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EU-CAN association agreement: another FTA in disguise

Movimiento Boliviano por la Soberanía y la Integración solidaria de los pueblos: Contra el TLC y el ALCA

EU-CAN association agreement: another FTA in disguise

Thu 20 Apr 2006

The “Association Agreement” between the EU and the CAN was agreed as a ‘common strategic objective’ in the last meeting of Heads of State and Government EU-Latin America/Caribbean in Guadalajara, May 2004.

Central to this “Association Agreement” is the negotiation of a Free Trade Agreement (FTA) and a free trade area between the EU and the CAN. This “Association Agreement” will be on the agenda of the next Meeting of Heads of State and Government of the EU-Latin America/Caribbean, in Vienna, Austria, the 11 and 12 of May 2006.

In preparation for this “Association Agreement” a Joint Assessment phase was launched to assess the level of regional economic integration in the CAN. Its stated objective was to promote further regional integration in order to ensure fast FTA negotiations.

Analysts within the Bolivian Movement for Sovereignty and Integration of the Peoples studied the recently published results of this Joint Assessment, which would fix the rules of the game for negotiations between the EU and the CAN and made the following observations.

The assessment:

a) does not make an evaluation of the European Union but limits itself to an analysis of the situation within the CAN and thus is not a ‘Joint’ Assessment;

b) contains over 50 recommendations for improvements within the CAN. Recommendation are not made for the EU (for example in areas such as agricultural subsidies);

c) includes recommendations which follow in the same vein as the FTAs with the United States, encompassing:

  1. Regional liberalisation of Services
  2. Legislation on Government Procurement
  3. Intellectual Property
  4. Agriculture
  5. Foreign Investment

d) has been made for the benefit of the European Union, and with this objective the document is written in English. Once accepted by CAN the document would signify for the CAN accepting a series of commitments before the start of the negotiation process.

As opposed to free trade agreements with the United States which negotiates agreements with countries on an individual basis, the EU proposes negotiations with the CAN in its entirety as a regional block.

The “Agreement of Association” between the EU and Mexico

As an example of an existing “Association Agreement” with the EU we can look at the agreement between the EU and Mexico, which came into force in 2000. This agreement includes:

- the progressive and reciprocal liberalisation of trade in goods (industrial, agricultural and fishery products);
- the liberalisation of services, in which the EU dominates in financial services, telecommunications and energy;
- the protection of foreign investors;
- the opening of the public sector to privatisation by international service providers;
- the protection of intellectual property rights.

In sum, the content of the “Association Agreement” between the EU and Mexico does not differ from NAFTA.

The situation of the “Association Agreement” between the EU and MERCOSUR (Common Market of the South)

In 1999 the EU also began the negotiation of an “Association Agreement” with MERCOSUR (Argentina, Brazil, Paraguay and Uruguay), however negotiations have come to a standstill due to the sensitive subjects of agriculture and services. MERCOSUR would like greater access for its agricultural products in the European market, whilst the EU maintains quotas for various products. In services the EU would like greater access to MERCOSUR and better conditions for investments, in particular its multinational service providers.

An alternative proposal for negotiations with the EU

We cannot negotiate with the EU under the same rules as the FTA with the US. Thus negotiations with the European Union must:

- privilege political dialogue and cooperation in order to achieve sustainable development and give priority to strengthening the process of social, political and economic integration in the region and not repeat the bad experiences under the format of the FTAs;
- not accelerate the speed and scope of liberalisation, but ensure that the countries of the Andean region are given the political space necessary to protect their industries and producers, as part of their development strategy, (especially when imported products from Europe are subsidised);
- promote the strengthening of the regulation of services in the Andean countries, in particular public services, and free them from increasing liberalisation. Access to basic services, for example water, energy, health and education, must be guaranteed for all, in particular for excluded social sectors, as is indicated in the International Agreement of Economic, Social and Cultural rights;
- guarantee that family agricultural production, and the indigenous population of the Andean region do not suffer the consequences of processes which allow the dumping of European agricultural products on the countries of the region;
- ensure that the public health does not suffer negative consequences in agreements concerning intellectual property, through making exceptions for generic medicines;
- exclude the patenting of living beings and guarantee the collective recognition of traditional knowledge;
- promote negotiations which do not include the subjects of foreign investment and legislation on government procurement;
- promote, protect and respect human rights and democracy, essential elements of all agreements between the EU and third party countries or regions;
- support the CAN and Andean integration without reproducing the bad practices of other free trade negotiations.

 source: Movimiento Boliviano por la Soberanía y la Integración solidaria de los pueblos