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EU-Central America

The European Union has been negotiating a free trade agreement with six Central American countries — Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica and Panama — since mid-2007. The draft negotiating plan from the EU’s side is available here.

The background logic to this is clear. As soon as the US signed NAFTA, the EU followed suit and made its own bilateral trade agreement with Mexico. Now that the US has signed CAFTA, here comes an EU deal for the same countries (minus the Dominican Republic, which is part of the ACP grouping that the EU is already negotiating an EPA with under the Cotonou Agreement).

The deal is dubbed an “Association Agreement” in which the FTA is one component alongside others (concerning cooperation and political dialogue). It is also a “progressive” agreement in that its provisions are phased in over time.

But analysts concur that such association agreements are even worse than FTAs: “The agreements are notable for their broad scope and their ‘open’ and ‘ongoing’ nature; in other words, they oblige the signatory countries in years to come periodically to extend the agreement and to undertake an undefined number of judicial, administrative, economic and social reforms, the aim of which is to provide ever more favourable investment conditions for European companies. As they accumulate, the changes will amount to constitutional reforms, which will be decided at ministerial level, far from the eyes of Parliaments and public opinion in the countries concerned.”

The social movements of Latin America have made their position clear: “The Association Agreement is nothing more than a continuation of free trade agreements. These texts are a farcical denial of democracy from the word go. Like the DR-CAFTA, the FTAA, and NAFTA, they are all tools used by big capital to exacerbate and deepen the poverty and exploitation of those who produce wealth by their labour. DR-CAFTA has been in force for two years and already we see our countries being inundated with imports, afflicted by rising consumer prices, and starved of tariff revenues, leading to reduced public spending. On top of this, the US has blockaded Central American agricultural products on spurious phytosanitary grounds. Meanwhile, the inhuman deportation of our compatriots continues. The enforcement of the FTAs and the neoliberal model is bolstered by criminalization and repression of indigenous and peasant agendas — particularly, the struggle for Mother Earth — through the enactment of antiterrorism laws. Therefore, we say NO to the negotiation and signing of the Association Agreement between Central America and the European Union: it is contrary to the interests of our peoples.”

In May 2010, the text was agreed to, and in March 2011, the text was initialled. It still needs to be signed, ratified and put into force by all parties: the European Union, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama.

last update: May 2012
Photo: Cacahuate/Wikipedia/CC BY-SA 3.0

Association Agreement between EU and Central America close to completion
Guatemala, the only country that does not have a treaty in place to implement the deal, is finalizing the procedures to apply on December 1st.
EU-Central America agreement : International statement
European and Latin-American networks reiterate their recommendations to the European Union and its Member States, in view of the imminent provisional implementation of the commercial pillar of the Association Agreement with con Honduras, Panama and Nicaragua
Association Agreement between EU and Central America enters into effect after ratification by El Salvador
With the recent ratification by the Salvadorean members of the House of Representatives, the Association Agreement between Central America and the European Union (EU) will enter into effect on August 1st. The agreement has been strongly rejected by social organizations.
Costa Rican lawmakers approve association agreement with European Union
The regional agreement, already approved by Honduras, Nicaragua, Panama, Guatemala and El Salvador, will enter into effect on Aug. 1.
EU, Central American countries sign Association Agreement
The European Union and six Central American countries — Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama —on Friday signed a comprehensive Association Agreement which also includes an ambitious trade component.
Central America and the EU - An asymmetric agreement
Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama will face major challenges when the Association Agreement to be signed in late June with the European Union, including commitments on trade, political dialogue and cooperation, comes into effect.
Karel De Gucht European Commissioner for Trade on the EU’s trade relations with Central America
"This is a case of ‘Buy one, get 26 for free’ – and surely you are businessmen enough to know how good a deal that is."
EU accord to favour shrimp industry
Honduran shrimp exports to the Community market are expected to increase by 15 per cent as part of the association agreement signed between the European Union and Central America.
Neoliberalism alive and well, as trade deals inked between EU, Latin America
Labor unions, human rights advocates and workers across both continents are opposing the new trade agreements at a time when Europe is struggling to rebound from the financial crisis, suddenly intensifed by the recent turmoil in Greece. The popular opposition to free trade could foreshadow similar conflicts in the United States, as several deals with Latin American countries are currently stalled in Congress.
EU, Central America reach accord liberalizing trade
Under the agreement, cars made by EU producers such as Volkswagen AG, Renault SA and Fiat SpA will be given increasing free access to the Central American market over 10 years. The governments also agreed on quotas for EU imports of 7,000 tons of boneless cuts of beef and 20,000 tons of rice, growing 5 percent annually, that constitute new trade.