Caricom/Mercosur trade deal by Dec 31

TRADE and Industry Minister Ken Valley yesterday expressed confidence that Caricom and the Mercosur nations of Latin America (Argentina, Brazil, Paraguay and Uruguay) will conclude a free trade agreement by December 31. However, Valley said no attempt was made to encourage Mercosur to support Trinidad and Tobago’s bid for the Free Trade Area of the Americas (FTAA) Secretariat. Addressing a news conference at the Crowne Plaza after two days of exploratory talks between Caricom and Mercosur delegations, Valley declared: “I am hearing from both sides that there is a feeling that given the goodwill, we should be able to conclude a free trade agreement between Caricom and the Mercosur countries by December 31.”

When asked if there was any effort to encourage Mercosur to support TT’s FTAA bid, Valley said, “Quite frankly that issue did not even come up in our two days of exploratory talks.” TT currently has the support of 18 of the 34 FTAA nations to become the site of the secretariat. The most recent FTAA nation to throw its support behind TT was Chile. Turning back to the proposed free trade agreement with Mercosur, Valley said there was a lot of discussion within Caricom about it and he was certain that those in doubt would be convinced that “this is the right thing to do at this time.” The minister explained that in formulating the free trade agreement, consideration would be given to the level of development of the different countries in Caricom and Mercosur.

“I made the point that wherever Caricom negotiates bilateral agreements we tend to have what we call a carve out for the smaller islands. This means there would be free trade between the more developed countries of Caricom and the third party. In the case of the smaller islands, generally they are not required to open their markets, so that while they can sell products freely into the third party, there is no reciprocity — their markets are not open to that party,” he said.

The minister added that there were some sensitivities on both sides with regards to certain products and this would be worked out through an exchange of information between Caricom and Mercosur teams. Head of the Mercosur delegation, Paraguayan Foreign Affairs Minister Leila Rachid de Cowles, said, “For Mercosur, December 31 would be the ideal day (to conclude a free trade agreement with Caricom).” She explained that like Caricom, there were a lot of economic asymmetries in Mercosur. “We need to preserve some of the smaller economies like Paraguay and Uruguay,” de Cowles stated.

She said both Caricom and Mercosur had the political will at the ministerial level to conclude the agreement and all the necessary support would be given to their respective technical teams to ensure that the December 31 deadline was met. Caricom trade ministers will make a decision on the free trade agreement with Mercosur at their next meeting in May. The initiative for a Caricom/Mercosur free trade agreement first started in 2002, and Mercosur is currently considered as one of the major poles of attraction for investment in the world with a potential market of 210 million people and a joint Gross Domestic Product of US$1 trillion.