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Notes on the Association Agreements with the European Union

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March 2010


by Biodiversidad, sustento y culturas
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Trade and sustainable development

For the first time in the negotiations around its association agreements, the European Union is proposing to the Andean Community a text on trade and sustainable development which, unlike the others, is not legally binding.

This text relates to the three components of sustainable development: social, economic, and environmental. It is worth mentioning that the European Union is proposing to negotiate this agreement with mega-diverse countries that have the highest levels of biodiversity on the planet.

Where the environment is concerned, one of the goals is to facilitate and promote trade and direct foreign investment in environment-related goods and services, including environmental technologies, renewable energy, energy-efficient products and services, and green-labeled products.

These goods and services include environmental services, biotrade, sale of biofuels within a framework conducive to greenwashing, and market environmentalism. Proposed themes include corporate social responsibility, good business practices, and fair trade in these components of nature.

The Andean countries see this agreement as an opportunity to generate foreign exchange from nature, and use the argument that the market can be an important instrument for biodiversity conservation through the economic benefits it generates (e.g., biotrade, payment for environmental services, avoided deforestation).

Furthermore, compensation (or equitable distribution of benefits) is being asked for the commercial use of traditional biodiversity-related knowledge and Andean genetic resources.

The text also opens up opportunities for technology transfer in which European companies can sell environmentally friendly technologies in the region. It opens up market opportunities for these companies.

Bluntly put: we will sell the Europeans biodiversity and related services, and they will sell us clean technologies. The market is all.

Another aspect addressed concerns voluntary environmental protection or improvement mechanisms, as well as the establishment of appropriate incentives, including market-based incentives, for promoting the conservation, restoration, sustainable use, and protection of natural resources and the environment, such as public recognition for companies with strong records of environmental performance.

One European Union proposal is that the parties commit to working together to improve and strengthen forestry law enforcement and the application of best forestry practices, and to promote trade in legal and sustainable forest products. This kind of proposal arouses skepticism as to whether the EU would ever allow a country like Peru or Ecuador to interfere in the drafting of its forestry laws. To make the proposal is to violate the sovereignty of the parties.

These forestry laws or best practices would cover such themes as CITES implementation, implementation of voluntary associations for forestry law enforcement, sound forestry management and trade, and side agreements covering trade in timber.

Forestry practices proposed include sustainable forestry based on native forest lands, and restoration of areas suitable for forestry (forest plantations?).

There is an entire chapter on fisheries. The text refers to sustainable fisheries, which will be achieved by combating illegal, unreported, and unregulated fishing.

While it is very important to regulate the fisheries, there is always the danger that "unregulated coastal practices" will be defined so as to include small-scale fishing.

Trade in agrofuel is presented as an economic alternative that can contribute to quality-of-life improvements for rural populations. This ignores the many studies showing that biofuels interfere with food production without having any positive impact on global warming.

The criticisms of agrofuels are apparently putr to rest through a proposal to cooperate on the development of joint quality standards (possibly at the roundtables on sustainable soy or palm oil). These standards would be subject to verification requested by the other party, which would have to be done within six months.

Regarding cooperation, the European proposal is that the parties would have to “cooperate” in international forums relating to social, environmental, trade-related, and sustainable development aspects, in forums under the WTO, ILO, UNEP, and multilateral environment agreements. This could create an obligation for the countries to align themselves with the European Union in international negotiations when it is not in their interest to do so.

Intellectual property and biodiversity

The intellectual property chapter of the association agreement between the European Union and the Andean countries addresses biodiversity-related issues.

The Andean countries are proposing language comprising general provisions taken from the Biodiversity Convention on such issues as States’ sovereign rights to biodiversity, recognition of the role of indigenous peoples and other communities in the conservation and sustainable use of biodiversity, and States’ and communities’ right to participate in the equitable sharing of the benefits derived from the use of biodiversity.

The EU, for its part, is proposing that the Parties, subject to their own laws and international law, cooperate to ensure that intellectual property rights protect and do not run counter to rights and obligations under the CBD as regards genetic resources and traditional knowledge associated with indigenous and local communities on their respective territories. It prefers to talk of mutually agreed terms.

The proposal of the countries that have the biodiversity is that there be recognition (principally economic recognition) of the resource provider countries, while the European Union has an ambiguous proposal that merely recognizes the usefulness of disclosing the origin or source of genetic resources or associated traditional knowledge in patent applications “as a means of adding transparency in regard to the use of genetic resources and/or associated traditional knowledge for the benefit of the genetic resource providers.”

Furthermore, the European Union is pushing for the parties to coordinate their positions on matters discussed at the WIPO Intergovernmental Committee on Genetic Resources, Traditional Knowledge and Folklore, where the EU has never sided with countries like Colombia and Peru; at the CBD, on Article 8(j) matters and negotiations around an international system for access to genetic resources and fair and equitable distribution of the benefits deriving from their use; at the FAO on matters discussed by the Commission on Genetic Resources for Food and Agriculture and under the International Treaty on Plant Genetic Resources for Food and Agriculture; and at the WTO on matters concerning the relationship between the TRIPs agreement and the Convention on Biological Diversity, the protection of traditional knowledge and folklore. 

The EU is asking that at the conclusion of these multilateral talks, this article be revised in light of the results and conclusions of those talks, including rules for its effective implementation.

The EU proposes that the parties be empowered to collaborate on the practical implementation of domestic rules regulating access to genetic resources and associated traditional knowledge, innovations, and practices on their territories, so as to guarantee compliance with those provisions. This is a case of interference with national sovereignty, unquestionably for the benefit of European pharmaceutical corporations.

There are proposals for detection of biopiracy, but the EU wants to train the technicians who will be put in charge of this.

Sanitary and phytosanitary measures

Internationally, the negotiations on sanitary and phytosanitary measures pose two fundamental problems:

  1. They are used to restrict the sovereign right of countries to protect health, the environment, and domestic systems of production, and thus to enact stricter domestic rules.
  2. These sanitary and phytosanitary measures are used as a barrier to international trade in agricultural goods.

Among the proposals made by the European Union to the various countries or country blocs with which it is negotiating free trade agreements, the EU demands that they regionally harmonise their rules on trade in agricultural goods in order to eliminate border controls.

A CEPAL analysis of the implications of the sanitary and phytosanitary measures proposed in the free trade agreements alerts us to the following:

The harmonization/equivalence/regionalization triplet is the most sensitive aspect in the regional integration processes and constitutes the focus of trade conflicts relating to sanitary and phytosanitary barriers. In the first place, it must be noted that the difference between “harmonization” and “equivalence” is well established by the countries.

Harmonization means identical standards. Equivalence means similar levels of sanitary protection obtained, albeit using different sanitary measures. This is due to the difficulty of establishing identical standards in countries possessing different sanitary situations and ecosystems (which may or may not be conducive to the spread of a given disease).

CEPAL adds that while free trade agreements encourage countries to follow the guidelines of competent international organizations, they must provide for some leeway for each country to enact sanitary and phytosanitary standards suited to its domestic realities. The European proposal would foreclose this possibility.

Rights and obligations: On the rights and obligations of the parties to the sanitary and phytosanitary association agreements, many states maintain that the ceiling should be the rights and obligations established by the WTO’s SPS Agreement. But the European Union adds that its intention is to include rights and obligations contemplated in other international instruments and, instead of referring to the WTO — which relies on the standards maintained by the Codex Alimentarius, the World Organisation for Animal Health (OIE) and the IPPC (International Plant Protection Convention) — the EU proposes to work with its own annexes, which in practice means WTO-plus.

Rules of origin: The European proposal maintains that rules of origin would be applied to products originating in or consigned from the exporting party.

The inclusion of consigned products covers agricultural goods passing through one of the parties but not originating in it. For example, a soy shipment originating in the United States could enter Peru or Colombia under the rules negotiated in this association agreement if it is reexported by the European Union.

Remember that in international trade, the important thing is not where an agricultural good is produced but who controls the supply chain. A European company may control the planting, processing, export, and import of a good produced in Thailand that could then be consumed in an Andean country. These are the kinds of processes that such rules are intended to protect.

Asymmetries: Many Third World countries hope that they can obtain special and differential treatment by virtue of the asymmetries between them and the European Union, but this principle is not accepted by the EU.

While the principle of special and differential treatment may appear in certain parts of the text, it is not reflected in the document as a whole, e.g., in aspects such as harmonization of standards, procedures, timetables, etc.

For example, there is language stating that the parties will not use their control, inspection, and approval procedures to restrict market access without technical and scientific justification. It will be very hard for most Third World countries to demonstrate technically and scientifically that a given European agricultural product will jeopardize domestic sanitary conditions.

The European Union proposes to create a committee on sanitary and phytosanitary measures that would be in charge, among other things, of reviewing and updating the agreement and recommending amendments. At the same time, it proposes that this committee be essentially technical in nature and that it be in charge of drafting much of the content of the annexes without scientific oversight by the Parties, this in spite of the undeniable technical asymmetries that exist.

Aspects that go beyond the WTO’s sanitary and phytosanitary measures: The European Union proposes various specific procedures not contemplated in the WTO SPS agreement:

 It would establish a sanitary and phytosanitary measures committee with powers going beyond what the WTO contemplates.
 It establishes a detailed process on equivalence.
 Guides are established for verification, import inspection, and certification in any party to the agreement.
 Specific timetables are established for various procedures, especially consultations and internal reports, determination of equivalence, and verifications.
 It presents a detailed institutional design.
 It establishes administrative provisions for imports.
 There would be exchange of information requirements with a specific timetable for responses (no consideration of asymmetries here).
 There are provisions to be implemented in certain establishments (especially slaughterhouses, fish processing, eggs, etc.) prior to inspection.
 Provisions on animal welfare, although there are no applicable international standards in this area.
 A glossary of terms not included in the WTO/SPS measures is proposed.

As in other international agreements, the EU is working with positive and negative lists subject to modification by the technical committee. There will be lists of matters to which the agreement does not apply and others to which it explicitly applies.

These are lists for live animals, animal products, plants and plant products, and animal welfare (which is not a WTO topic).

The WTO sanitary and phytosanitary measures do not provide for these types of lists.