Semana | February 2, 2009
Green light for Colombia to discuss FTA with the EU
In the second week of February Colombia will start to negotiate a Free Trade Agreement with the European Union. SEMANA INTERNATIONAL spoke to Fernando Cardesa García, Ambassador of the Delegation of The European Commission to Colombia and Ecuador, about what this new deal means and how both parties will benefit from it.
The European Union recently approved separate negotiations with Colombia and Perú for a Free Trade Agreement, although the original idea was to discuss the subject with the Andean Community of Nations as a whole.
The decision to have a multi-party negotiation was, according to the European Commission, basically based on the insistent demand from Colombia and Perú, who wanted to have a separate negotiation, and because there was not a coincidence of will between the four countries of the Andean Community of Nations.
Over the years, Colombia’s trade with the EU has been based mainly in agricultural products and energy. Other sectors like machinery, transport equipment, chemicals and textiles play a smaller role in the bilateral commercial relations. Until the year 2000, the exports from Colombia to the EU had been dramatically dropping in comparison to those from to the Andean Community of Nations. Nevertheless, from 2003 onwards the trade has grown steadily.
The EU’s imports from Colombia are higher than the exports. Four main Colombian products are exported: banana, coal, coffee and ferronickel. But, if the agreement is signed, the parties will try to include a broader list of products, according to Fernando Cardesa García, Ambassador of the Delegation of The European Commission to Colombia and Ecuador, who spoke to SEMANA INTERNATIONAL.
SEMANA: Bearing in mind the present financial crisis, is this a good moment for a Free Trade Agreement with Colombia?
Fernando Cardesa García: We think it is. It is interesting both for Colombia and for us in many ways. When there is an economic crisis there are many things to be done. First, increase and diversify production and make the most of the crisis to look at the market areas which need to be stocked up.
This happens in economies like the Colombian one, which has a problem diversifying exports. This is the right moment for innovating and diversifying.
Second, because the experience shows that what made other crises more difficult to solve, like the one in 1929, were the restrictions to international commerce, which generated a policy called “impoverishing the neighbours”. So, we think it is fundamental that, in the middle of a crisis, countries embark in free trade agreements precisely so that the economy is not affected.
SEMANA: What Colombian products will benefit with this FTA?
Fernando Cardesa García: All products, and when I say all, I mean all. What we want now, at this stage of the proceedings, is an ambitious, balanced and comprehensive agreement, based on the parameters of the World Trade Organization. This means that the agreement must include at least a good part of the actual trade, over 85%. But it must not be limited to the products that are actually being traded, but one that can also find the potential in other ones. As that potential is not clearly defined, the best way of discovering it is covering as much products as the treaty can. If something is left behind, it is not because we’ve intended to do so.
SEMANA: Can you give us a timetable for these negotiations?
Fernando Cardesa García: It was established last week during a meeting in Brussels. Four rounds will take place, starting February 9 here in Bogotá. If everything works out as we have planned, negotiations will conclude in June and some adjustments should be made in September and October. We will probably have the agreement ready for the end of this year.
SEMANA: What problems will the negotiations face? Earlier agreements with Canada found human rights was an obstacle...
Fernando Cardesa García: Basically, we don’t believe the human rights issue is a problem for the negotiations, because it is not an element in the commercial agreement.
SEMANA: Which are the main points to be negotiated?
Fernando Cardesa García: Markets, foreign investment and intellectual property regime.
SEMANA: There have been similar trade agreements between the EU and countries like Mexico and Chile. What lessons can be drawn from those treaties in the case of Colombia?
Fernando Cardesa García: They have been very beneficial agreements for both parties. The commercial flow between the parties has increased. In a six year period, both countries -Mexico and Chile- have multiplied by four their exports to the European Union, which has also increased its exports to the countries but in a much lower proportion.
SEMANA: What do you believe is Colombia’s role as part of South America?
Fernando Cardesa García: In economic terms, under the interests Europe has in Latin America, Colombia is very important. Alongside Mexico and Brazil, Colombia is one of the three countries that absorb most of the EU’s investment in the region.
From the political point of view Colombia is important, because during its recent history the country has been stable in terms of changes in the government.
Socially, Colombia is an interesting case. Even though it is one of the countries with the greatest social inequality, it has developed more dynamic inclusion policies and social equality throughout the years. We find this quite interesting and useful if we want stability for the whole region.