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Trade deal with Mercosur is No. 1 priority - EU trade chief

Credit: REUTERS/ARND WIEGMANN

Sealing a free trade agreement with South American bloc Mercosur after 20 years of talks is the European Union's top priority, EU trade chief Cecilia Malmstrom said on Thursday.

By Philip Blenkinsop

BRUSSELS, June 13 (Reuters) - Sealing a free trade agreement with South American bloc Mercosur after 20 years of talks is the European Union's top priority, EU trade chief Cecilia Malmstrom said on Thursday.

EU negotiations with the Mercosur group of Argentina, Brazil, Paraguay and Uruguay, the world's fourth-largest trade bloc, have intensified since Europe's trade talks with the United States were frozen after Donald Trump's 2016 presidential election victory.

However, EU nerves about a surge of beef imports and Mercosur hesitation about opening up some industrial sectors, such as cars, have meant past deadlines have come and gone. A deal may be close, but just beyond reach.

European Trade Commissioner Malmstrom said she did not want to specify a new deadline, but believed an agreement could be struck during the term of the current European Commission, which runs until the end of October.

"There are some complicated matters remaining - agriculture and a few others ... I think there is a window now to close this, during this Commission. I will absolutely do my utmost. This is priority number one right now," she told an event hosted by the Bruegel think-tank in Brussels.

Malmstrom said the two sides were getting closer, with offers exchanged already on less controversial farm products.

In terms of tariff reduction, it could be the EU's most lucrative trade deal to date, with the savings potentially four times greater than for deals with Canada and Japan combined.

"It would be an extremely powerful signal ... For economic reasons, strategic reasons, and political reasons everything speaks in favour of this," Malmstrom said.

Brazilian President Jair Bolsonaro said a week ago that Mercosur would soon sign a trade deal with the EU.

(Reporting by Philip Blenkinsop Editing by Mark Heinrich)

((philip.blenkinsop@thomsonreuters.com; +32 2 287 6838; Reuters Messaging: philip.blenkinsop.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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