Bilateral Trade Relations by region Brussels, 11 December 2012
European Commission welcomes European Parliament’s support for closer ties with Central America and new trade deals with Peru and Colombia
EU High Representative Catherine Ashton and EU Trade Commissioner Karel De Gucht today welcomed the European Parliament’s backing for a major political and economic deal with Central America (Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama) as well as an important trade deal with both Peru and Colombia. A majority of MEPs (Central America: 557 MEPs in favour, Peru/Colombia: 486 MEPs in favour) supported these deals which will work to boost trade ties, economic growth, sustainable development and regional integration.
Commenting on the EU-Central America Association Agreement, the EU High Representative Catherine Ashton stated, "I welcome the European Parliament’s consent to the EU-Central America Association Agreement. Based on common principles and objectives, such as democracy, human rights, and inclusive and sustainable development, the European Union and its Central American partners have reached a comprehensive agreement, which includes three complementary pillars, political dialogue, cooperation, and trade. Through it, we will achieve a stronger political dialogue and more effective cooperation on a wide range of issues at the regional level. These important instruments will give us the opportunity to better work together towards the development of a closer relationship and a deeper regional integration. In this sense, we hope to see our commitment to shared principles and objectives emerge stronger. I look forward to a swift ratification process and entry into force."
"Today's green light from the European Parliament paves the way to opening our markets to create business opportunities, creating growth and jobs in the EU and in Peru, Colombia and across Central America", stated EU Trade Commissioner Karel De Gucht. "But I am convinced that these trade deals cannot just be measured in euros or dollars. They go much further than that – by providing a framework for sustainable social development through trade in the region."
Under the Lisbon Treaty, the European Parliament is required to give its consent on the EU's association and trade agreements and to be co-legislator on trade matters with the Council. Today it also voted on the Regulation implementing the bilateral Safeguard Clause of the agreements that will provide a safety net for the EU industries in case of injurious surge of imports from the countries concerned.
Both agreements will provide for a progressive and reciprocal liberalisation, leading to an ambitious free trading regime. It will help local businesses develop the strength in their regional market as well as to enhance the stability and predictability of the trading environment, further promoting trade and investment.
The Association Agreement with Central America is the first ever region-to-region Association Agreement which relies on three mutually reinforcing pillars, namely political dialogue, cooperation, and a trade agreement. This trade pillar is expected to be provisionally applied in the course of the second quarter 2013, once the Central American countries have all finalised their internal processes. Once ratified, this agreement will open up markets on both sides, help establish a stable and business and investment environment. An increase by 25-30% of the trade flow in value on both sides is expected as a result of this agreement. In turn, this should be translated into a GDP growth of Central American countries varying between 1 to 2%.
The Agreement with Colombia and Peru which will create an ambitious free trade framework between these two countries and the EU, should be provisionally applied in the first trimester of 2013, as soon as Colombia and Peru will have taken the necessary steps. The deal will result in total tariff saving of more than €500 million euros per year.
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.
Trade flows between the EU and Central America represented €8 billion in 2011.