The Coming Venezuela-Mercosur-EU Free Trade Area

I’ll take a break from opposition bashing and write about economic issues for a change. Believe it or not, I’m still writing a Ph.D. dissertation, and believe it or not it has nothing at all to do with Venezuelan politics. It’s about trade policy making and the WTO. So the second part of this item about the EU electoral mission caught my eye.

Foreign Minister Ali Rodriguez assured EU Commissioner Benita Ferrero-Waldner that Venezuela’s decision to join Mercosur (which is baffling on its own merit) would not delay ongoing Mercosur-EU negotiations to launch an Interregional Association Agreement.

What does that mean, exactly?

Since 1998, the EU and Mercosur have been negotiating a preferential trade deal. Under WTO trade rules, preferential trade deals must liberalize “substantially all trade.” And, indeed, the EU says its negotiations with Mercosur aim at the “liberalization of trade in goods and services, aiming at free trade, in conformity with WTO rules.”

So – and hardly anyone seems to have caught on to this – by joining Mercosur Venezuela would be joining a Free Trade Agreement not just with Brazil, Argentina, Uruguay and Paraguay, but also with the whole of the EU…in a few years’ time.