Opinion of the European Economic and Social Committee on EU-Central America Relations
Date: 2007-07-12
Institutions: European Economic and Social Committee
Subjects: Central America, EU relations, Latin America, association agreement (EU), cooperation policy, democracy, economic and social cohesion, trade policy

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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

and b) to help secure the commitments needed to monitor the
entire process.

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, poli-
tical, 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.

Now that negotiations have started up between the
1.3
European Union and Central America on securing an Associa-
tion 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 stra-
tegic 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.

The EESC recommends that negotiations take account of

1.5
the following aspects:

The need to strengthen organised civil society in
1.5.1
in particular by enhancing the institutional
Central America,
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
in combating
in consolidating democracies,
decisive factor
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 envir-
onmentally friendly form of
farming). Furthermore, during
negotiations and when subsequently implementing the Associa-
tion Agreement, particular importance should be attached to
full compliance by governments with the ILO International
Labour Standards.

The EESC hopes that

1.4
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 propo-
sals respected by both sides. The EESC also urges the Consulta-
tive 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

(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.

The existence of the Generalised System of Preferences
1.5.3
(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.

The need for organised civil society to be given regular,
1.5.4
timely and relevant information so that it can monitor negotia-
tions at institutional level. This should also entail a) the possibi-
lity of consultation prior to negotiating rounds so that the

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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 Moni-
toring 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.

In 2003,

2.2
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 organisa-
tions from the two regions in the institutional framework of the
future Association Agreement. Success in concluding an Asso-
ciation Agreement will depend greatly on civil society organisa-
tions in both regions being able to monitor negotiations effec-
tively and keep society informed of the progress, problems and
successes involved.

(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 exer-
cise 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. A new phase in EU-Central America relations

3.1
Political dialogue and cooperation and also trade rela-
tions 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 comple-
mented by a special system to encourage sustainable develop-
ment 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 memor-
andum signed by the Commission and the SICA General Secre-
tariat. 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 earth-
quake 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 prac-
tices 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 chal-
lenge and an opportunity that must not be missed.

3.5
Given that the European strategy for concluding associa-
tion agreements is based on inter-regional dialogue, it is impor-
tant
integration in Central
America.

to analyse the current state of

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.

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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).

are clear, consensual and respected. As shown by successive
surveys conducted by the United Nations Economic Commis-
sion 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;

However,

the fragile nature of regional

3.5.3
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 invol-
vement on the part of civil society are also grounds for opti-
mism and confidence.

In the

3.5.5
recent meetings between the EU/Central
America Joint Committee, held in April 2007, Central American
governments undertook to present, by the end of the Associa-
tion 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;

Greater, more harmonious social cohesion will help to
3.6.2
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

(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.

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 envir-
onment 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
The countries of Central America are some of
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 inade-
quate protection of basic rights, continuing impunity and
corruption enjoyed by some parties and a lack of transpar-
ency in decision-making on economic and political matters
and on public management;

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b) economic weakness, essentially due to the lack of competi-
tiveness 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 irra-
tional exploitation of natural resources, deforestation in par-
ticular. According to the United Nations Development
factors that make Central America
Programme (UNDP),
more environmentally fragile include random and poorly
thought-out spatial planning, excessive exploitation of water
resources, the over-use of pesticides in farming and deforesta-
tion.

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 rela-
tive exception of Costa Rica and El Salvador, caused the coun-
tries 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 phenom-
enon 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.

Gender inequality as measured by all socio-economic
4.7
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
to women in Central American society — has
detrimental
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 Discri-
mination against Women. Violence against women (in its
different forms, from domestic violence to violence in the work-
place) is still a great cause for concern, despite the efforts under-
taken by women's movements.

This poverty, affecting practically half of the population
4.9
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 Agree-
ment, 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.

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

there

fact

the

are

is

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

an aspect of

5.3
Boosting social cohesion. This should be one of the funda-
mental criteria for the future agreement, not only because social
cohesion is
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.

importance

strategic

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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 Asso-
ciation 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.

Institutions as diverse as those fighting to protect
5.4.1
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 poli-
tical, 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.

integration. Regional

Strengthening regional

5.5
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.

It would not be advisable to adopt an overly ambitious
5.5.1
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 impor-

tant, 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
take into
greater social cohesion, and contain clauses that
account
the role of women and the protection of human,
employment and environmental rights and the rights of indi-
genous 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 institu-
tions 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 coun-
tries 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 Agree-
ment 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.

This Agreement should give equal coverage to all aspects

6.2
of the Agreement — politics, trade and cooperation.

6.3
It should take account of the fact that the EU's nego-
tiating 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.

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6.4
It should contain measures to promote business competi-
tiveness, 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
to sectors already enjoying
just
apply to everyone and not
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 Multi-
national Enterprises and Social Policy (1977, amended in 2000)
the International Labour Conference
and the resolution of
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 environ-
ment and enshrine the objective of securing comprehensive
progress for the region and its peoples.

Brussels, 12 July 2007.

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 nego-
tiations through to implementation.

Support should therefore be stepped up for organised
6.10
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.

The Joint Monitoring Committee for

6.11
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.

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

The President

of the European Economic and Social Committee

Dimitris DIMITRIADIS