EU fta Negotiations with sadc and Mercosur: integration into the world economy or market access for EU firms?

Abstract

The EU claims that its free trade agreements with regional organisations of developing countries can promote the respective regions' integration into the world economy. Taking as case studies EU negotiations with the Southern African Development Community and Mercosur, the paper argues that the EU and its partners have different conceptions of integration into the world economy. For the EU the latter simply means multilateral trade liberalisation under the wto, while, for its partners, it involves increasing industrial production and exports of manufactured products. If the latter notion is accepted, an fta with the EU should increase European foreign direct investment into the region or at least increase their trade surpluses, thus increasing the resources available for support of local firms. The paper argues that an fta with the EU will not be likely to produce these results; thus the fta will simply be an instrument to promote market access for EU firms.

Notes

1 Mercosur's original members were Argentina, Brazil, Paraguay and Uruguay. Venezuela became a member in 2005.

2 sadc's members are Angola, Botswana, the Democratic Republic of Congo, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, South Africa, Swaziland, Tanzania, Zambia and Zimbabwe. The Seychelles withdrew from sadc in 2004.

3 European Commission COM(95) 219 final, (16 June 1995), European Community Support for Regional Economic Integration Efforts among Developing Countries, p 8.

4 Ibid.

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6 European Commission COM(95) 219 final, pp 5 – 7,10.

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62 Since 2004 various attempts have been made to revive the negotiations. In November 2006 both sides exchanged proposals once more, apparently to no avail. ‘Andinos y Mercosur complicados con UE’, La Prensa Gráfica, 1 June 2007, at http://www.bilaterals.org/article-php3?id_article=8512, accessed 4 September 2007. In May 2007 it was announced that both sides would resume negotiations in the last quarter of 2007. ‘Mercosur y Europa reinician diálogo tlc’, La Prensa Gráfica, 29 May 2007, at http://www.bilaterals.org/article-php3?id_article=8457, accessed 4 September 2007.