European Union: 'Trade Agreement' with Colombia and Peru

Research reports and studies
March 2012
Christopher Steven; Jodie Keane; Lorand Bartels; Stephen Woolcock

This study provides a comprehensive assessment of the EU Colombia-Peru Trade Agreement to assist the European Parliament in its deliberations. EU efforts to negotiate a region-to region agreement with the Andean Community (CAN) were not successful due to issues within the CAN. The agreement is in line with EU FTA policy in terms of content. Taken together with other EU agreements with South and Central America the Agreement is also consistent with an EU policy of strengthening trade and investment with regions of potential growth. There are small welfare effects from the agreement and trade benefits for the EU go mostly to the classic EU export sectors of machinery, transport equipment and services. The access to Colombia and Peru matches that and in some areas exceeds that provided in the US and Canadian agreements. The gains for Colombia and Peru are in fruit (especially bananas) and vegetables, but more importantly the Agreement ensures continued duty free access to the EU for Colombian and Peruvian exports. Many of the civil society criticisms of the Agreement have been addressed in the final text. The provisions on sustainable development are equivalent to the current practice in trade agreements. On the issue of human rights the Parliament will need to judge whether its consent for the Agreement is seen as a means of ensuring continued progress towards better implementation in the partner countries, or as condoning existing practices.

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