EU, Central America reach first-ever free trade deal

10:18, May 19, 2010      

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Central American countries and the European Union agreed Tuesday on the first-ever free trade deal between the two regions, they announced in a joint statement.

The deal between the 27-nation EU and the Central American nations of Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama was said to have followed "an intensive negotiation process."

The agreement was announced during a summit in the Spanish capital involving the EU and Latin American and Caribbean nations.

"The trade ministers of Central America and the EU express their full satisfaction with the outcome, which will result in an ambitious, comprehensive and balanced trade pillar of the Association Agreement," the statement said.

It is the first ever deal of its kind between the 27-nation bloc and Central America.

Salvadorean Cabinet Chief Alexander Segovia said the EU's "flexibility" led to the deal.

The six Central American countries have been in talks on a free trade deal with the EU since 2007.

The deal follows an agreement Monday between the EU and the four-nation South American trading bloc Mercosur to resume talks aimed at reaching a free-trade agreement, despite opposition from a number of European nations.

Any deal would be likely to involve Europe cutting its import tariffs for agricultural imports in return for greater access to Mercosur's services and telecoms markets.

The EU and Mercosur, which is made up of Argentina, Brazil, Uruguay and Paraguay, began free trade talks in 1999, but they stalled in 2004 due to disagreements over tariffs and subsidies paid to EU farmers.

Spanish Prime Minister Jose Luis Rodriguez Zapatero, whose country holds the rotating six-month presidency of the EU, said a free-trade agreement between those two blocs would lead to an extra 5 billion euros ($6.2 billion) in exports per year.

But last week 10 EU nations led by France, also the main beneficiary of the EU's Common Agricultural Policy, issued a statement opposing the talks because "the strategic agricultural interests of the European Union are clearly at stake."

Source: Global Times
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