A investigation into tainted meat from food giant BRF has led to arrests in Brazil, including the company's former CEO
Asuncion (AFP) - Negotiators from Mercosur and the European Union are due to resume talks on Wednesday after edging closer to a historic trade deal during the last round in Brussels.
"We still need to conclude sensitive pending issues," Paraguay's Foreign Minister Eladio Loizaga said in Asuncion, adding that there was agreement on "90 percent" of the issues.
Loizaga, who currently holds the rotating presidency of the Latin American bloc, said key points have already been resolved, such as beef exports to Europe.
At the end of the previous round, the EU said it was willing to accept tariff-free imports of 99,000 tonnes of South American beef annually, compared to an initial offer of 70,000 tonnes.
That sparked outrage among European farmers who accused the EU of a sellout on the beef issue, fearing a flood of cheaper meat imports.
EU Agriculture Commissioner Phil Hogan warned Monday in Brussels that the outcome of the talks was still in the balance.
"It's very open as to whether there will be a successful conclusion at this stage," he said.
"There are a lot of areas where we are not making as much progress as we should, and we're not receiving the type of offers from the Mercosur countries that we would have expected, particularly in relation to industrial products."
The EU wants the Mercosur countries -- a region of 260 million consumers -- to open up their markets to cars and auto parts, cheese and dairy products and maritime services.
The Paraguayan minister described talks on the automotive issues, which he said were set to conclude this week, as "very tough."
"Sometimes there is agreement at the table and then new elements appear," he said, adding however that the aim of both sides was to reach an agreement.
Beyond the economic threats, Europe's farmers say they are worried about poor food security in Mercosur countries, pointing to the scandal over rotting Brazilian meat passed off as safe last year.
Several countries imposed bans on meat imports from Brazil, the world's largest producer.
The talks are expected to run until March 2.
In addition to Paraguay, Mercosur includes Argentina, Brazil and Uruguay.