EU-Latin America trade talks hostage to WTO negotiations

(BRUSSELS) - The European Union aims to give a new boost to free-trade negotiations with Latin America at a summit Friday and Saturday in Lima, but the discussions remain eclipsed by long-struggling WTO talks.

"Lima will give us the opportunity to take stock of negotiations launched in 2007 with Central America and the Andean Community and where we are with Mercosur," said EU External Relations Commissioner Benita Ferrero-Waldner.

"We trust that if we continue to make progress we will be able to conclude the agreements toward end of 2009," she added.

Although all three sets of negotiations face their own tough political hurdles, the so-called Doha round of WTO free-trade negotiations currently looms large over all of them as the talks enter a crunch period.

"At the centre of all of these challenges is the possibility of a Doha deal in 2008," said EU Trade Commissioner Peter Mandelson.

WTO members are struggling to make a breakthrough in free-trade talks this month in order to clinch a broader agreement this year, widely seen as the last chance before the US administration and the European Commission change.

With trade ministers focusing squarely on Doha negotiations in recent years, long-running free-trade talks between the EU and Mercosur -- which were supposed to be concluded in 2004 -- have remained on the backburner.

Argentina, Brazil, Paraguay and Uruguay make up Mercosur along with Bolivia and Chile as associate members.

In the talks at the World Trade Organisation, the EU wants Latin American countries to make their markets more accessible to its goods and services while Latin American nations are seeking greater sales outlets in Europe for their agricultural products.

But the talks have stalled at the WTO, especially in the face of tough demands from Brazil and as well as because of differences over tropical products such as bananas.

"I hope we can use (the) summit to give renewed momentum to the Doha negotiation which is at a crunch point in Geneva," Mandelson said.

"Around the table ... in Lima will be some of the countries who can make a key contribution to making that happen," he added.

Spanish Foreign Minister Miguel Angel Moratinos said at the end of April that an EU-Mercosur free-trade agreement would not be possible before the first half of 2010, when Spain holds the EU's rotating presidency.

Meanwhile, free-trade talks between the EU and members of the Andean Community, which were supposed to be concluded in the first half of 2009, remain hobbled by divisions among the Andean countries.

EU talks with Central America have had more success although here too, Europe is struggling to negotiate with such a disparate group of countries.

Currently, Chile and Mexico are the only countries in Latin America that enjoy free-trade agreements with Europe.

With trade between Europe and those countries growing at up to 50 percent a year, the EU wants such pacts to serve as a model for other agreements in the region.

Summit EU - LAC