In the on-going negotiations for an EU-Mercosur Association Agreement, the EU has today sent Mercosur a completed offer. This offer matches the approach and the level of ambition in the offer which the Mercosur sent the EU on Friday 24 September. The offer proposes a gradual liberalisation of Mercosur exports of industrial and agricultural goods to the EU, the opening of its services market, access to a public procurement market worth €200 bio as well as non-discriminatory rules for Mercosur investors in Europe.
The presentation of the offer follows the calendar agreed between the EU and Mercosur on 12 September. Today's move shows the EU's commitment to creating the world largest free trade area covering 650 mio people. Mirroring Mercosur's approach, the EU offer remains valid until 31 October 2004. The EU now hopes that both parties can evaluate the respective offers in order to decide whether or not the negotiations can be concluded by the 31 October.
The EU completed offer in details :
Goods : the EU proposes to eliminate practically all tariffs on imports of industrial goods from Mercosur. 65 % would be immediately eliminated upon entry into force of the agreement. Only 9 % will be eliminated at the end of the ten year transition period. The EU proposes to fast-track elimination of its tariffs in a clear recognition of the principle of special and differential treatment for the Mercosur block.
The EU also proposes to eliminate or reduce tariffs on substantially all agricultural imports from the Mercosur. On a small number of sensitive products for the EU, the offer proposes Mercosur access to the EU market by means of important quotas. The EU is ready to give Mercosur a better access to imports of processed agricultural products, a sector with important export potential by Mercosur, provided adequate protection for EU geographical indications is granted.
Services: The EU gives access to Mercosur service providers to basically all commercial services sectors in the EU. These sectors represent between 50-55% of the EU GDP.
Investments: The value of the EU total stocks is around € 350 billion. The EU offer goes beyond the EU commitments in the WTO agreement on services (GATS).
Public procurement: The EU gives Mercosur access to a market worth €200 billion. The EU reserves the opening up of the food and beverages sector, textiles and clothing and aeronautical sectors to improvement by Mercosur of its offer.
The offer contains a number of general conditions which the EU believes are essential to advance in the negotiations. The conditions are among others, ensuring that EU goods will circulate freely within the Mercosur block without being subject to internal customs duties; prohibition of duty drawback; adequate protection of EU geographical indications and elimination of export duties. The EU believes that the issues of domestic support to the agricultural sector is an issue which needs to be addressed in the on-going WTO trade talks and not at the bi-regional level.