EU trade agreement with Colombia, Peru and Ecuador

SUMMARY OF:

Decision 2012/735/EU on the signing of the trade agreement between the EU and its Member States and Colombia and Peru

Trade agreement between the EU and its Member States and Colombia and Peru

Decision (EU) 2016/2369 on the signing and the provisional application of the protocol of accession to the trade agreement between the EU and EU Member States and Colombia and Peru to take account of the accession of Ecuador

Protocol of accession to the trade agreement between the EU and EU Member States and Colombia and Peru to take account of the accession of Ecuador

WHAT IS THE AIM OF THE DECISIONS AND THE TRADE AGREEMENT?

Decision 2012/735/EU approves, on behalf of the EU, the trade agreement (TA) between the European Union (EU) and EU Member States, on the one hand, and Colombia and Peru, on the other.
The TA between the EU and Colombia and Peru aims to open up markets on both sides and improve the stability of the trade relationship between the partners. It provides for progressive and reciprocal liberalisation by means of an ambitious and balanced free trade area.
Decision (EU) 2016/2369 adopts the protocol of accession of Ecuador to the TA, which contains all the relevant rules to take account of Ecuador’s accession.
The overall objective of the TA is to enhance trade and investment between the two regions, integrating productive value chains* and helping local businesses develop in their regional market to compete internationally.

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.

DATE OF ENTRY INTO FORCE

The TA with Peru has provisionally applied since 1 March 2013 and the TA with Colombia since 1 August 2013. Full entry into force is pending ratification by the Member States.
The TA with Ecuador has provisionally applied since 1 January 2017. Full entry into force is pending ratification by the Member States.
Decision 2012/735/EU has applied since 31 May 2012.
Decision 2016/2369/EU has applied since 11 November 2016.

BACKGROUND

For more information, see:

Andean Community (European Commission).

KEY TERMS

Value chain: a set of business activities that create value for a firm’s customers. At each point in this chain of activities, the product gains some value thanks to an added input or process.

MAIN DOCUMENTS

Council Decision 2012/735/EU of 31 May 2012 on the signing, on behalf of the Union, and provisional application of the Trade Agreement between the European Union and its Member States, of the one part, and Colombia and Peru, of the other part (OJ L 354, 21.12.2012, pp. 1-2)

Trade Agreement between the European Union and its Member States, of the one part, and Colombia and Peru, of the other part (OJ L 354, 21.12.2012, pp. 3-2607)

Successive amendments to the agreement have been incorporated into the original text. This consolidated version is of documentary value only.

Council Decision (EU) 2016/2369 of 11 November 2016 on the signing, on behalf of the Union, and provisional application of the Protocol of Accession to the Trade Agreement between the European Union and its Member States, of the one part, and Colombia and Peru, of the other part, to take account of the accession of Ecuador (OJ L 356, 24.12.2016, pp. 1-2)

Protocol of Accession to the Trade Agreement between the European Union and its Member States, of the one part, and Colombia and Peru, of the other part, to take account of the accession of Ecuador (OJ L 356, 24.12.2016, pp. 3-1456)