Proposal for a COUNCIL DECISION on the signing, on behalf of the European Union, of the Trade Agreement between the European Union and Colombia and Peru
Date: 2011-09-22
Institutions: European Commission
Subjects: Colombia, Peru, liberalisation of trade, signature of an agreement, trade agreement (EU)

EUROPEAN COMMISSION 

Brussels, 22.9.2011 
COM(2011) 570 final 

2011/0245 (NLE) 

Proposal for a 

COUNCIL DECISION 

on the signing, on behalf of the European Union, of the Trade Agreement between the 
European Union and Colombia and Peru 

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EXPLANATORY MEMORANDUM 

1. 

BACKGROUND 

The attached proposal constitutes the legal instrument for authorising the signature of a trade 
agreement between the European Union and Colombia and Peru: 

- 

Proposal for a Council Decision on the signature of the trade agreement. 

Negotiations  between  the  EU  and  the  Andean  Community  of  Nations  (hereinafter,  Andean 
Community)  for  a  region-to-region  association  agreement,  including  political  dialogue, 
cooperation and trade were launched in June 2007 following a Council decision to authorise 
these  negotiations  in  April  of  the  same  year.  Regrettably,  disagreement  between  Andean 
countries  on  approaches  to  a  number  of  key  trade  issues  covered  under  the  foreseen 
agreement  led  to  the  suspension  of  talks  in  June  2008.  Under  these  circumstances,  the 
Commission presented a recommendation to the Council on 17 December 2008 with a view to 
modifying  the  existing  authorisation  so  as  to  pursue  negotiations  of  a  trade  agreement  with 
those countries of the Andean Community willing to move ahead.  

On 19 January 2009, the Council authorised the Commission to negotiate a multiparty trade 
agreement  with  those  countries  sharing  our  general  objective  of  a  balanced,  ambitious, 
comprehensive  and  WTO-compatible  agreement.  The  Presidents  of  Colombia,  Ecuador  and 
Peru confirmed their commitment to negotiate in letters to President Barroso in January 2009. 
Bolivia  had  been  very  critical  of  the  new  format,  and  had  not  shown  any  interest  in 
participating.  New  negotiations  for  a  multiparty trade agreement were therefore launched in 
January  2009  between  the  EU  and  Colombia,  Ecuador  and  Peru.  After  4  rounds,  Ecuador 
suspended  its  participation  in  the  talks  and  negotiations  therefore  continued  with  Peru  and 
Colombia only. They were successfully concluded in May 2010 and - after a phase of legal 
review - the text of the trade agreement was initialled with Colombia and Peru on 23 March 
2011.  

As set out in the negotiating directives, the Commission reached the objectives to eliminate 
high tariffs, tackle technical barriers to trade, liberalise services markets, protect valuable EU 
geographical indications (GIs), open-up public procurement markets, include commitments on 
the enforcement of labour and environmental standards and offer effective and swift dispute 
settlement  procedures.  The  aim  to  go  well  beyond  WTO  commitments  and  ensure  a  level 
playing field with competitors in the region such as the US is therefore achieved.  

Above all, the agreement is an opportunity for the EU to provide an anchor for Colombia and 
Peru's reforms to integrate the global economy, increase welfare and consolidate their growth 
with a view to improving the living conditions of their peoples. Other Members of the Andean 
Community are  also encouraged via an accession clause to take part in the  trade  agreement 
whenever they see fit.  

The EU Member States were informed orally and in writing on the process of the negotiations 
with Colombia, Peru and - until it participated – Ecuador via the Trade Policy Committee of 
the Council. The European Parliament has also been regularly informed on developments via 
its  Committee  on  International  Trade  (INTA).  The  complete  text  resulting  from  the 

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negotiations  was  circulated  throughout  the  process  to  both  institutions.  A  detailed  Trade 
Sustainability  Impact  Assessment  (SIA)  examining  the  Agreement's  potential  economic, 
social and environmental effects has been conducted and published in October 2009.  

2. 

NATURE AND SCOPE OF THE AGREEMENT 

The trade agreement between the EU, Colombia and Peru establishes the conditions for EU 
economic  operators  to  take  full  advantage  of  the  opportunities  and  the  emerging 
complementarities between our respective economies. Over the course of its implementation, 
the Agreement will fully relieve EU exporters of industrial and fisheries products to Peru and 
Colombia  from  paying  customs  duties.  It  satisfies  art.  XXIV  GATT  criteria  (to  eliminate 
duties  and  other  restrictive  regulations  of  commerce  with  respect  to  substantially  all  trade 
between  the  parties)  i.e.:  99%  of  EU  exports  are  covered  (100%  of  our  trade  in  industrial 
products in 10 years; and c.85% of agriculture after 17 years). In addition, it will allow for the 
dismantling  of  some  difficult  non-tariff  barriers.  Peru  and  Colombia,  for  their  part,  will 
benefit  from  substantial  new  access  to  the  EU  market  in  particular  for  their  key  agriculture 
exports:  bananas,  sugar  and  rum  while  the  EU  will  grant  100%  duty-free  coverage  for 
industrial products and fisheries of Colombian and Peruvian origin at entry into force.  

On  services  and  establishment  as  well  as  public  procurement  coverage,  the  agreement  is 
among  the  most  ambitious  ever  negotiated  by  the  Commission.  It  includes  substantial 
commitments  on  all  key  sectors  (notably  financial  services,  telecommunications,  transport) 
for cross-border supply and establishment in particular, while the EU's concerns in terms of 
temporary presence  of  natural  persons  for  business purposes (mode 4)  have been dealt  with 
satisfactorily.  In  procurement,  the  EU  has  obtained  the  commitment  of  institutions  at  both 
central and sub-central level with reasonably low thresholds.  

The  agreement  also  establishes  a  set  of  disciplines  which  go  beyond  those  agreed  in  the 
multilateral framework, notably on intellectual property (e.g. 205 EU geographical indications 
protected,  data  protection  conditions  clarified);  sustainable  development  (the  agreement  is 
GSP+  equivalent  or  above  on  labour  and  environmental  issues  and  contains  specific 
commitments  on  sustainable  fisheries);  competition  (disciplines  on  monopolies  and  State 
Enterprises  –  transparency  obligations  on  subsidies);  technical  barriers  to  trade  (WTO+ 
elements  on  market  surveillance,  transparency  in  regulation  procedures  and  disciplines  on 
labelling  and  marking);  Sanitary  and  Phytosanitary  measures  (WTO+  measures  on  animal 
welfare, regionalisation, approval of export establishments, on the spot inspections and import 
checks) among others. In addition, the agreement establishes a Trade Committee as well as a 
set of sub-committees to allow for consultations on specific trade concerns under its different 
titles.  A  key  added  value  of  the  agreement  is  therefore  to  lock-in  and  promote  –  above  and 
beyond those rules that derive from the WTO framework – openness policies and respect for 
internationally agreed best practices at the domestic level while securing a transparent, non-
discriminatory and predictable environment for EU operators and investors in the region – in 
particular via the bilateral dispute settlement mechanism foreseen under the agreement.  

The agreement also includes a Title on technical assistance and trade capacity building aimed 
at  promoting  competitiveness,  innovation  and  facilitating  trade  and  technology  transfers 
between the parties.  

All the areas covered by the trade agreement fall within the competence of the EU and, more 
particularly, within the scope of Articles 91, 100(2) and 207 TFEU. Therefore, the agreement 

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should  be  signed  by  the  European  Union,  pursuant  to  a  decision  of  the  Council  based  on 
Article 218 (5) TFEU.  

3. 

PROCEDURES 

The Commission has judged the results of the negotiations to be satisfactory and requests the 
Council: 

– 

to authorise the signature, on behalf of the European Union, of the Trade Agreement 
between the European Union and Colombia and Peru. 

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2011/0245 (NLE) 

Proposal for a 

COUNCIL DECISION 

on the signing, on behalf of the European Union, of the Trade Agreement between the 
European Union and Colombia and Peru 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Articles 91, 100(2) and 207(4), first subparagraph, in conjunction with Article 218(5) thereof, 

Having regard to the proposal from the Commission1, 

Whereas: 

(1) 

(2) 

On 19 January 2009 the Council authorised the Commission to negotiate a multiparty 
trade agreement on behalf of the European Union with the Member Countries of the 
Andean Community which shared the aim to reach an ambitious, comprehensive, and 
balanced trade agreement. 

Those  negotiations  have  been  concluded  and  the  Trade  Agreement  between  the 
European Union and Colombia and Peru (hereinafter referred to as "the Agreement") 
was initialled on 23 March 2011. 

(3) 

The Agreement should be signed on behalf of the European Union, 

HAS ADOPTED THIS DECISION:  

Article 1 

The signing of the Trade Agreement between the European Union and Colombia and Peru is 
hereby  approved  on  behalf  of  the  European  Union,  subject  to  the  conclusion  of  the  said 
Agreement. 

The text of the Agreement is attached to this Decision. 

The Council Secretariat General shall issue the powers to sign the Agreement on behalf of the 
Union, subject to its conclusion, to the person(s) indicated by the negotiator of the Agreement.  

Article 2 

1 

OJ C , , p. . 

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Article 3 

This Decision shall enter into force on the day of its adoption. 

Done at Brussels, […] 

For the Council 
The President 

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LEGISLATIVE FINANCIAL STATEMENT FOR PROPOSALS HAVING A 
BUDGETARY IMPACT EXCLUSIVELY LIMITED TO THE REVENUE SIDE 

1. 

NAME OF THE PROPOSAL: 

COUNCIL  DECISION  on  the  signing,  on  behalf  of  the  European  Union,  of  the 
Trade Agreement between the European Union and Colombia and Peru 

2. 

BUDGET LINES: 

Chapter and Article: 12 0 

Amount budgeted for the end of the implementation period 

3. 

FINANCIAL IMPACT  

(cid:133) 

Proposal has no financial implications 

⌧  Proposal has no financial impact on expenditure but has a financial impact on 

revenue – the effect is as follows: 

(€ million to one decimal place)  

Budget line 

Revenue2 

Article … 

Impact on own resources 

12 month period, 
starting dd/mm/yyyy

[Year n] 

137.5  

Article … 

Impact on own resources 

Situation following action 

[n+1] 

[n+2] 

[n+3] 

[n+4] 

[n+5] 

Article … 

2 

Regarding  traditional  own  resources  (agricultural  duties,  sugar  levies,  customs  duties)  the  amounts 
indicated must be net amounts, i.e. gross amounts after deduction of 25 % of collection costs 

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Article … 

4. 

ANTI-FRAUD MEASURES 

The EU's customs legislation is designed to ensure the correct application of all EU customs 
measures  including  the  tariff  preferences  laid  down  in  this  trade  agreement,  which  also 
contains  the  necessary  provisions  on  the  application  of  preferential  rules  of  origin  and 
administrative  cooperation  (Annex  II),  assistance  with  enquiries  (Annex  V),  and  the 
possibility, after consultations, of temporary withdrawal of tariff preferences in the event of 
frauds and irregularities involving preferential treatment (Annex III). 

5. 

OTHER REMARKS 

This estimation is based on the average imports for the period 2007-2009 and represents the 
annual loss in revenues due to: 1/ full implementation of negotiated tariff preferences of the 
Trade Agreement i.e.10 years after entry into force and 2/ initial levels of conceded tariff rate 
quotas.  During  the  previous  years,  revenue  losses  will  be  inferior  also  bearing  in  mind  the 
likely  increase  in  imports  of  products  that  will  have  duties  reduced  in  stages  and  that  will 
partly compensate the loss. 

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