In May the two sides re-launched talks that had been on hold for six years, with the aim of creating a free-trade zone comprising 750 million consumers and goods trade valued at 65 billion euros ($86 billion) a year.
"Talks with the European Union are advancing well. There is a new negotiating spirit, really," Brazilian Foreign Minister Celso Amorim said during a Mercosur summit in Brazil's southern city of Foz do Iguacu, the site of world-famous waterfalls.
The economies of Mercosur, which is made up of founding members Brazil, Argentina, Uruguay and Paraguay, are on track to grow between 7.5 percent and 9.5 percent this year. The other Spanish-speaking countries of South America are associate members.
Venezuela, whose application to become a Mercosur member still requires approval by the Paraguayan parliament, is taking part in the talks as an observer.
"There is adequate understanding by the European Union of the conceptual framework that Mercosur is able to accept," Amorim said.
Negotiators made progress earlier this month in Brasilia on non-tariff issues such as intellectual property rights, government procurement, subsidies and investment rules.
"Issues have been resolved," Amorim said.
Both sides are expected to present their tariff proposals in Brussels in March or April next year and hope to reach an agreement by mid-2011. (Reuters)
