# EUR-Lex - 52011PC0570 - EN

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# 52011PC0570

**Proposal for a COUNCIL DECISION on the signing, on behalf of the European Union, of the Trade Agreement between the European Union and Colombia and Peru /* COM/2011/0570 final - 2011/0245 (NLE) */**

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EXPLANATORY MEMORANDUM

1.           Background

The attached proposal
constitutes the legal instrument for authorising the signature of a trade agreement
between the European Union and Colombia and Peru:

-             Proposal for a Council Decision
on the signature of the trade agreement.

Negotiations
between the EU and the Andean Community of Nations (hereinafter, Andean
Community) for a region-to-region association agreement, including political
dialogue, cooperation and trade were launched in June 2007 following a Council decision
to authorise these negotiations in April of the same year. Regrettably,
disagreement between Andean countries on approaches to a number of key trade
issues covered under the foreseen agreement led to the suspension of talks in
June 2008. Under these circumstances, the Commission presented a recommendation
to the Council on 17 December 2008 with a view to modifying the existing
authorisation so as to pursue negotiations of a trade agreement with those
countries of the Andean Community willing to move ahead.

On 19 January
2009, the Council authorised the Commission to negotiate a multiparty trade
agreement with those countries sharing our general objective of a balanced,
ambitious, comprehensive and WTO-compatible agreement. The Presidents of
Colombia, Ecuador and Peru confirmed their commitment to negotiate in letters
to President Barroso in January 2009. Bolivia had been very critical of the new
format, and had not shown any interest in participating. New negotiations for a
multiparty trade agreement were therefore launched in January 2009 between the
EU and Colombia, Ecuador and Peru. After 4 rounds, Ecuador suspended its
participation in the talks and negotiations therefore continued with Peru and
Colombia only. They were successfully concluded in May 2010 and - after a phase
of legal review - the text of the trade agreement was initialled with Colombia
and Peru on 23 March 2011.

As set out in
the negotiating directives, the Commission reached the objectives to eliminate
high tariffs, tackle technical barriers to trade, liberalise services markets,
protect valuable EU geographical indications (GIs), open-up public procurement
markets, include commitments on the enforcement of labour and environmental
standards and offer effective and swift dispute settlement procedures. The aim
to go well beyond WTO commitments and ensure a level playing field with
competitors in the region such as the US is therefore achieved.

Above all, the
agreement is an opportunity for the EU to provide an anchor for Colombia and
Peru's reforms to integrate the global economy, increase welfare and
consolidate their growth with a view to improving the living conditions of
their peoples. Other Members of the Andean Community are also encouraged via an
accession clause to take part in the trade agreement whenever they see fit.

The EU Member States were informed orally
and in writing on the process of the negotiations with Colombia, Peru and -
until it participated – Ecuador via the Trade Policy Committee of the Council.
The European Parliament has also been regularly informed on developments via
its Committee on International Trade (INTA). The complete text resulting from
the negotiations was circulated throughout the process to both institutions. A
detailed Trade Sustainability Impact Assessment (SIA) examining the Agreement's
potential economic, social and environmental effects has been conducted and
published in October 2009.

2.           Nature
and Scope of the Agreement

The trade agreement between the EU,
Colombia and Peru establishes the conditions for EU economic operators to take
full advantage of the opportunities and the emerging complementarities between
our respective economies. Over the course of its implementation, the Agreement
will fully relieve EU exporters of industrial and fisheries
products to Peru and Colombia from paying customs duties. It satisfies art.
XXIV GATT criteria (to eliminate duties and other restrictive regulations of
commerce with respect to substantially all trade between the parties) i.e.: 99%
of EU exports are covered (100% of our trade in industrial products in 10 years;
and c.85% of agriculture after 17 years). In addition, it will allow for the
dismantling of some difficult non-tariff barriers. Peru and Colombia, for their
part, will benefit from substantial new access to the EU market in particular
for their key agriculture exports: bananas, sugar and rum while the EU will
grant 100% duty-free coverage for industrial products and fisheries of
Colombian and Peruvian origin at entry into force.

On services and establishment as well as
public procurement coverage, the agreement is among the most ambitious ever
negotiated by the Commission. It includes substantial commitments on all key
sectors (notably financial services, telecommunications, transport) for cross-border
supply and establishment in particular, while the EU's concerns in terms of
temporary presence of natural persons for business purposes (mode 4) have been
dealt with satisfactorily. In procurement, the EU has obtained the commitment
of institutions at both central and sub-central level with reasonably low
thresholds.

The agreement also establishes a set of
disciplines which go beyond those agreed in the multilateral framework, notably
on intellectual property (e.g. 205 EU geographical indications protected, data
protection conditions clarified); sustainable development (the agreement is
GSP+ equivalent or above on labour and environmental issues and contains
specific commitments on sustainable fisheries); competition (disciplines on
monopolies and State Enterprises – transparency obligations on subsidies);
technical barriers to trade (WTO+ elements on market surveillance, transparency
in regulation procedures and disciplines on labelling and marking); Sanitary
and Phytosanitary measures (WTO+ measures on animal welfare, regionalisation,
approval of export establishments, on the spot inspections and import checks)
among others. In addition, the agreement establishes a Trade Committee as well
as a set of sub-committees to allow for consultations on specific trade
concerns under its different titles. A key added value of the agreement is
therefore to lock-in and promote – above and beyond those rules that derive
from the WTO framework – openness policies and respect for internationally
agreed best practices at the domestic level while securing a transparent,
non-discriminatory and predictable environment for EU operators and investors
in the region – in particular via the bilateral dispute settlement mechanism
foreseen under the agreement.

The agreement also includes a Title on
technical assistance and trade capacity building aimed at promoting
competitiveness, innovation and facilitating trade and technology transfers between the parties.

All the areas
covered by the trade agreement fall within the competence of the EU and, more
particularly, within the scope of Articles 91, 100(2) and 207 TFEU. Therefore,
the agreement should be signed by the European Union, pursuant to a decision of
the Council based on Article 218 (5) TFEU.

3.         Procedures

The Commission has judged the results of
the negotiations to be satisfactory and requests the Council:

–
to authorise the signature, on behalf of the European
Union, of the Trade Agreement between the European Union and Colombia and Peru.

2011/0245 (NLE)

Proposal for a

COUNCIL DECISION

on the signing, on behalf of the European
Union, of the Trade Agreement between the European Union and Colombia and Peru

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the
Functioning of the European Union, and in particular Articles 91, 100(2) and 207(4),
first subparagraph, in conjunction with Article 218(5) thereof,

Having regard to the proposal from the
Commission[1],

Whereas:

(1)       On 19 January 2009 the
Council authorised the Commission to negotiate a multiparty trade agreement on
behalf of the European Union with the Member Countries of the Andean Community
which shared the aim to reach an ambitious, comprehensive, and balanced trade
agreement.

(2)       Those negotiations have
been concluded and the Trade Agreement between the European Union and Colombia
and Peru (hereinafter referred to as "the Agreement") was initialled
on 23 March 2011.

(3)       The Agreement should be
signed on behalf of the European Union,

HAS ADOPTED THIS DECISION:

Article 1

The signing of
the Trade Agreement between the European Union and Colombia and Peru is hereby
approved on behalf of the European Union, subject to the conclusion of the said
Agreement.

The text of the Agreement is attached to
this Decision.

Article 2

The Council Secretariat General shall issue
the powers to sign the Agreement on behalf of the Union, subject to its
conclusion, to the person(s) indicated by the negotiator of the Agreement.

Article 3

This Decision shall enter into force on the
day of its adoption.

Done at Brussels, [...]

For
the Council

The
President

LEGISLATIVE FINANCIAL STATEMENT
FOR PROPOSALS HAVING A BUDGETARY IMPACT EXCLUSIVELY LIMITED TO THE REVENUE SIDE

1.           NAME OF THE PROPOSAL:

COUNCIL DECISION on the signing, on behalf of
the European Union, of the Trade Agreement between the European Union and
Colombia and Peru

2.           BUDGET LINES:

Chapter and Article: 12 0

Amount budgeted for the end of the
implementation period

3.           FINANCIAL IMPACT

 ̈      Proposal has no financial implications

x     Proposal has no financial impact on expenditure but has a
financial impact on revenue – the effect is as follows:

(€ million to one decimal place)

|| ||

Budget line || Revenue[2] || 12 month period, starting dd/mm/yyyy || [Year n]

Article ... || Impact on own resources || || 137.5

Article ... || Impact on own resources || ||

Situation following action

|| [n+1] || [n+2] || [n+3] || [n+4] || [n+5]

Article ... || || || || ||

Article ... || || || || ||

4.           ANTI-FRAUD MEASURES

The EU's customs legislation is designed to
ensure the correct application of all EU customs measures including the tariff
preferences laid down in this trade agreement, which also contains the
necessary provisions on the application of preferential rules of origin and
administrative cooperation (Annex II), assistance with enquiries (Annex V), and
the possibility, after consultations, of temporary withdrawal of tariff
preferences in the event of frauds and irregularities involving preferential
treatment (Annex III).

5.           OTHER REMARKS

This estimation is based on the average
imports for the period 2007-2009 and represents the annual loss in revenues due
to: 1/ full implementation of negotiated tariff preferences of the Trade
Agreement i.e.10 years after entry into force and 2/ initial levels of conceded
tariff rate quotas. During the previous years, revenue losses will be inferior
also bearing in mind the likely increase in imports of products that will have
duties reduced in stages and that will partly compensate the loss.

[1]               OJ C , , p. .

[2]               Regarding traditional own resources (agricultural
duties, sugar levies, customs duties) the amounts indicated must be net
amounts, i.e. gross amounts after deduction of 25 % of collection costs