EU seeks trade deal South American nations in post-Brexit expansion within the YEAR

BRUSSELS is seeking to seal political agreement on a trade deal with the Mercosur bloc of South American economies as it continues its global expansion in response to Brexit.

EU boss Jean-Claude JunckerGETTY

The EU wants to sign a swift trade deal with Mercosaur

The EU wants to tie up the principles of a deal with countries including Brazil, Argentina, Paraguay and Uruguay by December having injected new energy into the talks following the UK’s decision to quit. 

Negotiations with Mercosur first began as far back as 1995 but have been in a deep freeze for a long time, with the two parties unable to agree on a range of issues including farming standards. 

But Brexit and the election of Donald Trump have given the bloc renewed impetus and it is now trying to tie up a series of dormant deals across the globe, from Mexico to Japan. 

At a summit of Mercosur nations last week leaders of the South American powerhouse agreed to finalise a political agreement with the EU by the end of the year, which would be a significant mark of progress. 

Trade secretary Liam FoxGETTY

Liam Fox is in the US drumming up Britain's international prospects

But much like in the case of Japan - with which Brussels signed a similar memorandum of understanding earlier this month - experts have warned a full trading agreement is still several years off. 

And many EU trade deals, including the CETA agreement with Canada which is still not fully ratified, run into difficult territory in the final stages once national and regional parliaments begin to have their say. 

Thus far there have been 28 largely fruitless rounds of negotiations between officials from the EU and Mercosur, and the talks only really began to make progress last summer after Britain’s shock vote to leave. 

At the latest salvo of talks, held just last month, both sides agreed to “move quickly in order to conclude negotiations” with the EU unnerved by Brexit and the South American nations by Mr Trump’s “protectionism”. 

Mercosur, which has very loosely modelled itself on the EU in its early stages, said it wants to announce a deal to the World Trade Organisation’s 11th ministerial conference, which takes place in Buenos Aires in December. 

UK 'crazy' to start trade talks with US now expert warns

Argentinian foreign minister Jorge Faurie said: “Mercosur’s participation in world trade should increase significantly and that is why trade agreements have been prioritised. 

“We are moving forward with a view to finalising the EU deal in December this year.” 

The South American bloc, which contains fast emerging economies, boasts a 500-million strong consumer market for European goods. EU Commission figures show that in 2016 EU countries exported £38.6bn of goods and imported £37.1bn from the region. 

Marcelo Elizondo, the CEO of consulting firm Desarollo de Negocios Internacionales, said the election of Mr Trump had focussed minds in South America on the benefits of free trade. 

He said: “The United States is turning more protectionist and we need to counter that. Trump’s position has convinced others to side with pursuing international trade integration.”

Whilst the EU is strengthening ties with South America the UK is looking further northwards, with trade secretary Liam Fox in the US this week to start talks on an agreement. 

Downing Street wants to strike a deal with Washington as quickly as possible to demonstrate Britain’s ambitions to be a global trading nation outside the EU. 

The talks were welcomed by Mr Trump, who tweeted from his official POTUS account, Mr Trump wrote: “Our special relationship w/ UK is going to be even better. @USTradeRep & UK’s @LiamFox met today to begin new chapter for stronger trade!” 

However, there have been concerns in some quarters that a quick fire trade deal with the US may lead to a loosening of agricultural standards, with American chlorinated chicken being raised as an example. 

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