The Free Trade Agreement (FTA) between the EU and Colombia, a remarkable but also controversial agreement was signed on 26th June 2012. The agreement was the result of a long and exhaustive negotiation process that started in 2010.
The agreement took effect on 1 March 2013 for the EU and Peru, and Colombia is planned to follow at a later date. It is noteworthy that this FTA represents an interesting shift of European trade politics.
Wider policy framework of the EU-Colombia FTA
The most striking change is clearly the shift away from a strict commitment to multilateral agreement towards an eased willingness to consider FTAs. This is also evident from the EU’s Global Europe 2006-2010 strategy which clearly identified that:
‘Europe should pursue internal policies that promote the EU's external competitiveness. Competitiveness is determined fundamentally by productivity growth and the evolution of costs’
Furthermore the reports states that:
‘Global Europe’s main innovation was that, while reaffirming the EU’s commitment to the multilateral system and the Doha Round, it ended the de facto moratorium on launching new free trade agreements (FTAs).’
Also for the EU 2020 strategy the EU continued to set further incentives and goals:
“The Europe 2020 strategy rightly puts an emphasis on the need for a new growth path that can lead to a smart, sustainable and inclusive economy, a path that can overcome the structural weaknesses in Europe's economy, improve its competitiveness and productivity and underpin a sustainable social market economy.”
EU Free Trade Agreements
(The FTA with Peru and Colombia still has to be ratified by EU member states)
Both strategies opened the door towards markets with high growth potential, such as Colombia. However, even though the FTA between the EU and Colombia is a comprehensive agreement with primary economic focus it also includes ‘other’ politically driven elements as well. The EU also tries to forward its political agenda, employing soft foreign policy skills in order to achieve “universal peace”. Influenced by their own European experience, the EU perceives regional integration as a means of promoting economic and political stability.
Big economic benefits
So much for the motive behind this agreement. But what economical results can we expect from this agreement? According to a memo of the European commission, the potentials of this FTA are huge:
‘Over the next two years, 90% of world demand will be generated outside the EU. If we were to complete all our current free trade talks tomorrow, we would add 2.2% to the EU's GDP or €275 billion. This is equivalent to adding a country as big as Austria or Denmark to the EU economy. In terms of employment, these agreements could generate 2.2 million new jobs or additional 1% of the EU total workforce.’
A controversial agreement
Still, not everyone was particularly thrilled about the prospect of this FTA. This agreement has met severe criticism from member of the European parliament and NGOs. On 1st March 2010, the European Commission announced the end of a successful negotiation process with Colombia and Peru. The text of the agreement was then given to the European Parliament for review. However, the success of the Commission was not overwhelmingly well-received by the Parliament itself. The main disputes arose among three significant topics: concerns around the violation of human rights, the EU’s banana quota regimes and money laundering and transfer of drugs money.
The main cleavages were among the EP’s political groups – pressured by either from NGOs (skeptical) or business corporations (in favor) - and caused by not the central trade aspect of the FTA but rather its social, human and development effects.
To complicate the matter, parallel to the already heated debates in the EP among supporters (EPP, ECR, ALDE) and skeptics of the FTA (S&D, Greens-EFA, GUE/NGL), the EP International Trade Committee (INTA) has drafted a report on human rights and social and environmental standards in international trade agreements. Their intention was to include these standards in all new FTAs to secure the main dispute points.
Having met with several NGOs and Latin American experts under the plenary session of 22 March 2012; during the plenary meeting of 22 May 2012 the MEPs has raised thought provoking questions to Karel De Gucht, Member of the Commission. The scope of the debated points have not altered since the initial stage of the Agreement; therefore, this time again, there was attempt for more action and for better control over human rights and substantial development. As David Mario (rapporter) stated:
‘We also suggest that our partner countries should create a transparent and binding road map, possibly with the support of the Commission, regarding human labour rights and sustainable development. We also want to see both in Peru and Colombia the establishment of permanent institutionalised mechanisms that guarantee the role of civil society.‘
This matter was directly answered by Karel De Gucht, saying that ‘the protection of human rights is already central to our relationship with Colombia and Peru’. And as he continues:
‘The very first article of the text states that respect for democratic principles, the rule of law and fundamental human rights is an essential element of the agreement. If a government violates this essential element, the European Union, Colombia or Peru would be able immediately to suspend the benefits of the agreement to that government’s country. I do not see how this could be expressed more clearly or more strongly.’
To support this statement Catherine Bearder, on behalf of the ALDE Group, claimed:
‘The European Union has always fought, and will always fight, for more than merely its economic interests abroad. Our Treaties commit us to supporting democracy, human rights and environmental protection – not just on paper, but in practice – in everything we do, both within the Union and through our external relations.’
Finding a compromise
Following the plenary session, INTA still called for further actions in ensuring labour, human rights and environmental protection to accompany the deal and adopted a resolution by 21 votes to 4 (with 3 abstentions) that ‘calls on the Peruvian and Colombian governments to establish a transparent and binding roadmap to protect trade unionists, human rights and the environment’:
‘We strongly support the trade agreement with Colombia and Peru, which is a real opportunity to promote economic integration and development and raise living standards in the Andean Region, but we have adopted this resolution to express our concerns on human and labour rights and sustainable development and also to enhance the participation of civil society in their monitoring' (Mario David (PT, EPP) European Parliament 2012).’
This resolution was adopted by the EP on 13 June 2012, by 525 votes to 94, with 67 abstentions. Therefore, the way was completed for the last step before the ratification process: the EU and Colombia/Peru has officially signed the FTA on 26 June 2012. On Tuesday, 11 December 2012, final voting took place in Strasbourg and resulted in the Parliament consenting to the agreement with 72% of the votes in favour.
Distribution of votes according to VoteWatch.eu
‘However, the struggle against this agreement is not over’, as Public Service Europe puts it. Even though the text has been accepted by the European parliament, as a next step national parliaments in all the now 28 EU member states shall ratify the FTA and one ‘no’ is enough to stop the procedure and drop back the whole agreement.
Therefore, such as all parties, we are “awaiting final decision”
Photo Credits: Sea port by Gregory Brown via flickr, EU free trade agreements by Datastat via wikimedia, EU Colombia/Peru trade agreement - votes by political group via VoteWatch Europe