The European Union and the Mercosur group of four South American countries relaunched talks on Monday aimed at creating the world's largest trading bloc despite warnings that a deal could hurt EU farmers. Interest in creating a free-trade zone representing 750 million people with annual commerce worth nearly 100 billion euros ($123 billion) has grown since the start of the financial crisis and delays to the Doha round of world trade talks.
Mercosur - Brazil, Argentina, Paraguay and Uruguay - and the 27-country EU will hold a first round of talks in July. "We relaunched the negotiations because we are quite convinced we can make them lead to an ambitious, balanced, association agreement," Jose Manuel Barroso, president of the executive European Commission, told a news conference.
The relaunch has met strong criticism from EU farmers. Many EU farm ministers earlier on Monday in Brussels warned against reviving the talks, saying a deal would put thousands of European farmers out of business. But Barroso, speaking after talks with the Mercosur countries in Madrid, said both sides would have to make concessions for an agreement to be reached.
When the talks were suspended in 2004, Mercosur countries expressed dissatisfaction with the EU's offer of access to agricultural markets. At that time, the EU was seeking proposals from Mercosur on opening the South American bloc's telecoms market and protection for EU industries.
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