(Diao; Roe; Somwaru, 1999).

             The same policy has also led to increased growth in agricultural imports from non-MERCOSUR countries. Thus overall the policy has created more opportunities for agricultural trade, though many of the countries here are themselves major exporters of agricultural products. It is also clear that trade was increasing among MERCOSUR countries was increasing even before the agreement took place. On the other hand in blocks like the European Union there has been a decline in agricultural trade. This can be held to be the responsibility of the group as their policies appear to divert trade to member countries, and this has not created additional opportunities for world trade in agricultural products. (Diao; Roe; Somwaru, 1999).

             A historic change came over the American continent in 1995 - the end of observation of the Monroe doctrine - with the signing of the Framework Cooperation Agreement between the European Union and MERCOSUR, the Common Market of Brazil, Argentina, Paraguay, and Uruguay. The pact was to result in a free trade agreement between the two blocs of countries and this would ensure links in terms of politics economics and social-cultural. The process of negotiations was long and took more than ten years, and it is sure to evolve into a very powerful trading bloc in the world. The alliance would have effects on the countries in both the pacts - the countries in Europe as also Latin America. This would also affect the future of G-20 which is a coalition intended to protect the interests of some developing countries. The biggest effect in Europe will be on their agricultural policy as that aims to protect the local farmers from external competition. (EU-Mercosur Free Trade: US, a Third Wheel?).

             This is due to the high cost of cultivable land within Europe and this makes the European Union provide subsidies, import quotas and tariffs so that agriculture can be kept alive in that area.