BUENOS AIRES, Jan. 31 (Xinhua) -- The trade agreement being negotiated between South American trade bloc Mercosur (Southern Common Market) and the European Union (EU) must allow for the industrialization of South America, said leading Argentine politician Alejandro Karlen, a member of the Mercosur Parliament.

"We are inclined to establish an agreement between Mercosur and the European Union. But what is important for South America needs to be taken into account, and that means that Brazil cannot renounce its right to reindustrialize, just as Argentina cannot renounce being a country with a strong industry," Karlen told Xinhua following German Chancellor Olaf Scholz's Jan. 28 visit to Buenos Aires as part of a South American tour that includes Chile and Brazil.

"A deal is made so everyone wins," he said. "As Mercosur, what we want to discuss with Europe is not renouncing our interest in reindustrialization."

Mercosur, which gathers Argentina, Brazil, Paraguay and Uruguay, reached a trade agreement with the EU on June 28, 2019, after 20 years of negotiations, but the deal has yet to be ratified by the two sides.

"It is important to note that Europeans' growing concern for the security of their energy, raw materials and food supplies has brought about a change," said Karlen.

Scholz's visit to Argentina suggests "Germany supports the realization of an ambitious EU-Mercosur agreement for geo-strategic, economic, foreign policy and sustainability reasons," he said.

Each of the two regions has its comparative advantages, with Europe strong "in the production of high-value goods," and South America rich "in natural resources and basic manufactured goods, including agricultural and mineral products," said Karlen.

But the EU is clearly the more industrialized of the two, and any deal should reflect that status, he said.

"If the partners ... are very asymmetrical, the agreement must be too. The more developed partner has to make many more concessions, has to liberalize much more than the less developed region, which has to make many fewer concessions," said Karlen.

The "special and differential treatment" provision of the World Trade Organization represents one of "the fundamental principles of negotiations between developed and developing countries," he said.

Looking to the future, Karlen said greater South American integration, through a common currency for example, would strengthen the region's negotiating hand.