EU economic and trade relations with Mercosur (debate) 
President
The next item is the debate on the report by Mr Varela Suanzes-Carpegna, on behalf of the Committee on International Trade, on economic and trade relations between the EU and Mercosur with a view to the conclusion of an Interregional Association Agreement.
Daniel Varela Suanzes-Carpegna 
rapporteur. - (ES) Mr President, Commissioner, ladies and gentlemen, I would like to begin by informing you that Commissioner Mandelson has contacted me to explain why he is not attending this debate, and I am grateful to him for that. The reason is the Summit on India in Finland; this led to an interesting conversation with the Commissioner on the agreement with Mercosur, in which I explained to him that, as well as India or China, Brazil and the Mercosur group are also emerging powers, a view that the Commissioner certainly, and fortunately, shares.
Let us hope that, when the bleak scenes of the Doha Round have faded away, when the elections in Brazil have taken place and when the political, economic and commercial foundations for the European Union's relations with Mercosur have been laid, which is this Parliament's intention in the report we are presenting today, we will take the definitive steps to guide the final phase of the negotiation of an ambitious European Union-Mercosur Association Agreement.
That is the intention of our report: to restore a political, economic and commercial priority, to establish a collection of principles, rules and guidelines that give form to a strategic political priority, and to strengthen the framework for relations between two trading blocs. If we can bring them together by means of an Association Agreement which, together with the political aspects of cooperation, involves an agreement on the creation of a free trade area, we will have taken the historic step of creating the world's largest such free trade area. At a time when new powers are emerging in the East, this would be a way to enhance the mutual interests of two blocs that are united by history and culture, with all the benefits that that would bring to our citizens on both continents.
We are talking about a combined population of more than 700 million inhabitants. Our report therefore calls for a full, ambitious and balanced agreement based on three pillars: a political and institutional chapter reinforcing democratic dialogue and political cooperation; a cooperation chapter promoting sustainable economic and social development; and a trade chapter establishing an advanced free-trade area with a broad agenda including, as well as reciprocal liberalisation of trade in goods and services, investment, public procurement, the protection of intellectual property rights, cooperation regarding competition and trade protection instruments, trade facilitation, and a binding dispute settlement mechanism.
Mexico and Chile are good examples of how our relations can be intensified by means of an association instrument. With Mercosur representing 45% of the population of Latin America and the region's largest market, as well as 45% of its GDP, the great potential for growth on both sides is clear. Furthermore, unlike what is happening in Latin America as a whole, where US imports are three times higher than those from the EU, in Mercosur the EU quota is about 25% compared with 20% from the United States.
According to the Institute of Political Studies in Paris, the costs of not reaching an agreement are estimated to be some EUR 3.7 billion per annum in trade and goods, rising to over EUR 5 billion if one includes investment and services. The trade agreement must be wide-ranging and cover all sectors, though the specific sensitivity of certain products must of course be taken into account, as the report indicates.
We did not wish to look into the details of the agreement's impact on the different sub-sectors, but rather we thought it appropriate to analyse the issue as a whole, to analyse the mutual interests at stake in the negotiation altogether. Our report therefore refers both to the EU's interests in Mercosur and to Mercosur's interests in the EU, and specific sections are dedicated to such important aspects as agriculture, with references to subsidies, geographical designations, bioethanol, etc.; NAMAs, where we include a special reference to fisheries and the sensitivity of certain processed products, such as canned tuna; services, where it is essential to achieve real improvements and clear and stable regulatory frameworks; investments, which are fundamental for sustainable economic development and generating employment and prosperity; public procurement and intellectual property, as well as the clear identification of possible barriers to trade and the approximation of rules on certification, accreditation, standardisation, etc., to promote fair trade and competition; and the establishment of an agreed dispute settlement instrument.
As well as the strictly technical and commercial aspects, the report also covers the mechanisms necessary for the industrial, employment and social cooperation of small and medium-sized businesses and aspects relating to technology, science, environmental measures, energy and communication, as well as European Union aid and solidarity mechanisms.
Finally, we include the necessary inter-parliamentary cooperation between the European Parliament and the Mercosur Parliament in order to make the agreement more democratically representative and bring the sometimes excessively technical aspects of the agreement more into line with the feelings of the citizens we represent, thereby giving the agreement a greater popular dimension.
We believe that, by means of this report, the European Parliament is making clear its support for a far-reaching and ambitious Association Agreement between the old continent and a large part of the new continent, which we want to be integrated, and we call upon the Commission to speed up the negotiations so that the agreement can become a reality as soon as possible, for the benefit of the citizens of both continents.
I would like to end, Mr President, by thanking all of the parliamentary groups for their invaluable understanding and support. I have received much understanding and support and I needed as much of it as possible in order to achieve the broad consensus that we wanted.
Neelie Kroes
Mr President, on behalf of my colleague Peter Mandelson, I would like to congratulate the rapporteur and the Committee on International Trade on the report on economic and trade relations between the EU and Mercosur with a view to the conclusion of an Interregional Association Agreement.
This report gives a very comprehensive picture of the current relations between the EU and Mercosur in the economic as well as the political field, and the European Commission shares most of the analysis presented in this report.
The European Commission very much concurs with the Committee on International Trade in its view that a conclusion of an ambitious and balanced Association Agreement between the EU and Mercosur is a strategic objective.
The Commission remains firmly committed to concluding the Agreement with Mercosur as soon as it is technically and politically feasible. Such an agreement would be the platform for promoting the relationship between the two regions and for promoting the common values and objectives that unite us.
An EU-Mercosur agreement would establish the first ever region-to-region association and the largest free-trade area in the world, covering almost 700 million people. As the INTA report points out, such an Association Agreement would enable both regions to respond more effectively to the challenges of globalisation. It would enhance the competitiveness of our economies, increase growth and thereby contribute to economic and social cohesion. Creating the world's largest market place would give an enormous boost to job creation, economic reform and productivity levels. A free-trade agreement with Mercosur is a very good example of how EU trade policy can contribute to the EU's wider approach to economic reform and competitiveness.
A region-to-region agreement with Mercosur would also serve as an instrument to support an integration effort within Mercosur and Latin America. The accession of Venezuela to Mercosur this year implies an enlargement of the region and the European Commission also hopes that the process of broadening and deepening regional integration will continue. We know from our own European experience that the reforms and adjustments necessary for integration are not easy. But we also know that the rewards make the effort worthwhile.
An Agreement would also create a more transparent and stable business environment for the EU and Mercosur companies. This would contribute to attracting more investment flows. Investment - and future investment - could possibly have the biggest impact on the shape of our future economic partnership with Mercosur. Although foreign direct investment to Mercosur increased in 2004 and 2005, the relative share of the region in relation to global EU investments has been sliding ever since the 1990s. This is a source of concern, as investment means transfer of know-how, of industrialisation and jobs. This relative downward trend of the Mercosur region in relation to the rest of the world, especially Asia, is one of the challenges of the future agreement and, possibly, its main potential economic benefit.
Let me just say a few words on the timing. In the report by the International Trade Committee, you request the establishment of a negotiating calendar which would allow us to conclude the EU-Mercosur negotiations as soon as possible. The European Commission is fully committed to concluding these negotiations as soon as is technically and politically feasible, but we have always been of the opinion that substance prevails over timing. What we want to achieve is an ambitious, comprehensive and balanced agreement which goes beyond our WTO commitments. As the INTA report points out, there is a cost to not having an Agreement. But there is also a long-term cost in missed opportunities from having a bad agreement.
Related to the issue of timing is the link between these biregional negotiations, the progress of the WTO Doha Development Agenda and the sequence of the two negotiations. In this respect, the European Commission fully agrees with the analysis of the report by INTA; both these processes can realise substantial synergies. They are not mutually exclusive; they are complementary.
To conclude, let me convey to you the following message, which I am sure that you share with me: for strategic and political reasons, the European Commission remains committed to negotiating and concluding an ambitious and balanced agreement with Mercosur.
Trade is an important element of this agreement but not the only one. Beyond the trade negotiations, we should not lose sight of the strategic, political and economic rationale of this agreement. Let us not forget the strategic dimension of a future Association Agreement, which is to promote a relationship between regional blocs which enhances peace, stability, prosperity, social progress and democracy.
Filip Kaczmarek 
Mr President, I would like to extend my heartfelt congratulations to the rapporteur, Mr Varela, for his extremely successful report on economic and trade relations between the European Union and Mercosur with a view to the conclusion of an interregional association agreement. The report is an important one, and it has come out at an appropriate moment.
As we know, negotiations regarding the EU-Mercosur Association Agreement have a long and rather troubled history. In the current situation - the failure of the Doha talks - we need to put out a strong and clear signal that an association agreement is necessary and favourable both to Mercosur members and to European Union members. There is also a need for greater political involvement in and support for the final success of the EU-Mercosur negotiations. I believe that the rapporteur has been very successful here. The report sends out a positive signal and can play an important and positive role in mapping out the next stages of the negotiations.
I would also like to thank the rapporteur for taking into account many submissions and comments from the report of the Committee on Development, which I represented as a draftsman. I would like to thank you for emphasising the importance of maintaining balance between trade and development in the final text of the agreement so that the sections relating to trade do not conflict with the sections on development, and for underlining the need to establish guarantees that the provisions on cooperation are effective in combating poverty and are in accordance with the EU's negotiating policy.
The Committee on Development drew attention to various aspects of development cooperation. It is clear that better economic and trade conditions can contribute towards resolving some of the social problems that exist in the Mercosur countries. The Committee on Development underlines the need to increase support for social development, education, reducing social inequalities, more equal distribution of income, and reduction of poverty. We also believe that we should support small and medium-sized enterprises and balance farming, tourism and infrastructure investment with protection for the natural environment. An important advantage of this report is that it provides institutional reinforcement of Mercosur. One of the ways it proposes to do this is by strengthening cooperation at parliamentary level, which would have a very positive effect.
José Ignacio Salafranca Sánchez-Neyra
on behalf of the PPE-DE Group. - (ES) Mr President, Commissioner, ladies and gentlemen, I would like to begin by congratulating the rapporteur, Mr Varela Suanzes-Carpegna, on the excellent work that he has done on behalf of the Committee on International Trade.
I would also like to express my regret at the absence of the Commissioner responsible, Mr Mandelson, although at least he has had the courtesy to call the rapporteur to explain, which does not happen very often in these cases.
In my capacity as draftsman of the opinion of the Committee on Foreign Affairs, Mr President, I would like to say that I would have liked to have obtained a firmer commitment from the Commission with regard to the timetable called for by the rapporteur in his report because ten years is a long time to be negotiating an agreement which, as the rapporteur and the Commissioner have pointed out, is an agreement on political association, economic coordination and cooperation.
It is clear that the European Union has not shown any lack of will; I believe that one of the Member States of Mercosur has shown clear and decisive support for the multilateral round, and the Chilean and Mexican experiences - Mr Varela Suanzes-Carpegna reminded us of this - demonstrate clearly that it is possible to go much further than the expectations established by the multilateral round.
I therefore believe, Mr President, that where there is a will there is a way. Although this kind of agreement is characterised by commercial aspects, when it comes to third-generation agreements, which have contained the democratic clause, it is clear that following the Vienna Summit, following the failure of the multilateral round, we must go the whole hog.
I believe that the European Commission must give its clear and decisive support to these association agreements, since Latin America does not need hand-outs, but opportunities, and this European Union-Mercosur Association Agreement offers an excellent opportunity for all of us to pursue our shared objectives of greater democracy, greater integration and, of course, more fluid and efficient trade, which mean peace, progress and prosperity for everybody.
Javier Moreno Sánchez
on behalf of the PSE Group. - (ES) Mr President, ladies and gentlemen, Commissioner, I would like to begin by congratulating the rapporteur, Mr Varela Suanzes-Carpegna, on his excellent report and, as shadow rapporteur for the Socialist Group in the European Parliament, to thank him for cooperating so closely since the initial exchange of views in the Committee on International Trade. That cooperation has helped to produce a balanced report containing the clear message that this House wants to address to the Commission: Commissioner, we want an association agreement to be reached between the European Union and Mercosur as soon as possible for several reasons.
Firstly, this agreement will be much more than merely a trade instrument: it will be an instrument at the service of peace, multilateralism and dialogue that will enable both blocs to adopt policies that promote shared economic, social and geopolitical values and interests.
It will enshrine the first North-South intercontinental association, offering an alternative to other attempts at integration, such as the FTAA, which had more to do with a desire for trade domination.
Furthermore, the European Union-Mercosur association will lead to the largest region of shared prosperity in the world, benefiting more than 700 million citizens, as previous speakers have said. Strengthening cooperation will make it possible to implement policies aimed at economic and social cohesion with a view to promoting development, as well as the equality and prosperity of citizens in both regions.
For the final report, the Socialist Group in the European Parliament considers it necessary to involve social actors more in the process of integration and to have a genuine interparliamentary dimension between the European Union and Mercosur. We hope that the other groups will support our amendments to this effect.
Commissioner, although efforts that come to nothing may be dispiriting, the Commission must do everything it possibly can to enable the agreement to be concluded and to put an end to the sense of stagnation and pessimism recently surrounding the multilateral and bilateral trade negotiations.
I shall end with a question, Commissioner: could you provide us with any information regarding Venezuela's process of accession to Mercosur and tell us what effect this process is having on the negotiations underway?
Helmuth Markov
on behalf of the GUE/NGL Group. - (DE) Mr President, Commissioner, I consider it right that the European Union is striving for beneficial and close relations with the most diverse regions of the globe and, of course, with Mercosur as well. However, it is wrong in my view if the Commission, by means of such agreements, tries to implement through the back door that which was rejected by the majority of countries during the WTO negotiations, namely, the liberalisation of international trade between partner countries with very different economic and social conditions, without taking the different situations in these countries into account. The EU - Latin America summit which took place in Vienna, as well as the alternative 'Enlazando alternativas' summit of last May afforded the opportunity of being better able to understand the wishes of the new voices in Latin America and of shaping relations in the interests of the populations of both regions in a more balanced manner, and not just for the benefit of industry and commerce.
A few days ago, the Commission published a communication on its trade policy strategy which focussed more strongly on economic liberalisation than had previously been the case. In yesterday's debate, Commissioner Mandelson again emphasised that he shares the same fundamental position. I would not like to advocate such a fundamental position. The report contains references which I deem to be extremely important, such as emphasising the principles of 'less than full reciprocity' and 'special and differential treatment depending on the levels of development'.
All in all, however, the report puts forward the known liberalisation demands and even goes beyond them by approving, for instance, the area of investment as the subject of a chapter in the EU-Mercosur agreement. As a result of international protests, however, this has been deleted in its entirety from the Doha development round negotiations.
My group supports a fair association agreement but not the route taken to a free trade area between the European Union and Mercosur.
Kader Arif
(FR) Mr President, ladies and gentlemen, Mr Varela's report quite rightly reminds us, and he is to be congratulated for it, that Europe and Mercosur would be well advised to strengthen their cooperation. In recent months negotiations with Mercosur have rather come to a standstill, with most of the controversial questions waiting to be sorted out at the WTO. With the recent suspension of the Doha Round, we must henceforth show an unwavering political will to relaunch these discussions.
Bilateral negotiations between regions assume a high level of economic and political integration from the two partners. Mercosur, however, seems weakened by the asymmetry of its members and by their sometimes divergent interests. Its institutions, therefore, need to be consolidated, in particular by setting up a regional parliament and a binding instrument for settling disputes. Furthermore, consideration needs to be given in view of Venezuela's membership which will give, without any doubt, a more political nature to the bloc and will alter the economic balance of power.
Since it is very much in the interest of the European Union to negotiate with a strong partner, it has to support politically and financially the emergence of Mercosur as an integrated regional bloc. This area has the authority to reinforce alongside us the multilateral structure and the economic and social model that we hope and pray for.
Antolín Sánchez Presedo
(ES) Commissioner, ladies and gentlemen, I would like to begin by congratulating my fellow countryman, Mr Varela Suanzes-Carpegna, on his report and on his open and positive approach, which I hope will lead to a significant consensus in this House.
Mercosur has more than 230 million inhabitants, it is one of the five largest economic areas in the world and it is the largest in terms of food production.
Relations between the European Union and Mercosur have deep historical roots and shared cultural foundations. The association agreement is therefore the best formula for extending our links and stimulating exchanges between us.
I am pleased that our amendments have been incorporated into the report, stressing the democratic component of our relations, based on shared values, the parliamentary dimension and the active participation of civil society, aspects in connection with which I still believe we should be making additional efforts, as Mr Moreno Sánchez has pointed out.
I am also pleased with the inclusion of our proposals on extending fisheries and tourism relations, creating appropriate regulatory frameworks, intensifying exchanges and increasing investments - with accounting and auditing standards duly harmonised - and dealing with the obstacles to rationalisation in the public sector.
Finally, I would call upon the Commission to treat this Agreement as an objective of the highest political priority.
Neelie Kroes
Mr President, I should like to thank the House for its comments. I have taken careful note of them and I will convey them to my colleague, Commissioner Mandelson, for his consideration.
For strategic and political reasons, the European Commission is totally committed to negotiating and concluding an ambitious and balanced agreement with Mercosur. Therefore, such an agreement remains a priority. Engaging in negotiations with other partners does not mean, by the way, that we are giving less priority to an agreement with Mercosur. The Treaty on Venezuela's accession has been signed by the Mercosur members. However, in order for Venezuela to be a full member, that Treaty has to be ratified by the parliaments. We, the Commission, do not foresee any major obstacles to the negotiation process as a result of the accession of Venezuela.
A lot has been said here about development. The EU is by far the biggest donor. We plan to pay out about EUR 50 million for the period between 2007 and 2013.
I believe that, for economic, cultural and political reasons, both the European Parliament and the Commission share the same view in respect of concluding an ambitious and balanced association agreement between the EU and Mercosur. It is a strategic objective.
President
The debate is closed.
The vote will take place tomorrow at 11 a.m.
