EU trade agreement with Colombia, Peru and Ecuador

KEY POINTS

Benefits of the trade agreement for partners

• The main benefit of the TA is that it should provide businesses with stable and predictable conditions, allowing them to trade and invest with confidence. The TA creates significant opportunities for businesses and consumers on both sides.
• Other expected benefits are:
  • open markets for goods, services, government procurement and investment;
  • savings of €500 million per year on import duties (taxes collected on imports by the customs authorities based on the value of goods or some other criteria, such as their weight) at the end of a transition period;
  • better conditions for trade brought about by facilitating procedures (such as rules of origin, sanitary and plant health conditions and customs procedures), enhancing competition, improving transparency and ensuring the protection of intellectual property rights;
  • a more transparent business environment that makes life easier for firms and for individuals;
  • new cooperation on competitiveness, innovation, production modernisation, trade facilitation and technology transfer.
• The TA also aims to foster regional integration among the Andean countries. In this context, in July 2014, negotiations were concluded for the accession of Ecuador to the TA, resulting in its accession in January 2017.
• Bolivia, a member of the Andean Community, also has the possibility to seek accession to the TA.

Human rights and sustainable development

The TA identifies the respect for human rights and the rule of law as essential elements. The TA also includes elements to promote sustainable development through the implementation of international conventions on labour rights and environmental protection. Citizens’ groups are involved in the control of these commitments.

TA implementation

• In Peru, the TA represents an important opportunity for Peruvian agricultural and fisheries exports (one third of all the country’s exports to the EU). The EU is the largest investor in Peru, mainly in communications, extractive industries, banking and finance.
• In Colombia, the TA allows the country to diversify its exports to the EU, not only for agriculture and fisheries, but also for Colombian industrial products. The EU is the largest investor in Colombia and is mainly involved in the agricultural, fuel and mining sectors.
• According to the fifth Annual report on the implementation of the EU – Colombia/Ecuador/Peru trade agreement, the results of the TA remain positive. It has had a stabilising effect on trade despite the fall in commodity prices, and it continues to promote the diversification of trade. The TA has opened up sectors for EU investment and increased legal certainty for investors in relation to future policy reversal. It has also encouraged micro, small and medium-sized enterprises to engage in bilateral trade between the parties; this is primarily due to the tariff preferences and the efficient operation of customs. Agricultural exports now account for almost half of all exports to the EU. The agreement has positively affected the sectors trading with the EU on employment, welfare, reduction of poverty and informal activity. However, the full implementation of the agreement remains a priority in order to bring further benefits to the businesses and consumers it pertains to. There is still work to be done on sanitary and phytosanitary matters with regard to harmonised procedures (certificates and pre-listing) and trade and sustainable development issues, in particular the environment and human and labour rights.