MEP concerns are no setback for Mercosur deal, negotiator says

"We are aware of the concerns, but we have also received many letters of support," Joao Aguiar Machado told EUobserver in an interview on Tuesday.

"I don't think the resolution is a setback. I'm not minimising it, but it certainly doesn't represent a reduction in the commission's commitment to a deal," the commission's deputy director for trade said.

The prospect of a free-trade agreement with two of the world's largest agricultural producers has raised hackles elsewhere in Europe however, with an own-initiative resolution from Greek centre-right MEP Georgios Papastamkos last week gaining widespread support.

In the resolution, euro-deputies criticised what they said was the commission's tendency to conclude trade agreements without taking into consideration the very negative impact these can have on the EU's agricultural sector.

The MEPs also said an impact assessment should be carried before trade talks start, and called on the commission not to pre-emempt decisions on the EU's reformed common agricultural policy post 2013.

Under the Lisbon Treaty, the European Parliament has co-ratification powers with EU member states on all international trade agreements negotiated by the commission.

Earlier efforts to negotiate a free trade deal between the two sides broke down in 2004, with a commission decision last year to restart the negotiations drawing fire from ten EU member states.

The group, led by France, said the resumption of talks sent "a highly negative signal" to Europe's struggling farm sector, while the commission defends a future deal as having clear economic benefits for both sides.

Supporters point to Latin America's six percent growth rate last year, citing increased trade and investment between Europe and the South American bloc as helping to end the EU's current economic malaise.

An EU trade agreement with Mexico in 2000 saw trade increase by 100 percent over the first five years, with investment increasing by 120 percent, says the commission.

European farms groups are worried however that reduced tariffs and greater market access under an EU-Mercosur agreement would see Europe flooded with cheap beef imports, among other products.

"If trade is fully liberalised between the two sides, it is estimated that it would result in losses to the EU beef sector of as much as €25 billion," European farm lobby group Copa-Cogeca said in a recent letter to EU agriculture commissioner Dacian Ciolos.

EU trade commissioner Karel De Gucht has indicated he would like to see the Mercosur negotiations initialed before the end of this year, with issues of market access not on the agenda of this week's discussions.

"It's clear that we have a window of opportunity that will not last for ever," says Aguiar Machado. "Today all our regions are too small to face up to the challenge of China alone."