Proposal for a COUNCIL DECISION On the signature of a Political Dialogue and Cooperation Agreement between the European Community and its Member States, of the one part, and the Republics of Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama

(presented by the Commission)

EXPLANATORY MEMORANDUM

1. The attached proposals constitute the legal instruments for the signature and conclusion of a Political Dialogue and Cooperation Agreement between the European Community and its Member States, of the one part and the Republics of Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama:

(i) Proposal for a Council Decision on the signature of the Agreement;

(ii) Proposal for a Council Decision on the conclusion of the Agreement.

2. The European Union and Central America enjoy a comprehensive relationship that encompasses political dialogue, a broad cooperation framework and a favourable trade regime. The San Jose Dialogue forms the cornerstone of EU-Central American relations. It was initiated in Costa Rica in 1984 and renewed in Florence (1996) and in Madrid (2002). It can claim a notable historical success in that it was the key instrument in bringing about peace and re-establishing democracy in the region in the early 1990s.

Cooperation with Central America is currently carried out in the context of the 1993 Framework Cooperation Agreement. Historically, this cooperation has focussed on human rights and democracy, integrated rural development, disaster prevention and reconstruction, social development and regional integration. The sub-region has traditionally received the largest share in both absolute and per capita terms of EC cooperation with the Latin American region.

Trade relations between the European Union and Central America are dominated by the 'Drugs Regime' of the Generalised System of Preferences. In line with the March 2001 San Jose Declaration and the subsequently established EU-Central America Joint Working Group on Economic and Commercial Relations, Central America has underlined its desire to achieve greater stability and predictability in EU-Central America economic and commercial relations.

3. At the European Union-Latin America and the Caribbean Summit held in Madrid on 16/17 May 2002, the Heads of State and Government of the European Union and the Central American Republics of Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama decided to negotiate a Political Dialogue and Cooperation Agreement between the two regions. The draft Negotiating Directives for this Agreement were submitted to the Council in December 2002 and approved by the Council on 18 March 2003. The firs round of negotiations was held in Panama from 13 to 15 May 2003 and the second and concluding round of negotiations was held in Brussels from 29 September to 1 October 2003. The text of the Agreement was initialled by the Director General of External Relations of the Commission and the six Central American Ministers and Vice-Ministers of External Relations on 2 October 2003 in Brussels.

4. The new EU-Central America Agreement focuses solely on political dialogue and cooperation and does not contain a trade component. The main objectives of the Agreement are to: a) strengthen EU-Central American relations by developing political dialogue and reinforcing cooperation, and b) create the conditions under which, building on the outcome of the Doha Work Programme, a feasible and mutually beneficial Association Agreement, including a free trade agreement, could be negotiated between the parties.

The Political Dialogue Title institutionalises and strengthens the San Jose Dialogue process. The Cooperation Title is based on current cooperation with broadened coverage to include new areas of cooperation such as human rights, migration and counter-terrorism. Special emphasis is placed on cooperation in support of the process of regional integration in Central America. The Agreement builds upon and will replace the existing 1993 Framework Cooperation Agreement between the two regions.

5. 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 Community, of the Political Dialogue and Cooperation Agreement between the Community and the Republics of Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama; and

- to conclude the Political Dialogue and Cooperation Agreement with the Republics of Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama, on behalf of the Community.

The European Parliament will be called upon to give its opinion on this accord.

The Member States are also Parties to the Agreement, which therefore needs to be approved by them according to their internal procedures.

Proposal for a COUNCIL DECISION On the signature of a Political Dialogue and Cooperation Agreement between the European Community and its Member States, of the one part, and the Republics of Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community and in particular Article 181 thereof in conjunction with Article 300(2), first subparagraph, first sentence;

Having regard to the proposal from the Commission,

Whereas:

(1) On 18 March 2003 the Council authorised the Commission to open negotiations for a Political Dialogue and Cooperation Agreement between the European Community and its Member States, of the one part, and the Republics of Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama, of the other part;

(2) These negotiations have been concluded and the Agreement was initialled on 2 October 2003 in Brussels;

(3) Subject to its possible conclusion at a later date, the Political Dialogue and Cooperation Agreement should be signed on behalf of the Community.

HAS DECIDED AS FOLLOWS:

Sole Article

The President of the Council is hereby authorised to designate the person(s) empowered to sign, on behalf of the European Community, the Political Dialogue and Cooperation Agreement between the European Community and its Member States, of the one part, and the Republics of Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama. The text of the Agreement is attached to this decision.

Done at Brussels,

For the Council

The President