EU, Brazil leaders urged to push trade talks

BRASILIA Thu Jul 15, 2010 3:30am IST

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BRASILIA (Reuters) - Brazilian and European business leaders urged their governments on Wednesday to accelerate talks on an ambitious trade accord, despite the euro-zone crisis and opposition from European farmers.

The European Union and South American trade block Mercosur in May relaunched talks that had been on hold for six years with the aim of creating the world's largest free-trade zone, encompassing 750 million people and goods valued at 65 billion euros ($82 billion) a year.

The initiative faces strong opposition from farmers, environmentalists, and lawmakers in Europe.

"It's been advancing very slowly. We need to speed things up," Robson Andrade, head of Brazil's CNI industry federation, said on the sidelines of an EU-Brazil summit in the capital Brasilia.

Farm lobbies in France and elsewhere in Europe have criticized a possible accord in recent weeks, warning that cheaper imports such as Brazilian ethanol or meat did not meet environmental or health standards and could wipe out local producers.

"The most difficult part as always is agriculture," said Pierre-Alain De Smedt of the Belgian Business Federation.

"We want an ambitious accord. It's important the politicians keep this in mind as they come under political pressure," he added.

WARMING FRENCH HEARTS

Brazil's President Luiz Inacio Lula da Silva said he would try to persuade French President Nicolas Sarkozy in coming months to throw his support behind the deal.

"We need to warm the hearts of the French," Lula said.

Some industry leaders talked up the benefits of a deal for European businesses struggling with the euro-zone crisis.

"At a moment of crisis in Europe, it's important to be able to count on fast growth in countries like Brazil. We will do everything we can to push authorities on both sides," said Jorge Rocha de Matos, head of the Portuguese Industry Association.

Brazil's economy is expected to grow by more than 7.5 percent this year as European countries struggle to emerge from recession and a region-wide debt crisis.

EU Commission President Jose Manuel Barroso acknowledged negotiations would not be easy.

"We're 27 countries, we need to gather support on many fronts, in many sectors," Barroso said.

But the EU chief joked that if the two regions' achievements in soccer were any indication, the outlook for a trade deal was good.

"Have you noticed that the World Cup has only been won by countries of the European Union or Mercosur? If we are able to always win the World Cup, we should be able to reach an historic accord that is as good for our economies as the EU-Mercosur deal," Barroso said during a news conference following a meeting with Lula and EU President Herman Van Rompuy.

Mercosur is made up of founding members Brazil, Argentina, Uruguay and Paraguay. Venezuela, whose entry depends on approval from Paraguay's parliament, will participate in talks as an observer.

(Editing by Stuart Grudgings and Mohammad Zargham)

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