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EU and Central America clinch trade deal

EU and Central America clinch trade deal
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Europe and six Central American nations have been doing business at a key summit in Madrid, agreeing to liberalise trade and cut import tariffs.

The stakes are high. The EU is Central America’s second largest trading partner.

With that deal under his belt, the host of the summit with Latin American heads of state, Spain’s Jose Luis Rodriguez Zapatero, wants progress on a free trade accord between the EU and Mercosur.

Brazil, Argentina, Uruguay and Paraguay make up the South American economic group.

Suspended since 2004, talks between the two parties have just been relaunched with a view to creating the world’s largest trading bloc.

Slow progress of the Doha round of world trade talks has pushed the EU to seek regional trade agreements. But some European countries, led by France, fear a Mercosur deal could be disastrous for their farmers.