I welcome again Mr. José Antonio Gutiérrez of the Latin America Solidarity Centre and invite him to make his presentation.
EU Association Agreements with Andean Community: Discussion with Latin America Solidarity Centre.
Mr. José Antonio Gutiérrez
Thank you very much, Chairman. I will not delay the committee long as my colleagues, Mr. Colin Roche and Mr. Michael O'Brien, have covered much of the framework in regard to the association agreements. It is a different name for something that is framed in the same way as the EPAs. The association agreements also have three main pillars, namely, co-operation, political dialogue and trade. They are presented in a similar fashion to the EPAs but have applied thus far to just two regions in Latin America, namely, Central America and the Andean Community. In the future it is intended to apply them to Mercosur which encompasses the countries in the southern corner of South America.
The issue the Latin America Solidarity Centre has been working on is part of the EU-CAN network of different organisations working on EU-CAN trade in Europe, including Oxfam, Caritas, Christian Aid and others. We are focusing at the moment on the Andean Community because the deal being pushed in the association agreements with the Andean Community is particularly harmful. The development of the negotiations has proved this to the extent that this week the fourth round of the negotiations that should have taken place in Brussels was cancelled owing to a number of differences and political problems. It is feared that, as happened in the third round of the negotiations in Quito in April, negotiations would become stalled and no progress would be made at this time.
The Andean Community, in case members are not aware, is an economic bloc in South America comprising Peru, Ecuador, Bolivia and Colombia. It is not a very significant trade partner for the EU, but the EU is a very significant trade partner for it. It is a market with a lot of potential, a market of 97 million people. In addition, it is an area with huge biodiversity and great wealth in terms of mining, oil production and other resources. Currently, relations between the European Union and the Andean Community are governed by a co-operation and political dialogue framework signed in 2003. Trade relations are governed by the GSP plus system - global system of preferences - agreed in 2005. Since then 90% of the products that can be traded enter Europe without tariffs.
The negotiation of the agreement has been ongoing for a number of years. The first draft was published in April 2007. The issues were the same as those that arose in regard to EPAs. The agreement went beyond the requirements of WTO rules. It referred to liberalisation of markets of public procurement. Most remarkably, its spirit was to establish a free trade area in ten years, no matter what happened in that period. The deadline for establishing a free trade area is the latest development. It would obviously impact on the GSP plus system from which Andean countries benefit.
The first round of negotiations took place last September in Colombia. The second round took place in December in Brussels. It was only during the third round in Quito from 21 to 25 April that the first problems started to appear at a significant level. At least two countries of the four in the Andean Community were strongly opposed to the ongoing intellectual property negotiations. They were also worried about the emphasis being placed on the privatisation of public services and the delivery of services. They were worried about the fact that special differential treatment by the European Union referred only to quotas and timings, for example, the establishment of a free trade area in ten years. There was no talk of benchmarks around development issues. Further, there was much discussion about the inclusion of Singapore issues in the agreement.
The last item to be put on the agenda was the issue of immigration. This created further difficulties. Recently the directive return was approved. It was one of the issues to be discussed in the fourth round of negotiations in Brussels which was deferred. Andean countries have been very upset regarding the directive return and the most outspoken against the new immigration Bill. In particular, President Alan Garcia of Peru called the OAS for an extraordinary meeting on the impacts it would have. The interim president of CAN, President Correa from Ecuador, went a step further and said that as long as there was no freedom of movement for people, there was no point in talking about freedom of movement for services and trade and so on. He was literally tying whatever had happened in regard to the directive return to the following-up of the negotiations. It is not surprising that the European Union decided to cancel the fourth round of negotiations this week. The excuse or argument presented was the disagreements between Andean countries on trade issues, mainly because two countries, Peru and Colombia, are strongly in favour of establishing the free trade area, while Bolivia and Ecuador are strongly against it. The immigration issue is a further problem, in addition to the political turmoil in the region, which must also be taken into account.
For a number of months we have been advocating a review of the terms of the agreement with the Trade Commissioner, Mr. Peter Mandelson, and those negotiating the agreement, such as Mr. João Aguiar Machado. In addition, we have informed members of 133 committee of our letters of recommendation. If Deputies and Senators are interested, I have copies of the letter - with our recommendations - sent before the third and fourth round of negotiations began. As I stated, the fourth round was cancelled.
The main problem we have identified is the lack of consultation with civil society, in spite of the fact that there is a democratic clause attached to the agreement. This is obviously creating other problems, as my colleagues stated. There is an inconsistency between the objectives of the agreement and the proposals. On the one hand, the European Union wants to open water services markets, while at the same time civil society has no voice to have a say in that decision. That is very important, given that water has been a major issue of contention in the Andean region. I do not know if members remember the massive demonstrations in Cochabamba,the first of a series of mass demonstrations against the privatisation of the water works system that eventually led to two presidents being toppled in Bolivia. We have seen similar instances in Ecuador. We believe this would be at odds with the articulated objective of strengthening democracy and good governance.
We must take account of the tensions in the CAN. Peru and Bolivia are involved in a bitter diplomatic quarrel, as are Ecuador and Colombia. The different approach adopted to free trade is creating more and more problems. This became worse only in the third round of negotiations and at the fifth summit of European, Latin American and Caribbean Heads of State which took place in Lima in May. There was a very strong exchange of words between Mr. Mandelson and Mr. Pablo Solon, the negotiator from Bolivia. Bolivia stated it had been told it would not be a free trade agreement, while Mr. Mandelson insisted free trade was the main issue.
To put the matter in context, there are 14 working groups negotiating the agreement, of which 11 are dealing with trade issues, mainly with liberalisation and privatisation. Mr. Solon stated countries had entered the negotiations on the understanding that this would not be a free trade agreement but then Mr. Mandelson stated that if his country did not want to be part of such an agreement, he was invited, as the representative for Bolivia, to step out. Obviously, that was censured even by Members of the European Parliament and there was a very strong reaction to it.
This is creating tensions. Ms Angela Merkel, Mr. Peter Mandelson and others state that to apply special and differential treatment, we can speed up the negotiations with two countries, Colombia and Peru, and leave Ecuador and Bolivia aside, as they seem to be very much against free trade. The European Union wishes to negotiate a free trade agreement with the other two separately as they say they do not want to impose such an agreement on them but eventually when Ecuador and Bolivia believe they can be part of it, they are always welcome to step in and accept what has been agreed with Peru and Colombia. It is worrying that Bolivia has pushed a number of proposals when it comes to trade and benchmarks to be implemented in this period to establish a free trade area, but with the negotiations split, they will not be taken into account, which means Bolivia will have to accept the free trade proposal as put forward by the European Commission.
We fear that in bringing together the issues of co-operation and political dialogue in a free trade agreement, it might be the case that co-operation will be bound to free trade in the future. Such conditionality is not new, as it has been happening for a number of years through international financial institutions, but we believe it is a dreadful development for the European Union to go down that road.
In the regions there are serious abuses of human rights but this is not considered and not mentioned in the political dialogue pillar. Let me give an example. Colombia is negotiating a free trade agreement with the United States which the United States has not ratified because of concerns about human rights, particularly the executions of trade unionists. This is not an issue in the association agreement negotiations. Human rights issues should form some part of the negotiations.
Immigration is an issue to be discussed as part of the agreement, yet we see the return directive being pushed by the European Union, giving the impression that it has little respect for its partners. One cannot enter negotiations on an issue and then go ahead and make one's own resolution, regardless of what the other party has to say.
Our proposal is to take the GSP plus system as a starting point. The European Union is proposing to take the free trade agreement negotiations of Peru and Colombia with the United States as the starting point and states it does not want anything less. We propose, for the sake of coherence with development issues, that the GSP plus system be taken as a starting point.
We propose the exclusion of Singapore issues and basic services such as water. We want the symmetries to be taken into account through development benchmarks. For instance, the Bolivian Government proposed the tying up of liberalisation of trade in certain products to increase its own exports. If negotiations are to proceed in parallel lines, this proposal will be excluded from negotiations with Peru and Colombia. We want time to be allocated for proper consultation with civil society before the rounds of negotiations begin.
The European Union stated one of the main reasons to negotiate with the CAN in a regional block was to strengthen regional unity. However, since the negotiations started, the process of integration of the region has gone from bad to worse. Not only have we seen negotiations along parallel lines but there is also bitter in-fighting among Andean countries on the issue of free trade. If we are serious about regional integration, we should not be pushing for conditions which are unacceptable to some of the partners.
In the document circulated to the committee by Mr. Gutiérrez I read, "While the EU has stated its commitment to reaching the millennium development goals, it insists on free trade". Does Mr. Gutiérrez believe the European Union is serious about trying to reach the millennium development goals?
Chile and Venezuela are former members of the CAN. Why are they no longer members?
I congratulate the Colombian authorities on the role they played in the release of Ms Ingrid Bertancourt last week.
I welcome Mr. Gutiérrez. He says only 0.6% of EU trade is with the Andean Community, of which 90% is free of customs duties. If the level of EU trade is so small and 90% of it is free of customs duties, what are we talking about? Is it proposed that the area in which trade is excise free be changed in a new liberalisation process? It seems that the existing process is beneficial to the Andean Community. It also seems incredible that the European Union would seek to make services such as water part of the services agreement within an overall privatisation process. This brings us to the issue of human rights. Are water and shelter human rights? How can such basic human rights be subject to international trade agreements? It cannot be described as fair trade or free trade.
How is it envisaged that consultation with civil society will take place? Is civil society sufficiently organised to be able to make a meaningful input into the negotiations? Has the European Union precluded civil society from doing so, in any sense? Is civil society being prevented from participating on the Andean side of the negotiations?
The European Commissioner, Mr. Peter Mandelson, seems to have a lot to answer for in terms of the negotiations. Is he subject to unanimity in the same fashion? Can he veto any association deal finalised?
I welcome Mr. Gutiérrez. I would like to be associated with the remarks of Deputy Timmins about Ingrid Betancourt. We are all satisfied that she was released last week. I congratulate the Colombian Government and defence forces on their tremendous work. They showed great resilience in making such a sustained effort, with international diplomatic support from Europe and elsewhere, to achieve their ultimate aim. I wish Ms Betancourt and the Colombian Government and people every success.
Mr. Gutiérrez comes from a region rich in natural resources. What contribution are those resources making to gross domestic product and the economic wherewithal of the region?
I listened with interest to what Mr. Gutiérrez said about the need, as some Latin American countries see it, for an immigration agreement with the European Union to be agreed at the same time as a free trade agreement. We do not believe there is a need for both agreements at this stage. It is possible to finalise a free trade agreement in the absence of an agreement on immigration, which is a major problem for the European Union. Migration and immigration are big global challenges. If the free trade agreement has a positive impact on Latin America, the immigration issue might be resolved on the back of it. Does Mr. Gutiérrez agree that the European Union's failure to ratify the Lisbon treaty has prevented it from having the cohesion and unity of purpose it needs if it is to reach a multilateral agreement?
Mr. José Antonio Gutiérrez
Like Mr. Roche, I find it hard to believe, on the basis of its actions, that the European Union is serious about achieving the millennium development goals. I do not see it happening. I understand the Union will fail to achieve 83% of the goals. That is a major problem. It is not likely that they will be met by the target date of 2015. The countries involved are not making enough of an input to make them a reality.
Deputy Timmins asked why Venezuela and Chile were no longer members of the Andean Community. Chile decided to quit the community in 1976 following a dispute about trade policy issues. Venezuela left in 2006 in protest at Peru's decision to negotiate a free trade agreement with the United States. Negotiations on free trade agreements have had a negative effect on regional integration.
I was also asked about the privatisation of services such as water. While there is no binding international document in which the right to water is set out specifically as a human right, we are certain that one needs water in quantity and quality if many of one's human rights are to be fulfilled fully. It is part of a long-term discussion and there is a logjam in respect of the wording required to establish the right to water as a human right. It is something the Government should support.
It should not come as a surprise that the privatisation of water could become one of the leading forces behind this agreement. Big EU multinational companies that operate water services, such as Suez and Veolia - the latter of which supplies services to the Luas - once played an important role in Latin America in the context of water privatisation. They have operated in Bolivia, Ecuador, Colombia and Argentina and in each case, especially in Bolivia, there were large-scale struggles to get them out. They have also put demands on the International Centre for the Settlement of Investment Disputes, ICSID. Bolivia was involved in two major investment disputes, one with Suez and one with Bechtel, the latter of which is a US company.
The GSP plus system, in terms of trade, works very well for the Andean Community. However, there is huge pressure from international investors, particularly in the area of services, where they want to make more of an inroad. Most foreign direct investment in the Andean region is taking place through extraction of natural resources but it increasingly involves services, such as telecommunications, finance, water, electricity and so on. Spanish companies in particular, such as Santander in the financial sector, Endesa in electricity and Telefónica in telephones, are having a massive impact. There are also Dutch and English companies.
Deputy Costello asked if civil society was strong enough. In Bolivia, Ecuador and Peru there is a very strong civil society. In Colombia it is more difficult because of 60 years of conflict and the systematic elimination of popular leaders in the past 20 years. Since 1988 some 70,000 people, mainly from social organisations, have been killed so Colombia is the weakest link in terms of civil society. However, in Bolivia the Government has a genuine mechanism for consultation with civil society organisations but when these rounds take place there is no mechanism for their input to be taken on board by the EU, let alone for the participation of EU civil society in the negotiations. For example, when the fourth round of negotiations was to take place the Bolivian delegate, Pablo Solon, sent a formal letter of complaint to the European Commission accusing it of failing to find accommodation in Brussels for delegates from the civil societies. Such things are very simple but it highlights the fact that these representatives are not a priority.
I agree that a trade agreement should not necessarily include an agreement on immigration but a chapter dealing with the issue was accepted in the third round of negotiations. The representatives were not obliged to accept it but did so out of their own free will because it is a major problem. The Latin American community in Ireland is very small, probably amounting to a couple of thousand people, but in some European countries there are considerable numbers, such as in Spain, where the Peruvian community numbers 1 million, and the same is the case in Italy, France, Sweden and so on. The fact that they agreed, during the negotiations, to include something on this subject, only for it to be thrown back at them when a directive to return was issued, is a bad sign. I agree that a free trade agreement should not necessarily mean free movement of people but the conditions in the directive are particularly repressive in that they allow for an illegal immigrant to be sent to a detention centre for 18 months. The OAS and other organisations have voiced their opposition to this. The Lisbon treaty will have an impact on the negotiations at the European Council. It has not been said that the official reason is the tensions between Andean countries on trade issues, but I would not be surprised if within the European Union there was some tension about the terms of the negotiations.
This is a time of high turbulence from a number of points of view. The autonomy referendum is being held in Bolivia. It could remove Mr. Morales from office. In addition, we have a constituent assembly. All this could eventually change the rules of the game. There is also a constituent assembly in Ecuador.
In the case of Peru, there is a government with a very low level of credibility and popular support and serious internal turmoil. Last week there were 65 struggles in the country, between strikes, agrarian strikes and so on. We have declared a general strike to take place tomorrow on issues such as free trade policies and food price increases. Even though the official position of Peru is one of full support for free trade agreements, the people have a different idea. The response of Mr. Garcia to the general strike tomorrow has been to put troops on the streets, which is far from democratic behaviour.
In Colombia we have the timely and fortunate deliverance of Ms Betancourt and the other hostages. At the same time, we have an increasingly worsening situation of human rights in the country and an increase in the number of human rights abuses perpetrated by the army and state officials. Amnesty International's report was very clear. Since President Uribe came to power, at least 1,200 people, the so-called "false positives", have been killed by the army and disguised as guerrilleros. Soldiers are receiving incentives to do this. Amnesty International and Human Rights Watch have been very vocal against this practice. Approximately 1,200 cases have been proved. God knows what else is going on. More than 4 million people are being displaced by the militarisation of large parts of the country. Colombia is second only to Darfur in Sudan when it comes to the number of displaced people. We have a major judicial crisis as the Supreme Court proved that Mr. Uribe bribed one of the persons who approved a constitutional reform amendment that made it possible for him to apply for a second term in office. The response was to deny this and challenge the ruling of the Supreme Court. There is a serious crisis. What is going on in regard to the Lisbon treaty has not helped in the negotiations that should have taken place this week.
Like the previous presentation, this calls for ongoing updating. Perhaps Mr. Gutiérrez might return at a later stage to update the committee. I thank everyone for a very informative discussion. We hope also we will have a follow-up.