EU-Mercosur trade relations: impacts of exchange rate misalignments on tariffs. CEPS Working Document No. 372, February 2013

The issue of “trade and exchange rate misalignments” is being discussed at the G20, IMF and WTO, following an initiative by Brazil. The main purpose of this paper is to apply the methodology developed by the authors to exam the impacts of misalignment on tariffs in order to analyse the impacts of misalignments on the trade relations between two customs unions – the EU and Mercosur, as well as to explain how tariff barriers are affected. It is divided into several sections: the first summarises the debate on exchange rates at the WTO; the second explains the methodology used to determine exchange rate misalignments; the third and fourth summarises the methodology applied to calculate the impacts of exchange rate misalignments on the level of tariff protection through an exercise of ‘misalignment tariffication’; the fifth reviews the effects of exchange rate misalignments on tariffs and its consequences for the trade negotiations between the two areas; and the last concludes and suggests a way to move the debate forward in the context of regional arrangements.

The Mercosur-EU preferential trade agreement. A view from Europe. CEPS Working Document No. 377, February 2013

This paper first aims at assessing the economic and political importance of Mercosur for the EU’s interests in the short and medium run – say for the one or two coming decades or so. As Mercosur’s size is largely determined by Brazil’s size, this paper focuses on Brazil – although the paper assumes that, from Brazil’s perspective, a Brazil–EU preferential trade agreement (PTA) is a non-starter. It then aims at positioning the Mercosur–EU (MEU) PTA in the context of the EU’s current trade policy. In particular, it tries to assess, once one takes into account all the crucial goals to be met by the EU, whether the EU is likely to find the time and the resources necessary for dealing properly with a MEU PTA; this effort is notably complicated by the very divergent views on the role of trade between Brazil on the one hand, and Argentina and Venezuela, on the other hand. Finally, the paper examines the PTA options that can be seen as reasonably feasible. It suggests that, unless there are dramatic changes in Mercosur’s present trajectory, the goal of negotiating a fully-fledged MEU PTA should be set aside for some time – at least a decade or so. This does not mean leaving the negotiating table, but rather focusing on negotiating topics that remain attractive to both sides in the current context, and manageable and flexible enough to overcome the broad general problems confronted by Mercosur and the EU.

In Search of a Feasible EU-Mercosul Free Trade Agreement. CEPS Working Document No. 378, 25 February 2013

This paper aims at identifying ways to pursue the EU–Mercosul negotiations leading to a free trade agreement (FTA). After reviewing their already long history, it outlines a basic framework, in goods, services and other themes, judged possible. The main point is that, given the prevailing conditions on both sides, an agreement to be signed within a reasonable time must be modest, i.e. along the described lines. It then clearly sets up the decisions confronting the negotiators: either to pursue the modest, feasible option or to terminate negotiations under the FTA heading. The latter, however, does not imply an end to the dialogue. Many actions and measures may be taken – which are easier to discuss and fix – that could pave the way for, in due time, a closer-to-ideal FTA to be considered again. These are the subjects of a last section.

EU Trade Actors after Lisbon: Enhanced Negotiations or Business as Usual? Brugges Political Research Paper No. 32, November 2013

As seen by the launching of trade negotiations with Japan and the United States, the European Union has shifted gears in order to achieve amplified benefits in bilateral trade agreements. The entry into force of the Lisbon Treaty brought the European Parliament and the European External Action Service into the picture as new actors in trade negotiations. The question arises if the new framework of trade negotiations is better off than the pre-Lisbon era. By applying Veto Players theory to the Central American Association Agreement and Principal-Agent theory to the Ukrainian Association Agreement, two results were concluded. First, the participation of the European Parliament as a veto player has decreased the effectiveness of trade negotiation. Second, the participation of the European External Action Service has shown the contrary, namely an increase of effectiveness in trade negotiations.