EU - ANDEAN COMMUNITY (CAN) TRADE AGREEMENT

Camilo Tovar ALOP

CAN Political Context

Colombia Perú Ecuador - Bolivia

• Uribe 2002 • Garcia 2006 • Affirm neoliberal development model • Shrink State – market driven development: de regulation, privatisation, FTA, competitivity • Social conflict: authoritarism (Bagua , Minga, etc...) • Evo Morales 2006 • Correa 2007 • Constitutional processes rupture with neoliberal • Strengthen State – regulate market: nationalisation, regional, complementarity • Space and role of social movement

Differentiation

Different views on development Different strategies of international insertion

• FTAA fails  US FTA with CAN : – Colombia and Perú signed 2006 – Ecuador and Bolvia pull out (election flag) – Venezuela pulls out of CAN (2006 – Crisis) • Tense relations: Colombia vs. Ecuador Perú vs. Bolivia

EU Political Context

• 2004 Enlargement + EU Constitution  Lisbon Treaty : LA less priority • Barroso COM 2004  Lisbon Agenda Growth and jobs: internal + external market • Global Europe 2006 (Mandelson) Competitiveness + business driven New generation of RTAs/FTAs Raw materials initiative 2008 (key priority)

EU POLITICAL COMPASS 2008

Eastern block  fast free market approach, slow social rights Western block  expansion of neoliberal economics, erosion of some social policies

Additional “pull factors”

• Doha Development Round (WTO) – 2001  Talks collapse Cancun 2003 – 2005 Deadline missed (Hong Kong)  extend to end 2006: missed 2008 Geneva: collapse • EU loosing market share - emerging economies (China) + US FTA • EU regional approach to FTAs

EU - ANDEAN COMMUNITY (CAN) TRADE AGREEMENT • 1 st EU-CAN Coop Agreement 1983  1993 • 2003 Political Dialogue and Coop Agreement • 2004 EU-LAC Summit  EU: wait for FTA – EU evaluation of CAN economic integration • 2006: EU-LAC Summit - Crisis CAN (Venezuela) • June 2007: CAN Summit Tarija – Andean Differences  Decision 667 (framework) • July 2007: Agreed modalities for negotiation

EU “marca la cancha”

• EU format: 3 pillars + region to region • Trade: classic FTA format (WTO plus) • Objectives: Strength regional integration – Social cohesion  Sust. Development – Free trade • Asymmetries: “when possible” – SDT for CAN  mechanism: ≠ speed liberal.

• CAN Consensus base for negotiation – Possibility of veto (block proposals)

Regional Negotiations

• Complex negotiation process for CAN – 1 st intra-CAN negotiation  position to EU • Bolivia: innovative proposals – WG asymmetries and SDT for all agreement – No “across the board” national treatment – No further IPR  TRIPS – Development benchmarks • COL + PE: accept but not commit • EU: “accept” but dangerous precedent • Challenge: new architecture + technical

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• Sept 2007 – April 2008: 3 rounds • Ecuador: low profile  Quito • Bolivia/Ecuador: ≠ FTA – regional integrat.

• Node: position on biodiversity and IPR • CAN Summit Oct 2008  no solution • Peru/Colombia: bilateral FTA (not new) • 2009: EU propose Multiparty Trade Agree: – Only trade, ± bilateral  regional long term

Multiparty Trade Agreement

• Ecuador: yes.. but Agreement for Development • Bolivia: Out • Speedy negotiation: 2009 – 2010: 8 rounds – EU aggresive: US FTA Plus Plus – Col/Peru: accepting conditions • Ecuador complex position: – No clear space for alternatives – Correa mandate NO FTA – Banana issue: heavy weight

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• July 2009 Ecuador pulls out: – EU comply with WTO rulings on Banana – Include Polit. Dialogue and Coop • EU-LAC Summit May 2010: – Conclude, ambitious FTA EU-Col/Perú – Defines scenario for Ecuador and Bolivia • Ahead: – ratification process Col/Perú – Ecuador??

Conclusions

• Regional integration further crisis • EU: satisfied  FTA as they wanted • Col/Perú: re-affirm dev. Model – Raw materials export-led model (extractive) – Open services, public procurement and IPR – Erosion of State policy space – Static, long term – Investment • Ecu/Bol: struggle for alternatives