1.

Central American and Andean countries have become highly specialised in exporting products of Sector V (trees, plants and cut flowers) under the Community's Generalised System of Preferences (GSP) and particularly under its ‘special arrangements to combat drug production and trafficking (drugs regime)’. As a result of this and in line with agreed EU rules related to GSP, it is proposed to graduate countries such as Costa Rica and Colombia out of the GSP scheme for this sector. The ‘drugs regime’ is meant to assist the beneficiary countries in their struggle to combat illicit productions by providing them with export opportunities for substitution crops. This may also improve their sustainable development by fostering environmental protection and the respect of fundamental social rights. The Commission monitors each beneficiary country's efforts in combating drug production and trafficking. In addition, it is also called upon to evaluate each country's social development, in particular the respect and promotion of core labour standards, as well as its environmental policy. The Commission informs each beneficiary country of its evaluation and invites it to comment. It will also take into account the results of this evaluation when establishing guidelines for a scheme of generalised tariff preferences for the decade 2005-2014. Thus, the drug regime establishes a dialogue with the beneficiary countries, providing the Union with the possibility to stress the importance of sustainable development and the need to respect its principles. In this context, it is only at the end of the current GSP Regulation (i.e. 31 December 2004), that it will be possible to fully assess the progress made by these countries in the protection of labour standards, particularly in sectors such as the flower industry. As regards bilateral agreements, the Commission communication ‘Promoting Core Labour Standards and Improving Social Governance in the Context of Globalisation’ (1), suggested inclusion of core labour standards as an integral element, thus following the approach taken in the EC-ACP Partnership Agreement with the African, Caribbean and Pacific States (the Cotonou Agreement). Specifically, the agreement between the European Union and Chile signed in November 2002 includes a special section (Title V) on cooperation in social matters. The latter spells out commitments to promoting fundamental labour rights, taking into account the rules of the International Labour Organisation (ILO). It sets out among priority measures for cooperation in particular (Article 44): promoting human development, the reduction of poverty and the fight against social exclusion; developing and modernising labour relations, working conditions, social welfare and employment security; giving priority to education and training programmes aimed at vulnerable social groups. The agreement with Chile will in this respect serve as a model in current negotiations with Mercosur. Moreover core labour standards are part of the human rights clause, which forms part of bilateral co-operation agreements. In its Communication on The European Union's Role in Promoting Human Rights and Democratisation (2), the Commission proposed as part of the political dialogue discussing with partner countries how ratification of the fundamental human rights instruments and other rights-based international agreements (in particular ILO conventions) and their effective implementation could be pursued. The Commission believes that respect for social rights and core labour standards contribute to durable and equitable social and economic development.