The European Union and South America's Mercosur bloc begin a fresh round of trade talks this week with renewed optimism that negotiators may be nearing an accord after almost 20 years of talks. Since trade negotiations with the United States were frozen after Donald Trump's 2016 presidential election victory, the European Union has turned its focus to other large economies and has already struck agreements with Japan and Mexico.
The Mercosur group of Argentina, Brazil, Paraguay and Uruguay, the world's fourth-largest trade bloc, is the next target on its trade hit list, given an extra impulse by metals import restrictions brought in by Trump. "We've never been so close. The beginning of the end is there," said an EU diplomat familiar with the talks, adding that both sides now better understood each other's limitations.
"Bridging the gap requires them to come out a bit more." In terms of tariff reduction, it could be the EU's most lucrative trade deal to date, with the savings potentially three times greater than for deals with Canada and Japan combined. The last round of talks, in April, ended with limited progress and finger-pointing about who was holding up a deal.
The agriculture minister of France, which with Ireland is most concerned about a sharp increase in beef imports, said last month he thought the talks were "at the point of death".
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