Opinion of the European Economic and Social Committee on EU-Andean Community relations
Date: 2006-07-05
Institutions: European Economic and Social Committee
Subjects: Andean Community countries, EU relations

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Opinion of the European Economic and Social Committee on EU-Andean Community relations

(2006/C 309/18)

On 14 July 2005 the European Economic and Social Committee decided to draw up an opinion on:, under
Rule 29(2) of its Rules of Procedure, on EU-Andean Community relations.

The Section for External Relations, which was responsible for preparing the Committee's work on the
subject, adopted its opinion on 1 June 2006. The rapporteur was Mr Moreno Preciado.

At its 428th plenary session, held on 5 and 6 July 2006 (meeting of 5 July), the European Economic and
Social Committee adopted the following opinion by 156 votes to two, with ten abstentions.

1. Introduction

1.1
The final declaration adopted by the Third Meeting of
EU-Latin American-Caribbean civil society proposed the ‘…
establishment of a genuine partnership based on a network of
agreements between the European Union (EU) and the various
bodies in the region’, and calls for negotiations to be opened
with the Andean Community (1).

1.2
The Guadalajara declaration adopted by the Third
Summit of Heads of State and Government of Latin America
and the Caribbean and of the European Union (2) considered it
to reach an EU-Andean
their ‘common strategic objective’
Community association agreement (like those already reached
with Mexico and Chile and currently under negotiation with
Mercosur) that would include a free trade area.

1.3
This EU-Latin America-Caribbean Summit also decided
to carry out a joint assessment of the state of economic integra-
tion in the Andean Community, which was begun in January
2005.

1.4
Thus far, the EU Member States have not taken advan-
tage of the economic and trade potential of the Andean Com-
munity; despite the EU being its second largest trading partner
after the USA, trade has not reached significant levels. The
Andean Community's efforts to further integration (despite the
difficulties
and limitations mentioned in this document)
increase the prospect of an association agreement, which could
greatly boost trade between the EU and the Andean Com-
munity, as has already proved to be the case in other areas.

1.5 Moreover, in the context of its relations with Andean
civil society, the EESC maintains regular relations with the two
bodies representing social players from the entire region: the
Andean Labour Advisory Council (Consejo Consultivo Laboral
Andino — CCLA) and the Andean Business Advisory Council
(Consejo Consultivo Empresarial Andino — CCEA).

(1) Mexico City, 13-15 April 2004. Also known as the Andean Com-

munity of Nations, although this is less common.

(2) Guadalajara (Mexico), 28-29 May 2004.

1.6
On 6 and 7 February 2006, the EESC, together with the
General Secretariat of the Andean Community, held a hearing
in Lima. The Labour and Business Advisory Councils took part,
as well as other Andean civil society associations, whose valu-
able contributions have been incorporated into this document.
The participants welcomed the opening of negotiations with
the EU, although they warned that the association with the EU
the imbalances between the two
should take account of
regions, avoid models of dependent development and help to reduce
social debt in the region and promote effective social cohesion.

This opinion will serve to inform the authorities of the
1.7
position of organised civil society towards relations with the
Andean Community,
in line with the proposals of the Final
Declaration of the Fourth Meeting of EU-Latin American-Carib-
bean civil society organisations held in Vienna in April 2006
(which reiterated the need for the EU to help strengthen the
integration processes in Latin America), and the final recom-
mendations of the Summit of EU-LAC Heads of State and
Government (May 2006) on the possibility of an EU-Andean
Community association agreement, referred to in the Final
Declaration:

Recalling the common strategic objective established in the
Declaration of Guadalajara, we welcome the decision
adopted by the EU and the Andean Community to initiate
during 2006, a process leading to the negotiation of an
Association Agreement which will
include political
dialogue, cooperation programmes and a trade agreement.

2. The situation in the five Andean nations

2.1
It is hard to give a concise summary of the situation of
five countries which, despite their common geographical loca-
tion (the Andes mountains), vary greatly in terms of economic
levels, demography, political trends, etc. This document will
therefore only highlight some of the more noteworthy aspects
of each country's current situation.

2.2
Bolivia is the poorest of the five Andean partners, and is
one of the least advanced countries in all Latin America. This is
partly due to its lack of direct access to the sea, although there
are other contributory factors, such as its low population (more
and more of whom are emigrating), the lack of land suitable
for competitive farming, traditional dependence on undiversi-
indigenous peoples
fied natural resources,

the exclusion of

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(who account for over half of the population) and growing
tensions between the traditional centre of political power on
the high plateau and emerging areas of economic power in the
eastern plains. Bolivia has managed to find democratic solu-
tions, but the prolonged situation of uncertainty has hampered
its economic development. The new government, which took
up office in January 2006, is carrying out extensive reforms in
order to find the right path for development, but without
undermining the legal certainty of investments and compliance
with the international and bilateral agreements currently in
force.

2.3
The situation in Ecuador has a lot in common with
Bolivia, with a large indigenous population and considerable
political and cultural differences between the coastal plain and
high plateau. Although in recent years it has not suffered the
same degree of open social conflict, political
instability has
been even greater. 49 % (3) of the population lives below the
poverty line. The economic crises of the last decade and the
‘dollarisation’ of the economy have contributed to the country's
high poverty levels, as has the emigration of 10 % of its active
population. Remittances, which totalled USD 1,74 billion in
2004, constitute the second greatest source of foreign currency
income, after oil.

2.4
Peru has followed a different path, undergoing a period
of terrorism (in the eighties and early nineties) followed by a
government
(during Fujimori's presidency) which became
authoritarian and corrupt. Although the economy is growing
fairly quickly, the current government has not managed to set
up a sound programme of political and social reform, and
enjoys very little popular support. When it comes to the
Andean Community, whose General Secretariat is headquar-
tered in Lima, Peru has shown some reluctance towards certain
aspects of subregional integration.

3. Andean integration

3.1 Institutional development

The Andean Community is the oldest model of inte-
3.1.1
gration in South America.
Its founding countries (Bolivia,
Colombia, Chile, Ecuador and Peru) signed the Cartagena
Agreement in 1969, creating what was then called the Andean
in 1976,
Pact. Three years later, Venezuela joined the Pact;
Chile withdrew. The current five members (Bolivia, Columbia,
Ecuador, Peru and Venezuela) have a combined population of
120 million and a total GDP of approximately USD 265
billion. The internal market is worth around USD 8.6 billion.

3.1.2
In its 35 years of existence, the group has moved from
a protectionist model (based on the replacement of imports), as
was common in the 60s and 70s, to a model geared towards
‘open regionalism’. Meanwhile, it has undergone various institu-
tional reforms designed to take it towards an ever-closer model
of integration, culminating in the creation of the Andean Com-
munity in 1997. As a result, the Andean Community has a
highly developed institutional structure, and a fairly compre-
hensive body of Community legislation.

The purpose of

3.1.3
the Andean Integration System
(Sistema Andino de Integración — SAI) (5), which was estab-
lished under the Trujillo Protocol in 1996, is to ensure coordi-
nation between its bodies, in order to deepen and strengthen
Andean integration. The System is made up of intergovern-
mental, Community bodies that have executive,
legislative,
jurisdictional, decision-making and tax-levying powers.

The case of Venezuela (4) is monitored throughout the
2.5
region and elsewhere in the world: in recent years the country
has suffered serious social and political tensions, with intense
rivalry between the followers and detractors of President
Chávez. Venezuela's economy is increasingly dependent on oil
exports, whose international price is high, enabling the govern-
ment to develop an active international policy and devote a
substantial budget to internal policies.

3.1.4
The System has two main decision-making bodies: the
Andean Council of Foreign Ministers, and the Commission of
the Andean Community, both of which are intergovernmental.
The Commission's role is to draw up economic, trade and
investment legislation. The Andean Council of Foreign Minis-
ters deals with all aspects not in the remit of the Commission,
particularly political, social and environmental issues, migration
the
policy,
external activity of the various Community bodies.

free movement of people, and coordination of

Despite suffering great political and social violence,
2.6
exacerbated by drug trafficking, Columbia has managed to keep
its democratic institutional structure intact, an uncommon feat
in Latin America;
its
economic progress is also noteworthy. However, despite the
the murder and
relative decrease in violence in Colombia,
kidnapping of
journalists, businessmen and
members of other human rights associations continue.

in addition to these political efforts,

trade unionists,

The highest political body of the Andean Integration
3.1.5
System is the Andean Presidential Council, comprising the
heads of state of the member countries. It expresses its opinion
through Declarations or Guidelines that set the pattern for the
System's other bodies and institutions. The presidency of the
Andean Presidential Council changes halfway through each
year, in alphabetical order, and this rotation also applies to the
other intergovernmental bodies.

(3) United Nations
(15.10.2003).

Statistics Division Millennium Indicators

(4) This document (and the indicators contained in it) has been drawn
up considering Venezuela to be a member of the Andean Com-
munity.

(5) In principle, the Andean Community refers to the set of institutions
and bodies, including the Member States, while the Andean Integra-
tion System refers to the relations between those bodies. However,
in practice, there is no clear distinction between the Andean Integra-
tion System and the Andean Community of Nations.

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3.1.6
The General Secretariat of the Andean Community
(Secretaría General de la Comunidad Andina — SG-CAN) is
worth noting among the Community bodies and institutions of
the Andean Integration System. It is based in Lima, Peru (6),
and acts as a technical support body for the intergovernmental
institutions. It has legislative powers in certain areas (adoption
of resolutions), the right of initiative and other specific tasks.

3.1.7
Other Community bodies include the Court of Justice
of the Andean Community and the Andean Parliament, while
the recognised complementary institutions include the Andean
Business Advisory Council and Andean Labour Advisory
Council, the Andean Development Corporation (Corporación
Andina de Fomento — CAF), the Latin American Reserve Fund
(Fondo Latinoamericano de Reservas — FLAR),
the Simón
Rodríguez and Hipólito Unanue Agreements and the Simón
Bolívar Andean University.

3.2 Current state of Andean integration

3.2.1
Any assessment of Andean integration should take
two points into consideration. Firstly, although the Andean
Community has been in existence for over three decades, it still
consists of
five developing countries (with an average per
capita income of EUR 2 364, against an EU-25 average of
EUR 20 420), with all the implications that this has in institu-
tional and economic terms.

3.2.2
Secondly, and in relation to the above, although the
conventional aspects of integration (those relating to the crea-
tion of a common market) may not seem very advanced in the
Andean Community, other areas are fairly well developed. In
spite of the difficulties holding back trade integration, other
dimensions of the Andean Community (cultural, social, finan-
cial, etc.) have been strengthened.

3.2.3
In order to understand how the Andean Community
works, it is usual to start by looking at economic integration.
In this respect,
the Andean Community has had a bumpy
history. It did not manage to create a free trade area until
1993, which Peru immediately opted out of. The plan to create
an Common External Tariff for all members has still not been
completed, although there has been progress towards trade
harmonisation. In this context, in order that both sides fully
benefit, it is essential that, in the future EU-Andean Community
association agreement, the countries of the Andean Community
develop a real customs union.

3.2.4
This limited progress with a regulatory architecture
has resulted in reduced levels of intra-Community trade, which
varies greatly from one year to the next. During the 90s, trade
increased considerably between Andean Community members,
rising from 4,1 % of the total in 1990 to 14,2 % in 1998 (7).
However, in comparison with the trade levels recorded within
the group in the 70s, this figure is still low, remaining under
the Latin American average (20,2 %). Since 1998, trade within

(6) Article 30 (a) of the Agreement.
(7) Data from the Economic Commission for Latin America and the
Caribbean (ECLAC), Latin America and the Caribbean in the world
economy, 2004. Trends 2005. Santiago de Chile, 2005.

the Andean Community has been on the decrease (10,4 % in
2004), although an upturn was registered in 2005.

3.2.5
Internal trade in the Andean Community has been
lower than trade with the USA (46,6 % of total trade in 2004)
and is almost equal to trade with the European Union (11,0 %
in 2004). Three of the Andean Community's current five part-
ners send less than 12 % of their exports to the subregional
market.

3.2.6
Although some progress has been made with integra-
tion, there have been many difficulties, caused partly by a lack
of political will, together with other factors such as market
structure, differences between economic models, different levels
of economic development, geographical location (which makes
trade within the Community difficult), and internal political
problems. Despite all
the Andean Community has
managed to stay on the path towards integration for over three
decades. The lack of modern communication and transport
infrastructure linking the five Andean countries is one of the
biggest obstacles to the completion of an intra-Community
market and the general development of
the Andean Com-
munity.

this,

3.2.7
Importantly, the Andean Community countries show
little commitment when it comes to coordinating their external
relations. Bolivia and Venezuela have moved closer towards
Mercosur, while Peru and Colombia have signed free trade
agreements with the USA.

3.2.8
These disparities were heightened on 22 April 2006
when Venezuela announced it was leaving the Andean Com-
munity. This,
the FTAs, has
together with the signing of
sparked a deep political crisis within the Andean Community,
which will be addressed during an extraordinary summit.

3.3 Challenges of social cohesion

3.3.1
Nonetheless, as stressed earlier in this opinion, the
Andean Community of Nations does not stop at trade integra-
tion. There has always been a broader aspiration to incorporate
the political and social dimensions into the Andean integration
process. This is a reflection both of the recent struggle for
democracy experienced by many of the countries, and of the
need to strengthen the Andean voice in the Latin American
arena and beyond. It is also a product of the socio-economic
reality of the Andes.

3.3.2
The statistics on the lack of social cohesion are over-
whelming: 50 % of Andeans — some 60 million people — live
beneath the poverty line. The five Andean Community nations
are among the most unequal in the world (in accordance with
the Gini index), not only in terms of income but also as regards
other forms of exclusion,
through ethnicity, race, place of
origin, etc.

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it

Here,

is important

3.3.3
to stress the high levels of
informal work, internal and external migration (which greatly
affects women), and other phenomena such as the marginalisa-
the indigenous populations which form significant
tion of
minorities (Ecuador and Peru) or majorities (Bolivia)
in the
region. It is also in this region that most of the world's cocaine
is produced, contributing to illegal economies and high levels
of population displacement, violence and corruption which, in
Columbia's case, come in addition to a long history of armed
conflict.

3.3.4
Against this backdrop, trade liberalisation cannot be
the only instrument for boosting cohesion between Andean
countries. The new Strategic Design spearheaded by the
General Secretariat of the Andean Community (8) places less
emphasis on dismantling tariffs and more on other challenges
such as
intellectual property,
removing non-tariff barriers, infrastructures, free movement of
people, energy, the environment and security.

improving competitiveness,

One of the focuses of this new strategic plan, which
3.3.5
proposes integration for development and globalisation,
is
social development. To this end, one of the Andean Communi-
ty's most important initiatives of recent times has been its Inte-
grated Social Development Plan (9) (Plan Integrado de Desar-
rollo Social — PIDS), which was adopted in September 2004
in order to tackle poverty, exclusion and social inequality in
the area. In the medium term, the PIDS could form the basis of
a general social (and economic) cohesion strategy. The open
method of communication, used by the EU in the social
context, is of great interest to the Andean Community, and the
idea of a social fund similar to the EU Structural Funds is also
an attractive option. This means that the Andean Community
is the first subregion that intends to adopt aspects of the Euro-
pean social model.

The social dimension has proved to be an increasingly
3.3.6
common theme in political declarations and Andean Com-
munity decisions since 1999 (10), and in the last five years,
certain specific initiatives have begun to take shape.

(8) See, for example, Globalization through Integration, Speech by the
Secretary-General of the Andean Community, Ambassador Allan
Wagner Tizón, during the official swearing-in ceremony Lima, 15
January 2004 (available at:
http://www.comunidadandina.org/index.asp).

(9) See text at:

http://www.comunidadandina.org/normativa/dec/DEC601.pdf

(10) Article 1 and Chapter XVI of

the Cartagena Agreement on
economic and social integration and cooperation; Andean Social
Charter, adopted by the Andean Parliament in 1994 but not yet
ratified by the governments; Cartagena Declaration of the XI Presi-
dential Council
instructing the Council of Foreign Ministers to
present a proposal for participation of civil society in addition to
business and labour participation stipulated in Decisions 441 and
442; Andean Presidential Dialogue on Integration, Development
and Social Cohesion, Cuzco, 2004.

3.3.7
The Andean Presidential Dialogue on Integration,
Development and Social Cohesion recognised that within the
context of their internationalisation efforts, the Andean econo-
mies should strive to diversify production and achieve inclusive
competitiveness in a process that would incorporate micro,
small and medium-size businesses, promote cooperative and
Community efforts, and create favourable conditions for local
development and regionalisation through the use of territorial
development approaches.

3.3.8
The General Secretariat of the Andean Community
states that the main Community objectives are globalisation
with integration, development with competitiveness and social
inclusion, and social cohesion with the reinforcement of demo-
cratic governability. The pending social agenda covers all these
issues and will be viable provided that it prioritises the Andean
region in trade liberalisation negotiations with third parties,
particularly those negotiations which could, by definition,
cause greater imbalances in the region and within Andean
societies (which are characterised by the exclusion of certain
sectors on ethnic and gender grounds).

4. Civil society involvement in the Andean institutional

framework

4.1 The Andean Business and Labour Advisory Councils

4.1.1
Although the Andean integration process is several
decades old, civil society participation was only formalised
during the most recent phase in the Andean Community's
history, with the creation of the Andean Labour and Business
Advisory Councils. Previously, employers and trade unions, as
players in Andean integration, had had little opportunity to
participate on a regional level, although they had been involved
in Andean integration via the national governments.

The Andean Labour Advisory Council

4.1.2
(CCLA) was
created by Decision 441 (11), and comprises four delegates from
each of the Andean countries. These top-level delegates and
their alternates are chosen from among the heads of the repre-
sentative organisations in the labour sector designated by each
country. The most representative trade union federations and
confederations from each country participate in the Andean
Labour Advisory Council. At present 16 federations are repre-
sented from the five countries (12).

4.1.3
The Andean Business Advisory Council (CCEA) was
created by Decision 442, and is made up of employers' organi-
sations operating in the Andean region, comprising four top-
level delegates elected from among the heads of the representa-
tive employers' organisations of each of the Andean countries.

(11) Cartagena de Indias, Colombia, 26 July 1998.
(12) MARCOS-SÁNCHEZ, José, La experiencia de participación de la soci-
edad civil en el proceso de integración andino (The experience of civil
society participation in the Andean integration process), 1st EU-
Mexico Civil Society Forum, Brussels, Belgium, March 2005.
http://europa.eu.int/comm/external_relations/andean/conf_en/docs/
jose_marcos-sanchez.pdf.

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The tasks of both Advisory Councils were redefined by
4.1.4
Decision 464 (13) which states that
they can express their
opinion to the Andean Council of Foreign Ministers,
the
Commission or the General Secretariat, attend the meetings of
the Andean Council of Foreign Ministers and the Commission
of the Andean Community, as well as the meetings of govern-
ment experts or working groups connected with the Andean
integration process, and participate in them with a right to
speak.

4.1.5
The Andean Labour Advisory Committee has drawn
up many opinions to date, some of which relate to the Andean
Community's social agenda or external agenda. In particular, it
is worth noting Opinion No. 27 (14) on Following up the
conclusion of a possible association agreement between the EU
and the Andean Community, in which the CCLA ‘shares expecta-
tions for progress towards a political, economic and social alliance
with the EU’.

4.1.6 Meanwhile, the CCEA stressed, in one of its declara-
tions (15), that ‘the issue of association with the EU is essential; the
publicity given to these negotiations with the EU must be carefully
designed so as not to endanger these negotiations.’

Both the CCLA and the CCEA have stressed the need
4.1.7
to step up cooperation with other civil society players in the
Andean region, on the one hand, and with the European
Economic and Social Committee (EESC) on the other, in order
to coordinate common positions and boost initiatives aimed at
guaranteeing basic labour standards in all agreements between
the EU and the Andean Community.

4.2 Other methods of participation

4.2.1
In addition to the aforementioned forums for institu-
tional representation of civil society, the Andean Community
has other participatory instruments for social policy, such as
the Simón Rodríguez Agreement
(1973; one of the ‘Social
Agreements’ (16)), which consists of a tripartite forum for
debate, participation and coordination between labour minis-
ters, employers and workers, in order to address socio-occupa-
tional policies at regional level..

4.2.2
This Agreement was one of the first instruments of
Andean socio-occupational integration, and directly addressed
the issues of social and labour development. The implementa-
tion of the Agreement was not devoid of success, attracting
constant
the sectors interested in making
progress in the socio-occupational field. However, on balance,
it is clear that adverse — mainly institutional — circumstances
had a strong impact on the integration process and, in 1983,
the Agreement came to a standstill.

from all

interest

adopted by the Andean Presidential Council on 24 June 2001.
The Agreement aims:

a) To put forward, and debate on, proposals on topics linked
with the social and labour environment, which may signify
an effective contribution to the development of the Subre-
gion's Social Agenda, contributing to the activity of the
other bodies of the Andean System of Integration.

b) To define and coordinate Community policies on promotion
of employment, vocational and labour training, health and
safety in the workplace, social security, labour-related migra-
tion; as well as any other topics that the Member Countries
may deem fit;

c) To propose and design activities for cooperation and coordi-
nation among the Member Countries on Andean social and
labour issues.

4.3 Role of NGOs and civil society organisations

4.3.1
National and global social dynamics are not excluded
from the Andean dimension: in addition to the labour situation,
the interests of society are also represented in other ways,
based on specific areas such as human rights, rights of indi-
genous populations, women's rights, culture, the environment,
consumers, family farming and smallholdings, etc.

4.3.2
These particular interests are represented in numerous
‘various interests’ organisations which already play a very active
role in regional integration. Their role will become even more
important in view of the future EU-Andean Community asso-
ciation.

The importance of other types of civil society organi-
4.3.3
sation is also worth noting, whether they be associations or
movements (of
for example) and non-
governmental organisations (NGOs), platforms and networks of
NGOs, coalitions or platforms for action, research centres,
universities, etc.

indigenous peoples,

4.3.4
The social dynamic of these movements and of ‘non-
organised’ civil society is very active in the Andean region,
although its organisation and activities are often restricted to
the national level, or it is unable to find channels for access or
participation in the formal Andean integration system. In this
context, the General Secretariat of the Andean Community has
announced the forthcoming creation of a subregional Andean
network of academic bodies and NGOs.

The Agreement took on its current format with the
4.2.3
Protocol of Substitution of the Simón Rodríguez Agreement

(13) Cartagena de Indias, Colombia, 25 May 1999.
(14) CCLA, Lima, Peru, 7 April 2005.
(15) 7th ordinary meeting of the CCEA (Lima, April 2005).
(16) Others being the Andrés Bello Agreement, which tackles education
policy in the Andean Region, and the Hipólito Unanue Agreement,
which addresses health policy.

4.3.5
In order to help bring these other players within the
formal dynamic of the Andean integration process, the Andean
Community created various Working Groups. The Working
Group on the Rights of Indigenous Peoples (17) was established
as a consultative body within the Andean Integration System to
promote the active participation of indigenous peoples in the
economic, social, cultural and political spheres of subregional

(17) Decision 524, 7 July 2002.

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integration. The Working Group deals with delicate issues such
as the occupancy of communal and indigenous lands, rural
communities and production, economic development, social
equality and political involvement, cultural identity and institu-
tionalisation, etc.

The Andean Working Table on Consumer Rights (18)
4.3.6
was also set up as an advisory body within the Andean Integra-
tion System. Its aim is to promote the active involvement of
public and private institutions working in the field of consumer
rights in the Andean Community member states in the social
consultation and decision-making processes relating to regional
integration in their areas of interest.

These advisory bodies (19) are not allocated any of the
4.3.7
Andean Community budget to support their operation. There-
fore, the only organisations able to participate are those that
can mobilise their own personnel and resources in order to
attend meetings of Andean Community Working Groups and
bodies.

against drug-trafficking. The EU wanted to offer a different
approach to that of the USA, which focused on crackdown
tools. This approach was twofold: firstly,
in response to a
request from the Andeans themselves, it was agreed that the
Generalised System of Preferences would be extended to
include the Andean countries via a special scheme, GSP-Drugs,
which allowed 90 % of Andean products to enter the EU
without tariffs. Secondly, a High-Level Specialised Dialogue on
Drugs was set up.

5.1.5
The 1993 agreement was quickly superseded by a new
framework for relations which the EU began to promote
during the mid-90s, when fourth-generation agreements were
negotiated with Mercosur, Chile and Mexico. These texts were
drawn up as the first step towards association agreements that
would incorporate a free trade agreement. The Andean Com-
munity was hoping for a similar agreement, but the EU felt
that it would be better to work gradually towards that goal,
starting with an intermediate agreement; the EU's proposal was
adopted at the Second EU-Latin America-Caribbean Summit
held in Madrid in May 2002.

5. EU-Andean Community relations

5.1 The first EU-Andean Community agreements

5.1.1
The first Cooperation Agreement between the Euro-
pean Community and Latin America was signed with the
Andean Pact in 1983, 14 years after the latter was set up.

The agreement formed part of the so-called ‘second
5.1.2
generation of cooperation agreements’. Unlike the first genera-
tion, which was essentially trade-based (and non-preferential),
this new generation of agreements was more comprehensive,
including political and cooperation-related aspects, which
would become key in later agreements. These treaties were also
a clear indication of the importance that the European Com-
munity gave to regional integration in Latin America.

In 1993,

5.1.3
The dynamism of EU-Latin American relations in the
80s soon sparked the need for a new generation of agreements,
as from 1991.
the EU signed a third-generation
Framework Agreement with the Andean Group. One new
feature of this agreement was the inclusion of a ‘democratic
clause’ expressing the joint commitment to democracy, and a
‘future developments’ clause which would allow for coopera-
tion areas to be extended.

5.1.4
In tandem, another issue was bringing relations with
the Andean Community to the fore in the 1990s: the campaign

(18) Decision 539: Andean Working Group on the Participation of Civil
Society for the Defense of Consumer Rights, Bogota, Colombia, 11
March 2003.

(19) A consultative working table of local authorities was also set up.

5.2 The 2003 agreement: an intermediate step

5.2.1
On 15 December 2003, the EU-Andean Community
Political Dialogue and Cooperation Agreement was signed.
While this was a step up from the previous agreement, it did
not quite live up to the expectations of the Andean coun-
tries (20). One of the problems that the Andeans had with this
model was that it did not improve access to the EU market.
this agreement does include one important new
However,
feature:
It also
includes new fields
for biregional cooperation (migration,
terrorism, etc.) and boosts civil society involvement therein (21).

the institutionalisation of political dialogue.

5.3 EU-Andean Community trade

As

illustrated in the table below,

5.3.1
trade relations
between the EU and the Andean Community have experienced
a degree of stagnation. Although the EU is currently the
Andean's second biggest trading partner,
it barely represents
12-13 % of
trade, compared to the
USA's 40 %. Andean exports to the EU dropped from 19 % of
total exports in 1994 to 12 % in 2004. As a supplier, the EU
generated 19 % of Andean Community imports in 1994,
compared to 13 % in 2004.

the region's external

(20) Some authors refer to the agreement as ‘third generation plus or
fourth generation minus’ in reference to its intermediate position
between the 1993 agreements and those signed with Mercosur,
Chile and Mexico:
‘Un nuevo
marco para el refuerzo de las relaciones entre la Unión Europea y
la Comunidad Andina’ (A new framework for strengthening rela-
tions between the European Union and the Andean Community),
Revista de Derecho Comunitario Europeo, 1989, No 17, January-April
2004.

Javier Fernández y Ana Gordon,

(21) Article 52(3) of the Agreement provides for the creation of a
Consultative Committee to ‘promote dialogue with economic and
social organisations of organised civil society’.

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EU TRADE WITH THE ANDEAN COMMUNITY

Imports (Imp.)

Exports (Exp.)

Volume

Yearly
% change

Share of total
EU imports

Volume

Yearly
% change

Share of total
EU imports

8 153

8 863

8 853

7 911

8 904

8,7

-0,1

-10,6

12,6

2,2

0,82

0,90

0,94

0,84

0,87

7 020

7 908

7 085

5 586

5 988

0,82

0,89

0,79

0,64

0,62

12,6

-10,4

-21,2

7,2

-3,9

(millions of Euros)

Balance
(for EU)

Imp+Exp

-1 134

15 173

-955

16 771

-1 768

-2 325

-2 916

15 938

13 497

14 892

-0,5

2000

2001

2002

2003

2004

Average annual growth %

Source: Eurostat

5.3.2
The EU is the biggest source of direct investment in
the Andean Community, although flows have decreased steadily
since 2000 when they reached over USD 3.3 billion, against
barely USD 1 billion in 2003.

5.3.3
The outlook for trade relations looks uncertain. The
new GSP that came into force in 2006 does not seem to bring
any significant increase in access to the EU market, although it
does raise the number of products covered. Also, the extension
of the scheme to ten years allows for greater predictability
(which could boost investment). In this context, an association
agreement would help to forge much stronger economic links
between the EU and the Andean Community.

5.4 Towards an association agreement

5.4.1
Despite some significant progress, EU-Andean Com-
munity relations could become deadlocked in their current
state — characterised by fairly substantial cooperation but stag-
nant economic links, and political dialogue with an institutional
framework but no shared agenda. Therefore, despite the
current difficulties, the EESC proposes that steps be taken as
soon as possible towards an association agreement like those
signed with Chile and Mexico and currently being negotiated
with the Mercosur countries.

5.4.2
This agreement would include a free trade agreement,
broader political dialogue and new cooperation possibilities. It
should also include a more ambitious social dimension, with
greater opportunities for the involvement of social players and
civil society.

5.4.4
The European Union finally agreed to consider this
in Guadalajara
the Third Biregional Summit
possibility at
(Mexico) in May 2004, but it included a series of prior condi-
tions (for example, any free trade agreement would take
account of the results of the Doha Development Programme
and a sufficient level of Andean regional economic integration)
which would be jointly assessed by the EU and Andean Com-
munity.

5.5 The social content of the EU-Andean Community partnership

5.5.1
In line with the goal of full partnership, the nego-
tiating parties must focus on the monitoring of fundamental
socio-labour rights and the defence of democracy and human
rights, and set up mechanisms for promoting all these rights,
expressly showing their determination to fight drug trafficking
and corruption, and to temper economic development with
justice and social cohesion.

5.5.2
The future agreement should be organised in such a
way that it meets the stated aim of political, economic and
social partnership. The text should therefore include a social
chapter which would complement and counter-balance the
sections devoted to trade relations and political dialogue.

This

social

chapter

5.5.3
and
employers' rights, based on the criteria mentioned above,
expressly mentioning freedom of association, social dialogue
and social consultation (22).

should cover workers'

The agreement should also include the equally impor-
5.4.3
tant subjects of boosting competitiveness, the legal certainty of
investment and the development of a real Andean internal
market in which business can operate with guarantees.

(22) This point is acknowledged in point 6.8.3 of the EESC opinion on
Social cohesion in Latin America and the Caribbean: ‘Strengthening
independent
representative economic and social organisations
which are capable of compromise is a key condition for bringing
about social dialogue and fruitful civil dialogue and, therefore, for
the very development of LAC countries;’ (OJ C 110, 30.04.2004,
p.55).

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5.5.4
The clear lack of security affecting the exercise of
human rights and freedom of the press and trade unions in
some Andean countries makes it all the more necessary for
there to be a stronger contribution from the EU.

5.5.5
The agreement should commit the signatory parties to
biregional promotion of social rights through technical coop-
eration and other assistance programmes.

EU-Latin American-Caribbean civil society, calling for ‘agree-
ments with the EU to contain a vigorous social dimension and
provide for the promotion and reinforcement of the role of
social organisations and participative and consultative bodies
representing organised civil
society’ and reaffirming ‘their
determination to give impetus to relations between the regional
consultative bodies within the LAC and between the EESC and
these bodies’ (23).

5.6 Cooperation

5.6.1
The EU has been a clear leader in the field of develop-
ment cooperation with the Andean countries. Just over one
third of EU cooperation with Latin America has been devoted
to the Andean Community and its member states. Bolivia and
Peru were among the top three recipients of official EU aid
between 1994 and 2002.

5.6.2
The European Commission is currently drawing up a
new subregional cooperation strategy for the Andean Com-
munity and a specific strategy for each of the five Andean
countries,
in order to give focus and direction to its efforts
from 2007 to 2013.

5.6.3
The European Commission's draft Regional Strategy
Paper for the Andean Community (2007-2013) is based on
three areas: regional integration, social cohesion and the fight
against drugs.

6. Participation of organised civil society in EU-Andean

relations

6.1
This opinion aims to provide the EU institutions with
the basic criteria for a social dimension and civil society invol-
vement which the EESC believes should underpin relations with
the Andean Community, and should be studied by the future
negotiating committee for the association agreement.

6.4 Moreover, the EU and Andean Community countries
have adopted the principles and values expressed in the ILO
Constitution and its key social instruments, such as the Declara-
tion 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). They also subscribe
to the Universal Declaration of Human Rights (1948) and the
International Pact on Economic, Social and Cultural Rights
(1976).

6.5
The EESC and the Andean Advisory Councils should
form the pillars of this joint action between Andean and Euro-
pean civil societies and their participation in negotiations
between the two areas and involvement in the future consulta-
tion and participatory structures, which the EESC believes
should be established through the future association agreement.

6.6
The three bodies have taken an important first step
towards institutionalising their relations by signing an Interin-
stitutional Cooperation Plan. This plan will bring an improve-
ment in the quality of understanding between the EESC and the
Advisory Councils, in order to reinforce and stabilise mutual
cooperation.

6.7 The Interinstitutional Cooperation Plan sets out to:

1) support the participatory civil society organisations of the

Andean Community;

6.2
Although there are no previous EESC opinions or reso-
lutions on Andean Community relations, the abovementioned
criteria could be based on the following:

2) contribute to civil society dialogue between the Andean

Community and the European Union;

a) the points already set down in this respect in the Political
Dialogue and Cooperation Agreement, especially Articles 42
(social cooperation), 43 (participation of organised civil
society in cooperation) and 44 (cooperation against gender
discrimination), which should be adapted to meet the objec-
tives of the future association agreement;

b) certain documents and declarations referring to the more
general context of relations with Latin America produced by
the EESC or by civil society in either region.

In this context,

it is important to bear in mind the
6.3
implicit commitment by participants in the Third Meeting of

3) promote the importance of including a social dimension in
the future association agreement between the EU and the
Andean Community;

4) support the CCEA and CCLA's initiative to work on the
proposal to create an Andean Economic and Social Council
(CESA);

5) achieve greater participation from Andean civil society orga-
nisations equivalent to those comprising the EESC's Group
III;

(23) Points 4 and 5 of the Final Declaration of the Meeting.

6) forge stronger economic links between both regions.

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6.8
The two Andean Advisory Councils have made a joint
proposal (24) to the Andean Community authorities to initiate
discussions that will, as swiftly as possible, lead to creation of
the Andean Economic and Social Council.

two regions, and it urges the parties to take steps to achieve
this.

6.9
The EESC welcomes this initiative and the consensus
surrounding it, and believes that basing this Andean Economic
and Social Council on a multipartite model,
representing
employers, workers and the various interests of organised civil
society, would facilitate the recognition and creation of a
much-needed joint consultative committee for the participation
of EU and Andean Community civil society organisations in
the institutional framework of the future association agreement.

6.10
On 3 March 2005, the European Commission orga-
nised an initial conference on the future of EU-Andean Com-
munity relations, which was attended by various social organi-
sations and representatives of the EESC. With the initiation of
negotiations a possibility, this event should be repeated and
extended so that in the future it would include existing Andean
civil society organisations (CCLA, CCEA, Andean Working
Groups on consumers and indigenous peoples).

6.11
The EESC believes that in order to develop the partner-
ship between the two regions, the organisations representing
different sectors of civil society in the EU and the Andean Com-
munity should step up bilateral relations and joint action,
building on the progress already made towards this objec-
tive (25).

7. Conclusions and economic and social proposals

7.1
In line with previous EESC opinions, stronger demo-
cratic stability will be contingent upon the reinforcement of
state institutions and relations between state and society, the
improvement of social welfare, the reduction of inequalities,
the promotion of development and economic growth, social
integration of sectors with a history of exclusion, and the crea-
tion of platforms for broad political dialogue at local, national
and regional levels.

7.2
The EESC believes that it would be beneficial for the
common interests of the EU and the Andean Community to
start negotiations (without these having to depend on the result
of the Doha Round) for an association agreement between the

(24) Fifth joint meeting of the Andean Business Advisory Committee
and the Andean Labour Advisory Committee in Lima, Peru, 2-
3 November 2004.

(25) On 7 April 2003, the European Trade Union Confederation (ETUC)
and the CCLA signed a declaration establishing regular relations
and announcing a cooperation agreement. On 17 February 2005,
in Lima, the Latin American NGO network ALOP and the Catholic
University of Lima organised a meeting of NGOs from the EU and
the Andean Community.

7.3
The EESC considers that this agreement should lay the
foundations for a full and balanced partnership, incorporating a
free trade area and allowing for dialogue on political and coop-
eration-related aspects. The social dimension of this partnership
should be expressly included in the text of the future agree-
ment, based on the commitment to comply with the ILO
conventions on fundamental rights and the other instruments
cited herein.

7.4

In economic terms, the agreement should:

a) re-evaluate the role of business in Andean society as a deci-

sive factor in economic and social development;

b) boost competitiveness through R+D and the development of

infrastructure;

c) promote investment and protect the legal certainty thereof;

d) facilitate access to funding, particularly for SMEs, and other

means of increasing economic growth rates;

e) boost development of the social economy sector;

f) promote the creation of a real Andean customs union.

In social

7.5
support and protect:

terms,

the agreement

should particularly

a) education and vocational training and inter-university coop-
eration as a means to develop scientific research and higher
education;

b) equality and the absence of discrimination on grounds of

gender, race, ethnicity, religion, disability etc.;

c) gender equality in the workplace through plans for equal

pay and other socio-occupational aspects;

d) integration of migrants and respect

rights,
including guarantees for the sending of remittances to their
countries of origin. On this basis the EU and the Andean
Community should agree an immigration policy;

their

for

e) plans for the eradication of child labour;

f) social dialogue between employers and workers and the

strengthening of their organisations;

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g) other types of occupational or social association (peasant
workers, consumers, etc.) and all civil society organisations;

h) fair working conditions with regard to occupational health
and the environment, gradually eliminating informal work.

7.6
The European Union should build on its — already
considerable — cooperation activity with Andean countries, as
a key factor for improving conditions within these countries
conducive to an association agreement, in line with the priority
that the recent Commission Communication gives to social
cohesion (26). The EESC supports the proposal for the European
Investment Bank to extend its funding for Latin America, so
that a significant proportion of these funds goes to small and
medium-sized enterprises. In order to achieve this and other
goals, the Andean Development Corporation could be a useful
partner.

7.7
The EESC also urges the Commission to closely analyse
the European Parliament's proposal to set up a biregional soli-
darity fund, which would be particularly beneficial for Andean
(and Central American) countries. The Committee also believes
that the Ibero-American Programme of Institutional Coopera-
tion for the Development of SMEs (IBERPYME) serves as a
good example of boosting business activity and that the experi-
ence gained in this programme could be applied to a similar
project between the EU and Andean Community.

Given the Andean Community's difficulties in imple-
7.8
menting the twenty projects that make up its Integrated Social

Brussels, 5 July 2006

Development Plan,
it should receive technical or financial
support from the European Commission, especially since EU
ministers have congratulated the Andean Community on the
plan, calling it a ‘very useful instrument for driving social cohe-
sion in the Andean Community’ (27).

7.9
The EESC highlights the decision taken by the CCLA
and CCEA to set up an Andean Economic and Social Council
similar to the European model, and will support this through
the measures agreed within the Interinstitutional Cooperation
Plan.

7.10
The EESC believes that a joint committee should be set
up between the EESC and the Andean advisory councils (and,
eventually, between the EESC and the Andean Economic and
Social Council), which could be created prior to the signing of
the association agreement under the terms of the Political and
Social Dialogue Agreement of 2003, once this is ratified.

The European Commission and the General Secretariat
7.11
of the Andean Community should — with the cooperation of
the EESC and the Andean advisory councils — together
promote a regular EU-Andean civil society forum where social
could
organisations
expound their views on EU-Andean Community relations.

from both regions

and associations

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

(26) Communication from the Commission to the Council and the
European Parliament ‘A stronger partnership between the European
Union and Latin America’ Strategy for a stronger partnership
between the European Union and Latin America. Brussels,
COM(2005) 636 final.

(27) EU-Andean Community ministerial meeting (Luxembourg, 26 May

2005).