Mercosur and the European Unionropea (EU) begin a new round of trade talks this week with renewed optimism that negotiators may be close to a deal after nearly 20 years of talks.
Since trade negotiations with the United States were frozen after Donald Trump's 2016 presidential election victory, the The European Union has been focusing on other major economies and has already reached agreements with Japan and Mexico.
Mercosur, the world's fourth-largest trading bloc, is next on its list of trade targets, given an added boost by Trump's metal import restrictions.
"We've never been this close. "The beginning of the end is there," said one EU diplomat, adding that both sides now better understand each other's limitations. "Closing the gap requires them to go out a little more."
In terms of tariff reductions, it could be the EU's most lucrative trade deal to date, with savings potentially three times greater than those for the deals with Canada and Japan combined.
The last round of talks, in April, ended with limited progress and finger-pointing over who was holding a deal.
France's agriculture minister, who with Ireland is most concerned about a sharp rise in beef imports, said last month he thought the talks were "on the verge of dying".
They still exist key issues regarding the gap between markets for industrial products and agricultural products, such as beef from Latin America and dairy products from the EU.
EU Trade Commissioner Cecilia Malmstrom said she expected progress on difficult issues next week but warned that further talks would be needed.
La EU wants to export more cars and seeks protection of food and drink names, that is, "geographical indications" (GI).
An EU diplomat said the Cars and geographical indications are the central requirements of the block.
The EU has 357 GIs that it wants to be recognised but 50 of them are difficult, such as cognac, parmesan cheese and Rioja. Mercosur has about 250 IGs on its list.
Source: MercoPress
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