mercosur could, for example, export 60,000 tons of cattle beef, being 2,400 rightly Brazilian.


“But the Mercosur already exports around 95,000 tons a year to the European market, without the benefit of an accord, and paying a tariff of 176%,” shows the statement.


In the service sector, according to the ministry, “no reference was made to the opening of the European market to professional service providers, one of the few sectors in which the Mercosur is adamant.”


Apart from that, adds the statement, the European union still restricts the export of Brazilian bank and transport services.


On the other side, the Itamaraty alleges that the proposal sent by the Mercosur on Friday (September 25) “was expanded to include over 90% of EU import, be it through complete elimination of tariffs, or through tariff concessions.”


With regard to the service sector, the ministry alleges that the Mercosur has executed “successive improvement” in its offers during the negotiations and contemplates “virtually all sectors that are priorities to the EU.”


Among the sectors to which the Europeans may have access, in case an agreement is signed, are the financial (banks and insurance), telecommunications, international maritime transport, professional services (architecture, engineering, computer services, etc.), environmental services (water supply, sanitation, etc.), postal services (courier services), civil construction, tourism, and distribution.


In the area of investment, the Itamaraty states that the recent Mercosur proposal covers “practically the entire investment universe in the primary and secondary sectors of the economy.”


And an example provided is that “the treatment offered to European investors would be practically the same as that offered to Brazilian companies.”


With regard to government purchases, a sensitive point for the Mercosur, and especially for Brazil, the Itamaraty says “a mechanism for inquiries and preference to European suppliers was offered.”


“Such a mechanism would open the perspective of preferred treatment with regard to other countries in terms of federal government tenders (in Brazil), while guaranteeing the preservation of the country buying capacity as an instrument for industrial and social policies.”


The ministry statement shows that the European counter proposal must still be analysed by other Brazilian government organizations, as the country is currently in charge of the Mercosur presidency, and by other countries in the bloc.


However, the document ends in a pessimistic note: “As it is currently presented, (the EU offer) means very large concessions by the Mercosur without the necessary counterparts in terms of equivalent EU concessions.”


ANBA – Brazil-Arab News Agency

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