What’s wrong with the EU-Andean Community Association Agreement?

international | eu | opinion/analysis Wednesday March 26, 2008 20:06 by José Antonio Gutiérrez - Latin American Solidarity Centre (LASC) research at lasc dot ie 5 Merrion Row, Dublin 2 00353-1-6760435

This is a brief article on our position as Latin American Solidarity Centre regarding the "free trade" agreements of the EU with Asia, Africa and Latin America, disguised as Economic Partnership Agreements and Association Agreements. On the series of events organised for Latin America Week (April 7th-12th) we will bring some speakers from Italy, Holland, Colombia and Ecuador who will speak on the impact of such agreements over basic services such as water. To find more information on Latin America Week, you can go to our website www.lasc.ie or contact us directly.

Europe has been, for the last number of years, trying to carve out a role for itself as a global power. Two major steps have been taken recently in that direction: firstly, the Lisbon Treaty which aims at centralising power in the hands of the European Commission; and secondly, a series of bi-regional agreements with developing regions of the world. These agreements have been developed in the form of Economic Partnership Agreements or EPAs, with Africa, Asia and the Caribbean, and of “Association Agreements” with Central America and the Andean Community of Nations (CAN –Peru, Bolivia, Ecuador and Colombia).

EPAs and AAs: Free Trade Agreements in disguise?

The EPAs and AAs, although different in name, are in substance very similar. Both are instruments to re-define the relationships of the EU with the regions in the South based on three main pillars: Political Dialogue, Cooperation and Trade (equation in which “trade” has the upper hand judging by the fact that in the EU-CAN AA negotiations, out of the 14 working groups, 11 are on trade, 1 is on asymmetries, 1 on Cooperation and 1 on Political Dialogue). Furthermore, they both respond to the needs for expansion of the EU: What the EU trade commissioner Peter Mandelson expressed as the project of Global Europe.

In the case of Latin America, it is obvious that the EU has an ever-increasing role in the region and that this agreement reflects the needs of the powerful business lobby in Brussels. It is worth noting that the EU is the main contributor of Foreign Direct Investment in Latin America, with most of the investment in the areas of privatised services. Moreover, the EU has an increasing presence in terms of aid and trade (Most of Latin American trade with the EU -86.4%- is primary production, while 83% of the EU’s trade with Latin America is manufactured products).

EU-CAN Association Agreement: for whose benefit?

The EU-CAN Association Agreement, currently at a negotiation stage, will replace the Political Dialogue and Cooperation Agreement signed up at the end of 2003 between the two parties. This new Agreement pushes liberalization, free trade and market openings for water, energy and other services, in its own words, “beyond the WTO’s basic rules”[1]. At the same time as it pushes for liberalisation, it declares the negotiations to be “based on respect for and the promotion of human rights, democracy and good governance”[2]. However, in the Andean region there has been massive opposition to privatisation and numerous attempts by people’s organisations to end it. The people have said, in an unequivocal way, that they do not desire basic services such as water to be privatised. The agreement, therefore, turns its back on the will of the people.

The document states that its intention is to “help create conditions for reducing poverty, promote decent work and more equitable access to social services, as well as ensure an appropriate balance between economic, social and environmental components in a sustainable development context”[3]. However, it also states its intention to “set out the conditions for the gradual establishment of a Free Trade Area between the two regions, and develop both intra- and bi-regional trade exchanges”[4]. Experience has shown that both objectives are contradictory.

As a consolation, the text includes a vague declaration of good will: “…taking into account different levels of development in the EU and in the Andean Community, region-to-region asymmetries may be considered, where necessary, in all trade and trade-related areas discussed in the course of negotiations, for instance by agreeing to different timings for transitional periods”[5]. However, the document goes on to say that “taking into account their levels of development, the Andean Community countries will be allowed a certain measure of flexibility in overall terms as well as in individual sectors and sub-sectors. Any transitional period should in principle not exceed 10 years”[6]. So whatever transitional period is agreed in order to buffer the impact of asymmetries, it should not exceed 10 years. But no clear indication is given about setting development milestones.

The credibility of the EU’s concern about developmental inequalities is made even more vague and meaningless when we consider “the importance attached to the principles and rules which govern international trade, in particular under the auspices of the WTO, and to the need to apply them in a transparent and non-discriminatory manner will be underlined”[7]. This sentence renders the point about asymmetries void of meaning, as the strongest party in the negotiations – the EU – can claim any such a measure to be discriminatory (at least, when the 10 year transition period is over).

Giving with one hand, taking with the other

With regard to the Cooperation pillar, it is stated that the objective is sustainable development to overcome the structural causes of inequality and poverty, with a focus on the most vulnerable sectors of society. What impact will liberalisation and privatisations have over this noble aspiration? We firmly believe that the sovereignty of a nation over its resources is a non-negotiable principle. Furthermore, given the dreadful experience of the past decade, the privatisation of basic services such as water, health, education and public transport should not be allowed.

We are also concerned that Cooperation could be bound to Trade and, particularly, to privatisation demands. We urge that the issue of Cooperation between the EU-CAN be treated autonomously and be subject only to respect of human rights.

Political… dialogue?

The Political Dialogue pillar includes a joint endeavour on social cohesion and poverty reduction, the fight against terrorism and drug trafficking, good governance, conflict prevention, migration, regional integration and human rights. We have concerns about a number of issues on this subject. First, how liberalisation will affect social cohesion and good governance can be foreseen by the impact of privatisations over the “lost decade” in the ‘90s.

Another source of concern is that standards on human rights monitoring can be disappointingly low. For example in Colombia, the State has been responsible for serious human rights abuses according to international observers such as Amnesty International and Human Rights Watch. Indeed, even the Free Trade Agreement with the US has been held back as the Democrats have well-ground reservations about the Human Rights record of the government. Yet, not a single voice from the EU has been raised on this issue, in spite of the democratic clause noting the centrality of human rights in this agreement.

A negotiation behind the backs of the citizens

It is important to note that negotiations have been carried in an environment of secrecy and with little or no interaction with civil society organisations, so these concerns have not found a channel of expression to those negotiating this Agreement. The fact that these negotiations have been rushed, that there have been no open forums, nor enough information on the public domain, nor opportunities provided for voicing opinions and concerns by the civil society is a worrying indicator.

Why we oppose the current EU-CAN AA

Despite the rhetoric that this is not a Free Trade agreement and that Political Dialogue and Cooperation are on an equal footing with Trade, it is clear that the emphasis is actually on Free Trade as stated in the Brussels round of negotiations in December 2007. The EU-CAN Association Agreement will be likely to undermine the Andean people’s efforts to regain democratic control of their own economies and resources. Furthermore, it advances a project towards a Global Europe to be competitive in the global context –a Europe of weak protection to its citizens, of precarity, out of the control of its citizens and to the exclusive service of a few business people gathered in the European Round Table of Industrialists (ERT). The struggle against the EU-CAN AA is, therefore, actually in the interest of the people of the two regions.

We have always welcomed Political Dialogue and Aid for Latin America, and we welcome efforts to strengthen trade between the EU and CAN. But we believe that Aid should not be bound to Free Trade demands and that policies on Trade should not run contrary to the efforts on Cooperation and Political Dialogue. We therefore call for a broad debate on this matter by all of the civil society, both in the EU and CAN.

A race against time

These debates should take place sooner rather than later. Two rounds of negotiations have already taken place in Bogotá (17th-21st Sept. 2007) and Brussels (10th-14th Dec. 2007). The next rounds will be in Quito (21st-25th April 2008), Brussels (July 2008) and the final one, will take place in an Andean country to be confirmed (October 2008). By this date, the agreement will go to the ratification stage.

The European Commission and the Council of the EU are undertaking the negotiations in consultation with the following EU special committees: C133 (common commercial policy), COLAT (political dialogue with Latin America), AMLAT (technical team of COLAT) and COHOM (the working party on human rights). Where ratification is concerned, in the European case, the European parliament must first approve the AA. Once approved by the European Parliament, the EU-CAN AA then goes for ratification to each National Parliament of the EU. If one National Parliament does not approve the agreement, then it cannot come into force. If the Lisbon Treaty is passed, it means that by early 2009 the consultation with the national parliaments will be eliminated altogether.

We should aim at mainstreaming as much as possible the issues at stake with the Agreement and to build up a campaign at both sides of the ocean that can effectively exercise some influence on behalf of the people in this race against time.

José Antonio Gutiérrez D.

Research & Development Officer

Latin American Solidarity Centre

www.lasc.ie

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[1] “Recommendation from the Commission to the Council –authorising the Commission to open negotiation for the conclusion of an Association Agreement between the European Community and its Member States and the Andean Community and its Member Countries”, April 2007, p.11. The full quote reads: “Provision within the Association for a comprehensive, balanced Free Trade Area, fully compliant with the rules and obligations of the WTO while going beyond the WTO's basic rules, so as to maximise the mutual and long term benefits of bi-regional trade liberalisation”.

[2] Ibid, p.6

[3] Ibid, p.6

[4] Ibid, p.6

[5] Ibid, p.14. Our emphasis.

[6] Ibid, p.17. Our emphasis.

[7] Ibid, p.11