REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL Third Annual Report on the Implementation of the EU-Colombia/Peru Trade Agreement
Date: 2017-10-10
Institutions: Directorate-General for Trade and Economic Security, European Commission
Subjects: Colombia, Peru, activity report, interim agreement (EU), liberalisation of trade, trade agreement (EU), trade cooperation

EN 

   EN 

   EUROPEAN COMMISSION  Brussels, 10.10.2017  COM(2017) 585 final   REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL Third Annual Report on the Implementation of the EU-Colombia/Peru Trade Agreement  
 
 
REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND 
THE COUNCIL 

Third Annual Report on the Implementation of the EU-Colombia/Peru Trade 
Agreement 

1.  INTRODUCTION  

2016 was the fourth  year  of implementation of the  Trade Agreement between the European 
Union  and  its  Member  States,  of  the  one  part,  and  Colombia  and  Peru,  of  the  other  part1 
(hereafter the "Agreement"). The Agreement has  been provisionally applied with Peru since 
March 2013 and with Colombia since August 20132. 

The Agreement saw its first amendment with the Protocol of Accession of Croatia to the EU. 
After completion of the ratification procedure by Peru on 6 April 2017, the Protocol entered 
into force with Peru on 1 May 2017.  

The Agreement also saw its second amendment with the Protocol of Accession of Ecuador, 
which  has  been  provisionally  applied  since  1  January  2017.  The  ratification  process  in 
Colombia and Peru as well as in EU Member States is ongoing3.  

In accordance with Article 13 of Regulation (EU) No 19/2013 of the European Parliament and 
of  the  Council  of  15  January  2013  implementing  the  bilateral  safeguard  clause  and  the 
stabilisation  mechanism  for  bananas  of  the  Trade  Agreement  between  the  European  Union 
and its Member States, of the one part, and Colombia and Peru, of the other part4 (hereafter 
the  "Regulation"),  the  Commission  committed  to  submit  an  annual  report  to  the  European 
Parliament and the Council on the application, implementation and fulfilment of obligations 
of the Agreement and the Regulation. The report responds to this requirement.  

2.  METHODOLOGY USED FOR THE ANALYSIS  

The  analysis  of  bilateral  trade  flows  is  based  on  a  comparison  of  EUROSTAT  data  for  the 
fourth  year  of  implementation  of  the  Agreement  (calendar  year  2016)  with  the  data  for  the 
calendar  year  immediately  preceding  the  Agreement  (2012).  For  trade  in  services  and 
investments flows and stocks, the analysis is based on annual data until 2015.  

Overall it should be noted that the causes for the fluctuation of trade flows reflect a multitude 
of  factors  and  cannot  be  attributed  solely  to  the  existence  or  degree  of  advancement  in  the 
implementation of the Agreement.   

1 OJ L 354, 21.12.2012, p. 3. 
2 http://www.consilium.europa.eu/en/documents-publications/agreements-conventions/agreement/?aid=2011057  
3 http://www.consilium.europa.eu/en/documents-publications/agreements-conventions/agreement/?aid=2016044 
4 OJ L 17, 19.1.2013, p. 1 

2 

 
 
 
 
 
 
 
 
                                                 
3.  EVOLUTION  OF  TRADE  (YEAR-TO-YEAR  AND  SINCE  THE  START  OF 

PROVISIONAL APPLICATION) 

3.1  Trade in Goods  

Colombia  

The  EU  is  Colombia's  second  trading  partner,  after  the  US.  Following  an  increase  between 
2012  and  2014,  trade  between  the  EU  and  Colombia  declined  in  the  past  two  years.  This 
appears  mainly  due  to  a  slow-down  in  external  demand  in  Colombia  and  the  fall  in 
international commodity prices, which affected Colombia’s export of mineral products. While 
bilateral trade in 2016 was 23.5% lower than in 2012, Colombia's total trade with the rest of 
the world decreased by about 36% during the same period.  

In 2016, bilateral trade amounted to 10.8 billion EUR compared to 14.2 billion EUR in 2012, 
resulting in a small trade surplus for the EU for the first time in a decade.  

EU exports to Colombia increased from 5.5 billion EUR in 2012 to 6.5 billion EUR in 2015, 
but  decreased by 15%  in 2016 to  5.4 billion EUR. This  is  in  line with the  trend of reduced 
imports to Colombia from the rest of the world.  

EU imports from Colombia amounted to 5.4 billion EUR in 2016, decreasing from 6.7 billion 
EUR  in  2015  and  8.6  billion  EUR  in  2012  (37.5%  drop).  However,  Colombia's  overall 
exports decreased by 48% over the same period.  

Table 1: EU-Colombia bilateral trade in goods 2012-2016 (million EUR) 

10.000

8.000

6.000

4.000

2.000

0

2012

2013

2014

2015

2016

EU imports from Colombia

EU exports to Colombia

Sectoral effects 

Source: Eurostat 

In terms of EU exports to Colombia, the most important categories in 2016 are: 

  Machinery  and  mechanical  appliances  (HS84),  16.1%  of  EU  exports,  declining  by 

24.6% compared to 2012, mainly due to lower investment demand; 
  Pharmaceutical products (HS30), 13% of exports, increasing by 12.5%; 
  Vehicles and parts (HS87), 8.5% of EU exports, increasing by 2.1%; 
  Medical  (and  other)  instruments  (HS90)  and  plastics  and  plastic  articles  (HS39) 

increased each by 11%; 

3 

 
 
 
 
  Total EU exports of agricultural products (HS01 to 24) increased by 82% since 2012, 
a  trend  across  most  product  categories  largely  attributed  to  progress  in  the 
implementation of the Sanitary and Phytosanitary chapter. 

As for EU imports from Colombia, the main categories are: 

  Minerals (HS27), 51.3% of EU imports, versus 68.5% in 2012; 
  Fruits  (HS08),  18%  almost  doubling  from  9.6%  in  2012  (besides  bananas,  other 

tropical fruits registered important increase); 

  Coffee (HS09), increasing by 44.9%, now representing 10.9% of EU imports; 
  Total  EU  imports  of  agricultural  products  (HS01  to  24)  increased  by  32.9%  since 

2012.  

Peru  

The EU is Peru's third trading partner, after China and the US. In 2016, bilateral trade slightly 
declined, mainly due to the reduction in external demand and the fall in global prices of raw 
materials. Peru's overall trade with the rest of the world decreased by 18% between 2012 and 
2016, compared to 11% with the EU.  

Bilateral trade amounted to 8.7 billion EUR in 2016, an 11% decrease compared to 2012, with 
the EU reducing its trade deficit compared to 2012. 

EU  imports  from  Peru  declined  by  4%  since  2012,  compared  to  a  decline  in  global exports 
from Peru of 14%.  

EU exports to Peru have grown by 4% over the same period, in contrast to a decrease by 22% 
in overall imports from Peru.   

Table 2: EU-Peru bilateral trade in goods 2012-2016 (million EUR) 

)
s
o
r
u
e
n
o

i
l
l
i

m

(
e
d
a
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T

8.000,00

6.000,00

4.000,00

2.000,00

0,00

2012

2013

2014

2015

2016

EU Imports from Peru

EU Exports to Peru

Source: Eurostat  

Sectoral effects 

In terms of EU exports to Peru, the most important categories in 2016 are: 

  Machinery and mechanical appliances (HS84), 27% of exports versus 34% in 2012;  
  Electrical appliances (HS85), 9% of exports, a 15% decrease since 2012;   
  Motor vehicles (HS87), 8% of exports, with cars increasing by 17% and trucks by 9%;  
  Pharmaceutical products (HS30), 5% of EU exports (a 76% increase since 2012); 

4 

 
 
 
 
 
 
 
  Agricultural products (HS01 to 24) increased by 73% since 2012,   particularly  spirits 
(by 60%), food preparations for infant use (by 277%) and vegetable preparations (by 
156%).  

As for EU imports from Peru, the main categories are: 

  Ores, slag and ashes (HS26), 24% of all EU imports, but with a 40% decrease since 

2012;  

  Mineral fuels and oils (HS27), 7% of EU imports, a 48% decline since 2012;  
  Fruits  (HS08),  now  18%  of  EU  imports,  increased  by  120%  (key  products  being 

avocados, table grapes, mangoes, blueberries besides bananas);  

  Coffee (HS09), now the third largest EU import category with 7% of imports, though 

decreasing by 32% since 2012, mainly due to a pest problem;  
  Fish and molluscs (HS03), 5% of imports with a 30% increase;  
  Vegetables (HS07), 4% of imports (77% of which asparagus), increasing by 22%.  
  Cocoa increased by 226% and represent 5% of EU imports.  

3.2  Trade in Services and Investment   

3.2.1.  Trade in Services 

Table 3: EU-Colombia bilateral trade in services 2010-2015 (million EUR) 

EU28 imports 
EU28 exports 
Balance 
Total trade 

2010 
987 
1,953 
967 
2,940 

2011 
1,355 
2,636 
1,281 
3,992 

2012 
1,447 
2,857 
1,410 
4,304 
Source: Eurostat 

2013 
1,434 
2,576 
1,141 
4,010 

2014 
1,615 
2,485 
870 
4,100 

2015 
1,496 
2,866 
1,370 
4,362 

Colombia, bilateral trade in services remained stable in 2015 at 4.3 billion EUR.  According 
to Colombian statistics, EU share in Colombia's total trade in services accounted for 16.2% in 
2016. 

Table 4: EU-Peru bilateral trade in services 2010-2015 (million EUR) 

2010 

2011 

2012 

2013 

2014 

2015 

EU28 imports 
EU28 exports 
Balance 
Total trade 

898 
1,067 
169 
1,964 

849 
1,094 
245 
1,943 

855 
1,503 
648 
2,358 
Source: Eurostat 

831 
1,704 
873 
2,535 

879 
1,472 
593 
2,351 

803 
1,667 
864 
2,469 

For Peru, bilateral trade in services increased by 5% in 2015 compared to 2012.  While EU 
exports increased by 11%, Peru exports decreased by 6% over this period.  Based on Peru's 
statistics, EU share in Peru's total trade in services represented almost 30% in 2015.  

5 

 
 
 
 
 
 
 
  
 
 
3.2.2.  Investment  

Table 5: EU-Colombia investment flows and stocks 2013-2015 (million EUR) 

Inward 
2014 
4,248 
-192 

2013 
4,788 
1,365 

2015 
4,418 
371 

2013 
17,528 
-278 

Outward 
2014 
16,258 
183 

2015 
18,163 
1,458 

Source: Eurostat 

Stocks 
Flows 

The EU is the first foreign investor in Colombia. EU FDI stocks in Colombia increased by 4% 
between 2013 and 2015, totalling 18.2 billion EUR in 2015. Colombian FDI stocks in the EU 
decreased by 8% since 2013, totalling 4.4 billion EUR in 2015.  

Table 6: EU-Peru investment flows and stocks 2013-2015 (million EUR) 

2013 

243 
129 

Stocks 
Flows 

Inward 
2014 

2015 

2013 

Outward 
2014 

245 
264 

1,536 
672 

9,135 
4 

9,512 
618 

Source: Eurostat 

2015 

10,465 
1,473 

The EU is the first foreign investor in Peru. EU FDI stocks in Peru increased by 15% between 
2013 and 2015, totalling 10.4 billion EUR in 2015. Peru's FDI stocks in the EU increased to 
1.5 billion EUR in 2015, a 533% increase compared to 2013.  

3.3 

Preference Utilisation rate  

The use of the tariff preferences can be estimated by assessing the fraction of the trade flow 
carried out within the framework of the Agreement.  

EU statistics indicate that over 95% of both Colombia and Peru's exports to the EU are made 
under the aegis of the Agreement.  

Based  on  statistics  from  Colombia,  preference  utilisation  rate  by  the  EU  in  Colombia 
amounted to 70.6% in 2016 (versus 55.7% in 2014, indicating that EU exporters are making 
better  use  of  the  Agreement).  It  has  not  been  possible  to  obtain  statistics  on  preference 
utilisation rate by the EU in Peru.  

3.4  Impact on SMEs  

According to data from Colombian authorities, 2,002 companies exported to the EU in 2016, 
compared to 1,656 in 2012. Among those exporting at least 10,000 USD to the EU, 314 are 
Small and Medium-Sized Enterprises (SMEs)5 and 634 micro-enterprises6. SMEs are strongly 
represented  in  non-mineral  exports,  which  increased  by  35%  since  2012.  Micro-enterprises 
increased their exports to the EU by 81% since 2012.  

5 A SME is a company which exports between 500,000 USD and 5mn USD FOB in total. 
6 A micro-enterprise exports less than 500,000 USD in total. 

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According to Peru's Export and Tourism Promotion Board, since the entry into force of the 
Agreement, 2,269 new companies have exported to the EU, of which 857 were from the agro-
industrial sector and 458 from the textile sector. New exporting companies are mainly SMEs 
(95.3%), in fast-growing exports of products, such as fruits, vegetables, food preparations and 
fishery products. 

4.  ACTIVITIES OF THE IMPLEMENTATION BODIES   

The third meeting of the Trade Committee of the EU-Colombia/Peru Trade Agreement took 
place  on  9  December  2016  in  Brussels,  Belgium,  with  prior  meetings  of  all  eight 
Subcommittees. The main conclusions of these meetings are as follows: 

a) Subcommittee on Customs, Trade Facilitation and Rules of Origin (28-29 November 2016 
– by video-conference) 

Parties  discussed  the  provision  defining  direct  transport,  concerning  a  possible  change  to 
allow for the splitting of consignments for products transiting a third country. No agreement 
was reached and the matter would be looked at further. 

The  EU  raised  the  issue  of  the  customs  overvaluation  in  Peru  for  the  import  of  trout  eggs. 
Peru  explained  that  the  issue  was  dealt  with  and  the  customs  value  would  be  based  on  the 
transaction value with importers entitled to refunds of any overpaid duty.  

Colombia and Peru raised issues related to proof of origin   and  to  the  number  of  verification 
requests from Spain.  

b) Subcommittee on Government Procurement (2 December 2016 – by video-conference) 

With  Peru,  EU  expressed  concerns  that  technical  specifications  might  refer  to  standards  in 
such a way to create a barrier for EU operators to access the procurement market.  

With  regard  to  Colombia,  the  EU  raised  market  access  at  sub-central  level,  notably  for 
decentralised  (municipal)  entities  responsible  for  infrastructure.  The  Parties  agreed  to 
continue discussions to find a solution.  

c)  Subcommittee  on  Technical  Barriers  to  Trade  (5  December  2016  –  for  Peru  by  video-
conference)  

With  Colombia,  the  EU  raised  the  implementation  of  the  National  Quality  Subsystem,  in 
particular  changes  introduced  in  regulatory  practices,  which  affect  the  development  of 
technical  regulations.  The  Parties  discussed  trade  facilitating  initiatives  on  conformity 
assessment to improve the recognition of certification carried out in the territory of the other 
Parties. Colombia presented a proposal for the recognition of such certificates.  

Towards  Peru,  the  EU  raised  concerns  on  the  recognition  of  Member  States  with  "strong 
health  monitoring”  status  for  exports  of  pharmaceutical  and  medical  devices  products  and 
insisted that all Member States receive the same treatment.  

d) Subcommittee on Sanitary and Phytosanitary Matters (6-7 December 2016) 

The Parties acknowledged progress in the implementation of the SPS provisions, notably in 
establishing  harmonised  import  conditions  and  certification  for  dairy  products  and  meat 

7 

 
 
products.  Peru  and  Colombia  accepted  the  implementation  of  the  regionalisation  principle, 
and the removal of the requirement “the animals must be born, raised and slaughtered in the 
same  Member  State”.  Peru  and  Colombia  expressed  interest  in  cooperating  with  the  EU  on 
antimicrobial  resistance.  On  animal  welfare,  Colombia  and  Peru  confirmed  interest  in 
collaboration  and  in  exchange  of  information  on  actions  in  this  field.  Parties  agreed  on  a 
working plan to improve trade conditions.   

e) Subcommittee on Agriculture (7 December 2016)   
The  Parties  reviewed  trade  flows  and  utilisation  of  quotas,  stabilisation  mechanism  for 
bananas  and  EU  support  program  to  the  Colombian  dairy  sector  and  possibilities  of  further 
cooperation in agricultural issues. 

On spirits which is subject to ongoing dispute settlement at the WTO, Colombia informed that 
a new Spirits law has been adopted. The EU raised concerns about the discriminatory taxes in 
Peru between Pisco and imported spirits, as well as the heavy metal analysis legislation which 
excludes Pisco but is imposed on similar imported goods.  

f) Subcommittee on Trade and Sustainable Development (7-8 December 2016) 

The Parties held the meetings of the institutions in charge of monitoring the implementation 
of the Trade and Sustainable Development provisions of the Agreement (see part 5 below).  

g) Subcommittee on Intellectual Property (8 December 2016) 

The discussion on Geographical Indications (GIs) covered remaining problems in registering 
GIs, enforcement issues and reflections on a simplified procedure for updates of GI lists. Peru 
and Colombia signalled intention to add new GIs to be protected.  

On  other  IPR,  the  EU  raised  points  relating  to  pharmaceutical  patents:    with  Colombia, 
concerns about the role of the Ministry of Health in patent examination and with Peru, issues 
relating  to  regulatory  data  protection  (such  as  clinical  test  data).  The  EU  raised  issues  on 
copyright and related rights: in Colombia, about the enforcement of the ‘public performance 
right’ on public transportation and in Peru problems relating to collecting societies in terms of 
transparency, distribution of revenues and supervision.  

The  EU  raised  issues  on  enforcement,  based  on  stakeholders'  concerns.  Peru  informed  on 
positive  developments,  such  as  quicker  procedures  and  adoption  of  precautionary measures, 
as well as on-going work to strengthen IP courts. Colombia referred to their new enforcement 
strategy on priority areas, which was under first-year implementation review.  

h) Subcommittee on Market Access (8 December 2016) 

Parties exchanged views on trade flows, including use of preferences and tariff rates quotas.  

On market access with Colombia, the EU highlighted concerns on the truck scrapping policy. 
Colombia  referred  to  an  upcoming  implementing  regulation  to  Decree  1517  to  improve 
market  access  until  the  policy  would  be  fully  phased  out  by  the  end  of  2018.  The  EU  also 
raised the application of a 30,000 USD FOB threshold, above which a higher tax rate applied 
to  sold  passenger  cars  as  well  as  the  obligation,  enacted  in  11  Colombian  departments,  to 
attach strip stamps for imported beers.  

In relation to Peru, the EU raised concerns about the application of its duty drawback system. 

8 

 
 
 
Trade Committee (9 December 2016) 

The Trade Committee took stock of the work in the subcommittees. The EU reiterated some 
of its main concerns, notably: direct transport and splitting of consignments in Colombia and 
Peru,  EU  market  access  to  public  procurement  at  sub-central  level  in  Colombia,  continued 
discrimination  of  imported  spirits in  Peru,  lack  of  enforcement  for  GIs  in  Peru  (Oporto  and 
Feta), obligation for imported beers to attach strip stamps in some departments in Colombia. 
Peru raised concerns about EU Regulation (EU) 2015/2283 on novel foods.  

The  EU  gave  an  update on  the ratifications  of  the  Agreement  by  Member  States.  Colombia 
and Peru informed about the ratification process of the Protocol of Accession of Croatia. The 
Parties  welcomed  the  ongoing  ratification  process  of  the  Protocol  of  Accession  of  Ecuador 
and its provisional application as of 1 January 2017.  

5.  IMPLEMENTATION  OF  THE  PROVISIONS  ON  TRADE  AND  SUSTAINABLE 

DEVELOPMENT  

5.1.  Sub-Committee on Trade and Sustainable Development 

The third meeting of the Sub-Committee on Trade and Sustainable Development (here-
after the "Sub-committee") was held in Brussels on 7 and 8 December 2016.  

5.1.1. 

Implementation of labour-related provisions 

The EU informed on the ratification of ILO Conventions by its Member States, 
in  particular  the  2014  Protocol  on  Forced  Labour  and  ILO  Conventions  on 
Domestic  Workers  and  on  Work  in  Fishing.  It  informed  about  the  European 
Platform  on  Undeclared  Work  as  a  tool  to  address  the  informal  economy  and 
about  an  ongoing  review  of  EU  Health  and  Safety  legislation.    The  EU 
expressed concerns on labour issues raised by the ILO supervisory system, and 
further  encouraged  Colombia  and  Peru  to  address  the  identified  shortcomings 
and improve the effective implementation of International Labour Standards.   

Colombia  described  reforms  aimed  at  ensuring  freedom  of  association  for 
workers and progress in diminishing impunity and violence levels, as well as its 
ratification of the ILO Domestic Workers Convention.  Colombia also informed 
on work to implement the labour policy recommendations in the context of the 
accession  process  to  the  Organisation  for  Economic  Co-operation  and 
Development  (OECD).  Colombia  highlighted  positive  experiences  with  social 
dialogue and with mechanisms for the resolution of labour conflicts. It noted the 
challenges brought by the peace process regarding decent work and informality 
in  rural  areas.  It  gave  an  update  on  measures  aimed  at  reinforcing  labour 
inspection and tackling subcontracting and informal labour practices.  

Peru set out the priorities of the new government: formalization; social dialogue; 
preventing  and  eradicating  child  and  of  forced  labour;  labour  inspection.  It 
referred  to  its  recent  ratification  of  the  ILO  Maternity  Protection  Convention 
and  mechanisms  to  involve  social  partners  through  the  National  Council  of 
Labour and Promotion of Employment.   

9 

 
 
5.1.2. 

Implementation of environment-related provisions 

The EU highlighted developments under multilateral environmental agreements, 
and actions to implement its Paris Agreement commitments. On the Conference 
of the Parties to the Convention on International Trade in Endangered Species 
(CITES), the EU encouraged Colombia to implement its commitments on robust 
control  mechanisms  for  trade  in  CITES-listed  crocodile  and  caiman  skins. 
Colombia  indicated  that  it  would  come  back  to  the  EU  with  additional 
information on the measures adopted to address this issue. The EU presented the 
circular  economy  package  and  its  interest  in  related  business  meetings  to 
Colombia. 

Peru  highlighted  its  strategy  axes  “Perú  Limpio”  and  “Perú  Natural”  and  the 
priorities  of  the  new  government:  sustainable  use  of  biological  diversity, 
especially  forests;  climate  change  adaptation  and  mitigation;  efficient 
management  of  solid  waste;  integrated  coastal  zone  management;  prevention 
and  control  of  pollution  and  eco-efficiency.  It  highlighted  the  need  for  an 
adequate  institutional  framework  and  for  work  across  sectors  and  at  different 
levels of government. 

5.2.  Domestic consultation and Sub-Committee sessions with civil society 

Domestic consultation 

Since  its  establishment,  the  EU  civil  society  consultation  mechanism  ("domestic 
advisory  group")  met  five  times,  with  the  European  Economic  and  Social 
Committee providing three members as well as the Secretariat.   

Colombian  civil  society  representatives  held  several  meetings  at  the  EU 
Delegation in Bogota, including one with the Chair of the EU domestic advisory 
group,  to  discuss  the  possibility  of  establishing  sub-group(s)  of  its  consultation 
mechanisms to follow up the Agreement. 

Sub-Committee session with civil society 

An open session of the Sub-Committee with civil society was held on 8 December 
2016  with  approximately  60  representatives.  It  was  web-cast  live. The  Parties 
informed  civil  society  of  the  Sub-Committee's  discussions  through  an  oral  and 
written report, followed by a question and answer session and debate. Civil society 
representatives  from  the  EU,  Colombia  and  Peru  submitted  a  joint  statement, 
which  raised labour,  environment and human rights  issues, access to  markets for 
small  producers  and  SMEs  and  made  recommendations  concerning  civil  society 
participation.    

5.3.  Further work and other activities 

All sides agreed to intensify contacts to develop activities implementing the Trade 
and  Sustainable  Development  provisions.    Besides  environment  and  labour,  the 
Parties  discussed  potential  work  on  Responsible  Business  Conduct/Corporate 
Social Responsibility as a cross-cutting instrument. 

On the request from Colombia and Peru, the EU organised a technical seminar on 
6 December  2016  with  video  link  to  Bogota  and  Lima,  where  it  presented  and 
discussed methodologies used in impact assessments of EU trade agreements.   

10 

 
 
Colombia 

In December 2016, the EU participated in a regional OECD seminar in Colombia 
on responsible mineral supply chains, focussing on its forthcoming Regulation on 
conflict  minerals.  As  an  outcome,  the  EU  Delegation  in  Bogota  set  up  a 
coordination group on illegal mining with other embassies to coordinate positions 
and plan joint actions. 

During  the  visit  of  EU  Commissioner  for  Agriculture  Phil  Hogan  in  February 
2016, the EU and Colombia agreed to start negotiations on a bilateral agreement 
on trade in organic products. 

A number of events were organised to raise visibility on sustainable development 
and its link to the peace process, including visits in areas affected by the conflict. 
The latest event was a conference in February 2017 on how the Trade Agreement 
can  contribute  to  creating  economic  opportunities  in  the  context  of  the  peace 
process.  To  increase  understanding  of  the  labour  situation  in  Colombia,  the  EU 
Delegation  organised  a  3-day  workshop  to  discuss  the  implementation  of  labour 
standards.  

Peru 

As  part  of  the  project  "Promoting  Corporate  Social  Responsibility/Responsible 
Business  Conduct  in  Latin  America  and  the  Caribbean  –  Pilot  phase”,  the  EU 
Delegation  in  Peru  held  the  seminar  "Towards  OECD  membership:  Promoting 
Responsible Business Conduct in Peru" in Lima on 29 November 2016. 

The  EU  Delegation  in  Peru  participated  in  NEXOS  +1,  a  seminar  on 
environmentally  sustainable  business  models  which  took  place  in  Lima,  on 
24 October 2016. 

6.  SPECIFIC AREAS SUBJECT TO REPORTING OR MONITORING 

6.1.  Use of Tariff-rate quotas  

The Agreement provides for tariff rate quotas (TRQs) which grant the other Party preferential 
tariff  treatment  up  to  the  quota’s  quantitative  threshold,  above  which  imports  are  subject  to 
the applicable Most-Favoured Nation tariff. 

Tariff quotas established by the EU 

Tables 7 and 8 show the rates of utilisation of TRQs established by the EU for Colombia and 
Peru. Only TRQs that were used are mentioned. 

Colombia's use of the TRQ for cane or beet sugar and chemically pure sucrose has increased 
from 88.4% to 96.2%. Other TRQs are hardly or not utilised.  

Table 7: Rate of utilisation of EU TRQs by Colombia  

2013 

2014 

2015 

2016 

Cane sugar and chemically pure sucrose  88,4%  85.72%  93.8%  96.2% 

Other sugar confectionery 

1,37%  1.32%  1.23%  1.5% 

Source: TAXUD, Surveillance Database 

11 

 
 
 
 
 
TRQ  for  cane  sugar  has  been  almost  fully  utilised  by  Peru  since  the  entry  into  force  of  the 
Agreement. TRQ for corn has also a high rate of utilisation. Peru is starting to take advantage 
of the TRQ on garlic. Other TRQs have very low utilisation rate.  

Table 8: Rate of utilisation of EU TRQs by Peru 

Cane sugar 
Sweetcorn 
Garlic 
Rum 
Maize (corn) 
Sugar 
confectionery 

2013 
100% 
21% 
0% 
0% 
0.7% 

2014 
100% 
76% 
0% 
0% 
2,9% 

2015 
3,5% 
83,2% 
2,4% 
0% 
1,8% 

2016 
99,8% 
87,3% 
53,8% 
7% 
6,1% 

0.02% 

0.01% 

0,16% 

0,1% 

Source: TAXUD, Surveillance Database 

Tariff quotas established by Colombia  

The EU is fully using the TRQs established for mushrooms, dairy products such as yogurt and 
milk and cream in powder, whey, preparations for infant use and sweetcorn, to a lesser extent 
TRQ on ice cream (though increasingly), and barely its TRQs on cheese (average of 8%) and 
on sugar confectionery (average of 3%).   

Table 9: Rate of utilisation of Colombia TRQs by the EU  

Mushrooms 
Milk and cream 
in powder 

2013 
1.6% 

2014 
5% 

2015 
100% 

0% 

34.9% 

100% 

Whey 

57.6% 

50% 

92.9% 

2016 
100% 

100% 

No more 
TRQ 

Preparations for 
infant use 
Yogurt 
Sweetcorn 
Ice cream  
Cheese 
Sugar 
confectionary 

40.4% 

67.5% 

99.1% 

100% 

0% 
0.42% 
5.26% 
9% 

0.5% 
54.2% 
13.4% 
8% 

0.8% 
100% 
7.4% 
8.2% 

100% 
100% 
25.9% 
7.9% 

1.8% 

3.4% 

3.1% 

3.8% 

Source: DIAN (Dirección de Impuestos y Aduanas Nacionales) 

Tariff quotas established by Peru 

The EU is  fully using the TRQ for butter  and milk powder,  and almost  fully for ice cream. 
Other TRQs are barely used.  

12 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Table 10: Rate of utilisation of Peru TRQs by the EU  

Butter 
Cheese 
Ice cream 
Milk powder 
Milk for babies 
Chewing gum 
Sugar 
Rum 

2013 
0% 
0% 
58.6% 
0% 
0% 
0.3% 
0% 
3.5% 

2014 
0% 
0% 
89.6% 
4.1% 
0% 
0% 
0% 
0.0% 

2015 
96.0% 
0% 
98.5% 
99.7% 
0% 
0.1% 
0% 
3.5% 

2016 
100% 
4.3% 
95.6% 
100% 
29.9% 
2.2% 
0.8% 
5.8% 

Source: SUNAT (Superintendencia Nacional de Aduanas y de Administración Tributaria) 

6.2.  Implementation  of  Regulation  (EU)  No  19/2013  of  the  European  Parliament 
and  the  Council  implementing  the  bilateral  safeguard  clause  and  the 
stabilisation mechanism for bananas  

Regulation  (EU)  No  19/2013  of  the  European  Parliament  and  the  Council  of 
15 January 2013 implementing the bilateral safeguard clause and the stabilisation 
mechanism for bananas of the Trade Agreement between the European Union and 
its  Member  States,  of  the  one  part,  and  Colombia  and  Peru,  of  the  other  part7 
(hereafter  the  "Regulation")  provides  for  the  possibility  to  initiate  a  safeguard 
investigation or introduce prior surveillance measures under conditions set out in 
the  Regulation.  In  accordance  with  Articles  3  and  13  of  the  Regulation,  the 
Commission  has  been  monitoring  the  evolution  of  imports  of  fresh  bananas  (HS 
08039010) from Colombia and Peru.  

In  2015,  EU  imports  of  fresh  bananas  from  Peru  increased  by  almost  5%  in 
volume  compared  to  2014.  This  trend  continued  in  2016,  with  an  increase  of 
almost 10% compared to 2015. In 2015 and 2016, EU imports from Peru reached 
in October the trigger import volume established by the Agreement (86,250 tonnes 
in 2015 and 90,000 tonnes in 2016). Pursuant to Article 15(3) of the Regulation, 
the  Commission  examined  the  impact  on  the  EU  banana  market,  taking  into 
account,  inter  alia,  the  effect  on  the  price  level,  developments  of  imports  from 
other sources and the overall stability of the Union market.  

The  Commission  concluded:  (1)  that  given  that  the  EU  imports  of  fresh bananas 
from  Peru  represented only  around  4%  of  total  imports  in  2015  and  slightly  less 
than 2% in 2016, (2) that imports of fresh bananas from other traditional exporting 
countries  remained 
in  comparable 
the 
stabilisation  mechanisms,  (3)  that  the  average  wholesale  banana  price  did  not 
register notable changes and (4) that there were no indications of a negative effect 
for the stability of the EU market, EU producers or the EU outermost regions, the 
suspension  of  the  preferential  duty  on  bananas  originating  in  Peru  was  not 
appropriate8. 

thresholds  defined 

largely  below 

7 
8  

OJ L 17, 19.01.2013, p.1. 
OJ L 328, 12.12.2015, p. 116 and OJ L 326, 1.12.2016, p.16. 

13 

 
 
 
 
 
                                                 
Table 11:  EU imports of bananas from Peru in 2015 and 2016  
(aggregate volumes in tonnes) 

Peru

Trigger level

140.000,00

120.000,00

100.000,00

80.000,00

60.000,00

40.000,00

20.000,00

0,00

In  2015,  EU  imports  of  fresh  bananas  from  Colombia  increased  by  21%  in  volume 
compared  to  2014.  Yet,  in  2016,  they  decreased  by  4%  (from  1,307,458  tonnes  in 
2015 to 1,249,513 tonnes in 2016).  

Colombia remained  significantly below (at  about 75%) the trigger import volume as 
established by the Agreement, i.e. 1,687,500 tonnes in 2015 and 1,755,000 tonnes in 
2016. 

Table 12:  EU imports of bananas from Colombia in 2015 and 2016  
(aggregate volumes in tonnes) 

2.000.000,00
1.800.000,00
1.600.000,00
1.400.000,00
1.200.000,00
1.000.000,00
800.000,00
600.000,00
400.000,00
200.000,00
0,00

Colombia

Trigger level

14 

 
 
 
 
 
 
 
  
  
 
7.  CONCLUSIONS  

Four years after its entry into force, the Agreement is functioning well overall. It is clear that 
the  economic  slowdown  in  Latin  America  and  the  fall  in  commodity  prices  on  the  global 
market  have  affected  trade  flows.  Yet,  the  decrease  of  bilateral  trade  between  the  EU  and 
Colombia (23.5%) and between the EU and Peru (11%) is lower than the overall decrease of 
these countries' trade with the world (approximately 36% for Colombia and 18% for Peru).  

While  the  share  of  mineral  products  in  the  exports  of  Colombia  and  Peru  to  the  EU  has 
decreased  and  is  today  significantly  lower  than  to  the  rest  of  the  world,  the  Agreement  has 
contributed  to  the  diversification  of  both  countries'  exports.  The  Agreement  provided 
opportunities for new exports, notably for agricultural products, which  are now a key element 
in both Colombia's and Peru's export structure to the EU accounting respectively for almost 
40%  and  51%  of  the  value  of  total  exports  to  the  EU.  This  diversification  also  led  to  an 
important expansion in the number of new exporters to the EU, notably Small and Medium-
sized Enterprises, which are strongly represented in the fast-growing categories of exports of 
agricultural products.  

Full  implementation  of  the  Agreement  continues  to  be  of  key  importance  to  bring  the 
expected benefits to both sides. While implementation is going well in most fields, some areas 
need further attention, for example the implementation by Peru of its obligations in the area of 
sanitary and phytosanitary measures to allow EU exports of agricultural products. 

The  taxation  of  spirits  -  a  long  standing  issue  in  Colombia  and  following  the  initiation  of 
Dispute Settlement case by the EU (DS502) - has registered major progress with the adoption 
of  a  reform  law  on  spirits.  Law  1816,  entered  into  force  on  1  January  2017,  reformed  the 
spirits  regime  by  removing  the  fiscal  discrimination  and  also  disciplined  the  monopolies 
exercised by the Colombian departments over the production, introduction and distribution of 
spirits. The Commission is closely monitoring the implementation of these steps. In contrast, 
the discriminatory taxation on spirits is still an unresolved issue in Peru.  

Discussions  with  Colombia  on  the  implementation  of  the  market  access  commitments  for 
procurement at sub-central level in Colombia are also positive.  

Both  countries  need  to  make  further  efforts  to  ensure  the  enforcement  of  EU  geographical 
indications in both countries.  

The  implementation  of  the  Trade  and  Sustainable  Development  chapter  has  progressed  and 
there  has  been  an  increasingly  open  dialogue  on  labour  with  both  countries.  Challenges 
nevertheless remain both on labour and environment issues and to support the implementation 
of this chapter, further efforts are necessary including cooperation activities. 

Regarding the stabilisation mechanism for bananas, there was no indication that the stability 
of the EU market nor that the situation of the EU producers have been affected by the level of 
Colombian and Peruvian exports. The close and reinforced monitoring of banana imports and 
the evaluation of the market situation will continue. 

The Commission will continue to pursue the implementation of the Agreement with Colombia 
and Peru and now also Ecuador, so that citizens, economic operators and other stakeholders 
on  both  sides  are  able  to  fully  benefit  from  the  opportunities  the  Agreement  creates.  The 

15 

 
 
 
 
Commission  calls  upon  the  EU  Member  States  and  the  European  Parliament  to  continue  to 
actively contribute to this process. 

16