FIRST MERCOSUL-ASEAN MINISTERIAL: BABY STEPS, BUT

UNCLAS SECTION 01 OF 02 BRASILIA 001610 SENSITIVE SIPDIS E.O. 12958: N/A TAGS: PREL ETRD BR ASEAN SUBJECT: FIRST MERCOSUL-ASEAN MINISTERIAL: BABY STEPS, BUT CONTINUITY IS ENSURED BRASILIA 00001610 001.2 OF 002 ¶1. (SBU) Summary. At the first Mercosul-ASEAN ministerial, delegations discussed global affairs, trade and investment, people-to people ties, and future cooperation. A joint declaration highlighted the blocs' "firm commitment to successfully concluding the Doha Round in a fair and balanced manner." Brazilian diplomats said the meeting revealed divergent views among ASEAN members on whether to pursue a free trade agreement with Mercosul, despite an ASEAN moratorium on new negotiations. Ministers agreed to continue the ASEAN-Mercosul meetings, which Brazil considers a significant achievement and a path toward eventual trade negotiations. End summary. ¶2. (SBU) Ministers from all Mercosul and ASEAN member states met in the first ministerial meeting of the two blocs on November 24 in Brasilia for talks on global affairs, trade and investment, people-to people ties, and future cooperation. The agenda began with discussions of the international financial situation, energy security, food security, and the WTO and Doha Round, followed by sessions on developments in ASEAN and Mercosul, enhancing trade and economic ties between ASEAN and Mercosul, promoting people-to-people ties, and an action agenda for future ASEAN-Mercosul cooperation. Differences Among ASEAN Members Over Trade Talks ¶3. (SBU) Second Secretary Andre Saboya Martins, Department of International Negotiations of the Brazilian Ministry of External Relations, said the meeting revealed divergent views among ASEAN members on whether to pursue a free trade agreement with Mercosul. Singapore and a few other ASEAN members were clearly in favor of trade talks with Mercosul, while others opposed such a course, according to Martins. He reported that that one (unnamed) ASEAN country's embassy phoned him afterwards to ask about opening trade talks as soon as possible. Continuity Ensured for ASEAN-Mercosul Meetings ¶4. (SBU) Ministers agreed to continue meeting, an outcome that was not a foregone conclusion because ASEAN had adopted a moratorium on new negotiations. Mercosul members were pleased because they wanted to ensure continuity, Martins said, and now there is a mechanism to continue talking without actually entering into economic and commercial negotiations, something ASEAN is not open to as a bloc. (Note: ASEAN countries may conduct trade negotiations individually, but Mercosul members may do so only as a bloc. End note.) The next ASEAN-Mercosul meeting, scheduled for March 2009 in Kuala Lumpur, is to be a high-level meeting to develop a Plan of Action and Road Map for ministers' consideration on the margins of the September 2009 UN General Assembly, followed by a second ministerial in an ASEAN country not later than June 2010. Multilateral Negotiations Should Meet Emerging Economies' Needs ¶5. (SBU) During the discussion of the global financial crisis, ministers agreed on the need to create both a global architecture of financial institutions and a Doha Round result closer to the needs o emerging economies, according to Martins. The oint press statement also reflected a view in favor of more favorable conditions for emerging economies in the Doha Round, calling for a successful conclusion of the Round "in a fair and balanced manner," expressing opposition to export subsidies for agricultural products and suport for "incorporating a development dimension n international discussions concerning intellectual property." Comment ¶6. (SBU) Part of the cntext for Brazil's interest in engaging ASEAN naions is President Lula's push to strengthen sout-south contacts, build new trade relationships, sek support for Brazil's UN reform aspirations, and advance the interests of Brazil and like-minded tates in multilateral negotiations. The rest ofthe context, as Martins pointed BRASILIA 00001610 002.2 OF 002 out, is that Mercosul is already in negotiations with the EU, Israel, Morocco, Jordan, Egypt, the Gulf Cooperation Council, and the South African Customs Union, and the ASEAN talks should also be viewed in that other, larger picture of bloc to bloc outreach. Mercosul may be ready to go faster than ASEAN as a whole, so ASEAN will hold the pace back, but we can also expect to see individual ASEAN members break out of the pack and make trade negotiation overtures to Mercosul, as one already has. SOBEL