EN Official Journal of the European Union C 256/138

Opinion of the European Economic and Social Committee on ‘EU-Central America Relations’

(2007/C 256/24)

At the plenary session held on 17 January 2007, the European Economic and Social Committee decided, under Rule 29(2) of the Rules of Procedure, to draw up an own-initiative opinion on EU-Central America Relations.

The Section for External Relations, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 14 June 2007. The rapporteur was Mr Soares.

At its 437th plenary session, held on 11 and 12 July 2007 (meeting of 12 July), the European Economic and Social Committee adopted the following opinion by 63 votes, with 2 abstentions.

1. Conclusions and recommendations

1.1 For a number of years, the EESC has deemed relations between the European Union and Latin America to be part of a broader strategic framework which, as well as covering trade relations also reflects Europe's desire to assert its role as a valid partner in the process of building a social model based on the rule of law, democracy and respect for human rights, peace and solidarity between peoples (1).

1.2 Furthermore, from a historical point of view, relations with Latin America and the Caribbean represent much more than just the quest for an economic and geo-strategic partner. The people of Latin America have long-standing cultural, political, social, linguistic and emotional ties with Europe and even share a similar world view, which not only cannot and must not be forgotten but should, even more importantly, be fostered in light of the negotiating process that is about to begin.

1.3 Now that negotiations have started up between the European Union and Central America on securing an Association Agreement between the two regions, the Committee calls for efforts to concentrate on reaching an agreement rapidly and to the satisfaction of both sides; this can also provide an example for current and future negotiations with Latin America and the Caribbean as regards the mutual advantages of a strategic partnership with the European Union. These advantages must go far beyond trade and must be underpinned by economic and social progress and progress on sustainable development in the region, respecting the rule of law and the dignity of all human beings.

1.4 The EESC hopes that the negotiations will help to ensure that Central American governments step up dialogue with organised civil society in their countries. This dialogue should be democratic, transparent and based on practical proposals respected by both sides. The EESC also urges the Consultative Committee of the Central American Integration System (CC-SICA) a) to pursue its efforts to conclude agreements that enjoy the greatest possible consensus and reflect the stance of Central American civil society as a whole on the negotiations and b) to help secure the commitments needed to monitor the entire process.

1.5 The EESC recommends that negotiations take account of the following aspects:

1.5.1 The need to strengthen organised civil society in Central America, in particular by enhancing the institutional power of the CC-SICA as the consultative body of the Central American Integration System. The European Union should help to achieve greater recognition by its negotiating partners of the key role that the CC-SICA has played and indeed should play in achieving solid regional integration. At the same time, it should consider financial support measures for that body, in line with the objective adopted by the Commission in its document on regional cooperation.

1.5.2 The introduction of the social clauses needed to ensure that the Association Agreement benefits all of society and is a decisive factor in consolidating democracies, in combating poverty, social exclusion and unemployment and in developing a social model that does not make inequalities more widespread or marked. The Agreement should also help to improve social cohesion and respect for the environment's biodiversity (to this end the Agreement should contribute to the inclusion of the thousands of small producers seeking to achieve a more environmentally friendly form of farming). Furthermore, during negotiations and when subsequently implementing the Association Agreement, particular importance should be attached to full compliance by governments with the ILO International Labour Standards.

1.5.3 The existence of the Generalised System of Preferences (GSP), a unilateral EU instrument aimed at supporting the least-developed countries. The Agreement's trade chapter should consequently be more favourable to the countries of Central America than is provided for in the system referred to above which, it should be stated, is already quite favourable.

1.5.4 The need for organised civil society to be given regular, timely and relevant information so that it can monitor negotiations at institutional level. This should also entail a) the possibility of consultation prior to negotiating rounds so that the views of organised civil society can be taken into account and b) forums to be held involving a wider range of participants, with a view to ensuring that all of society is able closely to follow developments in these negotiations. Here, a key aspect of civil society participation should be the creation of a Joint Monitoring Committee to ensure institutionalised monitoring of all the negotiations and act as a bridge between the negotiating process and civil society in general.

1.5.5 Lastly, to ensure that organised civil society is genuinely involved in all aspects of the EU-Central America Association Agreement, the EESC recommends that the Joint Consultative Committee (JCC) — the institutional advisory body comprising EESC and CC-SICA members and provided for in Article 52(4) of the political agreement between the two regions — becomes operational immediately after the agreement is signed and is tasked with ensuring that the agreement is followed up.

2. Introduction

2.1 Broadly speaking, relations between the European Union and Central America have not been particularly intense to date, despite the European Union having made a decisive contribution to the process of bringing peace and democracy to the region and having launched a process of inter-ministerial dialogue that still provides a point of reference for the region today — the 1984 San José ministerial dialogue.

2.2 In 2003, the EU and Central America signed an agreement with a view to consolidating political dialogue and cooperation. More recently, the fourth summit of heads of state and government of the European Union and Latin America and the Caribbean, held in May 2006, expressed the will to move towards concluding an Association Agreement as swiftly as possible (2).

2.3 In April 2006, the ‘Vienna Declaration’, adopted at the 4th Meeting of EU-LAC Civil Society Organisations, stated that the Association Agreements between the EU and LAC (Latin America and the Caribbean) should not be limited to trade and the economy, but should also take political, cultural and social factors into account with a view to boosting social cohesion.

2.4 Likewise, the cooperation protocol signed between the EESC and the CC-SICA lays down guidelines for action for the two institutions ‘to promote the inclusion of a social dimension in the future Association Agreement between the EU and the SICA’, and to ‘support the initiative to work on the proposal to establish a joint consultative committee’ of civil society organisations from the two regions in the institutional framework of the future Association Agreement. Success in concluding an Association Agreement will depend greatly on civil society organisations in both regions being able to monitor negotiations effectively and keep society informed of the progress, problems and successes involved.

3. A new phase in EU-Central America relations

3.1 Political dialogue and cooperation and also trade relations between the European Union and Central America are currently defined by the Generalised System of Preferences which the EU launched in the 1970s and is today complemented by a special system to encourage sustainable development and good governance, including the fight against drugs trafficking (GSP+).

3.2 With a 12 % share of total trade, the EU is Central America's second largest trading partner after the USA (46 %). Where cooperation and development aid are concerned the EU is Central America's largest donor, providing funds worth EUR 563,2 million in the 2002-2006 period, to which EUR 74,5 million should be added, provided under the memorandum signed by the Commission and the SICA General Secretariat. In addition, the EU has supplied a further EUR 279 million in aid in the wake of the disasters that have devastated the region, in particular following Hurricane Mitch and the earthquake that subsequently shook El Salvador. The EU has pledged to increase development aid to EUR 840 m in the 2007-2013 period. European direct investment in Central America is also increasing.

3.3 Relations between the European Union and Central America are about much more than just trade and cooperation, however. They are also underpinned by a broader strategic vision that covers such currently sensitive aspects as security and the fight against terrorism, environmental protection and the development of a sustainable development model, migration and the need to monitor this phenomenon for the benefit of both the countries receiving exported workers and also those actually exporting them. One other aspect concerns establishing a new economic world order based on good governance practices that respect human, economic and social rights.

3.4 The decision, taken in Vienna in May 2006, to open negotiations with Central America with a view to securing an Association Agreement with Central America is, in itself, a challenge and an opportunity that must not be missed.

3.5 Given that the European strategy for concluding association agreements is based on inter-regional dialogue, it is important to analyse the current state of integration in Central America.

3.5.1 Central American integration is a project which has been around for a while, rooted in the very independence of the countries in the region. The 1991 Tegucigalpa Protocol and the 1993 General Treaty for Central American Economic Integration have breathed new life into the project.

3.5.2 Despite there being a majority consensus on regional integration, the fact is that very little significant progress has been made, either because it has been difficult to put decisions made at political level into practice, because of major economic weaknesses, or even because regional solidarity has been lacking. Nevertheless it can be said that, as of 2002, integration seems to have moved onto a more solid path (3).

3.5.3 However, the fragile nature of regional institutions, which impedes decision-making at supranational level, and the difference in the economic development levels of the countries in the region, together with the near absence of participation by the social sectors in decision-making and in raising awareness of the benefits of regional integration, are both factors obstructing more tangible progress in the integration process.

3.5.4 Despite the difficulties, however, there are grounds for some optimism regarding the process of regional integration, in particular the traditions and culture that unite the different countries, the existence of a relatively stable and committed legal and institutional framework and the need — sensed and also demonstrated — to reform some institutions, such as PARLACEN (4) for example, to ensure that strategies to establish regional policies are more effective. Greater awareness and involvement on the part of civil society are also grounds for optimism and confidence.

3.5.5 In the recent meetings between the EU/Central America Joint Committee, held in April 2007, Central American governments undertook to present, by the end of the Association Agreement negotiations, a legislative framework for the Central American Customs Union, together with a timetable for its implementation. This is an important and decisive step towards Central American integration and suggests that the two regions might be able to reach agreement.

3.6 The negotiating process now under way presents an extraordinary opportunity for mutual benefit in a variety of areas, which can and should be turned to good advantage. The following aspects might serve as examples:

3.6.1 Developing and strengthening the Customs Union and eliminating economic and customs barriers between countries in the region, a policy endorsed by the European Union, could significantly help Central American countries to develop their economies by improving their competitiveness in relation to their current and their potential economic partners. This will also facilitate potential European investment in the region and even the establishment of development cooperation;

3.6.2 Greater, more harmonious social cohesion will help to strengthen the young Central American democracies, making conflict less likely and boosting legal certainty, whilst allowing trade between the two regions to take place based on rules that are clear, consensual and respected. As shown by successive surveys conducted by the United Nations Economic Commission for Latin America and the Caribbean (ECLAC), a country's political, economic and social development largely depends on the level of social cohesion it is able to achieve. Hence the need to involve organised civil society in the entire negotiating process;

3.6.3 Another area of interest to both regions is how to find solutions aimed at preventing natural disasters, thus making the countries of Central America less vulnerable. The region frequently suffers from this type of phenomenon, with the attendant costs to human life and deterioration in living and working conditions for millions of people. Negotiations should take account of this so as to establish measures for prevention and action aimed at managing these phenomena. Such measures would also make it easier to provide aid in emergency situations and lower the costs of collective international assistance;

3.6.4 Lastly, and without any claim to covering this issue exhaustively, reference should be made to the EU and Central America's shared interest in the urgent need to protect the environment and diversity through tangible policies, programmes and action. Whilst the negotiations encourage the rational use of natural resources, rejection of methods and products harmful to nature, respect for agricultural workers' labour and union rights and recognition of the existence of areas of natural interest requiring protection, the Association Agreement will also have made a major contribution that is valuable not only to these two regions but also as a blueprint for a new type of association that can provide a template for other negotiations.

4. The political, economic and social situation in Central America

4.1 The countries of Central America are some of the poorest in Latin America, with serious economic development problems and a high degree of social vulnerability, jeopardising the social cohesion of each of the countries and the region as a whole. Extensive poverty and a highly unequal distribution of wealth contribute to this vulnerability.

4.2 Whilst this is a region where democracy is still relatively new and which has endured lengthy dictatorships and armed conflicts with far-reaching effects (the sole exception being Costa Rica), it is nevertheless possible to pinpoint some of the major constraints on its development: a) the still fragile nature of the democracies, including inadequate protection of basic rights, continuing impunity and corruption enjoyed by some parties and a lack of transparency in decision-making on economic and political matters and on public management; b) economic weakness, essentially due to the lack of competitiveness of various countries and vulnerability to changes on the international markets; c) weak social cohesion, mainly due to high poverty levels and inadequate wealth distribution, which does not allow the least fortunate strata of society to benefit from economic growth, causing people to look for other ways to survive, such as emigration and, at another level, social violence; d) environmental vulnerability on many sides, due to either the dangerous natural phenomena to which the region is exposed (earthquakes, floods, prolonged droughts) or irrational exploitation of natural resources, deforestation in particular. According to the United Nations Development Programme (UNDP), factors that make Central America more environmentally fragile include random and poorly thought-out spatial planning, excessive exploitation of water resources, the over-use of pesticides in farming and deforestation.

4.3 In economic terms, the Central American region has achieved some economic growth, but this has not been enough, however, to overcome the social challenges the region faces. In recent years, the average annual rate of regional growth has been between 3,2 % and 3,5 %. Nevertheless, in 2006, the poor competitiveness of Central America's economies, with the relative exception of Costa Rica and El Salvador, caused the countries in that region to rank low on the World Economic Forum's competitiveness list — 53rd (Costa Rica), 61st (El Salvador), 75th (Guatemala) 93rd (Honduras), and 95th (Nicaragua) — in a survey of 125 countries.

4.4 In social terms, it should be stated that Central American society is extremely complex and diverse, comprising indigenous communities and a sizeable community of African descent, which has generally been ignored, if not marginalised.

4.5 The indigenous communities are commonly associated with poor rural areas, but this ignores the significant phenomenon of migration towards towns and cities as a result of the increasing deterioration of rural economies, which has expanded the poverty belt around the major cities.

4.6 The communities of African descent, which are spread across all countries in Central America except El Salvador, have not received the political and social attention they deserve and have consequently suffered racial and social discrimination and discrimination in employment.

4.7 Gender inequality as measured by all socio-economic indicators is such a widespread phenomenon that it cannot be ignored. In terms of unemployment or precarious employment, the quality of employment or wages earned, or early school leaving, which mainly affects girls, the situation — extremely detrimental to women in Central American society — has reached near-tragic proportions, especially because a high percentage of these women are, for various reasons, heads of household.

4.8 The lack of up-to-date, reliable and comparable data on the situation of girls and women appears to reflect the scant attention paid to this issue, despite the fact that the region's governments have signed and ratified international conventions relating to this matter, such as ILO Conventions and the United Nations Convention on the Elimination of All Forms of Discrimination against Women. Violence against women (in its different forms, from domestic violence to violence in the workplace) is still a great cause for concern, despite the efforts undertaken by women's movements.

4.9 This poverty, affecting practically half of the population or more (except in Costa Rica), the incidence of undeclared work, standing at around 40 %, and the totally inadequate budgets allocated to social sectors such as health, education and unemployment, are regional characteristics that should be borne in mind so as to comprehend the lack of social cohesion in Central America.

4.10 It is also important to highlight the widespread lack of respect at political level for human rights. In particular, there is a clear lack of respect for labour and union rights, despite the fact that the different Central American countries have ratified many of the ILO Conventions — meaning, of course, that their governments have an even greater responsibility to comply with them. Exercising civic and union rights in the region is often done at great personal cost, and can even lead to lives being lost.

5. Criteria to take into account in negotiations for an EU-Central America Association Agreement

5.1 In the course of formalising a future Association Agreement, a number of criteria need to be highlighted which should be taken into account and, in the EESC's opinion, form key components which will be fundamental to the success, not only of this agreement, but also of a broader strategy for Latin America as a whole.

5.2 Discrepancies. One of the most important aspects to take into account is the fact that there are enormous discrepancies between the two regions in a number of areas, including surface area, population, GDP, trade relations and socio-economic development.

5.2.1 The existence of such major discrepancies between the two regions means that compensatory measures must be implemented if the Association Agreement is to succeed. The Agreement should, therefore, help to ensure that trade and cooperation policies are consistent with one another and have the same goals.

5.3 Boosting social cohesion. This should be one of the fundamental criteria for the future agreement, not only because social cohesion is an aspect of strategic importance to the European Union's approach to relations with third countries, but also because it holds the key to the very development of the Central American region, which is wrestling with enormous problems of poverty and social exclusion.

5.3.1 To achieve this, the necessary, appropriate steps must be taken to develop social policies such as education, health and social security, and in the field of taxation, amongst others, in order to ensure that all of society is able to benefit from the economic development and opportunities afforded by the Association Agreement.

5.4 Strengthening democracy and the institutions. In a society as diverse as that of Central America, and so devastated by poverty, long dictatorships and civil wars, it is important that the Agreement provide an opportunity to strengthen democracy, in particular participative democracy, and the institutions involved.

5.4.1 Institutions as diverse as those fighting to protect human rights, the rights of indigenous peoples or those of African descent and women's, workers' and environmental rights have been demanding greater participation in the political, economic and social decision-making processes, despite the difficulties they face in being heard as partners with full rights. The Agreement must be a factor in boosting recognition of their participation.

5.4.2 In the specific case of the CC-SICA, the Consultative Committee of the Central American Integration System, which is the body enshrined in Article 12 of the Tegucigalpa Protocol, its role as representative of organised civil society should be recognised and supported by giving it the logistical and budgetary resources it needs to carry out its tasks.

5.4.3 The EESC recognises the CC-SICA as its institutional partner, having concluded an agreement in April 2006 based on a shared commitment to uphold the principles of democracy, human rights and economic and social rights and on the desire to participate in dialogue and steps to establish closer economic and cooperation-based links between the European Union and the Central American Integration System.

5.5 Strengthening regional integration. Regional integration should be seen not only as a European demand for concluding a trade agreement, but also as an opportunity for the countries of Central America to address their economic weaknesses and take advantage of the synergies that integration can provide.

5.5.1 It would not be advisable to adopt an overly ambitious approach to this issue, however. Regional integration is a process that takes time and requires support and continuous effort. The Agreement should, therefore, provide for a range of mechanisms (including, amongst others, the creation of funds to compensate for customs tariffs and to support economic and social cohesion) to stimulate, support and facilitate the process of regional integration in Central America.

5.6 Giving the Association Agreement a social dimension. The Association Agreement contains three closely interlinked pillars — political, trade and cooperation — all of which are important, and negotiations should not focus overly on the one that might appear to be the most complex and difficult.

5.6.1 At the political level, the Association Agreement will have to set out practical measures to support good governance, take account of a social dimension which aims to achieve greater social cohesion, and contain clauses that take into account the role of women and the protection of human, employment and environmental rights and the rights of indigenous peoples and people of African descent.

5.6.2 The agreement will also have to tackle the issue of emigration from Central America, which can have both positive and negative repercussions for the countries of the region (remittances, brain drain and labour drain). This approach should also bear in mind the need for due respect for the dignity and rights of immigrants living and working in the European Union.

5.6.3 In terms of cooperation, the Agreement will have to provide for continued and even increased Community aid for the region's development and for overcoming its political, economic, social and environmental shortcomings. It can and, in the EESC's opinion, should provide for support for institutions specialising in particular areas, such as the ILO, UNESCO and WHO, enabling them to analyse progress on the more sensitive aspects.

5.6.4 In fact, in order to meet the expectations of the countries of Central America, which already have experience of other international agreements (in particular the CAFTA, signed with the United States), Europe must demonstrate that this Agreement has broader aims, in line with a global social vision, rooted in the founding principles of the EU itself, including an economic model that is capable of bringing about sustainable development in the region.

6. The EESC's recommendations

In light of the above, the EESC wishes to make the following recommendations:

6.1 The Association Agreement between the EU and the countries of Central America should be a political priority for the Union because of its strategic potential for the EU's activities with other Latin American partners.

6.2 This Agreement should give equal coverage to all aspects of the Agreement — politics, trade and cooperation.

6.3 It should take account of the fact that the EU's negotiating partner comprises the poorest countries of Latin America and that the huge discrepancies between the two regions require cooperation programmes to be strengthened, in order to avoid any potential detrimental impact; an appropriate degree of trade openness should also be secured.

6.4 It should contain measures to promote business competitiveness, ensure legal stability for investment and provide for instruments to compensate for the inevitable difficulties arising from the completion of the single Central American market due to the discrepancies between economies in the region itself.

6.5 The Agreement should make a decisive contribution to strengthening social cohesion in the region so that its benefits apply to everyone and not just to sectors already enjoying certain advantages.

6.6 It should contain a socio-labour dimension, in particular for complying with ILO rules. The Association Agreement should encourage the signatories to comply with the principles and values expressed in the ILO Constitution and its key social instruments, such as the Declaration of Fundamental Principles and Rights at Work (1998), the Tripartite Declaration on Multinational Enterprises and Social Policy (1977, amended in 2000) and the resolution of the International Labour Conference concerning trade union rights and their relation to civil liberties (1970).

6.7 It should contain a clear social dimension, not only to emphasise labour-related issues but also to protect the environment and enshrine the objective of securing comprehensive progress for the region and its peoples.

6.8 It should take account of the most vulnerable members of society, such as women, indigenous peoples and people of African descent.

6.9 It should set out the mechanisms necessary to ensure effective civil society participation right from the start of negotiations through to implementation.

6.10 Support should therefore be stepped up for organised civil society consultative bodies, in particular the CC-SICA, the institutional body for the integration process in the Central American region, to ensure that it has the human, logistical and financial resources necessary to carry out its duties.

6.11 The Joint Monitoring Committee for following the negotiations should also be set up without delay, comprising members of the EESC and the CC-SICA, who could be joined, by common agreement between the parties, by representatives of other organisations deemed to be necessary and relevant to analysing the negotiating process.

6.12 Lastly, discussions between the CC-SICA and the EESC should start immediately on the membership, duties and methods of the future joint consultative committee, the institutional advisory body that will monitor the upcoming Association Agreement.

Brussels, 12 July 2007. The President of the European Economic and Social Committee Dimitris DIMITRIADIS

(1) ‘Social cohesion in Latin America and the Caribbean’, OJ C 110, 10.4.2004; ‘EU-Mexico relations’, ‘EU-Andean Community relations’, OJ C 309, 16.12.2006.

(2) Point 31 of the final declaration of the Vienna Summit states: ‘Recalling the common strategic objective of the Guadalajara Declaration and taking into account the positive outcome of the joint assessment exercise on regional economic integration carried out with Central America, we welcome the decision taken by the European Union and Central America to launch negotiations for an Association Agreement, including the establishment of a Free Trade Area.’

(3) Exports between countries of the Central American region increased by about 60 % between 1995 and 2002. ‘Informe Centroamericano 2004’ — Inter-American Development Bank.

(4) Central American Parliament.