WRITTEN QUESTION E-0901/97 by Jan Mulder (ELDR) to the Commission (12 March 1997)

Subject: Imports of flowers from Latin American countries

On 18 February 1997 an article appeared in the International Herald Tribune stating that the United States would be revising its position regarding the importing of cut flowers at zero tariff from Latin American countries, and specifically Colombia.

1. With which Latin American countries have agreements been concluded whereby cut flowers and other products can be imported into the European Union at zero tariff, in exchange for an official reduction in the production of cocaine and similar drugs in these countries?

2. What has the effect of these agreements been on exports of cut flowers and other products to the European Union in the past three years?

3. Does the Commission believe that these agreements have actually helped to reduce local production of drugs and their export, and on what does it base its view?

4. What steps, if any, does the Commission intend to take in response to these developments?

5. If the United States does decide to abolish the zero tariff for Latin American cut flowers, what effect does the Commission think this will have on Latin American flower exports to the European Union?

Answer given by Mr Marín on behalf of the Commission (24 April 1997)

1. It is not by virtue of any special agreement that the Commission allows a group of products from certain Latin American countries to be imported duty-free but under special arrangements as part of the generalized system of preferences (GSP) which is an autonomous instrument.

The countries concerned - the members of the Andean Community (Bolivia, Colombia, Ecuador, Peru and Venezuela) ((Venezuela from 1.1.1995, the other four from 13.11.1990. )), the Central American Common Market (Costa Rica, Guatemala, Honduras, Nicaragua and El Salvador) and Panama ((From 1.1.1992 for the six countries of Central America. )) - enjoy duty-free entry in respect of a list of products in the agriculture sector which includes cut flowers. Under the special arrangements, the Andean Community is also entitled to duty-free entry for products covered by the industrial chapter of the GSP.

They were granted the special arrangements in order to encourage the development and spread of lucrative, legal forms of production by promoting export outlets for them. The aim of the special arrangements is to diminish the influence of drug-trafficking on these countries by stimulating their economies and stabilizing the political and economic climate and the rule of law there. However, if a country fails for its part to make genuine efforts to combat the drugs problem effectively and shows inadequate progress, the Community may suspend in whole or in part the entitlement of the countries concerned to the special arrangements.

2. The special arrangements helped produce a substantial increase in exports from these countries to the Community. Between 1992 and 1994 ((All percentages given refer to data based on value. )) the Andean Community's originally relatively limited exports of cut flowers rose by 26% and those of the Central American countries by 80% whereas the increase in total EC imports from all sources barely exceeded 10%. Meanwhile, imports of the other products covered by the special preferences from the Andean countries and from Central America went up by 37% and 127% respectively.

3. A sufficiently long period of observation is required to verify the sustainable results of the process of introducing legal activities as an alternative to drug-related ones and the results of the updated, comprehensive study that it has set in motion are not yet available to the Commission. Certain indications tend to confirm that the special arrangements have led to the establishment of new job-creating activities and that flower crops, in particular, are taking over in the fields where coca used to be harvested. However, preferential market access is only one aspect of cooperation in the area of combating drug-trafficking whose success is conditional upon many other factors on which this purely commercial instrument has no direct influence.

4. If the beneficiary countries persevere with a dynamic policy to promote and step up the use they make of the advantages which the special arrangements offer, the Commission considers that they cannot fail to bring about the expected positive impact on socio-economic conditions in the countries concerned.

5. It would be unwise to predict the consequences of the abolition of the duty-free allowance granted by the United States. Suffice it to note that the US market is more of a mass market whereas the Community mainly imports top quality, and hence higher value products.