Free trade negotiations between the European Union and South America’s Mercosur (South America’s regional trade bloc) seem unlikely to produce the desired effect, said Roberto Lavagna, Argentina’s Minister of Economy during a trade conference in Buenos Aires.
Both Argentina and Brazil have suffered economic difficulties, with the latter recovering from its worst recession in 11 years, and have relied on exports to fuel growth and help create jobs. Hence, the decision to seek an economic accord to lower EU tariffs/quotas on Mercosur’s products in return for increased investment opportunities and government contracts.
With the EU’s offer failing to satisfy the bloc’s officials, Argentina’s farming groups and companies started calling for a trade accord elsewhere. As free trade talks of the Americas stalled as well, the prospects of a swift solution seem distant.
In 2003 Argentina exported agricultural commodities and farm-based products including food and leather that accounted for 44% of the $29 billion total exports. Mr Brazil exported $73 billion-worth of basic goods in 2004, whilst Uruguay’s exports climbed to $199.5 million, with agricultural products taking 53%.
