Negotiations between the EU and the Andean Community (Bolivia, Colombia, Ecuador and Peru) were launched in June 2007 for a regional Association Agreement that would include political dialogue, cooperation and trade. Building on the same principles and objectives as the Political Dialogue and Cooperation Agreement signed between the two regions in 2003, the aim was to consolidate and develop the political and economic relations between the two regions.
The talks were subsequently suspended in June 2008 because a lack of agreement between the Andean countries existed concerning the objectives and scope of the trade section of the agreement.
Talks were able to restart in January 2009 between the EU, Colombia, Peru and Ecuador aiming at a Multiparty Trade Agreement to provide for progressive and reciprocal liberalisation fully compliant with the rules and obligations of the WTO. Nine rounds of negotiations took place between January 2009 and March 2010 with a successful conclusion reached with Colombia and Peru. Ecuador suspended its participation in July.
The services, including mode 3 establishment, commitments agreed to by Colombia and Peru are very significant and respond to specific EU interests such as financial services, professional services, maritime transport services and telecommunication services. Such commitments will be important to EU services companies but also very important in building competitive infrastructure services within Colombia and Peru. Such benefits will be felt in all sectors of the economy and in combination with inward investment will help local businesses develop strength within the regional market so as to compete internationally.
The Commission’s impact assessment, based on an ambitious Andean wide agreement, finds that dynamic long term effects could result in GDP growth in Colombia of 1.3% and of 0.7% in Peru with the value of exports growing by 9.9% in Colombia and 7.2% in Peru. The effect on the EU is expected to be more marginal, but still positive.
In addition to services liberalisation, the agreement also includes significant market access in government procurement, a chapter on improving competition and enhancing transparency and an efficient and streamlined dispute settlement mechanism.
The EU, Colombia and Peru announced the conclusion of negotiations for a trade agreement on may 2010 during the EU-LAC summit. In April 2011, EU Trade Commissioner Karel De Gucht, the Minister of Trade, Industry and Tourism of Colombia and the Deputy Minister for Foreign Trade of Peru welcomed the initialing of the Trade Agreement after the conclusion of legal review. an ambitious and comprehensive Trade Agreement with Colombia and Peru.
On 11 December 2012, the European Parliament gave its final consent to the Agreement. A majority of MEPs (486 MEPs in favour) supported the deal which will work to boost trade ties, economic growth, sustainable development and regional integration.
The Agreement with Colombia and Peru should be provisionally applied in the first trimester of 2013, as soon as Colombia and Peru will have taken the necessary steps. In 2011, bilateral trade in goods between the EU and both Colombia and Peru was €21.1 billion. In the same year, the EU exported €5.0 billion to Colombia and imported €6.9 billion. The EU exported €2.8 billion to Peru and imported €6.4 billion in 2011.
Important excerpts from the text of the agreement, including commitments on services taken by the parties:
Annex XII – Government Procurement (part 1) Appendix 1: Coverage
Annex XII – Government Procurement (part 2) Appendix 2-8
The full agreement can be found: here
For more information:
- European Commission – DG Trade’s website
- European Commission’s highlights of the agreement
- EU Impact assessment
- European Comission position paper
- European Commission press release on the day of the ratification (Dec 2012)
- EPP Group Press release on day of ratification (Dec 2012)
- Website of the General Secretariat of the Andean Community
- European Commission’s trade statistics for the Andean Community and individual Andean countries.