Securities settlement systems and financial collateral arrangements (debate)
The next item is the report by Mrs Kauppi, on behalf of the Committee on Economic and Monetary Affairs, on the proposal for a directive of the European Parliament and of the Council amending Directive 98/26/EC on settlement finality in payment and securities settlement systems and Directive 2002/47/EC on financial collateral arrangements as regards linked systems and credit claims - C6-0181/2008 -.
rapporteur. - Mr President, I have had the pleasure of being the rapporteur on this topic of settlement finality in payment and securities settlement systems and the directive on financial collateral arrangements. I am leaving Parliament tomorrow - this will be my last legislative report for the European Parliament - so please accept my sincere apologies if I am a little bit emotional tonight.
This is not the most political of items. Sometimes what we do in the European Parliament is quite technical, but I am absolutely sure that this directive, this legislation, will also help Europe to go forward.
The aim of this legislation is to update the directives in line with the latest market and regulatory developments. The main change brought about by the settlement finality directive is to extend the protection of the directive to cover night-time settlement and settlement between linked systems; this is very important, since the number of links and the need for interoperability have lately increased immensely. The MIFID directive, on which I also had the honour to be rapporteur in this House, and the European code of conduct on clearing and settlement systems are expected to become increasingly operable, and that means that we have more need to coordinate our settlement and financial collateral arrangements.
Regarding the Financial Collateral Directive (FCD), it is very important to accept credit claims as financial collateral. The European Parliament also wanted to extend the scope of what is accepted as collateral to interbank credit claims. For me it was acceptable for credit for micro-enterprises and small enterprises to be excluded, like consumer credits.
The establishment of a harmonised legal framework for the use of credit claims as collateral in cross-border transactions helps enhance market liquidity and ensures the proper functioning of settlement systems in rapidly evolving markets. The new directives also introduce several simplifications and clarifications and definitions. These solutions will make an important contribution to strengthening the tools for managing instability in financial markets.
My aim was to reach a compromise at first reading, so we were negotiating with the Council and Commission the whole time. I have also negotiated with other political groups, with Ms Berès and Ms Starkevičiūtespecially, in order to achieve a compromise that could satisfy everyone in the Parliament. I am very happy that the report was unanimously accepted by the Committee on Economic and Monetary Affairs.
In the end I am also quite content with the compromise that will be voted during this week's part-session. On most of the issues the negotiations went well and we agreed on the basic lines of this legislation. However, there were a few controversial issues as well and I did not get all the goals through.
During the negotiations I was not able to get the support for the ECON proposal to amend the definition of the system which would have made it possible to grant the protection of the directive to systems based on the ECB legal act, and would have allowed the European Central Bank to designate such systems itself. I am happy that the European Commission stated during the negotiations that it is in principle in favour of such an amendment and will probably table a proposal to this effect in the near future.
Regarding the financial collateral directive and the notifications, I could have wished that all the Member States had already abolished the notification requirements, which in my view only add bureaucracy and do not advance any particular objective; however, as I learned that this issue was extremely sensitive to some Member States I am quite satisfied that we got a review clause written in.
I think that after five years the few Member States that still want to request these ex-ante notifications can be persuaded to end this unnecessary practice. As I mentioned already, I am happy that we were able to find a compromise that we could all agree on. I hope that you, my fellow colleagues, will vote on this legislation on Thursday.
Finally, I would like to say that it has been a pleasure to work with all of you during these years. It is my 20th legislative report and it will be the last. I shall miss this Parliament, this House, and all of you.
Ms Kauppi, once again we thank you for your work and we wish you all the best for your future.
Member of the Commission. - Mr President, I would like to thank the rapporteurs, Ms Kauppi and Mr Sakalas, of the Committee on Economic and Monetary Affairs and the Committee on Legal Affairs respectively, for their fast and very efficient work on this file.
The directives on settlement finality and financial collateral are working well and enjoy wide support in the market. Nevertheless, I am glad that we have been able to agree, in less than eight months, on the necessary adaptations to bring them fully into line with the latest regulatory and market developments. This is important for financial stability and in particular for the continued proper functioning of settlement systems, which become increasingly interlinked, while keeping their own identity. There was no need to create super-systems, and this is clearly spelled out in the amendments.
My services started preparing the Commission proposal in early 2007, before the onset of the ongoing financial turmoil. But I believe the changes we have proposed are vindicated by the challenges which the turmoil has raised. The establishment of a harmonised legal framework for the use of credit claims as collateral in cross-border transactions will further enhance market liquidity, so badly needed in the present environment.
We expect that, with easier rules, credit claims will be used more frequently in the future. Of course, this depends on the demand in the market for other forms of collateral. However, we have seen during the first months of the financial crisis that the demand for credit claims was growing, for instance as compared to the notorious asset-backed securities. The explanation is simple: as long as credit claims are not bundled together, which is the case with securitisation, the collateral taker is able to assess their creditworthiness on an individual basis before deciding whether or not to accept them. What you are asked to agree on by the voting on the report by Ms Kauppi is to facilitate the use of credit claims by abolishing some formal requirements.
The Commission undertakes that in five years' time it will report back to you on these changes. In particular we will look at how the abolition of the obligation to register or notify the debtor on the provision of credit claims as financial collateral is working, especially in those Member States that, for the time being, are hesitant and want to opt out from Article 3(1) of the Financial Collateral Directive.
Let me take this opportunity of wishing Piia-Noora Kauppi well for the future. I know she is going back to a very interesting position in Finland. During my time as Commissioner she has been exceptionally cooperative and helpful and always gave the utmost in any task that was assigned to her by Parliament. I know she will make a great success of her future career, and I wish her and her family well.
rapporteur for the opinion of the Committee on Legal Affairs. - Mr President, I was appointed by the Committee on Legal Affairs to draft the opinion for the main report by Ms Kauppi in the Committee on Economic and Monetary Affairs. I submitted two amendments. The Committee on Legal Affairs approved the draft opinion and is in favour of my submitted amendments that the European Central Bank should be able to designate and notify their own systems directly without interference from the German Bundesbank or other national authorities.
We had a trialogue with experts from the Central Bank, Council and the European Commission. The experts from the Central Bank gave a statement and expressed their strong support for the amendments tabled by the Committee on Legal Affairs. Conversely, the Council had difficulties in the working groups to find a compromise agreement on one of the tabled amendments because Member States are not in favour of giving the ECB the right to designate and notify their own systems directly. I regret that this tabled amendment was not approved by the Council, but I believe that there is a great opportunity to raise this topic in the near future.
Mr President, Commissioner, Mrs Kauppi, ladies and gentlemen, allow me - as I can now speak for the group - to start by saying that I thank Piia-Noora Kauppi on behalf of my group, not just for her immense commitment, but above all for her expertise and for her devotion to the work of Parliament and, hence also, for her willingness to compromise. With her, you always know what she stands for and you also know that she approaches others. She returns to an exciting position and, more importantly, she will have more time as a mother. I thank you for the good cooperation and wish you all the best.
In this review, the European Union is again giving the right answer to the crisis on the financial markets. There are still far too many differences in the individual Member States and the harmonisation undertaken is a step in the right direction. The crisis on the financial markets, as can be seen from this example, is also an opportunity for communication on the part of the European Union and for permanent improvement to our European financial market system. I say quite clearly that guaranteeing a settlement system that functions properly, especially on fast-moving markets, is essential to the stability of the financial markets and, in times such as these, is even more important.
For me, there are three important points. Firstly, the coherent approach taken in these reports. Secondly, I support the simplification and easing in the application of both directives. Thirdly, I shall take account of the results of this report and this directive in my own report on the Capital Requirements Directive, so that they contribute towards a comprehensive report and allow a coherent approach.
Mr President, Commissioner, Mrs Kauppi, please allow me, on behalf of the Socialist Group in the European Parliament, to add to the positive comments that have already been made. It is true that, when negotiating with you, we always know where we are. You have your opinions but at least, when negotiating with you, everything is very black and white. In the end, we knew exactly where we were and could therefore make progress. You again demonstrated your capacity to work with everyone. In my opinion, this is a particular feature of this Parliament's intelligence. In this specific report, this is what allowed you, as we all wanted from the start, to arrive at an agreement at first reading.
At heart this report concerns an issue on which the Commission is sadly lacking. This is the post-market issue on which, following adoption of the Markets in Financial Instruments Directive, we would have liked the Commission to come forward with weightier proposals for organising, structuring, supervising and regulating the market, known as the post-market.
This report is a very small, very legal and very technical building block, which is useful, but it cannot hide the enormous task before us, on which we are still awaiting proposals from the Commission. The results of what the Commission wanted to start with the code of conduct are very limited. We are now awaiting the assessment of this and we are quite disappointed, just like a number of stakeholders in the market who can clearly see that self-regulation is not enough in this area.
Two main difficulties emerged in the specific and very precise text that we have before us today. The first was to decide whether the European Central Bank should be given specific powers in this measure. I believe that useful suggestions were made. However, the Council did not want to go beyond the current situation and, due to our wisdom and sense of responsibility, we accepted this compromise. This therefore led to the balanced proposal that is now on the table and that we must acknowledge.
The second important element was to ensure that the way in which the systems linked together did not in itself create autonomous systems. Once again, the position adopted by Parliament is a reasonable position which allows this link to be ensured without, however, giving it an autonomy that we did not want to create through this text.
There are obviously still many issues to be tackled and I hope that the Commission, through its monopoly on initiative in this area, will shoulder its responsibilities.
The document presented only appears technical. In truth it ensures the functioning of a safe securities settlement system, which is important for many people who are members of pension funds, insurance schemes or investment schemes. The rapporteur's document is excellently prepared, as are all of her documents. I am very pleased that I had the honour of working with her in the preparation of many financial documents and I am very sorry that today is her last day in the European Parliament. We - the Group of the Alliance of Liberals and Democrats for Europe - can agree with this document, as our position is reflected in it. What is that position? Firstly, we believe that the European Union's common market of securities settlement must be expanded, as it is very fragmented. We do not, however, want to see the establishment of a monopoly; therefore we believe that in the report presented, conditions have been created to flexibly form a cooperation agreement for various systems and to introduce new links.
On financial collateral arrangements, we thought it very important that procedures be simplified and made clearer and that, in insolvency and various critical cases, it should be easier to resolve disagreements over property and that all conditions should be clearer. It seems that this goal has also been achieved.
Like the other rapporteurs, I am sorry that it has not been possible to solve the problem with the settlement systems established by the European Central Bank. I would very much like to urge the Commission to prepare a compromise proposal on this matter as quickly as possible, because the European Central Bank will have to devote more and more attention to the functioning of such systems and the question of their maintenance should be resolved, which is perhaps what is stopping the expansion of these regulations to existing systems under the influence of the European Central Bank.
(RO) I would like to congratulate the rapporteur, Piia-Noora Kauppi, for her report concerning the directive on financial collateral arrangements, which contains three major amendments to the current directive. These are the exclusion from the directive's scope of application of credit agreements for consumers and small businesses; the introduction of a sunset clause of five years with regard to the right of Member States to require notification or registration, and last but not least, the widening of the directive's scope of application by proposing its extension to include inter-bank loans as eligible collateral, instead of just central bank loans as the original proposal suggested.
I believe that the amendments tabled comply with the European provisions in this area, which is one reason why I support the adoption of this report. I would like to conclude by thanking Mrs Kauppi for all her hard work in the European Parliament and I wish her every success in her new venture. Thank you.
(CS) I would like to thank you, Mrs Kauppi, for your work, professionalism and dedication in negotiating a compromise over the proposed directive, which will undoubtedly help to stabilise the financial markets. I congratulate Mrs Kauppi for achieving an agreement at first reading. I would also like to thank her today for all of her work in the European Parliament, not just for the 20 or so reports, which have included topics such as cultivating good practice in the banking sector, for example the codex mentioned earlier. However, Piia Kauppi has also shown her professionalism in discussions over many other reports. I appreciate very much the stance she is taking in our joint struggle against software patenting at a time when the European Union has no European patent. We will feel her absence until we perhaps negotiate this patent some time in the future. Thank you for your cooperation.
Member of the Commission. - Mr President, I would like to thank everybody for contributing to the debate and, as I said in my earlier statement, I wholeheartedly welcome Parliament's report.
The directives on settlement finality and financial collateral are the two cornerstones of the post-trading environment, and there is no doubt that the current amendments represent very substantial progress.
The Commission supported the ECB's request to designate systems directly to the Commission, but there is insufficient support at present in the Council. However, it is something that we will come back to and look at again in the near future.
Again, I express my best wishes to Ms Kauppi.
rapporteur. - Mr President, I would like to thank my colleagues for their kind words and also the Commissioner for his cooperation over the years.
I would like to make a couple of political points, firstly about the code of conduct for clearing and settlement. I do not think the time is right to make the final judgement on the delivery of the code. This has been one of the reasons why some of the market participants have been against the development of links and interoperability. They say that there are problems in settlement finality and also with the coordination of different rules. I think that when we now accept this directive it will make it easier for market participants to accept links and interoperability with their systems.
The second issue concerns the ECB. I think that we can cooperate more with the Commission, especially in creating a Community approach to different topics. We already have a practical development which leads to Community systems, and the ECB has been creating network-based systems which do not operate under any particular Member State law. It would be stupid not to take this everyday practical development on board when we are trying to update European laws. So I am very happy that the Commission will be taking a look at this issue. Perhaps the time will be right during the next parliamentary term to make these ECB-established systems part of the Settlement Finality Directive.
Finally, concerning the Hague Convention, we have seen how difficult it is to agree on details when this has to be done through European Community directives. It is very important to go forward with the Hague Convention and with the negotiations on different private law issues. It was particularly difficult to try to find a compromise on moments of entry and moments of revocation. These are very small items, but I think that the Commission is also moving ahead on those important topics, maybe during the next term.
The debate is closed.
The vote will take place on Thursday.


Financial, economic and social crisis: measures and initiatives to be taken (continuation of debate)
We shall now continue the debate on the report by Mrs Berès.
Mr President, at this late hour, I would like to say a big thank you. Thank you to all my colleagues. I will not name them all, but nonetheless I will mention the Chair, the coordinators, the shadow rapporteurs and all those who have contributed to this task.
President-in-Office of the Council, Commissioner, the ball is now in your court. We have made proposals: please take them on board Commissioner. I am glad that you are acting on several of the proposals we have already made. Now, I am asking you for a commitment, the first on a long list in this road map that we have set out: carry out the audit of the public debt of Member States of the European Union. We need this so we know what action to take in the future.
Next, I wish to remind you of the objective of this report which we have drawn up together: the victims of this crisis must not be the ones who pay for it. Our goal is to reassert the sovereignty of politics, the sovereignty of citizens over the markets. That is what democracy is.
(Applause)
Some of you may be wondering: should we not use groups of experts? We have tried to do that. I would say to you: wisdom will come from those who vote, I hope in great numbers, for this report, and who will take its proposals forward so that they may become reality.
The debate is closed.
The vote will take place at the end of the debate.
Written statements (Rule 149)
With this report, Parliament is sticking its neck out with daring and innovative policy choices. In these days of economic turbulence, Euro-pessimism and Euro-realistic 'no' votes, politics has to dare to swim against the tide. The policy options that currently enjoy the support of a large majority of Members of this House are no pipe dream. They are the result of a year of intensive consultation and negotiations. A clear majority has been obtained in this House for establishing a European Energy Community. For me, that is one of the most important points. Europe must itself utilise a single European energy policy. Specifically, it must draw up a common strategy for renewable sources of energy and cross-border infrastructure. This must represent core business for the EU, as it is the only way to attain our climate targets and to turn around our vulnerable position as a major importer of energy into that of maximum self-sufficiency. Furthermore, it is also massively important that a European Ministry of Finance be developed. This idea is on the table, and it enjoys broad support in Parliament. Then there is the issuing of Eurobonds. To sum up, these are tangible measures that will enable Europe to emerge from the current financial crisis stronger and that are very much of the kind that will guarantee the prosperity of European citizens.
A third Member State has felt obliged recently to request aid from the European Union as it was unable to obtain financing. Against the current background of the public debt crisis and a fragile European economy, we need greater political and economic integration. In this respect, I welcome the report drafted on the financial, economic and social crisis, which highlights the importance of relaunching the European project.
To emerge from the stalemate it is in, the European Union must make long-term investments in key areas such as education, research and the road and IT infrastructures. These measures would help boost competitiveness and counteract job losses. We need a standard taxation policy at EU level to encourage these investments. In addition, the creation of bonds to be issued jointly for part of Europe's public debt would automatically reduce the cost of financing in the European Union.
I would like to begin by expressing my enormous gratitude for what is an absolutely key report. It may mark an historical breakthrough if there is sufficient political will to carry through the recommendations. On the other hand, I do wonder if this impulse to deepen the European project really had to wait for a global crisis. Any measure can be better implemented in more peaceful times. It is often the case, however, that crises create opportunities - and I hope that will be the case here as well. The most urgent issue in today's situation is to maintain the common currency. In this context, we cannot avoid fundamental reform of the EU budget. It was clear more than three decades ago that currency union requires a larger budget than the EU has at present. The budget needs its own sources, and we must take into account the serious long-term implementation of budgetary policies at EU level. The report, of course, contains a whole series of other key steps which, in the long term, should prevent the occurrence of crises such as the present one. The measures to limit capital flows and the emphasis on support for the real economy are important. In my opinion, the stronger role of the UN is a positive move - the EU can be a valid part of a multilateral world. A common Ministry of Finance, Eurobonds, a European Debt Agency - these are all important proposals. Now more than ever, we need political union and economic integration. We need more Europe.
The report by Mrs Berès sends out a strong signal for a permanent solution to the current crisis, setting out a whole series of ambitious recommendations. I can agree with the statement by the rapporteur that the crisis caused by large sovereign debts in various Member States has revealed the risks of imbalances within Europe. The EU must act and respond in a unified way by pressing harder for the closer coordination and harmonisation of fiscal policy. I agree with this view, and I also agree with the rapporteur's idea that closer European integration can act as a protective shield against a future crisis. I agree with the rapporteur's opinion that the asymmetrical development of individual euro area member countries must not be allowed to grow more pronounced in the future. The rapporteur makes a very daring call, however, for the creation of a single European Ministry of Finance, the powers of which would include joint administration of debt. This European super-ministry would be able to contribute towards better coordination of economic policy in the euro area and elsewhere. Such a development would mark a revolutionary change, but at this point in time, it is not at all clear whether the Union or the euro area is capable of such a fundamental intellectual and organisational change. At the same time, however, it is already clear that the euro area cannot continue to operate in its existing form after the current crisis, and will require profound reform.
Many of our citizens are disappointed and exasperated by EU policy. It is with some justification that they feel that they are the only ones who are required to suffer the consequences of the crisis. The high-finance sector, which has been rescued using taxpayers' money, is once again making huge profits. Even though it was largely responsible for the crisis, it is not being required to pick up the costs. In order to prevent future crises, those who profit from speculation must be required to pay a solidarity contribution. The EU should play a pioneering role in the introduction of a transaction tax, even though no agreement was reached at the last G20 summit in Toronto. However, fiscal sovereignty must remain with the Member States. Brussels should not be allowed to exploit this situation in order to acquire taxation powers, paving the way for a centralised federal state. What we need is a coordinated approach to the issue of a financial transaction tax between the Member States.
The crisis has kept the political boundaries intact but not the economic ones. It has also shown us that risk knows no boundaries. Hence, we need a broad and comprehensive approach rather than an ad hoc, case-by-case one. The only solution to be proposed with conviction, therefore, is that of a system of global governance that lays down common rules for all. We can build competitiveness, open up our markets and make them more efficient, but that will not protect us from future crises. No State or financial institution can consider itself safe, even if it is built on solid foundations, because of our interconnected economies. We have increasingly open and common markets, but we also have rules that differ from one State to the next, preventing the control and the supervision that the markets and the citizens are calling for. Common, blanket rules will not hinder the markets. Rather, they will give operators and investors more security and peace of mind. Europe must once again attract investment and manufacturing, and gain recognition as an international model of innovation and growth. Public and private financial institutions must do their best to ensure that the markets work to benefit the real economy and small and medium-sized enterprises. Unity and solidarity are essential if Europe is to successfully overcome the global challenge.
Mrs Berès's report is balanced and comprehensive and proposes real solutions and mechanisms to combat the financial, economic and social crisis. The fiscal problems which the Member States currently face and the need for important investments and growth call for new financing models, with a combination of public and private funds. I welcome the proposal made in the report to use project bonds in cooperation with the European Investment Bank and the recommendation that Eurobonds should be further investigated, so as to ensure that they benefit all the Member States. I consider that, beyond the common currency, the countries in the euro area should take another step, by making appropriate arrangements to jointly issue bonds and manage part of the Member States' public debt, so as to lay the foundations for more coordinated multilateral supervision which will make the market in the euro area as a whole more attractive.


Negotiations on an Interregional Association Agreement with Mercosur and the new bilateral strategic partnership with Brazil (debate)
The next item is the Council and Commission statements on negotiations on an Interregional Association Agreement with Mercosur and the new bilateral strategic partnership with Brazil.
We understand that the association agreement between the European Union and Mercosur must be comprehensive in all its aspects, that is, political and economic association and cooperation, aiming not only to promote trade and investment, but also to strengthen, in a decisive manner, the strategic relationship between the European Union and that region. This agreement will create the largest free trade area between two regional blocs, nearly 700 million inhabitants, enhancing economic and social integration, facilitating investment and bringing significant economic growth for both regions.
It is true that the results of the negotiations on the Doha Development Agenda influenced the negotiating process. We cannot, however, view the association agreement from a purely economic perspective; the importance of the political dimension of the agreement needs to be stressed.
In order to make the qualitative leap which we all want in the relationship between the European Union and Mercosur, it is fundamental to take account of the balance between the political and economic components. We must, however, acknowledge that after seven years of negotiations we are at an impasse. That impasse is the result of the discrepancy or difference between the offers presented.
On the one hand, the offer made by the European Union covered all sectors and, on the other hand, Mercosur's offer omitted sectors that are very important to the European Union. The Portuguese Presidency is waiting for the political commitment demonstrated by Mercosur to take the form of an improved offer, so that the Commission might resume the negotiations with a view to the speedy conclusion of an agreement which is fair and balanced for both parties.
The strategic partnership between the European Union and Brazil established at the Summit in Lisbon on 4 July, must be regarded not only as a vehicle for strengthening relations with Brazil, but also as a way of enhancing strategic biregional relations between the European Union and Latin America and, in particular, the EU's negotiations with Mercosur.
The joint statement issued following the Summit with Brazil unequivocally demonstrates the commitment to concluding negotiations on the EU-Mercosur Association Agreement.
With regard specifically to Brazil and, bearing in mind the growing strategic significance of that country on the international scene, the partnership established within the scope of the work of the Portuguese Presidency, constituted the beginning of a new relationship between the European Union and Brazil, similar to what we are seeing now with Russia, India and China. The partnership will develop on the basis of an action plan that will include strengthening dialogue and cooperation in the areas of mutual interest presented in the communication from the Commission to the Council on the EU-Brazil strategic partnership, which naturally include the Mercosur agenda.
Member of the Commission. - Madam President, I am grateful for the opportunity to discuss this very important topic. As has rightly been pointed out, the decision to establish a strategic partnership with Brazil goes back to the Commission's first communication on Brazil, where we proposed a way forward in our relations with Brazil, and the first EU-Brazil summit in Lisbon has confirmed and cemented this new relationship.
Why a closer relationship with Brazil? The EU-Brazil strategic partnership is a natural reaction to geopolitical realities. Today, Brazil is becoming an international player with a strong weight on important global issues like climate change, the fight against poverty, peace, security and multilateralism. It is a respected voice in the developing world, as shown by its chairmanship of the G20 within the WTO or as an active promoter of the South-South dialogue.
It has forged new partnerships with all key players: China, Russia and the United States. The European Union has a lot to gain from a closer partnership with Brazil in order to progress on global issues of common concern.
The strategic partnership provides the appropriate framework, as experience has shown with all other members of the BRICS group. What effects will this partnership have on Latin America and, more specifically, on the Mercosur region? The promotion of regional integration is one of the cornerstones of the partnership. This is clearly stated in the Commission's communication, and it is also how Brazil perceives it. President Lula made this point very strongly at the first EU-Brazil summit in July.
I cannot stress enough the importance of the Southern Cone for the European Union. Besides sharing cultural and political values like democracy, human rights and social justice, there is a huge economic potential to explore between the two economically complementary regions. The EU is Mercosur's number one trade and investment partner. We have goods and services worth EUR 50 billion crossing the ocean annually. In addition, the aggregate value of EU investments in the Mercosur countries in 2005 was around EUR 100 billion.
Also, and most importantly, we genuinely believe in the potential of an economically and politically integrated Mercosur. The recent creation of the Structural Convergence Fund and Mercosur Parliament are most encouraging signals. The EU is a firm supporter of this integration process, not just in words but also in concrete deeds.
The European Union has been and will continue to be the quasi-exclusive donor to Mercosur integration. A sum of EUR 50 million has been committed over the last five years and the same amount is available for the current Financial Perspective (2007-2013) to help build Mercosur's institutions, strengthen civil society and take economic integration forward.
The conclusion of the EU-Mercosur Association Agreement would be a colossal step forward in the integration process of the region. That is why the European Union remains firmly committed to concluding the negotiations and is keen to advance in negotiations once there is more clarity in the Doha Development Round.
The strategic partnership with Brazil is a decision in favour of Brazil and in favour of Mercosur. The two levels of relations - national and regional - will complement and mutually support each other. In no way does the partnership replace the biregional EU-Mercosur negotiations.
We are in full agreement with Brazil that Mercosur is and will remain the only platform for our bilateral economic and trade relations. I am convinced that by engaging with Brazil, Mercosur's largest member, we can bring a real added value to the regional integration process. Shared experience in a joint agenda with the EU will encourage Brazil to better support Mercosur efforts to build a common market and a political union.
on behalf of the PPE-DE Group. - (ES) Mr President, President-in-Office of the Council, Commissioner, ladies and gentlemen, I would first like to thank the Portuguese Presidency and the Commissioner for their necessary and relevant comments in the light of the text of the clear question put by the Committee on International Trade.
Brazil, as we all know, is a large and admirable country with enormous potential which is at a crucial point in its political and economic development. Our mutual relationship is strong and we can and should strengthen it further. Brazil's special links with Portugal, and Portugal's links with Brazil, are also known, recognised and respected by all.
- (PT) We well understand the position of our good and esteemed Portuguese friends, their interests and their concerns, because we share them.
(ES) However, the European Union, the Commission, the Council and Parliament have always expressed support for consolidating the regional integration of Mercosur, negotiating with the block and, as far as possible, supporting regional consolidation.
As has been said here, Brazil undoubtedly has a key role in this. If the Communication from the Commission and the strategic relationship proposed with Brazil go in this direction, so much the better. This would still be supporting the European Parliament, which expressed itself here in the debate and in the vote that took place on the report, for which I had the honour to be the rapporteur, on the EU's negotiations with Mercosur, which was adopted a year ago, and to which I refer.
Therefore, given the confusion that had arisen from this Communication, Parliament needed to ensure that this point would be clarified and that we would be kept informed.
We are also aware that the expectations of concluding an ambitious agreement between the European Union and Mercosur cannot go on forever, and if Mercosur itself does not make progress with its integration, and the European Union's negotiations with Mercosur remain stagnated, with or without a Doha agreement, a decision would have to be taken on them, and once again the most important thing would be effectiveness: a bilateral agreement with Brazil.
But unless this happens, Mr President, ladies and gentlemen, the aim is to reach an agreement with Mercosur. In short, yes to Brazil, but without damaging the negotiations with the whole of Mercosur.
on behalf of the PSE Group. - (DE) Mr President, Commissioner, Mr President-in-Office of the Council, we on the INTA Committee requested this debate because we are very concerned as we see that we are concluding more and more agreements of different kinds which affect all our work in the external economic sector and which also, of course, always have a foreign policy component. We have bilateral free trade agreements, regional free trade agreements, partnership agreements and strategic agreements and we worry about how these can be brought together so that we have a consistent European approach for responding to the challenges of globalisation in the foreign policy and external economic sector.
Commissioner, you have rightly said that Brazil is an important country for us. I am also very grateful that the President-in-Office of the Council is present, and we all, of course, share this opinion. It is not just an important country; it is in many respects also a fantastic country. The question simply is: how can we sensibly combine this strategic agreement with, at the same time, the idea of concluding a regional agreement with Mercosur, which has got itself into very troubled waters? It is simply not true that we get along wonderfully in the negotiations. It is very complicated.
Alongside this we want to conclude a multilateral agreement in the Doha Round. It does not seem at all likely that we will be able to bring this agreement off as a crowning achievement, if we can bring it off at all. So how do you want to bring all this together at the same time? That is our question.
Of course, it is also a strategic agreement. What is the nature of a strategic agreement? It contains a great deal if you look at it. There are very many political declarations of intent on Brazil and all of them very sensible. Again, in my Group we are very happy that they are also included, but how do you want to link this to the other members, e.g. in Latin America, with whom we have free trade agreements? Or how do you want to feed this back again so that our trade policy is imbued with a uniform European policy in such a way that all partners can understand this too?
on behalf of the ALDE Group. - (ES) Mr President, President-in-Office of the Council, Commissioner, Mercosur is a reality that owes a lot to the European Union. Undoubtedly Mercosur is essentially the fruit of the free and sovereign decision of its members, there is no doubt, of its four full members, soon five if, as we hope, there are no obstacles to the pending ratification of Venezuela's application for membership.
It is obvious that it is therefore the fruit of its members. However, it is also obvious that, since its origins in 1985, with the Foz de Iguazú declaration and the Treaty of Asunción in 1991, the European Union has been very close to what was then in its infancy and is now a reality. It has been very close, supporting, sharing and defending the very existence of Mercosur and what Mercosur was aiming to do, because we knew that the regional relationship, between regional framework and regional framework, had many benefits for them and also for us.
For this reason the European Parliament has always supported giving maximum impetus to the association agreement between the European Union and Mercosur. An agreement that can stand up, which is ambitious as well as balanced. An agreement which, alongside the trade dimension, the strictly trade dimension, also has a political and institutional chapter, as well as a chapter aimed at promoting sustainable economic and social development.
These are values that have been defended by the European Parliament throughout its relationship with Mercosur. This is why Members of this Parliament that are dedicated to external trade issues in the Committee on International Trade are surprised, as reflected in various speeches, at the announcement of a strategic bilateral agreement with Brazil.
We have all always felt that the regional framework is the most effective way to achieve these objectives, and the real pillar on which to base our relations. It is obvious that the growing role of Brazil deserves not only respect, but real congratulations. President Lula and his Government are consolidating a role of leadership for the country that is contributing a great deal to the stability of the area and progress for millions of people. Everyone is aware, if we look at the figures, of how important Brazil's influence is in our trade relations with this dear part of the world and how increasingly important it will be.
However, a specific, strategic relationship between the European Union and Brazil, as announced on 30 May, runs the risk of damaging the regional relationship between the European Union and Mercosur.
We heard the Secretary of State and the Commissioner trying to put our minds at rest on this, and we received those explanations. However, we ask that in these negotiations Parliament should continue to be kept informed, because we all understand that, in theory, a specific strategic agreement with Brazil is possible, but that we would not want and would not support anything that weakened the regional relationship.
on behalf of the UEN Group. - Mr President, the issue of Brazilian beef continues to dominate the headlines, as it is a problem that affects the farmers and consumers of Europe. As an Irish Government MEP, I met with the Brazilian Ambassador to the European Union in May of this year and again at the end of August to highlight my concerns regarding Brazilian beef exports to the EU. These include illegal removal of tags, smuggling of cattle across borders from foot-and-mouth-affected areas, and the proper testing of cattle.
The EU has rightly adopted the policy of regionalisation whereby, if there is an outbreak of foot-and-mouth in a country, only the affected area is excluded from exporting beef. This policy worked well in Ireland in 2001 and in the UK this summer, as strict traceability policies were implemented immediately. This level of traceability does not exist in Brazil and this is unacceptable from an EU point of view. In the EU, beef farmers have to comply with stringent standards imposed by the Commission. I would urge the Commission to ensure that the same standards and regulations are applied in Brazil as currently exist in Europe to ensure a level playing field for all. I am delighted that Commissioner Fischer Boel is visiting Brazil next month and I hope that after her visit she will be able to answer the justifiable concerns of the farmers and consumers of Europe.
Mr President, President-in-Office of the Council, Commissioner, I think we should not beat about the bush. The problem is not the respect that we owe this great country, Brazil, the problem is the turn that international relations are now taking.
Mr Mandelson and, it seems, the Directorate-General for Trade have abandoned the ideal of multilateralism and are embracing the bilateralist approach of the United States. What used to be the trademark European position in international trade was that we at least wanted bi-regionalism; in other words, to discuss things region to region. Well, we were told, we are in talks with Brazil, and we are in talks with India: as if we needed to compensate in some way for the memory of British imperialism by the memory of Portuguese or Spanish imperialism! India is two and a half times the size of Europe, including Turkey. India is three times the size of Latin America.
Our aim is to help create a multipolar world. This means that first of all, we must help with the unification of Mercosur and the Andean Community, and then the unification of the entire South American Community of Nations.
In this respect, we have nothing against discussions, whether with Bolivia or Brazil, but we must bear in mind that we should be seeking to unite and not divide. We must put Mercosur before Brazil in our list of priorities and, when we hold talks with Brazil, we must consider the consequences that this could have, including for our discussions with ASEAN on sugar.
on behalf of the GUE/NGL Group. - (DE) Mr President, Mr President-in-Office of the Council, Commissioner, even though negotiations with Mercosur are only making slow progress, the EU should send the clear signal to the government of Brazil and our other partners that it will not be concluding any bilateral agreements with individual governments that oppose the processes of integration in the respective regions: not with Brazil, which is a member of Mercosur and potentially a future member of Unasur, not with Columbia or Peru, which are members of the Andean Community and also potential members of Unasur.
The difficulties in the negotiations with Mercosur are not trifling matters. The future of farming, not just the future of agribusiness and the service sector, industrialisation, technology transfer, access to medication, these are all questions to which we must find answers together with our Latin American partners if we want real cooperation with this region. Our aim should be a process of cooperation in which the interests of the citizens are central. Cooperation should not be limited simply to dividing up market shares and access to energy and water or to distributing patents on intellectual property.
My Group has warmly welcomed the fact that Brazil, like Thailand, has been taking significant steps, despite objections from the pharmaceutical industry, to improve access to medication. These steps should be supported by the Commission and Council. We also welcome the fact that Brazil has already declared itself willing to discuss the problem of the destruction of the rainforest in the Amazon, because this is essential for stabilising the climate.
Even though destruction has slowed down in the last two years, it has not stopped. Pressure from both the European Union and the USA and other players for access to biofuels, particularly ethanol, instead of better controls on their consumers' behaviour, is another danger for the rainforest and food security.
Every so often we hear from the Brazilian authorities that the country has to expand its agricultural industry in order to improve its financial situation in the face of its problem with foreign debt. As you know, new governments in the region are trying to follow new paths to resolve this problem. Bolivia, Ecuador, Nicaragua, Venezuela, Paraguay and Argentina have joined forces to create a Bank of the South and thereby to become independent of the World Bank and the IMF. This is also good news, even if we as the European Union are shareholders in other banks and therefore suffer the loss of credit allocations. However, we then must abandon our kind of conditionality.
The European Union should not look on passively here, but be pro-active and develop and extend these approaches that are completely in line with our own aims of cooperation and environmental protection.
on behalf of the IND/DEM Group. - (NL) Mr President, it says a great deal that the new bilateral strategic partnership with Brazil has been brought about under the Portuguese Presidency. I value the fact that each Member State is given the space to leave its own mark on the EU policy during its presidency. I would add, however, that Member States should use this elbow room only whilst taking into consideration the continuity of the current EU policy agenda.
It is precisely for this reason that I share the concern that I sense in the issue that we are debating here. For some time now, the European Union has had the objective of entering into an interregional association agreement with Mercosur. This objective is thwarted by the bilateral strategic partnership with Brazil.
Firstly, the other Mercosur countries feel cheated by the European Union. Instead of an interregional agreement, the Union evidently prefers a bilateral agreement. I would therefore like to ask the Commission what initiatives it is taking to dispel these concerns in countries such as Argentina, Uruguay and Paraguay. Trade relations with these countries are just as important for the Union.
A second reason for my concern with regard to Mercosur lies in the stability and political course of this collaboration. Over the past few years it has been clear that Brazil wishes to profile itself more forcefully on a global level as the continent's natural leader. This manifests itself not only in an assertive role within the WTO, but also for example in the desire to acquire a seat in the Security Council.
As a result, Brazil has less of an interest in its own role on the continent. After all, Mercosur consumes just 10% of Brazil's export. The country therefore seems less prepared to invest in other Mercosur countries. With its entry into the global arena, Brazil is indicating that it feels it has outgrown its role within the region.
The reverse side to this Brazilian policy is the threat to the stability and political course of Mercosur. Following the withdrawal of Brazil, Venezuela is endeavouring to assume the leading role within Mercosur and therefore within the entire continent. Chávez is attempting to enhance its role within the region with the aid of oil funds and anti-western rhetoric. Venezuela operates a protectionist, internally oriented economic policy, in which major economic sectors are threatened with renationalisation. In the meantime, there is no more room for free trade and the opening up of new markets. I assume that the Council and the Commission are aware of the fact that these developments have consequences for the countries of South America, but certainly also for the economic and trade interests of the Union in this area.
I call upon the Council and Commission to exploit the fact that a bilateral partnership exists with Brazil in order to turn around the trend that I have just described. The Union must urge Brazil to use the new political weight of the bilateral partnership with the EU in order to display new political leadership within Mercosur and on the continent. This must serve to prevent the isolationist policies of countries such as Venezuela and Bolivia from extending further across the continent.
Finally, Mr President, I would like to comment on the content of the partnership. I am of the opinion that the content of the EU partnership with Brazil must not focus solely on topics such as bio-ethanol, but equally upon getting the Doha Round off the ground. After all, the role of Brazil has until now predominantly been the achievement of individual successes in relation to agriculture, whilst the country is not truly prepared to compromise with regard to NAMA and services.
(PL) Mr President, it is my conviction that negotiations between the European Union and Mercosur should be a priority for our work in the forthcoming months. Despite the many problems we are currently encountering, multilateral cooperation in the context of this region is far more advantageous, as it will enable cooperation within the framework of all the states associated together in Mercosur to be maintained and at the same time deepened, regardless of their economic position in the region.
A successful conclusion to the negotiations between the European Union and Mercosur has a chance of leading to the creation of the largest free trade zone in the world, which will translate into a significant increase in trading volumes and a strengthened position for both partners, the European Union and the Mercosur countries, in the world economy. It is evident that the greatest beneficiaries of this agreement will be small and medium-sized enterprises, in both the EU and Latin America, and we are all aware that small and medium-sized enterprises that are growing in strength mean new jobs, better quality of services and social wellbeing.
I think that partnership with Brazil, as our largest partner in this region, is very important, and we should develop it, but under the aegis of cooperation with Mercosur, and this means that first we must put together an association under the Mercosur framework, and only then, with this as a basis, should we build up any bilateral cooperation with individual Latin American countries. Building up cooperation with just one country in the region may undermine understandings that have been arrived at previously and become a factor that holds back work on an association agreement with Mercosur.
This is why I think, and I would like to stress this once again, that concluding an ambitious arrangement with Mercosur that is advantageous to all - the EU and the Latin American states that have joined to form Mercosur - should be a priority for us, and Brazil, as the strongest country in this region, should be the motor for this negotiation process.
(PT) Mr President, Secretary of State, Commissioner, ladies and gentlemen, the EU-Brazil strategic partnership is not a threat to regional balance nor to the EU's economic and trade relations with other Latin American partners. On the contrary, it favours those relations, as mentioned in the joint statement from the EU-Brazil Summit on 4 July.
Today's question has the benefit of provoking a debate on EU-Latin America and EU-Brazil relations, both of which are extremely important. As already mentioned here, I see the EU-Brazil partnership as filling a gap. It was not acceptable that the European Union's strategic partnerships with the BRIC countries should leave out the 'B' for Brazil. The Portuguese Presidency was right, then, to promote the EU-Brazil Summit, in line with what it did in 2000 when it held the first EU-India Summit, which did not harm relations with the other countries in that region.
There are therefore now better conditions for Europe to give a fresh impulse to relations with Mercosur and to the Doha negotiations. Strengthening the EU-Brazil dialogue makes complete sense because it will enable cooperation to be enhanced in key areas such as energy security and sustainable development, biodiversity, climate change, the fight against poverty and exclusion, promotion of democracy and human rights, etc. Brazil's demographic weight, economic development and political stability inevitably make it a key player on the international stage.
Europe can only gain from regarding Brazil as a strategic partner. As the Secretary of State has already said here, relations between the European Union and Brazil cannot be analysed solely in an economic context. That is too narrow a view that overlooks historical links, cultural and linguistic affinities, cooperation between universities and many common interests in various areas.
(NL) Mr President, ladies and gentlemen, do the South Americans still believe in an interregional agreement between the EU and Mercosur? This, I believe, is the question that we must ask ourselves. The trade strategy of the Mercosur countries follows two different paths, on the one hand allowing Mercosur to develop further, but on the other hand, as in the case of Brazil, concluding as many bilateral trade agreements as possible in order to secure a market position for the individual country, if necessary at the expense of the other Members of Mercosur. It sometimes resembles the combination of an Argentine tango with a Brazilian samba. Nevertheless, provided that both the EU and Mercosur continue to believe in the value of a broad-based collaboration between the two continents, then hope remains, despite the pressure of US President Bush to establish a free trade area of the Americas. With 34 countries, the enthusiasm of the Mercosur members is not tremendously great. They are disappointed with the lack of support offered by the United States during the recent heavy economic crisis. Europe is now already Mercosur's most important trading partner, yet there is still huge potential for growth between both trade blocs. If, therefore, we can do something to resolve the mutual discord between the Mercosur countries, for example by means of collaboration in multilateral trade negotiations such as the WTO, in which the EU and Mercosur frequently have common interests, perhaps we may once again come a little closer to achieving an interregional agreement.
(GA) Mr President, there is one point which I want to make about trade between Europe and Brazil, and that is the standard that we observe here in Europe, as far as meat production is concerned, and the strict rules that we lay down for the European meat trade. That notwithstanding, we accept meat imported from Brazil, a place where no such rules apply. I think that it is time for the Commission to address itself to this matter and ask questions of its own. Why is there a big difference between the stringent standard observed here in Europe and the standard permitted in Brazil as regards the traceability of meat, stock tags, and foot and mouth disease? It is time for the Commission to raise these matters, as the great discrepancy in terms of standards is seriously disquieting for customers. Trade is one thing; health for life is quite another.
(ES) Mr President, President-in-Office of the Council, Commissioner, I think that it is clear that Brazil, due to its size, its population, its natural resources and, above all, its role on the international stage - I am thinking about the role that it is playing in the reform of the United Nations system, the role that it is playing in relation to the whole subject of climate change and the debate on energy resources - fully justifies the Communication presented by the Commission in terms of being able to benefit from a strategic partnership between the European Union and the great country that is Brazil.
And this strategic partnership, in my opinion, needs to be on three levels: from a global perspective, a regional perspective and a bilateral perspective.
However, it is one thing to give Brazil the treatment it deserves as the great country that it is, and another for the European Union not to continue with its commitment to the work that it has been doing to conclude the Agreement between the European Union and Mercosur. I do not think that this was the Commission's intention in its Communication; I think that we can clearly gather from this Communication that the two hypotheses are perfectly compatible: on the one hand, the strategic dimension with Brazil, and, on the other hand, determined support for integration processes, of which the European Union is the most complete and obvious example.
Another thing is the Association Agreement between the European Union and Mercosur not being concluded on the terms that we would all like, and it is an agreement that has been delayed for too long now. The question is a legitimate one: How long is the European Union going to keep waiting to conclude this agreement?
I think that we need to support regional integration processes, and it is only with this perspective, only in this dimension, that we will understand the advantages of union and integration.
Mr President, the priorities of this House in trade negotiations are clear. Firstly, we want a successful multilateral round. Secondly, we want successful biregional arrangements and as a fall-back - but only as a fall-back - we look to improve bilateral arrangements.
I have to confess that when I first heard about the priority given to the Brazil strategic partnership agreement, I felt we were rewarding a country that has been one of our more awkward partners in the multilateral negotiations in the Doha Round. I also felt it would undermine Mercosur, where, without Brazil, there is no Mercosur. However, having heard the Council this morning, having spoken to my Portuguese colleagues, I am convinced that there is a possibility that a successful strategic partnership agreement with Brazil can make it easier in the Doha Round if we develop understanding between ourselves and a key Doha player.
It can make it easier to get a Mercosur agreement if we find solutions to some of our more intricate economic challenges and of course a good agreement with Brazil would signal to them that we support their domestic priority of tackling social exclusion and poverty. So I am not entirely convinced, but I am more convinced that an agreement between the EU and Brazil is now a more desirable objective than it was a few weeks ago.
(FR) Mr President, Commissioner, ladies and gentlemen, in such a changing global geopolitical context, our Parliament, on several occasions, has expressed its unwavering determination to strengthen the partnership between our two continents.
As I see it, this new entity must be Mercosur. It can help us find ambitious, balanced and political solutions to the issues of energy supply, reducing the greenhouse effect or even the quality of our agricultural products.
The regional integration of South America cannot be furthered and cannot be effective if we choose to negotiate with one of the members of Mercosur, rather than working in partnership with the new entity as a whole.
For my part, I am campaigning for regional integration, which as I see it is a vehicle of stability and prosperity for this part of the world, and for us, and should be supported and monitored. I also think it would be a shame if Mercosur countries were to move away from this major project because of our lack of political ambition, and thus fail to seize this opportunity for both continents, Latin America and Europe.
This would clearly set us apart from the US policy of creating a vast economic free trade area for the entire American continent.
(PT) When we ask what contribution a strategic partnership between the European Union and Brazil can make to developing the relationship between the EU and Mercosur, with a view, amongst other things, to concluding the much-wanted, long-delayed agreement, I think there can only be one answer: that contribution is of major importance.
At the same time, it must be said that a strategic partnership between the EU and Brazil would always be justified and that in this matter the only flaw is the time that has already been lost. Of the four 'BRIC' countries - Brazil, Russia, India and China - Brazil was the only one that the EU had not held any high-level meetings with until the Summit on 4 July. That is even more of an anomaly given that Brazil is the major regional power in South America. It is a democracy, with the imperfections which new democracies tend to have, which shares our own framework of values. It is a traditional and reliable ally and an economic partner of major importance both at regional level and in terms of the global economy.
For all these reasons a strategic partnership with Brazil is justified, because this country is a strategic partner of the European Union in its own right. However, there are also other reasons for strengthening the relationship and developing a strategic partnership with Brazil. As stated in the communication from the Commission, this relationship can and must be a driving force for developing dialogue with Mercosur. The two partnerships are not in opposition to one another; they are complementary. The relationship can and must also be a factor favourable to the quest for solutions in the context of the World Trade Organization. Just as, finally, the relationship can and must be a sign that the European Union recognises the special importance of this country in international relations and is intending to take that fact into account in the context of the discussion on UN reform.
Mr President, it is increasingly necessary for the European Union to act as a global-scale economic partner and a strategic partnership with Brazil is a sign that we want to follow that path. That is the way we must go if we want to obtain an agreement with Mercosur. To exclude Brazil from privileged bilateral relations would be unfair and, above all, a serious political mistake.
(RO) Mr. President, I would like to emphasize the importance of this document and, as a member of the EU - Mercosur Delegation, I would like to emphasize the importance of the region. It is a large region, with a high population, which is promising and must be helped towards economic growth.
This is a region with many natural resources and, in fact, the European Union absorbs 25% of the Mercosur region's exports. It is important to assist this region for economic development, for industrial development; its role in climate changes will be extremely important and, for this reason, we must support regional integration.
For the 2007-2013 strategy, one fifth of the budget allocated for the relationship with Mercosur will finance education and development of the information society and this is extremely important, taking into consideration that, in Brazil, the illiteracy rate is approximately 90%. Also, I believe that Brazil plays an important role due to the fact that almost half of the Mercosur region's population is located in this country. I repeat, climate changes are extremely important and this region plays an important role.
(EL) Mr President, there is no doubt that Brazil plays a significant commercial role on the world stage. Further strengthening of economic ties between the EU and Brazil is therefore desirable.
The EU is Brazil's main trading partner, whilst Brazil is ranked just our twelfth most important trading partner in the EU. The strategic partnership between the EU and Brazil should not, in my view, cause divisions in the en bloc approach of the Mercosur region.
Nevertheless, this relationship can play a complementary role in two spheres: in the multilateral negotiations at the World Trade Organisation (WTO), and in the free trade area between the EU and Mercosur. This area will be the largest area of inter-regional cooperation; it will highlight the lack of progress in the multilateral negotiations in question and in inter-regional negotiations. The progress of both areas of negotiation is to a large extent interlinked.
The free trade area between the EU and Mercosur, like the Doha Round at the WTO, has become caught up in issues of trade in agricultural goods. The role of Brazil is particularly important here: given its influence on economic stability and integration in the wider region, Brazil ought to contribute creatively to bring about a balanced and ambitious agreement between the EU and Mercosur.
At the WTO level, Brazil cannot expect only the markets in agricultural goods of developed Member States to open up further. Commissioner, President-in-Office of the Council, like the other emerging economies, Brazil must take its due share of responsibility in the current Doha Round negotiations, through genuine commitments to opening up particularly protectionist markets and complying with the rules and disciplines of the WTO.
(PL) Mr President, Commissioner, Minister, to begin with I would like to express my conviction that the Portuguese Presidency is following a correct strategy as regards achieving a strategic partnership between the European Union and Brazil. I feel that the European Union should initiate and finalise this partnership as quickly as possible. The role of Brazil in the modern globalised world is clear, economic and cultural, as is the role played by Brazil in the United Nations.
A strategic partnership between the European Union and Brazil will enable mutual relations to be energised, and will be of good service to today's political, cultural and economic order on a world scale. I repeat, it will be of service in improving political harmony in the global sphere.
I do not think this strategic partnership will prove any kind of hindrance to the development of a strategic partnership with Mercosur. Partnership with Mercosur requires a strategic partnership with Brazil.
(PT) From the outset the Portuguese Presidency's programme included holding a summit meeting with Brazil. It became clear that the parties would propose laying the foundations for establishing a strategic partnership. It does not therefore make much sense to express any surprise or concern now about disregard for Mercosur and undue or premature favouring of Brazil.
The scale of the Brazilian trade market for European exporters must not be underestimated. The European Union cannot lose the opportunity of obtaining a strategic partnership with Brazil. The facts show that the European Union's relations with Mercosur and Brazil respectively are already condemned to go at different speeds. It is not ideal, but there is no evidence that one going faster does any harm to the other. On the contrary, it might even be a strong incentive to speed things up.
Brazil today is an emerging world power, the only one among the Mercosur member states, with a market representing 85% of the Mercosur market. It is a representative democracy. It is one of the European Union's principal trade partners and a country whose 200 million inhabitants speak one of the most widespread European languages in the world - Portuguese - and whose values of civilisation and culture are closely related to those of Europe. Without prejudice to the advantages which real progress in relations with Mercosur would mean for the EU, I do not think there is or ever has been any weighty argument in favour of delaying advancement and enhancement of our relationship with Brazil. Nor is it up to the European Union to oversee the internal ups and downs between Mercosur members.
To think otherwise and to put off indefinitely the achievement of the Union's very important objectives, with respect, is to indulge in wishful thinking that is incompatible with the present day situation, acting as though our plans and wishes had come true, when they have not and we do not know when they will.
(PT) The experiment at regional integration in Mercosur has essentially been a success both at the economic and the political level. Mercosur's contribution to democratic consolidation in the region and growth in the volume of trade within that bloc are unquestionable facts.
It is true that at the moment the negotiations between the EU and Mercosur are at an impasse because of the wait for commitments and agreements to emerge from the Doha Round that may serve as a new starting point for our bilateral trade negotiations. Although I do not wish to appear too pessimistic, we run the risk that the Doha Round will merely result in our losing precious time. The EU should contribute to the success of South American regional integration by putting all its efforts into the success of the negotiations between the two blocs.
Our relationship must be much more extensive than a mere free trade agreement. Under discussion here is a global agreement that goes much further than figures and quantities of goods to be traded. The association agreement includes cooperation and political dialogue, which are fundamental pillars for our future relationship.
No one doubts nowadays that the European Union needs Ibero-America and its great instrument, Mercosur, in order to achieve its objective of building a more balanced and multilateral international order.
The joint statement by the President of the European Commission and the President-in-Office of Mercosur, the President of Uruguay, Tabaré Vásquez, following the meeting on 19 September promising a joint public statement by the two blocs by the end of the year on the environment and climate change is an important example of that political collaboration. Mercosur offers great promise as far as economic integration and making South America politically stronger on the international stage are concerned, but that does not mean we can overlook or pretend not to see what is before us - the incontrovertible political presence of Brazil, by sheer force of the facts, as the leading power in South America. Brazil is the soul and driving force of Mercosur. With its 190 million inhabitants and an economy representing approximately 75% of Mercosur's GDP, Brazil is the only BRIC country with which the Union had not held a summit until now.
Ladies and gentlemen, it is absurd to think that the European Union can teach Brazil anything about the importance of Mercosur or appoint itself Mercosur's champion before Brazil. That is absolutely ridiculous. Similarly, Brazil is the only Mercosur member country aspiring for a place on the UN Security Council, which it merits and which will give the whole of Latin America a voice within that important body.
Mr President, in the past I was a champion of EU-driven regional integration in Latin America through preferential support for regional multilateral blocs, such as Mercosur. But, regrettably, in spite of the closeness of its constituent countries (Argentina, Brazil, Paraguay and Uruguay) culturally, Mercosur remains too weak politically compared to national interests, therefore impeding an EU-style single market in the region - although this, of course, should be our long-term objective.
Mercosur's functioning is worsened by the recent decision by Venezuela to join, with Chávez's anti-free-market rhetoric leading to even more protectionism in Mercosur, whose talks with the EU have for some time now been stalled. Therefore, I welcome the fact that the EU is instead championing a strategic bilateral partnership - as agreed this July - with Brazil, which is an economic giant, but one whose share of global trade is still small in comparison to other developing countries, precisely because Brazil has failed to sign profitable bilateral free-trade agreements, placing too much faith in Mercosur.
Unlike Mexico, which already has a deal with the EU and is the other dominant player in Latin America today, Chávez's petrodollar generosity towards Argentina has forced President Lula of Brazil to ignore Mercosur issues and allowed President Kirchner of Argentina to further his protectionist stance.
Populist Ecuador is also making noises now, joining Mercosur in spite of joining the anti-US, Venezuelan-led Bolivarian Alternative for the Americas (ALBA) trade initiative.
One recent spat between Argentina and Uruguay clearly demonstrates the lack of effectiveness of Mercosur in resolving its partners' differences over the pulp mill being constructed by an EU Finnish company, Botnia, on the banks of the River Uruguay. President Kirchner failed to stop the project, and at the same time antagonised his neighbouring country - and Mercosur partner - Uruguay by refusing to allow Mercosur's supranational institutions to arbitrate this dispute. Instead, what did he do? He called in the King of Spain to arbitrate.
(MT) Mr President, we have before us today an agreement that reaffirms and consolidates the important role of the European Union in the global political sphere - a role to which we should attach great importance because it is part of the success of this union of states. This agreement emphasises the strengthening of the relationship not only with our neighbouring countries, but also with countries from other continents, especially countries that are home to thousands of millions of people of European origin such as those of Latin America and Central America. It is in the interest of both sides that these relations continue to be strengthened by means of dialogue and the exchange of ideas. However, we have to ensure that democracy in the countries that benefit from any assistance that we give is safeguarded. We should also ensure that all assistance, both direct and indirect, is targeted at reducing poverty, increasing equality and, last but not least, reducing the imbalance between the two regions of the world. This should always be within the bounds of transparency and accountability. Protection of freedom of expression and of fundamental rights should also be a priority in all negotiations. Whilst the European Union should provide assistance to each country in particular periods, but requires special help, we must ensure that this is done within a structured framework so that no one is left behind and so that wealth is distributed fairly. As Members of this Parliament we must as far as possible promote relations between the European Union and Mercosur and determine how to strengthen any weak points so that in these relations we can ensure efficacy and success as far as possible. With new challenges such as climate change being given increasing importance on our agenda, we should view these relations as the beginning of a strategic partnership that leads to an environmental dimension and sustainable development that produce reciprocal wealth.
President-in-Office of the Council. - (PT) Mr President, Commissioner, ladies and gentlemen, thank you very much for your contributions.
I have already had the opportunity on previous occasions to explain, justify and inform the European Parliament about the first EU-Brazil Summit, its results and objectives. Moreover, the importance of this strategic partnership with Brazil has been amply highlighted by many Members here today and I cannot but welcome the fact that those Members who at first seemed doubtful or more hesitant about the intention of the Portuguese initiative, now in fact seem more favourable towards the strategic choice which Portugal, as the country holding the Presidency, but also the European Union as a whole, made with regard to Brazil.
Naturally we are speaking and have spoken here about Brazil's importance politically and economically, and as regards the environment and energy, which are fundamental realities in the contemporary world which we cannot ignore. It would be odd, as pointed out here, if the European Union were to have strategic relationships, strategic partnerships with Russia, India and China, but not with Brazil. We believe that we have bridged that gap and we also believe that in a few years' time everyone will unequivocally applaud this initiative by the Portuguese Presidency. However, we also always made it absolutely clear that this strategic partnership which we believe the European Union should establish with Brazil in no way excluded or limited other relations which we also wished to extend on the economic and political levels with Mercosur.
I must say, ladies and gentlemen, that I am fairly at ease about that because Portugal was always amongst those EU countries that always fought for a close and deep relationship of solidarity with the Mercosur countries in all aspects of that relationship. We therefore have no hesitation and do not wish to allow the impression to be created here that a partnership with Brazil excludes or could exclude a close partnership with the Mercosur countries.
Such a vision, which instead of being a vision of complementarity could be a vision of exclusion, does not seem helpful to us and, above all, does not seem to correspond to reality - quite the reverse. Furthermore, as has been pointed out here, it is the final statement from the EU-Brazil Summit itself which explicitly and completely unequivocally states that the European Union and Brazil will work together so that the EU-Mercosur Association Agreement might finally become a reality.
We are all aware of the ups and downs which the EU-Mercosur Association Agreement has gone through. We really are at an impasse due largely, as we know, to issues of trade between the European Union and Mercosur. The Doha Round began in the meantime and what happened there obviously also influenced the trade dimension of the EU-Mercosur negotiations.
I want to make it quite clear to you, however, that once the Portuguese Presidency considers that the minimum conditions are established to relaunch that debate and that relationship, we shall not hesitate; we also assure you that, if that is not during the Portuguese Presidency then Portugal as a Member State - as it has always done and as has always been its aim - will not fail to call the attention of its partners to the real need to relaunch the negotiations on the Association Agreement with Mercosur in all its dimensions.
In conclusion, I must tell you that we are considering holding, if possible still within the Portuguese Presidency, a high-level troika meeting with the Mercosur countries. We are studying that possibility and, as I say, as a possibility for the Portuguese Presidency's agenda, which is, as you all know, a very full and very complex agenda, but we shall do what we can to be able to relaunch - at the political level too - this debate with the Mercosur countries.
Member of the Commission. - Mr President, I am also very grateful for the atmosphere, the debate and the real openness on this issue. I think we have to be responsive to the realities of the time and, fortunately, we now have many more important partners for multilateral cooperation than maybe 10 or 20 years ago. The reality is that Brazil is the only country missing from the BRICS group, one of the five which are regularly invited by the G8 to its summits and a country which represents EU investment equalling the level of investment in Russia, China and India cumulatively from EU countries, so it is a really important partner.
It is even more important to add that the strategic partnership is complementary to overall broader priorities, including cooperation with Latin America and with Mercosur: in the partnership itself, one of the strategic common issues is the promotion of regional integration and an EU-Mercosur Association Agreement.
A lot has been said about the content and some concerns voiced. We addressed them. For example, in the food safety area in the first half of this year, an intensive programme of inspections was carried out, especially regarding beef, fishery products and poultry. We have witnessed significant improvements in food safety, and many deficiencies have been largely rectified, but of course the work will continue, as some of you said, even at political level. The Commissioner will visit Brazil next month to discuss this area, and that is a very important area of closer cooperation.
It is our common cause, our common interest, that the Doha Development Round is concluded successfully. We are doing all we can in this regard on all sides in order to reach the end, hopefully this year.
I shall make a small remark on what could be done in promotion of cooperation with other countries. There is, for example, one area which I wanted to raise as a good case. Brazil is the first country from Latin America to cooperate in our research programme and, via this experience and bridge, I think we can gradually do more in other countries. So it is not against the others; it is one of the leading economies and partners in the area and cooperation is growing overall. It is very complementary to our ambitions to bring more integration to the Latin American continent.
The Commission will keep you duly informed about the process, as requested. We are now awaiting the political response to the communication from the Brazilian side. On the basis of this response, we will try mutually to draft an action plan proposal and then hopefully get this action plan agreed and implemented.
Last but not least, I want to express my gratitude to the Presidency for its commitment and very positive input, regarding not only the first historical summit, but also the development of cooperation between the EU and Brazil and between the EU and Mercosur as a broader area.
Thank you very much, Commissioner.
The debate is closed.


Dates of forthcoming sittings: see Minutes


6. Information provision and promotion measures for agricultural products (vote)
- Report: Bogdan Golik


Voting time
The next item is the vote.
(For the results and other details on the vote: see minutes.)
(FR) Madam President, I wanted to bring it to your attention that my card is not working, because I have just put in a card I thought I had lost in the office and it shows as not valid. So I am here, I want to vote, I have my card, but it is not working any more. I do not know what I should do, but I should like that to be recorded in the minutes.
We will send a technician so that you will be able to participate in the vote.
I should just like to point out before we start the vote that I shall not be reading out the numerical results of the roll-call votes: I shall just tell you whether they are adopted or rejected.