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EU-Andean talks inch forward, but Ecuador threatens to pull out

Bridges Weekly Trade News Digest | 27th May 2009

EU-Andean Talks Inch forward, but Ecuador Threatens to Pull out

Negotiations toward a trade-opening deal between the EU and a group of Andean countries hit another snag this week when Ecuador’s president publicly denounced the talks, calling them ‘biased’.

The comment came just over two weeks after negotiators from both sides met in Brussels for the third round of negotiations towards an ‘Association Agreement’ between the 27-member EU on one hand and Colombia, Ecuador and Peru on the other. While officials have been careful to point out that the potential agreement does not begin and end with trade (it also addresses cooperation and political dialogue), the trade aspects of the deal have caught the attention of its critics.

The EU is the Andean region’s biggest foreign investor and second-largest trading partner, after the United States.

The meeting in Brussels earlier this month drew mixed results. The negotiations with Peru are moving ahead smoothly, officials say, but difficulties have arisen in the talks with Colombia and Ecuador. Bolivia, an original party to the talks, has boycotted the negotiations since 2007, when its leftist leader Evo Morales withdrew in protest over the EU’s stance on intellectual property rules and the privatisation of services.
Ecuador may now be following a similar path.

“The European Union can give [the deal] whatever pretty name it wants, but we are headed toward a free trade agreement, and we will not accept that,” Ecuadorian President Rafael Correa said in a weekly radio address on Saturday.

”We are very concerned about the bias, the direction being taken by the negotiations,” he added.

It is still unclear whether President Correa’s strongly-worded comment will precede official action by Quito to pull out of the talks, but such action is possible. Correa’s denunciation of the EU deal is in keeping with

Ecuador’s recent step back from market opening amid the ongoing economic crisis. In January, Correa, a populist who was elected to a second presidential term last month, introduced far-reaching import restrictions intended to protect domestic producers. The safeguards will apply to imports from all countries - including those that had previously struck free trade deals or preferential trade agreements with Quito - for one full calendar year.

Peruvian trade minister Mercedes Aráoz, whose country is pushing ahead in its talks with the EU, expressed regret at Ecuador’s hesitance to move forward. Peru has yet to receive a response to its request for Quito to lift its trade restrictions, Aráoz also noted. Lima estimates that Ecuador’s recently enacted safeguards have cost the Peruvian economy between US$ 50 million and US$ 80 million.

Like Peru, Colombia still seems ready to push forward in the talks, but progress could be frustrated by European concerns over labour and human rights abuses in the country.

”There is no disagreement on the objectives. We all want better judicial procedures, fewer killings and a government with clean hands,” said Rupert Schlegelmilch, the EU’s chief negotiator for the Andean nations.

”The Colombian government is taking on board [our] recommendations,” he added. “It is certainly still a bad situation, but it is improving.”

The US Congress has yet to ratify a similar free trade deal with Colombia due to concerns over the country’s laws on labour and human rights.

Questions on intellectual property

Representatives from the Latin American pharmaceutical industry have expressed concern over what they consider an ‘aggressive’ EU stance on intellectual property, or IP, issues during the talks. In its negotiations with Colombia and Peru, Brussels is fighting for ‘data exclusivity’ - the right to prevent national health authorities from accepting applications for generic versions of patent-protected medicines - for up to 11 years.

This issue of ‘data exclusivity’ has also caused concern in civil society. NGO Health Action International claims that the EU’s demands for stronger IP protections “could constitute a serious barrier to access to essential medicines” in the Andean region.

The parties had hoped to wrap up the negotiations at the next round of talks, which is set to take place in Bogota in mid-June, but it now appears likely that a deal will not be reached before September.

Additional information

To read an open letter from Health Action International to the European officials, please click here

ICTSD reporting; “Human rights no block to EU-Colombia talks,” EUOBSERVER.COM, 4 May 2009; “Correa rechaza ‘TLC’ en negociación con UE,” LOS TIEMPOS, 26 May 2009; “Tariffs are Ecuador’s response to crisis,” WASHINGTON POST, 30 March 2009.

 source: ICTSD