Round Three of Negotiations Between the European Union and the Andean Community

Free trade agreements have a bad reputation in Latin America. The word itself has been marked in the social imaginary as synonymous with a lack of transparency, the end of sovereignty, the instability of labor, environmental degradation, the downfall of small farmers, the unlimited enrichment of transnationals, and imposition by the United States.

Perhaps the last in this list is the reason that in the negociations that have occurred over the past year between the European Union and the countries of Central American and the Andean region, they have replaced the term Free Trade Agreement (FTA) with Association Agreement (AA).

AAs certainly have not sufficiently attracted the attention of social organizations nor have they provoked the massive and prolonged mobilizations that took place during the failed negotiations for the Free Trade Area of the Americas (FTAA) or against the free trade agreements with Ecuador, Colombia, Peru, Costa Rica and other Central American countries.

Looking at the content, however, of the goals and actors of the AA, shows that it is the moment to react. There are some differences between the FTAs and the AAs, but both maintain the same mercantilistic essence.

Maybe to differentiate them from the FTAs, the AAs are accompanied by terms such as “political dialogue,” “cooperation for development” and “civil society participation.”  In the negotiations, it will become clear whether these just words, since the objectives of the European Union are clearly defined in the document entitles "Global Europe: Competing in the World,” developed in 2006 by the European Commission (1).

In this document, the objectives of the European Union are clearly defined:

Various businesses that have tried to conserve the status quo and increase their profits with the association agreements, have been pointed out by civil society organizations for being involved in damaging the environment, violating labor rights, etc.

Grouped together in the Union of Industrial and Employers’ Confederations of Europe (UNICE), the corporations have a large influence over the European Union and many European governments who defend the interests of transnationals above those of their citizens. In other words, the real interlocutor in these commercial negotiations in Europe is the Europe of capital and not the Europe of social well being, integration, or its citizens. The interlocutor is the Europe that demands free transit for goods and capital and closes the borders for immigrants. It is the Europe that is subordinated to the United States and collaborates in the military occupations of Iraq and Afghanistan and lends its airports for the secret transfer of prisoners en route to Guantánamo, it is the Europe of the racist attacks and of the internment camps of immigrants….

In terms of public transparency, the AAs have developed in great secrecy, greater even that the FTAs. The negotiating mission of the European Union, which last week met with its Central American counterpart in San Salvador, insisted especially on the  “confidentiality principle,” while the El Salvadoran Minister of the Economy has said “…we are not going to negotiate in the media.” (2)

Under these conditions, can we speak of dialogue, of cooperation for development, of the participation of civil society? What we are seeing, so far, is that the real interest is commerce and business and that cooperation or development are secondary.  This is confirmed by the European Union’s announcement that it does not have new resources and that the assigned resources cannot be reassigned to other needs, so that only starting in 2013 could they be made effective… and this only if they the agreements are signed immediately.

If the European Union is interested in the development of Latin America and in overcoming the tremendous problems of inequality, it should follow through on its promise to designate 0.7% of Gross National Product (GNP) for development aid. Of the European countries, only five (Norway, Switzerland, Luxemburg, Denmark, and the Netherlands) have reached this minimum goal. (3)

A statement of condemnation from the European Union, of Colombia for the military incursion that this country carried out last March 1st on Ecuadorian territory—such as that already made by the Rio Group and the OAS—as well as their explicit support of the process of democratic change in Bolivia—now threatened by the landowning classes that have tried to secede from the country—would be good indicators to really speak of political dialogue, above all because it would mark a contrast to the militaristic, interventionist and exploitative policies of the United States.

The Negotiations

What should be the point of departure for the negotiations? While Bolivia suggests that it should be what is already established in the World Trade Organization (WTO), the European Union is attempting to go beyond what has been agreed on in the WTO, and trying to obtain a WTO-plus. It puts emphasis on its two strong sectors: services and investments. It objectives are to open markets, obtain the same treatment as nationals for its businesses and secure guarantees for its investors, including the repatriation of capital.

“In the 2003 WTO meeting in Cancun, developed nations rejected three areas of the Singapore agenda, for being contrary to development: government purchases, investment and competition.  It is unacceptable the EU, by means of the AA, is putting these issues back on the agenda of its commercial negotiations,” states a letter signed by many organizations and sent to Joao Aguiar Marchado, chief negotiator of the European Union.

The EU itself has not accepted to take as a starting point the General System of Trade Preferences (GSTP) that the Andean countries now enjoy.  According to the Peruvian Network for an Equitable Globalization, the tariff offer presented in the third round of negotiations has included in the tariff elimination lists over 3, 5, and 7 years, Andean products that now have free access to the European market. Therefore, “The European Union is replicating the strategy that the United States used with its FTAs, with ATPDEA [the Andean Trade Promotion and Drug Eradication Act]. The EU includes in the lists products that are central to Andean exports that are now beneficiaries of the GSP+  (4). In this way, they seek to put pressure on the negotiations and most likely generate better conditions for issues of European interest such as services, public purchases, intellectual property, among others,” pointed out the Network.

Different Visions

In the Andean region there are a variety of perspectives regarding the negotiations with the European Union given the change in the power balance in the region itself. As is well known, Venezuela is outside of the CAN.  Peru and Colombia, favorable to “free trade,” are unconditionally allied with the United States and have agreed to a free trade agreement with the latter—even though the FTA with Colombia is bogged down in the US Senate. Ecuador and Bolivia, for their part, are strongly questioning neoliberalism, and have refused to get on board the Washington train; at the same time they are developing, without difficulties, constitutional processes that put at the forefront the defense of sovereignty and the State’s capacity to establish policies that favor the development of the internal market. In these circumstances, a commercial agreement with the European Union that contradicts the principles just indicated would be incompatible with the processes that are underway.

These fundamental differences between the Andean countries are reflected in the rhythms and timetables that each country wants to impress on the negotiations. While Colombia and Peru want a fast track agreement, Ecuador and Bolivia prefer to take their time to debate the major issues.

Bolivia participates, along with Cuba, Venezuela, and Nicaragua. in the project of the Bolivarian Alternative of the Americans (ALBA) that has kept a distance from market logic and suggests another integration model based on complementarity, cooperation, reciprocity, and respect for national sovereignty. Complementarity as opposed to competition, conviviality with nature in contrast to the irrational exploitation of natural resources, the defense of public property in the face of extreme privatization, the promotion of cultural diversity in the face of monoculture and the homogenization of the market (4). These principles are situated at a considerable distance from what is being discussed with the European Union.

Bolivia, in the negotiations with the European Union, suggests a system of tariff reduction based on concrete goals. Starting with recognition of the asymmetries between both blocks and special and differentiated treatment, Bolivia considers that reduction should not be automatic, but subject to objective, concrete achievements, equivalent to a third of its exports to the European Union.

Ecuador, in this third round, is paying greater attention to the negotiations with the European Union.  The Rafeal Correa government does not want to reissue an FTA along the lines of the one that it negotiated with the United States. But the problem is that there is a negotiating team that is “exactly the one that negotiated with the United States and that was rejected by the indigenous movement in 2006,” according to the Confederation of Indigenous Nationalities of Ecuador (CONAIE), five days before the beginning of the negotiations. The indigenous organization also asked President Rafael Correa to review the members of the negotiating team and that the team should report to the National Constituent Assembly on the texts agreed upon at the negotiating table so far. (5).

President Correa has adopted some measures to reorient the Ecuadorian position. This was made clear when the Ecuadorian Minster of External Relations, María Isabel Salvador suggested, at the inauguration of the third round of the EU-CAN negotiations, that the Association Agreement “must consider effective measures to safeguard industrial policies and, in general, development policies, of the Andean nations, both for those that they are carrying out right now as those that will be carried out in the future.” This would mean that Ecuador does not want to remain an exporter of agricultural produce or raw materials, as Europe may wish, but instead is looking to allow space for the protection and development of its incipient industry.

Notes