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China, the EU and Latin America : current issues and future cooperation
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16 China theEUandLatinAmerica:CurrentIssuesandFutureCooperation intotherelationship withaseriesofhighlevelvisitsandmeetingsatworkinglevel. AttheEUMERCOSURsummitinLimain May2008 thepartiesconfirmed the importanceofreachinganambitiousandbalancedAssociationAgreementandtheir commitmenttocarrynegotiationsthroughtoasuccessfulconclusion adding as conditionspermit .Similarannouncementsweremadebeforeandafter.TheEUhas beenfrustratedthataftersuchhighlevelcommitments noprogresswasvisiblewhen negotiatorsmetagain.Itremainstobeseenwhetherthenewcommitmentsmadeatthe IVEUMERCOSURSummiton17 May2010in Madridwillfinallyleadtonew advances EUCouncildoc.9870 10 Thetaskofthepresentchapterisnottodealwiththethornyissueofoverall tradenegotiationsaimedatbiregionalfreetrade.However someaspectsofthe tradeissue mustbeoutlinedtobetterunderstandthepossibleevolutionof biregionalcooperation.MERCOSUR ranksonlyeighthamong EU trading partners withjust2.7percentoftotalEUtrade whereastheEUaccountsfor 27percentofMERCOSURsexportsand20percentofitsimports. EvenBrazil isonlytheEUseleventhlargestmarket.AggregateEUinvestment however exceedsEUstocksinChina IndiaorevenJapan.EUinvestmentstandsoutin nonprimarysectorsandisthereforecontributingmoretolocaladdedvalueand jobs.SixtypercentofFDIisrelatedtoservices.Asamajorsourceoftrade relatedassistance theEUreinforcesthecompetitivenessofitscompetitors EU Councildoc.8695 09 .The negotiation problemsindicatea NorthSouth cleavage.TheEU wantsacomprehensiveagreementwithresultsexceeding thosetobereachedonthe multilaterallevel Dohaplus .Otherwise additionalandparallelnegotiationsonasubDoha biregionallevelwouldnot makemuchsense.LeadingCommissionfiguresaskedpubliclyin2007whether anEUofferaslargeastheonemadeatthemultilaterallevelcouldreallybe expectedinthisbiregionalcontext.Servicesrepresent70percentofGDPand jobsintheEU whichthushasanunderstandableinterestinfreetradeinthis area.InMERCOSUR theyrepresentlessthan20percent.Itwascalculated thataFreeTradeAgreement FTA wouldaddEUR57billiontoservices the costofafailuretoreachagreementisoverEUR5billion andnearlyEUR4 billioningoods. InnegotiationswiththeEU MERCOSURfocusesonagriculturalproducts andrelatedsubsidies.Understandably thereareclearreasons notalways economicones whyagricultureplayssuch adecisiverole.Butitis worth stressingthattheEUisMERCOSURsprimarymarketforagriculturalexports. Thereisawisesayinginbusinessthatyoudonotinsultyourbestclient.Inthe