This article was downloaded by: [Northeastern University]On: 11 November 2014, At: 05:13Publisher: RoutledgeInforma Ltd Registered in England and Wales Registered Number: 1072954 Registered office:Mortimer House, 37-41 Mortimer Street, London W1T 3JH, UK

Third World QuarterlyPublication details, including instructions for authors and subscriptioninformation:http://www.tandfonline.com/loi/ctwq20

EU fta Negotiations with sadc and Mercosur:integration into the world economy or marketaccess for EU firms?Alfredo C Robles Jr aa Department of International Studies , De La Salle University , Manila E-mail:Published online: 03 Dec 2007.

To cite this article: Alfredo C Robles Jr (2008) EU fta Negotiations with sadc and Mercosur: integrationinto the world economy or market access for EU firms?, Third World Quarterly, 29:1, 181-197, DOI:10.1080/01436590701726608

To link to this article: http://dx.doi.org/10.1080/01436590701726608

PLEASE SCROLL DOWN FOR ARTICLE

Taylor & Francis makes every effort to ensure the accuracy of all the information (the “Content”)contained in the publications on our platform. However, Taylor & Francis, our agents, and ourlicensors make no representations or warranties whatsoever as to the accuracy, completeness, orsuitability for any purpose of the Content. Any opinions and views expressed in this publication arethe opinions and views of the authors, and are not the views of or endorsed by Taylor & Francis.The accuracy of the Content should not be relied upon and should be independently verified withprimary sources of information. Taylor and Francis shall not be liable for any losses, actions, claims,proceedings, demands, costs, expenses, damages, and other liabilities whatsoever or howsoevercaused arising directly or indirectly in connection with, in relation to or arising out of the use of theContent.

This article may be used for research, teaching, and private study purposes. Any substantialor systematic reproduction, redistribution, reselling, loan, sub-licensing, systematic supply, ordistribution in any form to anyone is expressly forbidden. Terms & Conditions of access and use canbe found at http://www.tandfonline.com/page/terms-and-conditions

EU FTA Negotiations with SADC andMercosur: integration into the worldeconomy or market access for EUfirms?

ALFREDO C ROBLES, JR

ABSTRACT The EU claims that its free trade agreements with regionalorganisations of developing countries can promote the respective regions’integration into the world economy. Taking as case studies EU negotiationswith the Southern African Development Community and Mercosur, the paperargues that the EU and its partners have different conceptions of integrationinto the world economy. For the EU the latter simply means multilateral tradeliberalisation under the WTO, while, for its partners, it involves increasingindustrial production and exports of manufactured products. If the latter notionis accepted, an FTA with the EU should increase European foreign directinvestment into the region or at least increase their trade surpluses, thusincreasing the resources available for support of local firms. The paper arguesthat 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.

The conclusion of free trade agreements (FTAs) between developed anddeveloping countries, exemplified by NAFTA, has been identified as one majorfeature of the ‘new regionalism’ that emerged in the 1990s. Since the late1990s this feature has been further developed by the practice of the EuropeanUnion, which has not only concluded FTAs with individual developingcountries, such as Mexico and Chile, but has also embarked on FTA

negotiations with regional groupings of developing countries. Negotiationswere initiated with Mercosur (the Common Market of the South in LatinAmerica) in 1999,1 with regional subgroups of the African, Caribbean andPacific (ACP) countries in 2002, and with the Association of Southeast AsianNations (ASEAN) in May 2007.These negotiations deserve special attention, because through them the EU

claims to be pursuing the aim of integrating its partner as a region into theworld economy. How an FTA can achieve this goal has not been adequately

Alfredo C Robles, Jr is in the Department of International Studies, De La Salle University, Manila.

Email: roblesa@dlsu.edu.ph.

Third World Quarterly, Vol. 29, No. 1, 2008, pp 181 – 197

ISSN 0143-6597 print/ISSN 1360-2241 online/08/010181–17 � 2008 Third World Quarterly

DOI: 10.1080/01436590701726608 181

Dow

nloa

ded

by [

Nor

thea

ster

n U

nive

rsity

] at

05:

13 1

1 N

ovem

ber

2014

addressed by the voluminous literature on the respective negotiations or onthe EU’s foreign, trade and development assistance policies. To be sure, thechallenge is a daunting one, since the negotiations involve very diverseregional organisations, whose members may themselves be characterised bygreat diversity. Nevertheless, this paper will attempt to take on the challenge,because such negotiations, if successful, will involve a far larger number ofdeveloping countries in FTAs than those presently participating in bilateralinter-state agreements. However, in order to narrow the paper’s scope,examples will be limited to the EU’s negotiations with two regionalorganisations from different regions: the Southern African DevelopmentCommunity (SADC),2 and Mercosur.This study adopts a deductive approach, taking as its starting point the

conception of the EU, as the partner that has actively promoted thesenegotiations. In the first part the goal of integration into the world economywill be critically analysed. It is argued that, although the EU and itsnegotiating partners apparently share the same goal, there are significantdifferences as to the understanding of ‘integration into the world economy’.The latter has become a central aim of the EU’s development policy, but theEU’s conception is extremely narrow, equating it purely and simply withmultilateral trade liberalisation. On the other hand, for its partners a wholehost of other goals, such as diversifying production, increasing manufacturedexports and attracting foreign direct investment (FDI), is inherent in thenotion. In the second part an attempt will be made to assess the role of FTAsas instruments for achieving the integration of developing regions into theworld economy. Given the differences in understanding of the goal, it isinevitable that there will be divergences between the partners as to an FTA’scontribution to the goal. The EU’s argument in favour of FTAs originates in arepresentation of the Single European Market (SEM) that neglects the EU’sactive role in promoting the competitiveness of European firms andprotecting them from competition. The EU’s partners need FDI and resourcesin order to promote their integration into the world economy. If an FTA withthe EU fails to produce these results, there is a risk that it will become a mereinstrument for market access of European firms, rather than a means ofpromoting integration into the world economy of the regions concerned.

Integration into the world economy as the goal of EU development policy

It is an axiom for the EU that, as the most successful regional integrationscheme, it is the ‘natural’ supporter of regional integration among developingcountries. While the EU cautions that its experience cannot be transposed toother regions, it has never doubted that it could offer valuable lessons to suchgroupings in ‘improving the functioning of regional institutions, absorbingthe adjustment costs originated by lowering barriers, and sharing the benefitsfrom integration’.3 However, since 1995 the EU’s professed support forregional integration among developing countries has been subordinated to anew overarching goal, that of the integration of the developing countries intothe world economy. On the surface it appears that SADC and Mercosur share

ALFREDO C ROBLES, JR

182

Dow

nloa

ded

by [

Nor

thea

ster

n U

nive

rsity

] at

05:

13 1

1 N

ovem

ber

2014

the same goal, but this superficial agreement should not disguise thedifferences in conception of the ways that they can be integrated into theworld economy.

The EU’s conception of integration

Integration into the world economy is not just a rationale for EU support ofregional integration among developing countries; it is the overall goal ofdevelopment co-operation, according to the 1992 Maastricht Treaty. TheEuropean Commission argued that, by first competing in regional markets,developing countries can ‘gradually and smoothly increase their competi-tiveness’ before they take on the challenges of the world market.4

The crucial question is how one knows when a region is integrated into theworld economy. In the absence of a widely agreed definition of ‘integrationinto the world economy’, we could take an intuitive approach to this conceptand start from the condition of those states that are not so integrated—thosestates that have been marginalised. By ‘inverting’, so to speak, the indicatorsof marginalisation, we would be able to identify the indicators of integrationin the world economy.In the early 1990s, when the EU adopted integration into the world

economy as the overall goal of its development policy, there was very littledoubt that the African countries were the paradigmatic examples ofmarginalisation from the world economy. Their contribution to worldproduction of goods and services was only 4% and they accounted for barely2% of world exports. Their specialisation in international trade wasregressive, consisting mainly of agricultural and mineral commodities forwhich both demand and prices were falling. At the same time theircontribution to global manufacturing value added fell to less than 1% inthe 1980s. Finally FDI represented only a fifth of total capital flows intoAfrica since the 1970s.5

Using these indicators of marginalisation, one can justifiably deduce thatintegration into the world economy entails at least some, if not all, of thefollowing: an increase in the region’s share of world production of goods andservices; an increase in the region’s share of world exports, generating tradesurpluses; progressive product specialisation, or specialisation in goods andservices for which demand is increasing; an increase in the share of worldmanufacturing; and an increase in the world share of FDI.Instead of adopting a broad conception of ‘integration into the world

economy’, encompassing any combination of the above indicators, theEuropean Commission emphasised what it called ‘multilateral integration’,which in turn is equated with ‘global liberalisation of trade’ and ‘multi-lateralisation of concessions’. In other words, a region would be consideredintegrated into the world economy if the countries there reduced their tariffsand adopted the liberalising rules advocated by the EU at the World TradeOrganizatio (WTO) on trade facilitation, investment, competition andgovernment procurement. The European Commission warned that thealternative to multilateral trade liberalisation—preferential treatment for

EU FTA NEGOTIATIONS WITH SADC AND MERCOSUR

183

Dow

nloa

ded

by [

Nor

thea

ster

n U

nive

rsity

] at

05:

13 1

1 N

ovem

ber

2014

members of a regional grouping—would encourage trade diversion, andultimately end in the failure of regional integration. Yet the Commissionprovided no evidence that intra-regional preferential treatment wouldinevitably cause regional integration to fail.6

The EU’s narrow conception of integration into the world economycontrasts sharply with the broader conceptions underlying the regionalintegration schemes of its developing country partners.

SADC’s and Mercosur’s conceptions of integration

The idea that a region can be integrated into the world economy by firstintegrating itself has been widely accepted by regional groupings ofdeveloping countries. The most succinct explanation of the linkage betweenthe two types of integration is provided by the Economic Commission forLatin America and the Caribbean. Regional integration would make itpossible to take advantage of economies of scale; to reduce unproductiverents deriving from the lack of competition; to influence expectations ofdomestic and foreign investors; to reduce transaction costs, which result fromgeographic, institutional, legal and social barriers that in turn undermine thecompetitiveness of goods and services produced in the region; to increaseefficiency, savings, investment and the productivity of all factors ofproduction as a result of the employment of a qualified labour force andthe strengthening of businesses; to incorporate technical progress andpromote inter-sectoral relations; to facilitate the standardisation of normsand regulations; to promote the creation of centres of excellence; to reducethe costs of basic and applied research, whose goal is to avoid or minimise therisk that investment will go into sectors characterised by slow technicalprogress; and to increase the yield of innovation.7

In Southern Africa, which in some observers’ view will be the mostdynamic African sub- region,8 SADC seeks to promote the region’s integrationinto the world economy. Although SADC’s combined GDP represents half ofthe GDP of ub-Saharan Africa, the paramount challenge for SADC is theexistence of extreme poverty in the region. Eight out of its 12 members areclassified as low-income economies by the World Bank; some 40% of theregion’s population lives below the poverty line of $1 a day; nearly 70% liveson less than $2 a day. To make matters worse, poverty has increased since thelate 1990s in all member states, except Mozambique and Mauritius. Finally,more than 14 million of the 37.8 million people in the world affected withHIV/AIDS live in SADC countries.9 Southern Africa illustrates the plight ofstates that are marginalised in the world economy. Over 80% of their exportscomprise primary commodities, while manufactured products, primarily lowvalue-added consumer goods, account for only about 10% of their exports.Their comparative advantages are to be found in regressive sectors of theworld economy—energy, agricultural and food products and nonferrousmetal.10

Originally established in 1980 as the Southern African Development Co-ordination Conference (SADCC) and founded in its present form in 1992,

ALFREDO C ROBLES, JR

184

Dow

nloa

ded

by [

Nor

thea

ster

n U

nive

rsity

] at

05:

13 1

1 N

ovem

ber

2014

SADC aims to promote social and economic development through theelimination of obstacles to the free movement of capital, labour, goods andservices, and people in the region. In 1995 SADC members adopted a Protocolon Trade, which aimed to further liberalise intra-regional trade in goods andservices; to ensure efficient production within SADC; to improve the climatefor domestic, intra-regional and foreign investment; to enhance the economicdevelopment, diversification and industrialisation of the region; and,ultimately, to establish an FTA in the SADC region by 2006.11

As this cursory survey shows, integration into the world economy isnowhere identified exclusively with multilateral trade liberalisation. The factthat diversification of production, industrialisation and encouragement ofdomestic, intra-regional and foreign investment are identified as the primarymechanisms for reducing Southern Africa’s marginalisation in the worldeconomy supports the argument that it has adopted a broader conception ofsuch integration. SADC members wish to increase their exports, to diversifythe composition of their exports so as to increase the share of manufacturedgoods, and to increase their trade surpluses.At first glance it might seem inappropriate to compare SADC and

Mercosur. Three of the latter’s members (Argentina, Uruguay andVenezuela) are classified as upper-middle-income economies by the WorldBank; the two others (Brazil and Paraguay) are lower-middle-incomeeconomies.12 In general, standards of living are much higher in the SouthernCone of the Americas than in Southern Africa. That said, Mercosur’sestablishment in 1991 also reflected an acceptance of FDI and integration intothe world economy as a means to promote growth. In the early 1990s thecompletion of the EU’s SEM, the conclusion of NAFTA, and the paralysis ofthe Uruguay Round negotiations fuelled fears among the Southern Conecountries that they might be marginalised in the world economy. At the sametime inward-oriented import substitution strategies and state intervention inthe economy had been discredited in Latin America by the debt crisis.13

The goal of the Treaty of Asuncion was to constitute a common market by31 December 1994, which was to serve as a pole for attracting FDI, creatingeconomies of scale, enhancing possibilities for industrial specialisation andultimately making Mercosur a platform for export to world markets.14

Consciously emulating the EU model, Mercosur’s members undertook toliberalise circulation of goods, services and factors of production, to create acommon external tariff (introduced in 1995), and to formulate a commontrade policy vis-a-vis third states.It might seem surprising that Mercosur’s members sought integration into

the world economy, given that they are among the world’s major exporters ofa number of commodities (coffee, soybeans and iron ore in the case of Brazil,and cereals and feed in the case of Argentina). The problem lies in the natureof their specialisation: for the most part their exports consist overwhelminglyof primary commodities. They have been far less successful than the EastAsian countries in diversifying their exports and increasing their share inworld exports of manufactured goods. The regressive nature of theirspecialisation has entailed large trade deficits, thanks primarily to imports

EU FTA NEGOTIATIONS WITH SADC AND MERCOSUR

185

Dow

nloa

ded

by [

Nor

thea

ster

n U

nive

rsity

] at

05:

13 1

1 N

ovem

ber

2014

of manufactured goods. Hence, Mercosur countries are seeking to change thenature of their integration into the world economy. Like SADC, Mercosurwishes to stimulate intra-regional and foreign investment as a mechanism forencouraging industrialisation and diversifying their production and exports.As in the case of SADC, multilateral liberalisation of trade for Mercosurcannot be limited to multilateral trade liberalisation.After having explained the divergent conceptions of integration into the

world economy, we shall now examine the question of whether FTAs with theEU can indeed integrate Southern Africa and Mercosur into the worldeconomy.

FTAs with the EU as an instrument of integration into the world economy

The EU’s conception of the way in which regional integration can facilitateintegration into the world economy is shaped by the experience of the SEM.Yet the EU argument that an FTA with itself can facilitate such integrationignores the fact that the SEM was accompanied by support for R&D byEuropean firms and a degree of protectionism. In its negotiations withdeveloping countries, the EU simply insists on lowering or abolishing tradebarriers. From the perspective of the EU’s negotiating partner, an FTA withthe EU may make sense if it stimulates EU FDI into their region. At the veryleast an FTA should improve their trade surpluses with the EU and in thismanner make available to the organisation’s members additional resourcesthat could be utilised to enhance the competitiveness of local industries.Unlike the EU, the central organs of SADC and Mercosur do not dispose oftheir own resources that would make possible regional financing of supportfor R&D by local firms.

The Single European Market: supporting and protecting EU firms

The vision of the SEM as a comprehensive exercise in deregulation is onlypartially accurate, as deregulation went hand-in-hand with R&D support forEuropean firms and trade protection in strategic sectors. The SEM has beendealt with extensively elsewhere; hence we shall only recall here the EUprogrammes in semiconductors and telecommunications. Both sectors werechosen for strategic reasons. In electronics European firms were weak incapital goods as well as consumer goods sectors, leading to losses in marketshares in European and third markets to US and Japanese firms.Telecommunications was a large and growing sector that provided productsessential to the infrastructure of a modern economy and the SEM’sfunctioning.15

The European Commission’s (EC) response was to establish sectoralpolicies, involving ‘selective, firm-requested government intervention’.16 Insemiconductors, the Commission funded pre-competitive research byEuropean companies through two phases of the European StrategicProgramme for Research in Information Technology (ESPRIT). ESPRIT I(1984 – 88), with a budget of 800 million ECU from the EC and another 800

ALFREDO C ROBLES, JR

186

Dow

nloa

ded

by [

Nor

thea

ster

n U

nive

rsity

] at

05:

13 1

1 N

ovem

ber

2014

million ECU from European firms, covered five information technology sub-programme areas, the largest of which aimed to ensure that Europemaintained a competitive position in the supply of components for thedomestic IT industry. ESPRIT II (1988 – 92), with EU funds amounting to 1530million ECU and 1530 million ECU from European firms, involved newmicroelectronics and peripherals research programmes, with a view toensuring the commercial exploitation of the results of ESPRIT I. There can belittle doubt that ESPRIT was a major factor in the resurgence of the EU’ssemiconductor industry in the 1990s.17

In telecommunications, the EC proposed Research and Development inAdvanced Communications Technologies for Europe (RACE). The definitionphase (1985 – 87), with EC funding of 21 million ECU and equivalent fundingfrom firms for R&D, set the requirements for a European IntegratedBroadband Communication (IBC) network and provided the technologicalbase for it. The main phase (1988 – 92), with EC funding of 460 million ECU

and a matching amount from the firms, focused on eight priority areas,including mobile communications, image and data communication, andinformation security technology. RACE was also widely considered to be asuccess story.18

It is little known that, during this period, the EC continued to protect thesestrategic sectors from foreign competition. At the same time as the EU wasfunding R&D of European firms, it set restrictions on free trade. In the case ofsemiconductors, these protectionist measures were of at least five differenttypes. First, the EC continued to maintain a 14% tariff on imports. This typeof protection has continued well into the 21st century. In 2004 Japancomplained that the EU was imposing a tariff rate of 14% on digitalaudiovisual and household electrical appliances. If these had been classifiedas information technology goods, they would be eligible for zero tariff,according to the WTO’s Information Technology Agreement. Second, certainplasma display panels (PDPs) from Japan had been reclassified by the EU asvideo monitors, which were subject to a 14% tariff. As computer terminals,the PDP would have been subject to zero tariff.19 To protect European firms,the EU enforced local content rules requiring that chips have at least 50% EC

value added. Third, a February 1990 procurement directive authorised EUagencies to refuse tenders if 50% or more of the value of the manufacturedgoods forming part of the tenders was of non-EU origin. Fourth, rules oforigin defined the country of origin of imports as the country in which theknowledge-intensive chip creation stage occurred, and where the microchipwas given all its functional capabilities. This had the effect of severely limitingmicrochip imports into the EU.Finally the European Commission almost invariably responded favourably

to complaints by European firms that US and Japanese firms were dumpingsemiconductors in Europe.20 By the 1990s the complaints extended toproducers of electronic products from other East Asian countries. Theinvestigations into the alleged dumping of electronic weighing scalesimported from Japan, South Korea and Singapore provide a graphicillustration of the Commission’s protectionist attitude. In the Commission’s

EU FTA NEGOTIATIONS WITH SADC AND MERCOSUR

187

Dow

nloa

ded

by [

Nor

thea

ster

n U

nive

rsity

] at

05:

13 1

1 N

ovem

ber

2014

view European industry was ‘under attack’ in the 1980s from Japan, whichwas allegedly dumping medium and high-segment imports, and from SouthKorea and Singapore, which were allegedly dumping low-range models. This‘attack’ was said to be responsible for the decline in European productioncapacity, a 4% fall in prices, the decline of the European industry’s marketshare in Europe from 84% to 62%, and the loss of 25% of jobs between 1988and 1991. In response the EU imposed anti-dumping duties ranging from7.2% to 29% on imports from South Korea and 8.5% to 31% on importsfrom Singapore. These duties raised the prices on the European market of theelectronic weighing scales originating from these countries.21

When arguing for FTAs with developing countries and regions, theCommission has rarely, if ever, recognised that the EU’s common externaltariff offered some degree of protection from imports. Similarly the idea that,during periods of development of strategic industrial sectors, protectionshould be afforded to regional firms and industries by regional organisationsof developing countries was not incorporated into the EU’s policystatements; neither did the suggestion that the EU, as a ‘natural supporter’of regional integration, should assist the developing countries to developstrategic industrial sectors. The Commission’s enthusiastic support for FTAswith regional organisations of developing countries raises the question ofwhether such FTAs did not contradict the EU’s own experience, whichguaranteed tariff protection for strategic industrial sectors in the run-up tothe completion of the SEM.If integration into the world economy had been understood to entail an

increase in exports of manufactured goods, then an FTA with the EU shouldstimulate domestic and foreign investment aimed at increasing manufactur-ing production and exports, notably of goods and services for which demandis increasing. The Commission did recognise the need for increased FDI indeveloping regions, but it simply assumed that FTAs would stimulateinvestment by increasing transparency and making economic policy reformsmore credible. The last two sub-sections will argue that EU FTAs with SADC

and Mercosur will not necessarily encourage EU FDI into these two regionsand might not even increase the resources available to members of these twoorganisations for supporting local firms.

The risks of an EU– SADC FTA

As mentioned earlier, SADC wished to encourage domestic, intra-regional andforeign investment in order to develop its industry and diversify productionin Southern Africa, as well as to increase exports, particularly ofmanufactured goods, to the world market. In Southern Africa, investmentis required in agriculture for inputs like seeds, fertilisers and machinery.Investment would raise productivity and increase the chances of intra-regional trade in agriculture, prospects for which are said to be favourablebecause of complementary climatic conditions and differences in factorendowment across the region.22 Investment is also essential if industrialproduction is to be increased (at present only South Africa, Mauritius and

ALFREDO C ROBLES, JR

188

Dow

nloa

ded

by [

Nor

thea

ster

n U

nive

rsity

] at

05:

13 1

1 N

ovem

ber

2014

Zimbabwe have manufacturing sectors that represent a quarter of GDP) anddiversified (manufacturing is concentrated in food products, beverages,tobacco and textile). While SADC members have proposed setting up an SADC

FTA, they recognised that, for purposes of industrial development, regionalindustries may have to be protected. Thus, sugar, wheat flour, textiles andgarments and motor vehicles were excluded from intra-SADC free trade.Moreover, SADC provided for the possibility of suspension of tradeliberalisation for the sake of infant industry protection.Neoliberal economists warn that it would be a mistake to emphasise the

benefits from trade among ‘a relatively small number of extraordinarily poorpeople’.23 They point out that the total SADC market was estimated in 1999 at$17 billion, which was less than one-third of the market of the ASEAN FreeTrade Area.24 In their view the smaller SADC members should encourageproduction not just for the region but for the global market, following theexample of Mauritius. At present SADC attracts only 2% of total FDI flows todeveloping countries. It follows for these economists that the most importanttask for SADC is to create the appropriate environment for FDI.25 Thanks tofree trade and the abolition of protection of particular industrial sectors,multinational firms would allegedly be able to import inputs at the least cost,instead of being obliged to purchase them at higher cost from within theregion.In its relations with the EU, SADC had little choice but to accept the

opening of negotiations for an FTA in September 2002, which were mandatedby the Cotonou Partnership Agreement (CPA) of 2000 signed between the EUand the ACP countries. Under the CPA, subgroups of the FTA other than leastdeveloped countries would simultaneously introduce an FTA amongthemselves and establish an FTA with the EU by 1 January 2008.Could the competitiveness of Southern African agricultural products be

improved by FDI from Europe? The likelihood of such FDI is open toquestion. In 2002 62% of the investments of multinationals in the foodprocessing industry was concentrated in the developed regions—NorthAmerica, Europe and East Asia. Most European food-processing multi-nationals invest primarily in Western Europe. In the developing world theyfocus their attention on emerging markets where purchasing power is high orwhere major cities exist, principally in Latin America, South Asia and SouthAfrica. In the poorer developing countries the food-processing multinationalsconduct business through exports, minority share-holding or licensing anddistribution agreements. Even in the Mediterranean countries, which havebilateral association agreements with the EU, European firms invest verylittle. Little wonder that, in 2005, the UN expressed the view that theprospects for FDI from all sources—whether European or not—in agriculturein Africa as a whole were not very bright.26

But would an EU– SADC FTA not attract resource-seeking FDI to SouthernAfrica? In other words, given the size of the regional market, would FDI notbecome a viable alternative to exporting to Southern Africa? According tovarious surveys, European firms generally invest in SADC in order to supplylocal markets.27 In other words, European FDI in SADC does not aim to

EU FTA NEGOTIATIONS WITH SADC AND MERCOSUR

189

Dow

nloa

ded

by [

Nor

thea

ster

n U

nive

rsity

] at

05:

13 1

1 N

ovem

ber

2014

develop Southern Africa as a base for export to the world market. EvenSouth Africa is considered only as a base for production for SouthernAfrica.28 Defenders of an FTA with the EU might find in this a confirmationthat free trade would make Southern Africa more attractive as a regionalbase for production.Nevertheless, doubts must be entertained concerning the possibility of

substantial increases in FDI in manufacturing in most SADC countries. Ingeneral, the bulk of FDI in Africa goes to oil and the mining sector.29 In themid- and late 1990s it was the financial services industry in Southern Africa,particularly in Botswana, Lesotho, Malawi, Mozambique, Tanzania, Zambiaand Zimbabwe, that was the target of FDI by British and Portuguese banks,but FDI took the form primarily of mergers and acquisitions andprivatizations.30 The products of the financial services industry not beingtradeable, their contribution to increasing the production and exportcapacity of SADC members is indirect. Assuming for the sake of argumentthat European firms start to relocate industrial production in South Africa,the consequence might be to concentrate industrial production further in thatcountry, aggravating the existing asymmetry in industrial developmentbetween South Africa and other SADC members.31

Could SADC members at least increase their earnings from exports toEurope to such an extent that they themselves could finance intra-regionalinvestment in agriculture and manufacturing? South Africa’s 1998 FTA withthe EU had already fuelled fears that Southern African agricultural products(eg meat from Botswana, food and live animals from Lesotho, processed fishfrom Namibia, and cotton yarn, citrus and canned fruit and soft drinkconcentrates from Swaziland) would be unable to compete with heavilysubsidised European products entering Southern Africa via South Africa.32

Once an FTA is introduced with SADC, such European products would enterits markets directly, without any need for transit via South Africa, and wouldmost probably flood SADC markets.An impact study funded by the UN Economic Commission for Africa casts

doubt on the FTA’s ability to increase SADC trade surpluses. It predicted thatthat any increase in exports resulting from an FTA would accrue to the EU,through an increase in EU market share. EU exports to SADC would rise byas much as 30% in Tanzania and Swaziland and by 20% in Mozambique.The EU’s potential gain was estimated to be $213.5 million in Angola, $88.6million in Tanzania and $17.8 million in the smaller SADC members. As awhole all the expansion of EU– SADC trade would correspond to an increasein the EU’s market share.33 If these projections materialised, then SADC

members would not be able to accumulate resources enabling them to financedomestic and intra-regional investment or support local firms.It is sometimes argued that free trade will result in lower prices of imported

raw materials and inputs, which could in turn enhance the Southern Africancountries’ capacity to produce goods for world markets. Lower input priceswould be to the benefit of SADC when associated with the diversion of tradein favour of European firms of almost 20% in Tanzania and 32% inBotswana, Lesotho, Namibia and Swaziland, resulting from the FTA.34

ALFREDO C ROBLES, JR

190

Dow

nloa

ded

by [

Nor

thea

ster

n U

nive

rsity

] at

05:

13 1

1 N

ovem

ber

2014

However, such diversion of trade would not necessarily improve SADC’Scapacity to produce manufactured goods for the world market. If at presentSADC countries import inputs and raw materials from the rest of the world,one reason might be that European inputs and raw materials are moreexpensive (perhaps up to 20%–30% more than world market prices). Shouldan FTA encourage SADC countries to purchase inputs from European firms,the result would be a less efficient use of scarce resources by the SADC

countries.35

Given these and other risks associated with an FTA, it is not surprising thatSADC’S attitude in the negotiations has been described as unresponsive andnon-committal.36 In February 2007 all African countries—not just the SADC

members—requested a one-year extension of the FTA negotiations, as theydid not believe that it would be possible to conclude them by the 31December 2007 deadline.37 In August 2007 the EU publicly expressedfrustration at the slow pace of negotiations with SADC.38 For its part, theSADC Secretariat was said to be considering alternatives that could beimplemented if the negotiations failed to meet the deadline.39 However, EUTrade Commissioner Peter Mandelson warned all ACP sub-regions that theEU did not have a ‘Plan B’ for the FTAs.40 Whether or not the deadline ismet, it can be plausibly argued that, if the EU is not persuaded to modify itsinsistence on duty-free access to SADC for European products, an EU– SADC

FTA will serve primarily to improve European firms’ access to SouthernAfrican markets, without necessarily contributing to the region’s integrationinto the world economy.The final sub-section presents the disagreements between the EU and

Mercosur over the way in which an FTA with the EU could have facilitatedMercosur’s integration into the world economy.

The failed EU–Mercosur FTA negotiations

As mentioned earlier, the economic conception of Mercosur envisioned aregional market that would attract FDI and ultimately make the region aplatform for export to world markets.41 In the 1990s a boom in FDI seemed toturn into reality Mercosur’s ambition. Most of the FDI came from Europe,with the total rising from $6 billion in 1994 to $53 billion in 1999, beforedeclining to $5 billion in 2005 as a result of the region’s financial crises. At thesame time Mercosur’s trade balance with the EU changed from a surplus of$8.6 billion in 1990 to a deficit of $6.4 billion in 1998. Subsequently thebalance improved as a result of the region’s financial crises, so that, by 2005,Mercosur had a surplus of $9.5 billion.42

In view of the size of Mercosur’s deficit with the EU in the late 1990s, it isnot surprising that it was Mercosur that sought FTA negotiations with theEU, which were launched in November 1999. Its hopes were encouraged byeconomic simulations demonstrating that an EU–Mercosur FTA would bemore beneficial for it than the US-backed proposal for a Free Trade Area ofthe Americas (FTAA).43 The EU finally agreed because of the desire forcontinued access to Mercosur markets. Despite the prevalence of poverty in

EU FTA NEGOTIATIONS WITH SADC AND MERCOSUR

191

Dow

nloa

ded

by [

Nor

thea

ster

n U

nive

rsity

] at

05:

13 1

1 N

ovem

ber

2014

Mercosur, there were 30 million Brazilians and six to eight million Argentineswith an income of $10 000, who could purchase European consumerdurables.44 The EU also wished to avoid the risk that an FTAA could reduceEuropean market shares in Mercosur, in the same way that NAFTA had led toa 50% fall in European market shares in Mexico.45

Scholars from Mercosur explicitly declare that one of its aims is to attractEU FDI that can export back to the EU.46 There is no denying that thecompetitiveness of Mercosur’s manufactured goods exports to the EU and tothe rest of the world needs to be enhanced. Most of the capital- andtechnology-intensive goods traded between Argentina and Brazil, theregion’s two largest economies, could not be exported to the EU, becausethey are of low and medium quality.47 Lack of competitiveness explains whyMercosur firms are unable to take advantage of duty-free access for theirmanufactured goods to the EU market and to expand their manufacturedexports to the EU as East Asian firms have done.Yet an FTA with the EU would have threatened key industrial sectors in

Mercosur: machinery and electrical equipment, chemicals, plastic andrubber, textiles, base metals and transport equipment.48 In these sectorsMercosur is one of the EU’s most lucrative export markets and it isprecisely in these sectors that Mercosur’s tariffs are higher than the average.Interestingly enough Mercosur’s negotiating strategy manifested a desire tomaintain national industrial policies that would enable its members toenhance their industries’ competitiveness in the face of Europeancompetition. In textiles and clothing as well as footwear, Mercosur opposedreciprocity—duty-free access for European products to the Mercosurmarket in return for duty-free access in Europe of Mercosur products.Mercosur demanded longer periods for the FTA’s implementation,accompanied by slower tariff elimination. It refused the idea of anaccelerated tariff phase-out schedule for selected sectors, as desired by theEU. Finally, and most significantly, Mercosur insisted on maintaining thepower to increase tariffs on products whose production would begin afterthe FTA had already entered into force. This power would evidently be aninstrument for nurturing infant industries that did not exist at the time ofthe conclusion of the FTA.49

Would an FTA not stimulate EU FDI in Mercosur? Until the mid-1990s thebulk of EU FDI in the region was market-seeking, with German firms playinga dominant role in sectors such as food and tobacco in Argentina and inpractically all sectors in Brazil. It was only European automobile firms thatexported part of their local production, and even then they exported only toregional markets.50 It is doubtful that an EU–Mercosur FTA would triggerdramatic changes in European manufacturing firms’ strategies and persuadethem to use Mercosur as an export platform. Claims that European firms inthe car, chemical and petrochemical industries are interested in efficiency-seeking FDI in Mercosur remain unsubstantiated.51 There are more reasonsto believe that European firms will continue to behave as they have in thepast. Europeans openly admit that the EU does not wish to re-import intothe EU goods manufactured by European firms in Mercosur.52 On the

ALFREDO C ROBLES, JR

192

Dow

nloa

ded

by [

Nor

thea

ster

n U

nive

rsity

] at

05:

13 1

1 N

ovem

ber

2014

contrary, an FTA, guaranteeing duty-free access of European goods toMercosur, might discourage European firms from relocating industrialproduction in the region. The sole exception might be the car industry, whichin the short term will continue to supply regional markets from withinMercosur.53

Doubts regarding an FTA’s capacity to integrate Mercosur into the worldeconomy are further reinforced as a result of the shift of orientation ofEuropean FDI since the mid-1990s from manufacturing to the serviceindustries. Dominated by Spanish and Portuguese firms, European FDI hasbeen concentrated in telecommunications, electricity, gas and water, financialservices, banking, insurance and air transport.54 FDI in services can hardlycontribute to increasing Mercosur’s industrial production, its exports ofmanufactured goods to the EU, or its trade surpluses with the EU, for thesimple reason that the service sector generates no tradeables.It might be objected that FDI in services indirectly raises productivity by

improving efficiency and cost of service delivery, yet even this contributionis debatable. While in telecommunications critics from Mercosur areprepared to admit that coverage has broadened and quality has improved,the same can not be said of FDI in gas and water, where improvements aresaid to be more modest. In electricity supply there has been a deteriorationof supply.55 In financial services Spanish banks throughout the region havefailed to increase the volume of credit, or to reduce the cost of financialservices.56

The profitability of EU FDI in services explains the EU’s 2001 demand thatMercosur agree to substantial liberalisation of all service sectors. In 2003 theEU went a step further and demanded that national treatment—the grantingof identical treatment to European and Mercosur firms—be put on theagenda. Given the lack of Mercosur’s capacity to export services to the EU,or to invest in services in the EU, national treatment would simply havegenerated a trade deficit for the association.57 The latter insisted on eachstate’s right to adopt regulations on services in conformity with nationalpolicies. Liberalisation would have to take into account national policyobjectives and differences in level of development. With respect to nationaltreatment, Mercosur wished to be able to modify or to withdraw anycommitment made. As was to be expected, the EU refused to makeconcessions in these matters.Could an FTA with the EU at least increase Mercosur’s trade surpluses,

which could in part be used to finance domestic or intra-regional investment?Regional financing would be central in ambitious proposals put forward byBrazilian scholars for a relaunching of Mercosur following the Argentinefinancial crisis of 2001, and involving industrial reconversion, regional publicgoods, joint development of new products, niches, and sectors, and exportalliances.58

In the negotiations with the EU Mercosur placed great hopes on improvedmarket access for 11 products (bovine, pork and poultry meat; sugar,ethanol, tobacco, powdered milk, corn, wheat, orange juice and fruits).59 Atpresent, Mercosur’s exports to the EU are limited to a small number of

EU FTA NEGOTIATIONS WITH SADC AND MERCOSUR

193

Dow

nloa

ded

by [

Nor

thea

ster

n U

nive

rsity

] at

05:

13 1

1 N

ovem

ber

2014

agricultural products with low value-added.60 An FTA should ideally make itpossible for Mercosur not only to increase export volumes and to transformits deficit into a surplus but also to diversify product composition and tomove up the value chain. Mercosur firms would be able to export moreproducts for which demand was increasing, changing their patterns ofspecialisation from regressive to progressive. Increases in Mercosur’s share ofworld exports and its trade surpluses would provide capital that could thenbe reinvested in agricultural processing and in manufacturing. Predictablythe central obstacle to progress in the negotiations was the EU’s CommonAgricultural Policy. The EU refused to abolish subsidies to agriculture andpreferred to await the outcome of negotiations at the WTO, which woulddetermine European concessions in agriculture to all developing countriesand, therefore, the extent of EU concessions to Mercosur in the bilateralcontext. The EU’s offers on agriculture were so modest and hedged withnumerous restrictions that Mercosur complained that they did not reallycreate free trade at all.61

In the end, both sides considered each other’s offers in agriculture andservices to be unsatisfactory, and negotiations were suspended in October2004. Thus came to a (temporary?) conclusion the EU’s first negotiation witha regional organisation comprising developing countries.62

Conclusions

To return to the question posed by the title, there would be no contradictionbetween integration into the world economy and market access for EU firmsif we accepted the EU view that the former was confined to multilateral tradeliberalisation. The answer to the question would be radically different ifintegration into the world economy meant an increase in world share ofproduction and exports of manufactured goods and goods for which demandis rising.An FTA with the EU would integrate developing regions into the world

economy by stimulating EU FDI in the regions. At the very least an FTA

should increase their trade surpluses with the EU, part of which could thenbe used to finance domestic and regional investment in support of localfirms.It has been argued here that, given the behavior of European firms, an FTA

with the EU would not really encourage EU FDI in SADC or Mercosur.Moreover, the competitiveness of European goods, accompanied byEuropean protection for sensitive sectors, means that an FDI would riskincreasing the region’s trade deficits with the EU, undermining localindustries, and hampering efforts to enhance competitiveness of local firms.These conclusions challenge the rhetoric of the EU, which is often

uncritically echoed by many scholars, namely that it is the natural supporterof regional integration among developing countries, and that its goals indoing so are political rather than economic. As for the regions concerned, it ispossible that the failure of negotiations with the EU will preserve theirchances of integrating themselves into the world economy.

ALFREDO C ROBLES, JR

194

Dow

nloa

ded

by [

Nor

thea

ster

n U

nive

rsity

] at

05:

13 1

1 N

ovem

ber

2014

Notes

1 Mercosur’s original members were Argentina, Brazil, Paraguay and Uruguay. Venezuela became amember 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 andZimbabwe. The Seychelles withdrew from SADC in 2004.

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

4 Ibid.5 LJ Gregoire, ‘L’insertion economique internationale de l’Afrique’, Etudes internationales, 22 (2), 1991,pp 279 – 286.

6 European Commission COM(95) 219 final, pp 5 – 7,10.7 Comision Economica de las Naciones Unidas para America Latina y el Caribe, El regionalismo abiertoen America latina y el Caribe: La integracion regional al servicio de la transformacion productiva conequidad, Santiago: CEPAL, 1994, p 2.

8 H Weiland, ‘The European Union and Southern Africa: interregionalism between vision and reality’,in H Hanggi, R Roloff & J Ruland (eds), Interregionalism and International Relations, London:Routledge, 2006, p 192.

9 S Naidu & B Roberts, ‘Achieving the Millennium Development Goals in SADC’, SADC Barometer, 7,2004, pp 5 – 8.

10 O Cureau, ‘Integration economique regionale et mecanismes compensatoires dans la Communaute dedeveloppement d’Afrique australe: quelles lecons tirer de l’experience europeenne?’, in P Kafffmann &B Yvars (eds), Integration europeenne et regionalisme dans les pays en developpement, Paris:L’Harmattan, 2004, pp 103 – 104.

11 By 2007 the goal had been transformed into one of achieving a customs union by 2010.12 World Bank, ‘Data and statistics: country groups’, available at http://web.worldbank.org/WBSITE/

EXTERNAL/DATASTATISTICS, accessed 2 June 2007.13 A Hurrell, ‘Regionalism in the Americas’, in L Fawcett & A Hurrell (eds), Regionalism in World

Politics: Regional Organizations and International Order, Oxford: Oxford University Press, 1995, pp253 – 259.

14 F Giambiagi & R Markwald, ‘A estrategia brasileria de insercao na economia mundial: Mercosul ou‘‘Lonely Runner’’?’, Revista Brasileira de Comercio Exterior: Ensaios BNDES, 14, 2002, p 6.

15 W Sandholtz, ‘Institutions and collective action: the new telecommunications in Western Europe’,World Politics, 45 (2), 1993, pp 242 – 270.

16 TC Lawton, Technology and the New Diplomacy: The Creation and Control of EC Industrial Policy forSemiconductors, Aldershot: Ashgate, 1997, p 84.

17 MG Hobday, ‘European semiconductor industry: resurgence and rationalisation’, in C Freeman, MSharp & W Walker (eds), Technology and the Future of Europe: Global Competition and theEnvironment in the 1990s, London: Pinter, 1991, pp 84, 93.

18 Sandholtz, ‘Institutions and collective action’, pp 258 – 259.19 Government of Japan, ‘Japan’s proposal for regulatory reform dialogue: tentative list of proposals’,

Ministry of Foreign Affairs, Tokyo, November 2004, p 21.20 Lawton, Technology and the New Diplomacy, pp 107 – 111.21 Commission Regulation (EEC) No 1103/93 imposing a provisional anti-dumping duty on imports into

the Community of certain electronic weighing scales originating in Singapore and the Republic ofKorea, Official Journal, No L 112 (6 May 1993), p 20.

22 N Khumalo, ‘Agricultural trade and food security in SADC’, SADC Barometer, 5, 2004, pp 8 – 12.23 Quoted in R Gibb, ‘Southern Africa in transition: prospects and problems facing regional integration’,

Journal of Modern African Studies, 36 (2), 1998, p 299.24 F Flatters, ‘The SADC Trade Protocol: impacts, issues and the way ahead’, February 2002, available at

http://www.satradehub.org/CXA_html/docs/reports, accessed 5 May 2006.25 C Jenkins & L Thomas, ‘African regionalism and the SADC’, in M Telo (ed), European Union and New

Regionalism: Regional Actors and Global Governance in a Post-Hegemonic Era, Aldershot: Ashgate,2002, p 160.

26 CNUCED, Le developpement economique en Afrique: repenser le role de l’investissement etranger direct,New York: United Nations, 2005, p 61.

27 J Morisset, ‘Foreign direct investment in Africa: policies also matter’, mimeo, International FinanceCorporation, Washington, DC, 2000, p 3; M Makola, ‘The attraction of the foreign direct investment(FDI) by the African countries’, paper presented at the biennial ESSA conference, Cape Town, 17 – 19September, 2003, p 14; and CNUCED, Le developpement economique en Afrique, p 30.

EU FTA NEGOTIATIONS WITH SADC AND MERCOSUR

195

Dow

nloa

ded

by [

Nor

thea

ster

n U

nive

rsity

] at

05:

13 1

1 N

ovem

ber

2014

28 C Jenkins, ‘What determines investment into SADC?’, SADC Barometer, 2, pp 12 – 13; and Makola, ‘Theattraction of the foreign direct investment (FDI) by the African countries’, p 13.

29 Morisset, ‘Foreign direct investment in Africa’, p 4.30 Makola, ‘The attraction of foreign direct investment (FDI) by the African countries’, pp 6 – 8.31 M McQueen, ‘ACP –EU trade cooperation after 2000: an assessment of reciprocal trade preferences’,

Journal of African Studies, 26 (4), 1998, p 689.32 Eurostep, ‘The EU–South African Trade Development and Co-operation Agreement: an analysis of

its implications in Southern Africa’, Eurostep Briefing Paper, 2000, p 9, at http://eurostep.antenne.nl/detail_pub.html?page¼pubs_position.tra, accessed 19 April 2006.

33 S Karingi et al, Economic and Welfare Impacts of the EU–Africa Economic Partnership Agreements,Addis Ababa: Economic Commission for Africa, 2005, p 79.

34 Ibid, pp 78 – 79.35 McQueen, ‘ACP –EU trade cooperation after 2000’, pp 679, 681.36 C Van Gass, ‘SADC dragging its heels’, Business Day (Johannesburg), 17 October 2005, at http://

www.tralac.org/scripts/content.php?id¼4178&print, accessed 22 February 2007.37 B Kathuri, ‘Africa: continent asks for more time in EU talks’, All Africa, 14 February 2007.38 T Creamer, ‘EU– SADC economic partnership: frustration between EU and South Africa boils to the

surface as trade deadline looms’, Engineering News (South Africa), 29 August 2007, at http://www.bilaterals.org/article-print.php3?id_article¼9512, accessed 4 September 2007.

39 T Bertelsmann-Scott, ‘Difficult deadline: challenges to the SADC – EPA negotiations’, Trade Negotia-tions Insights, 6 (4), 2007, p 9, at http://www.acp-eu-trade.org/tni, accessed 6 September 2007.

40 ‘EPAs: there is no plan B: an interview with Peter Mandelson’, Trade Negotiations Insights, 6 (6), 2007,p 3, at http://www.acp-eu-trade.org/tni, accessed 6 September 2007.

41 Giambiagi & Markwald, ‘A estrategia brasileria de insercao na economia mundial’, p 6.42 INTAL, Mercosur Report 2005 (Second Semester) – 2006 (First Semester), Washington, DC: Inter-

American Development Bank, 2006, pp 18, 41.43 J Monteagudo & MWatanayuki, ‘Regional trade agreements for Mercosur: a comparison between the

FTAA and the FTA with the European Union’, Economie Internationale, 94 – 95, 2003, p 67.44 B Yvars, ‘L’Union europeenne et le Mercosur, deux voies specifiques d’integration et d’insertion dans

la mondialisation des activites’, in Kauffmann & Yvars, Integration europeenne et regionalisme dans lespays en developpement, p 221.

45 Chaire Mercosur de Sciences Po, Annual Report 2004 – 05, Paris: Chaire Mercosur de Sciences Po,2005, p 18.

46 F Pena, ‘Los intereses del Mercosur en sus negociaciones con la Union europea’, in TradeLiberalisation in an EC –Mercosur Free Trade Agreement: Experts Workshop Briefing Notes, Paris:Chaire Mercosur de Sciences Po, 2000, p 33.

47 CA Leite Moreira & MC Pereira de Melo, ‘Comercio exterior brasileiro: uma analise das trocasregionais no ambito do Mercosul’, Mercator-Revista de Geografia de UFC, 1 (1), 2002, pp 62, 65, 71 –76.

48 M Castilho, ‘EU–Mercosur FTA: an evaluation of the vulnerability of Mercosur imports’, in AValladao & R Bouzas (eds), Market Access for Goods and Services in the EU–Mercosur Negotiations,Paris: Chaire Mercosur de Sciences Po, 2003, pp 15 – 16.

49 S Rios & M Doctor, ‘Scenarios for untying the knots in market access for goods’, in P Messerlin, FPena & A Valladao (eds), Concluding the EU–Mercosur Agreement: Feasible Scenarios, Paris: ChaireMercosur de Sciences Po, 2004, pp 109 – 110.

50 C Frischtak, ‘Multinational firms’ responses to integration of Latin American markets’, Business andPolitics, 6 (1), 2004, pp 5 – 6, 11, 15.

51 J Faust, ‘Blueprint for an interregional future? The European Union and the Southern Cone’, in VKAggarwal & EA Fogarty (eds), EU Trade Strategies between Regionalism and Globalism, Basingstoke:Palgrave Macmillan, 2004, pp 49 – 50.

52 Chaire Mercosur de Sciences Po, Annual Report 2004 – 05, p 32.53 Frischtak, ‘Multinational firms’ responses to integration of Latin American markets’, pp 14 – 15.54 P Nunnenkamp, ‘Foreign direct investment in Mercosur: the strategies of European investors’, in

P Giordano (ed), An Integrated Approach to the European Union –Mercosur Association, Paris: ChaireMercosur de Sciences Po, 2002, pp 232 – 233.

55 C Lara Cortes, Las negociacions para un acuerdo (servicios) entre la Union europea y Mercosur enmedio de la crisis, Santiago: Alianza chilena por un comercio justo y razonable (ACJR), 2003, pp 28 – 29.

56 G Buster, ‘La Union europea y America latina: inversions, estrategias empresariales y partenariadotransatlantico’, paper presented to an International Seminar on ‘Amerique latine et Caraibe: sortir del’impasse de la dette et de l’ajustement’, organised by the Comite para la Anulacion de la Deuda delTercer Mundo (CADTM) and the Centro Nacional de la Cooperacion y el Desarrollo, Brussels, 23 – 25May 2003, p 8.

ALFREDO C ROBLES, JR

196

Dow

nloa

ded

by [

Nor

thea

ster

n U

nive

rsity

] at

05:

13 1

1 N

ovem

ber

2014

57 S Stephenson & P Contreras, ‘An asymmetric approach to services liberalization: the EuropeanUnion –Mercosur case’, in Giordano, An Integrated Approach to the European Union –MercosurAssociation, p 297.

58 F Giambiagi & I Barenboim, ‘Mercosul: por uma nova estrategia brasileira’, Revista do BNDES, 12 (24),2005, pp 79, 90 – 91.

59 MS Jank et al, ‘Scenarios for untying the agricultural knots’, in Messerlin et al (eds), Concluding theEU–Mercosur Agreement, pp 35 – 81.

60 VM Valle, ‘O peso das relacoes con a Uniao europeia en relacao a outras alternativas de polıticaexterna do Mercosul’, Revista Brasileira de Polıtica Internacional, 48 (1), 2005, p 115.

61 Chaire Mercosur de Sciences Po, Annual Report 2004 – 05, p 17.62 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 Grafica, 1 June 2007, at http://www.bilaterals.org/article-php3?id_article¼8512, accessed 4September 2007. In May 2007 it was announced that both sides would resume negotiations in the lastquarter of 2007. ‘Mercosur y Europa reinician dialogo TLC’, La Prensa Grafica, 29 May 2007, at http://www.bilaterals.org/article-php3?id_article¼8457, accessed 4 September 2007.

EU FTA NEGOTIATIONS WITH SADC AND MERCOSUR

197

Dow

nloa

ded

by [

Nor

thea

ster

n U

nive

rsity

] at

05:

13 1

1 N

ovem

ber

2014