EU, Andean Nations struggle forward in trade talks

Bridges Weekly | 18 February 2009

EU, Andean Nations Struggle Forward in Trade Talks

Intellectual property, a potential regional customs union, human rights, and bananas triggered heated debate last week in Bogota during the first round of negotiations toward a free trade agreement between the European Union and Andean nations Colombia, Ecuador and Peru.

The meeting was hailed as a success by leaders of government and business, who noted that significant progress over the week-long session may allow for negotiations to close by September, with FTA completion by the end of 2009.

The first round of negotiations ensured that Brussels would consolidate tariff treatment to certain products produced by the South American nations under the Generalised System of Preferences Extended (GSP+), established a Working Group for Capacity Building Trade of the Andean countries, and led to agreements regarding customs and facilitation of trade.

But some challenges remain as the nations work independently to advance domestic priorities. Officials from Ecuador expressed a desire to further refine market access conditions for bananas, while the Colombian negotiator Santiago Pardo indicated that he was satisfied with the current arrangements for fruit exports to European shores.

Peruvian representatives were similarly pleased with an EU willingness to exclude from the negotiations agricultural and food products currently receiving subsidies, although officials from Lima expressed concern that the EU has recently taken a “much stronger” position on intellectual property, specifically with regards to pharmaceutical data exclusivity and medical patent protection.

Local media reported major disagreements on services and responsibility on the fight against drug trafficking; however, the details of such differences were not disclosed. Additionally, the development of a customs union was challenged by Peru, which rejected the deal, stating that such an arrangement “was too much to ask” in the absence of the Andean member state Bolivia. Bolivia was absent from last week’s meeting, having expressed strong opposition regarding the creation of an FTA with the European trading bloc.

Complications on several issues

Although officials were generally optimistic, the talks were not without their detractors. Trade analysts have criticised the EU negotiations as repeating the mistakes of a nearly identical agreements that Colombia and Peru each signed with the United States. Some observers say that those deals harm Andean intellectual property interests. Other critics spoke out against a lack of transparency in the decision-making process.

Alejandra Alysa, Executive Coordinator of the Peruvian Network for Globalisation with Equity, additionally lamented that ambitious EU demands may ultimately result in further erosion of Andean integration. Similarly, Bolivian Deputy Minister of Foreign Trade Pablo Guzmán Laugier noted that Brussels’ position was less flexible than it has been in the past.

Moreover, Guzmán criticised negotiators for eliminating the discussion panel on ‘asymmetry’ in the talks - the panel that would consider how requirements for the two parties should differ in strength according to their respective levels of development. In Guzmán view, this asymmetry is one of the most important aspects of the talks, as it “guarantees that the agreement will not be a simple FTA.”

Regarding issues outside of trade, Germán Umaña, a professor at the Universidad Nacional de Colombia, argued that human rights have been overlooked in the negotiations. The same view was expressed by a senator for the Liberal Party of Colombia, Cecilia Lopez, who has said that she believes that the agreement implicitly approves of questionable EU migration policies.

Representatives within the fruit industry have also criticised preliminary versions of banana trade agreements, saying that they are step down from the short-lived agreement reached between the EU and Latin American banana exporters at the WTO mini-ministerial meeting in Geneva last summer. However, because that meeting ultimately collapsed, the EU says that the offer it made as part of the negotiations is now invalid.

Additionally, representatives of the EU-CAN Alliance on Access to Medicines were frustrated by requests from Brussels to extend protection of pharmaceutical data exclusivity to 11 years, to stretch patent terms and to implement harsher penalties for intellectual property violations.

Industry experts say that such changes would significantly impact the availability of generic medicines. Germán Holguín, Coordinator of the Alliance, said that the EU proposal was unacceptable because it goes beyond the standards of free trade agreements with the US.

Is Peru first in line?

Antonio Cardoso, head of the European Commission delegation in Lima, suggested that the completion of a Peru-EU trade agreement would be likely come before talks toward parallel deals with Colombia and Ecuador are finalised. Cardoso noted that the Peruvian government has been eager to complete negotiations as soon as possible.

However, officials from Brussels have stated that negotiations will respect the political procedures and desired pace of the various states, and the government of Ecuador consequently issued a statement emphasising that negotiations with the EU will respect limits imposed by the new Ecuadorian Constitution, as well as national policies and priorities.

Yet politically, the first round of the talks has not been without its hurdles for Lima, as relations between Peru and Bolivia have continued to deteriorate. In light of Bolivia’s continued - and loud - opposition to engaging with Brussels, Peru has accused Bolivia of attempting to impose its views on all Andean Community members.

The next round of EU-Andean talks is set to be held in Lima next month.

ICTSD reporting.

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source: ICTSD