Trade agreement between the European Union and Colombia and Peru European Implementation Assessment STUDY EPRS | European Parliamentary Research Service Editor: Anna Zygierewicz Ex-Post Evaluation Unit PE 621.834 – July 2018 EN Trade agreement between the European Union and Colombia and Peru European Implementation Assessment On 29 November 2017, the Committee on International Trade (INTA) of the European Parliament requested authorisation to undertake an own-initiative report on the implementation of the trade agreement (TA) between the EU and Colombia and Peru (2018/2010 (INI). Santiago Fisas Ayxelà (EPP, Spain) was appointed rapporteur. This European implementation assessment has been provided to accompany the work of the INTA committee in scrutinising the implementation of the agreement. This European implementation assessment (EIA) consists of two parts. The in-house opening analysis (Part I) outlines the process leading to the signature of the trade agreement between the EU and Colombia and Peru. It also presents the socio-economic situation in Colombia and Peru and relations between the EU and Colombia and Peru, as well as relations between the EU and the Andean Community. The research paper prepared by external experts (Part II) presents a detailed analysis of trade in goods and services and foreign direct investments. The paper also evaluates, in detail, the implementation of the trade and sustainable development chapter of the trade agreement in both Colombia and Peru. Finally, the paper provides recommendations for the improvement of the implementation of the trade agreement. EPRS | European Parliamentary Research Service AUTHORS Part I: The opening analysis has been prepared by Dr Anna Zygierewicz, Ex-Post Evaluation Unit, EPRS. To contact the author, please email: [email protected] Acknowledgements: The opening analysis was peer-reviewed internally by the Policy Department for External Policies. Subsequently, staff of the European Commission provided comments on it. The author would like to thank the various contributors for all their valuable feedback and recommendations. Part II: The research paper has been prepared by the Instituto Complutense de Estudios Internacionales (ICEI) at the Complutense University of Madrid, Spain, and integrated by Prof. Isabel Alvarez (ICEI), Prof. Alan Fairle (PUCP, Perú), Prof. Victor Martin (ICEI, URJC), Lisset Medina (ICEI), and Dr Alvaro Montoya (Colombia, ICEI), at the request of the Ex-post Evaluation Unit of the Directorate for Impact Assessment and European Added Value, within the Directorate-General for Parliamentary Research Services (EPRS) of the Secretariat of the European Parliament. ADMINISTRATOR RESPONSIBLE Anna Zygierewicz, Ex-Post Evaluation Unit, EPRS To contact the publisher, please e-mail [email protected] LINGUISTIC VERSIONS Original: EN (Part I) and ES (Part II). Translations: ES (Part I) and EN (Part II). Manuscript completed in July 2018. DISCLAIMER AND COPYRIGHT This document is prepared for, and addressed to, the Members and staff of the European Parliament as background material to assist them in their parliamentary work. The content of the document is the sole responsibility of its author(s) and any opinions expressed herein should not be taken to represent an official position of the Parliament. Reproduction and translation for non-commercial purposes are authorised, provided the source is acknowledged and the European Parliament is given prior notice and sent a copy. Brussels © European Union, 2018. PE 621.834 ISBN: 978-92-846-3470-5 DOI: 10.2861/846773 CAT: QA-03-18-095-EN-N [email protected] http://www.eprs.ep.parl.union.eu (intranet) http://www.europarl.europa.eu/thinktank (internet) http://epthinktank.eu (blog) Trade agreement between the European Union and Colombia and Peru Table of contents PART I: IN-HOUSE OPENING ANALYSIS ______________________________________________ 2 Introduction __________________________________________________________________ 4 The signature of the trade agreement between the EU and Colombia and Peru _________ 4 The accession of Ecuador to the trade agreement _________________________________ 8 Relations with Bolivia _______________________________________________________ 9 Annexes ____________________________________________________________________ 11 Annex I. Colombia and Peru – basic country notes __________________________________ 11 Annex II. EU – CAN regional cooperation – a brief presentation ________________________ 17 Annex III: EU bilateral relations with Colombia and Peru – a brief presentation ____________ 20 PART II: EXTERNAL RESEARCH PAPER: Implementation of the Trade Agreement between the EU and Colombia and Peru _________________________________________________________ 25 1 EPRS | European Parliamentary Research Service PART I: IN-HOUSE OPENING ANALYSIS Frequently used acronyms and abbreviations Agreement or TA Trade agreement CAN Andean Community of Nations (es. Comunidad Andina de Naciones) CELAC Community of Latin American and Caribbean States (es. Comunidad de Estados Latinoamericanos y Caribeños) Commission European Commission DAND The European Parliament delegation for relations with the countries of the Andean Community DAS Alternative Development Programme in Satipo (es. Programa de Desarrollo Alternativo en Satipo) DCI Development cooperation instrument EEAS European External Action Service EU European Union ERC European Research Council FARC Revolutionary Armed Forces of Colombia (es. Fuerzas Armadas Revolucionarias de Colombia) FTA Free trade agreement GDP Gross domestic product GDI Gross national income GSP Generalised scheme of preferences HEI Higher education institution HR/VP High Representative of the Union for Foreign Affairs and Security Policy IA Impact assessment IcSP The Instrument contributing to Stability and Peace ILO International Labour Organization LAC Latin America and the Caribbean MEP Member of the European Parliament MIP Multiannual indicative programme MSCA Marie Skłodowska-Curie Actions ODA Official development aid OECD Organisation for Economic Co-operation and Development Parliament or EP European Parliament p.p. Percentage point PPP Purchasing power parity SIA Sustainable impact assessment SME Small and medium-sized enterprises 2 Trade agreement between the European Union and Colombia and Peru Tables Table 1 – Colombia and Peru - the basic data _______________________________________ 11 Table 2 – Colombia - share of population by level of income, 2005 and 2015, in % __________ 13 Table 3 – Peru - share of population by level of income, 2005 and 2015, in % ______________ 15 Maps Map 1 – The Andean Community _________________________________________________ 17 3 EPRS | European Parliamentary Research Service Introduction The trade agreement between the EU and Colombia and Peru was signed six years ago, on 26 June 2012, and has been in provisional application since 1 March 2013 with Peru and since 1 August 2013 with Colombia. In November 2016, Ecuador signed the trade agreement, and the agreement has applied provisionally to it since 1 January 2017. At the time of writing this analysis, the trade agreement had still not been fully ratified. Article 4 of the trade agreement between the EU and Colombia and Peru describes its objectives, which include, inter alia, progressive and gradual liberalisation of trade in goods; facilitation of trade in goods; progressive liberalisation of trade in services; development of an environment conducive to an increase in investment flows; facilitation of trade and investment; the opening of government procurement markets and the protection of intellectual property rights. The trade agreement between the EU and Colombia and Peru belongs to the 'new generation' of EU trade agreements that, in addition to trade and investment, focus, inter alia, on the sustainable development of the partner countries. This element raises many concerns, in particular owing to the insufficiently described means for its enforcement. In the case of the trade agreements between the EU and Colombia and Peru voices were raised against the signature of the agreement. Civil society organisations and trade unions, for instance, pointed out the insufficient protection or violation of human, labour and environmental rights in Colombia and Peru. In contrast, the signature of the trade agreement was supported by business associations. Regional cooperation between the European Union and the Andean Community, as well as bilateral cooperation between the EU and the Andean Community Member States, is progressing, bringing the benefits to both sides. The EU supports the sustainable development of the four Andean countries while helping them to terminate internal conflicts or deal with emerging situations arising from natural disasters. The EU has also played an important role in the peace process in Colombia. The socio-economic situation in both Colombia and Peru is improving, according to various reports prepared by international organisations and civil society organisations. Yet, improvements are needed, especially in the area of human rights, with special attention to the indigenous peoples and other groups in the 'litigation' areas, such as mining areas and areas that are the focus for conflict over land. The need to achieve more equal distribution of the growing wealth of the Andean Community member states and to combat wide-spread corruption are also on-going problems. The signature of the trade agreement between the EU and Colombia