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This monograph seeks to examine the motivations behind the European Union’s (EU) policy towards the Common Market of the South (Mercosur), the EU’s most important relationship with another regional economic integration organisation. In order to investigate the motivations (or lack there of), this monograph will examine the contribution of the main policy and decision-makers, the European Commission and the Council of Ministers, as well as the different contributions within both institutions. By doing so, it will be possible to show the degree of “involvement”/”engagement” reflected in the EU’s policy towards Mercosur, which is the dependent variable in this study. The analysis offered here examines the development of EU policy towards Mercosur in relation to three key stages: The non-institutionalized relations (1986-1990), official relations (1991-1995), and the negotiations of an association agreement (1996-2007 and 2010-present). This degree of engagement will be measured using a scale of low, medium and high degree. The outcome of the measure is created by analysing two factors, the level of “ambition” and “commitment”.

This chapter establishes the analytical framework that will be used to examine EU- Mercosur relations. The chapter begins by offering a critical review of the existing literature. Until now, the existing literature on EU-Mercosur has been very descriptive but not very analytical. It has tended to cover very specific moments of the relations and as a consequence it has forgotten to look at the bigger picture. Most authors have chosen to explain EU-Mercosur relations by using more than one argument at the same time without choosing one as the most representative. Furthermore, some authors explicitly say that until the end of the negotiations of the Association Agreement there will not be a final answer. This is hardly a clear and strong debate on a policy.

This chapter covers a new stage in EU policy towards Mercosur and Latin America. This stage started with a new framework of policies within which agreements between the European Union and Latin American countries, including the Mercosur countries, were made. By explaining EU-Mercosur agreements within the general context of EU-LA relations it is possible to bring some clarity to the EU level of engagement with Mercosur in relative terms so it is neither over nor underestimated. In doing so it will show how EU-Mercosur relations were the most important ones within the EU-LA framework. As has been established before, the level of engagement will be explained by discussing two aspects of it, “ambition” and “commitment”. This chapter shows that there is a medium level of “ambition” and a high level of “commitment” which helps to explain the outcome of a medium level of engagement. In relation to this stage, in the literature it has been accepted that, in 1990, the EU’s means of dealing with Latin America changed (Aldecoa Luzarraga 1995; Bizzozero 1995; Laporte Galli 1996; Birochi 1999). Detailed explanations for this have not yet been offered. Some indicate that these changes were due to wider changes in the international arena. With the end of Cold War, the EU was given a chance to develop a global vision and a space in which to do it (Aldecoa Luzarraga 1995; Birochi 1999). The internal changes in the European Union, especially its increased integration, have also been mentioned in this regard (Aldecoa Luzarraga 1995).

This chapter aims to explain the phase in EU-Mercosur relations which negotiated the association agreement without reaching a successful ending. Both parties developed those negotiations under the European Mercosur Interregional Cooperation Agreement (EMIFCA). It was agreed that this agreement would be carried out in two phases. The first phase related to the preparation of the ground for future negotiations by comparing standards, statistical systems, trade procedures, whilst the second phase focussed on trade liberalization. The second phase of this agreement was also focussed on the actual negotiations. In the end, both parties were unable to reach an agreement and the negotiations were stopped in October 2004. This chapter will focus on the period up until the period where the EU became set on developing a political partnership with Brazil. In doing so, this decision marked the beginning of a new stage in history of EU policy towards Mercosur. By looking at how these two parts of the policy were developed, and how far both sides went in both their statements and actions it will be possible to discuss the level of engagement on the EU side towards Mercosur. It seems that there were actors within the EU willing to both increase and decrease the level of “ambition” and “commitment”. Also, Mercosur countries helped to overcome some of the obstacles and this should be considered in order not to attribute the whole outcome solely to EU behaviour. The EU developed the association agreement towards Mercosur at this stage because of the efforts of the Commissioner in charge of the policy until 1999.

From the moment the European Union and Mercosur stopped their negotiations there was not progress or a real intention to re-start the negotiations again until 2010. Officially the EU and Mercosur “continued” negotiating the Association Agreement but it is fair to say that after such a failure at the last minute in October 2004, both sides becoming cautious in their hopes for a successful agreement. Considering that the negotiations failed publicly it is understandable to expect some years of “healing” before considering a new attempt. One more time, the right momentum was necessary to facilitate the re-launching of the negotiations. The economic environment was completely different from 2004. At this moment Europe is the one recovering from a financial crisis and from a weak Eurozone, while in Latin America this international crisis did not have that much of an effect. However in 2004 Brazil and Argentina were recovering from the economic crisis of the late 1990s early 2000s. The negotiations between the EU and other Latin American regional groups or individual countries were being successful. At the same time a third major investor and trader became an important piece of the puzzle, China. To some extent this could be seen as a better scenario for a successful agreement between both regions. The facilitator of the re-launching of the negotiations was one more time the Spanish presidency of 2010. Since then, several meetings have taken place between the EU and Mercosur, the last one in mid June in Brussels 2015.

“(…) Russia and China, as well as partners in Latin-America, deserve a clear European strategy. Africa has, unfortunately, been absent from the EU’s strategic agenda for years and needs to be reengaged. (…)The Union can be a global actor considering we possess the objectives, principles and instruments. Unfortunately the political will is often lacking and the question is whether the EU Member States will take action to change this.” (Miguel Angel Moratinos, Spanish Minister of Foreign Affairs and Cooperation, 20 January 2010). The views of Miguel Angel Moratinos during the Spanish Presidency recognize a series of gaps in the strategic behaviour, the existence of partiality in the strategic agenda, and a lack of will in the European Union external relations. These quote suggest that if this has the situation in 2010, then EU policies during the 1980s and 1990s towards a Latin-American region such as Mercosur were not the most structured nor did the EU develop these policies to their full EU potential. At the same time, the EU’s internal institutional and legal frameworks also changed as a result of different treaties and enlargements. These internal changes affected either positively or negatively EU relations with Latin America. On the one hand, the Iberian enlargement affected EU policy positively towards Latin America, whilst on the other hand, policy towards Central and Easter European countries which culminated in the 2004 enlargement was affected negatively on EU-Latin America relations.