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EU concludes FTA talks with Colombia, Peru

Bridges Weekly Trade News Digest • 3rd March 2010

EU concludes FTA talks with Colombia, Peru

Trade negotiations between the European Union and Colombia and Peru ended on Monday with the resolution of a handful of outstanding issues in the nearly three-year-old talks. Spain’s wish for the EU to finalise its trade agreements with Latin America during its six-month presidency of the bloc may well be coming true.

Meanwhile, talks on a free trade agreement between the EU and Central America saw another round of negotiations close on 27 February. The chapters on political dialogue and cooperation were concluded successfully, however some other issues remain unresolved.

Peru and Colombia finally make it, alone

Negotiations toward a regional free trade deal between the four-country Community of Andean Nations (CAN) and the EU were launched in 2007. However, the bloc-to-bloc talks eventually turned into bilateral negotiations due to differences among the Andean countries - Bolivia, Colombia, Ecuador and Peru - on intellectual property issues, biodiversity protection and the EU’s banana tariffs.

The abandonment of the negotiations by Bolivia in 2007 and Ecuador in 2009 revealed sharp differences within the CAN bloc.

The Bolivian government declared early last month that it would file a complaint with the dispute settlement body of the Andean Community, since, according to the Bolivian president, the new trade deal violates Andean regulations, including the CAN Common Regime on Industrial Property. Additionally, Bolivia claims that Peru has adopted decrees contrary to the Andean legal system.

For its part, Ecuador recently expressed a desire to re-join the negotiations with Europe given the resolution in December of a long-running dispute over the EU’s banana tariffs.

Meanwhile, Colombia and Peru have been continually engaged in the EU-CAN talks, each country negotiating schemes to meet its own particular circumstances. Those efforts bore fruit on Monday.

The final discussions

The EU’s deal with Colombia and Peru was completed after nine rounds of negotiations. The resulting free trade agreement is expected to be signed by the parties at a summit in Madrid in May.

“Implementation [of the agreement] will take several years, and we estimate that in the best case, could be in force by early 2012,” said Peruvian Minister of Foreign Trade and Tourism Martin Perez.

Colombia’s Minister for Commerce, Industry and Tourism, Luis Guillermo Plata, said the talks focused on outstanding issues related to access to markets for agricultural products and rules of origin for some sectors as well as the completion of the issues of intellectual property and institutional issues of the agreement.

The text of the agreement, which has not yet been publicly released, also includes a clause, useable by any party, that provides for the possibility of taking action if there is a repeated violation of human rights or a sudden interruption of democracy for any party. This measure is a result of pressure from non-governmental organisations that have come out against the agreement following allegations that the human rights situation of the two countries has not improved, particularly in Colombia.

For Santiago Pardo, chief negotiator for Colombia, the main achievements in this round were in intellectual property issues, rules of origin, services and market access.

Intellectual property matters were resolved through agreements on issues of geographical indications and biodiversity. Furthermore, according to the official statement, the governments agreed to arrangements dealing with the misappropriation of genetic resources and knowledge, innovation and associated practices. The parties also established a reciprocal obligation to adopt measures to protect these areas.

In regards to market access, the Colombian negotiating team and its European counterpart clarified the conditions for preferential access for products such as bananas, sugar, rum, palm oil, candies and chocolate. These goods will not be subject to tariffs after the agreement enters into force.

Some analysts predict that the signing of the EU deal with Colombia and Peru could put pressure on the United States Congress to ratify the free trade agreement that the White House finalised with Colombia in 2006. Despite hard lobbying by many in the business community, the pact has been tripped up by political hurdles on Capitol Hill. An FTA between the US and Peru took effect early last year.

Continuing negotiations with Central America

As trade talks came to a close in South America, the EU’s negotiations with a bloc of Central American countries picked back up after a political tussle stalled progress last year.

Officials had hoped that the inter-regional trade talks, which were launched in 2007, would be concluded before the end of 2009. But the negotiations hit a snag last summer when a military coup overthrew Honduran president Manuel Zelaya. The EU condemned the coup and refused to recognise the new government, effectively paralysing free trade talks with the entire region.

Since then, however, the talks have gotten back on track. According to the Ministry of Foreign Trade of Costa Rica, advances were made in many of the points of the trade agreement during the latest round of negotiations, which concluded on 27 February. The main developments were the conclusions of the chapters on competition and on procurement. With respect to the issue of sanitary and phytosanitary measures, the Central American countries filed a closing package that covers all Central American interests in that area.

On the issue of technical barriers to trade and market access, the Central American region managed to include a provision that allows any country in Central America that has trouble understanding or following a European regulation - whether proposed or actual - to request clarification and guidance on meeting the measure.

The negotiations are now expected to be completed in April. Honduran negotiator Melvin Redondo, speaking to journalists on Friday, said the resumption of negotiations between the two blocs would be bolstered by the two sides’ “pragmatic” approach and that the process will be a “test” of “how legitimate this government is” and “how it can contribute” to the settlement.

The European negotiator in the area of cooperation, Petros Mavromichalis, stressed that the EU “does not recognise governments, only states,” observing that “it is time to normalise” relations after the “acceptable, even good” elections in Honduras that occurred in November.

ICTSD reporting; translated and adapted from Puentes Quincenal, Vol. 7, No. 4; “Bolivia insiste en defensa de integración andina,” PRENSA LATINA, 28 February 2010; “Finaliza Ronda de Negociación entre Centroamérica y la Unión Europea,” Ministerio de Comercio Exterior de Costa Rica, 27 February 2010; “Terminan conversaciones sobre el Acuerdo Comercial con la Unión Europea,” Ministerio de Comercio Exterior e Industria de Colombia, 1 March 2010; “TLC entre Perú y la Unión Europea entrará en vigencia a inicios del 2012, proyecta el Mincetur,” ANDINA, 1 March 2010; “UE y Centroamérica insisten en que rubricarán acuerdo de asociación en la cumbre de mayo en Madridz,” EUROPAPRESS, 26 February 2010.

 source: ICTSD