Mercosur plays tough over arms trade

Europe and the Latin American trading bloc Mercosur are still facing off over a new trade deal with recent difficulties arising over armaments.

Brussels is pushing a non-proliferation clause into the pact, insisting Mercosur countries commit to not produce or trade atomic, biological or chemical weapons.

But the Latin Americans are not prepared to play ball.

While content to join the fight against terrorism, the bloc – which consists of Brazil, Argentina, Paraguay and Uruguay – will not have its hands tied.

“We have a potential problem,” said EU trade commissioner Pascal Lamy.

"We are not yet clear how this [clause] should be worded," said one trade official.

Handelsblatt reports that Germany, Holland and the UK are standing firm over the clause, but other EU governments may be more flexible.

Negotiations on what could be the world’s largest trade zone have been plagued by delays and poker-playing over the last two weeks.

“Official offers” were supposed to be exchanged mid-April, but nothing side would commit, believing the other trading bloc should make more concessions.

Nevertheless, the rhetoric is unclear from both sides as to what the exact state of play is.

EU farm chief Franz Fischler, currently on tour in South American, added to the confusion, saying that Brussels had put its cards on the table and was now waiting for Mercosur’s offer.

Argentine officials, who currently hold the Mercosur presidency, said however that they had already tabled their offer.

Either way both sides are staring each other out to see who will give in first on the all important question of trade in agricultural produce: sugar, beef and orange juice being of the greatest importance to the South Americans.

In return, Brussels wants to see better access for services and investement.

After incessant delays, an EU official played down the stalling saying that offers would be exchanged before the end of the month.

Next week will see five days of negotiations in Brussels.

All eyes are on the May summit in Guadalajara where the EU and Mercosur should make strong political commitments to wrapping up the deal.

Both sides are planning to have the paper signed by October, but Lamy recently sought to play down the importance of the date.

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