The 10th Annual Conference on Global Economic Analysis “Assessing the Foundations of Global Economic Analysis”

Twelve years after the agreement on the framework of negotiations, eight after the beginning of the market access talks, the EU and the MERCOSUR negotiations have not managed to reach significant achievements. Several reasons explain this situation. First, progress in bilateral negotiation are hold on the conclusion of the Doha Round. Second, Agriculture is a key element of this FTA since it is a the core of MERCOSUR’s comparative advantages and still a major element of EU policy. Bargaining on Tariff-rate quotas (TRQ), the most favored tool of mercantilist policy makers for granting market access while keeping import’s control, is difficult. Finally, the possibility that Venezuela becomes a full member of the MERCOSUR could also change the conditions of these bilateral negotiations. For providing a very detailed analysis of the negotiations, we use the CEPII’s MIRAGE CGE dynamic model from CEPII. The policy relevance of this paper is threeofold: first, Venezuela’s joining in MERCOSUR is explicitly taken into account in the dynamic baseline. Second, simulations are run by considering plausible outcomes of the Doha Round, including its failure. Indeed, due to the ”one pocket ” approach of the EU Commission, major concessions on agriculture in DDA will have negative effects on what will be offerered in the bilateral talks, and reciprocally. Last, between 200