The surprising cancellation of the fourth round of negotiations of the Association Agreement (AA) between the European Union and the Andean Community (EU-CAN), which was supposed to take place from July 7^th to July 11^th, has revealed the serious difficulties the AA is presently experiencing. These problems jeopardize its viability, at least in the terms it was originally presented. This article aims at looking back on the milestones of these negotiations, to at the same time reveal their true character: A new neoliberal imposition with a colonial attitude, disguised as "Association".

The EU-CAN AA: Key For Imposing an FTA

The EU-CAN is an instrument that proposes a redefinition in the relationship between the South American block and the EU, through negotiations based on three pillars: trade, political dialogue, and economic cooperation. As a response to denouncements by many peoples' movements, for almost a year the EU kept on repeating, to the point of exhaustion, that these agreements did not constitute a Free Trade Agreement. On contrary, they went beyond the free trade model, comprising Free Trade as one aspect in harmony with social and political objectives serving the altruistic mission of "supporting" Andean development. The EU claimed that the AA is not a free trade agreement despite the fact that one of its explicit goals is the establishment of a Free Trade Area in the next 10 years. But although the EU denied the AA to be nothing but a disguised FTA, since the formal beginning of negotiations in Bogota (September 2007), its neoliberal nature has clearly been taking shape.

But it was not until the Third Round of Negotiations that took place in April of this year that the façade of development discourse started to crumble. This was when all the noble social-democratic rhetoric gave way to the true neoliberal nature of the AA, which was actually more than obvious, as the supposed harmonious equilibrium between the three pillars is inconsistent with the fact that in practice 11 out of 14 work-groups were dedicated to the trade pillar. During the third round, three negotiation tables were blocked (services and investments, intellectual property and sustainable trade and development); the government of Bolivia, backed by Ecuador, claimed that for the establishing of free trade not only time-based variables should be considered (a period of not more than 10 years according to the European proposal), but also the need to exclude topics from the agenda, such as the privatization of services and public contracts, as well as establishing clear landmarks of a social character, and not merely a schedule to achieve trade opening. Furthermore, at that time, the free trade agreements that Peru and Colombia had developed with the US were still considered the basis of negotiation.

The AA’s neoliberal nature, if anyone still doubted it, was revealed in May in a worryingly aggressive manner in Lima during the 5th Summit of Latin American, Caribbean and European Union Heads of State and Government, by Peter Mandelson, the EU trade commissioner, in an EU-CAN meeting. He stated that the AA was essentially an FTA and that he would not accept proposals outside of this framework, and, referring directly to Bolivia, added that those insisting on these proposals would be excluded from the Fourth Round of negotiations. Although the European member of parliament Helmut Harkov, head of the European Parliament’s international trade committee,  quickly contradicted Mandelson by stressing the need to strengthen the pillars of political dialogue and cooperation while looking for alternatives to free trade (such as reinforcing the SGP+ system), the neoliberal emphasis of the negotiations became evident even to the most gullible.

Evo Morales, making an allusion to Mandelson's words, referred to the imposition of an FTA by the EU in harsh terms: "He can't tell us: accept the pattern of the Free Trade Agreement, or stay out of negotiations (…) We do want trade, but a fair one, allowing us to find an equilibrium between continents and families" [1].

Crisis in the CAN?

But during the Lima summit, it also became much more obvious that the Andean integration through CAN was splitting everywhere: the impetus to free trade agreements with the US, on the part of Colombia as well as Peru, had already caused a recent fissure when Venezuela decided to withdraw from the Community, claiming that these countries were harming CAN as a whole. The withdrawal of Venezuela did not bring to an end the problems caused by FTAs: in fact, Bolivia did not hide its intention to sue Peru if it implements the FTA already approved with the US in the coming months. It claims that this would not only be against the CAN rules, but it would also affect the other countries, for very fundamental reasons: as the CAN is a market where products circulate free from tariffs, the fact that a country enters into an FTA with the USA or any other country has the consequence that products or investments of these third countries may enter into the rest of the countries not included in the agreement, using the country that signed it as a platform.

Up until now, the regional nature of the negotiations, from block to block, has created a lot of pressure inside the CAN by aggravating the social and economic differences between its four member countries and their different political visions, and thus encouraging centrifugal tendencies. The Bolivian and Ecuadorian governments stressed that they do not want FTAs and that they expect the EU to keep its promise to make the AA something different. It is worth mentioning that, if they ever sincerely believed in the honesty of "development" and "social-democratic" promises of the EU, after Mandelson made public the orientation of the European block in his document "Global Europe", they are either enormously naïve or have dreadful advisers.

On the other hand, the governments of Peru and Colombia have shown an even stronger addiction to free trade than their European partners, and they have entered into acute disagreement about the issue of intellectual property rights with Bolivia, particularly concerning the patenting of biodiversity. Last August 14, Decision 486 about Intellectual Property was modified, which is essential for fostering the Peruvian FTA with the USA as well as the AA. They seek to change the compulsory character of the Decision through it and to convert it into a mere recommendation in order to be able to "extend the periods and faculties in the application of patents and multiclass registration of brands; introduce additional specifications that limit the disclosure of an invention; compensate for delays in the granting of patents; eliminate the obligation to register the license contracts to use brands; give better protection to brands against denominations of origin; establish a better control regime of intellectual property at the frontier which would be extended to transporters." [2]

Parallel Negotiations?

These internal contradictions in the CAN have been skillfully used by the EU with its perennial imperialist vocation. The EU has a special interest in a market which, although nowadays relatively insignificant on its own, is potentially important with its 97 million inhabitants and growing trade between the two blocks.

This is how the EU begins to change the discourse, from a focus on regional negotiations to parallel negotiations: Ecuador and Bolivia on one side, Colombia and Peru on the other. Economic topics are excluded from the negotiations with the former, while the establishing of an FTA continues with the latter. With Mandelson's own words "If they (ed. Bolivia and Ecuador) feel that the moment is not right to enter into the same commitment that, for example, Colombia and Peru feel able to make, I will respect their wishes". He adds that both countries could sign the agreement made with Colombia and Peru once they feel "ready" [3].


It all sounds very democratic, but (and there is always a "but") the big problem is that this is a deceitful and – like everything in the EU – seemingly "democratic" way to, in fact, ignore the proposals on the part of Ecuador and Bolivia which offer an alternative to free trade. Like this, the EU shows that it is not interested in dialogue but in the imposition of a neoliberal agenda. And even if Bolivia and Ecuador do not want to accept these conditions now, sooner or later they would have to do so. After being excluded from the negotiations on trade and their proposals being rejected, they will eventually have to accept what has been negotiated with Peru and Colombia once they feel "ready". This is neither democratic nor does it respond to the necessity of negotiations in their true sense, which imply looking for common grounds that are not unacceptable to any of the parties. This is an effort the EU has not been willing to undertake.

The governments of Colombia and Peru quickly echoed Mandelson's words. The Peruvian Minister of Foreign Trade, Mercedes Aráoz, was first to give the green light to this about-turn in the negotiations, asserting that "It is necessary to accelerate the signing of the Free Trade Agreement (FTA) between the Andean Community and the European Union (EU), but respecting each Andean country's priorities" [4].

Aráoz added that "advances are made at different paces.  Peru wants to go faster, and we believe that the negotiations could conclude before March of 2009.” The Peruvian President, Alan García, supported the Minister’s statements, showing that such a vision was not just an "outburst" of an irresponsible minister: “We need to understand that opportunities can be missed, if one starts to discuss philosophical issues, the train goes by and other countries take advantage of relations with Europe” [5].

For his part, the ultra right-wing Colombian president Álvaro Uribe expressed himself in similar terms: “I am of the opinion that countries like ours, who have demonstrated their readiness to enter into negotiations, should respect the speeds, the flexibilities, and the decisions that Bolivia and Ecuador take about the issue, and that they for their part should express that they respect the will of Colombia and Peru to advance a prompt conclusion to the negotiations” [6].

In effect, this tendency to promote two parallel negotiations deepens CAN’s internal crisis and comprises their viability as an economic block—not to mention the impact that the implementation of the FTA with the EU would have for the same reasons that we have explained in respect to the US-Peru FTA.  Colombia and Peru, in this case, would end up being intermediaries for the entrance of products and capital from these powers into the rest of CAN, free from taxes.

This internal division of CAN is really not that new; it is an expression of the little cold war emerging on the continent between those (diminishing) segments that still follow the Washington Consensus, and populist and "progressive" governments. This has been stated very clearly by the President of the National Confederation of Private Business Associations in Peru (CONFIEP), Jaime Cáceres Sayán, who said:

"Peru must insist on dissociating itself as much as possible from Chavez (…) we have to free ourselves entirely and make joint efforts with other countries to achieve this FTA with the EU", he said. Nevertheless, he added that if negotiation in one block is not possible, "I guess that as Peruvians we have to do what is possible to obtain it individually" [7].

In this eagerness to promote the FTA at any cost, the EU, although it has not caused the very real tensions already existing among the members of the CAN, is exacerbating these tensions to a point where they become an element of pressure that can lead to the Community's imminent disintegration. This role is, to say at least, contrary to the initial purpose of the AA as the EU put it: "One important aspect of this agreement is that it will be negotiated from region to region to give greater vigor to the regional integration process of the Andean Community" [8]. That is, we are again facing a situation where the EU's promises are completely contradictory to reality.

What will be coming up in the negotiations?

In the face of all these problems, it was no surprise that the fourth round of negotiations which was supposed to take place at the beginning of July was cancelled unilaterally by the EU, with the argument that the CAN had not been able to agree on positions regarding topics of interest to the European, such as the area of services or Intellectual Property (which was "resolved" recently, at the middle of August)

On one hand, Ecuador as well as Bolivia is opposing an FTA, although recently, the Ecuadorian government's decision to support the amendment of decision 486 on Intellectual Property, which deepens the crisis in CAN, seems to indicate that Ecuador is more ready to make concessions to the neoliberal counterpart (Peru and Colombia) of the CAN than Bolivia. In turn, neither Colombia nor Peru is willing to make any concessions. Egged on by the EU, they even seem ready to break off if necessary, so as to promote nothing less than an FTA with the EU.

However, it appears that taking this FTA forward will not be that easy, considering the present equilibrium of power in the CAN and, above all, the opposition it would face in Bolivia, Ecuador and Peru. In the latter, the popular movement, after a series of strikes and demonstrations that were facing harsh repression from the government of Alan Garcia, is regaining strength.

Correa, in a letter addressed to the EU, stressed this more or less clearly: "I find it necessary to ratify my Government's decision, which goes beyond the relationship with the EU, not to conclude free trade agreements with any country. We do believe in trade, but not in the irrational and indiscriminate opening of markets" [9].

And the differences in the area of trade and sustainable development remain unresolved, even after the extraordinary meeting on August 14, which made it clear that there would be no joint position on these issues. Therefore the continuation of negotiations as a block remains suspended.

But when it cancelled the round, the EU probably also had in mind the problems that could have emerged with the negative reactions that could be felt all over Latin America against the new immigration policies approved in June.  The Return Directive seems at present to be making progress in the negotiations more difficult.  It certainly creates resistance in the Andean countries that have a significant number of immigrants in Europe.  It would have been an awkward thing to discuss while spears were pointed at Brussels, including by international human rights organizations because of an extremely repressive legislation, which even allows for the separation of children from their parents in case of deportation, and retention during up to 18 months in specialized detention centers. This is serious, as the EU had committed itself during the Third Round of Negotiations of the EU-CAN AA in Quito to integrate the issue of migration into the 4^th round of negotiations.  By approving this legislation and ignoring the commitment to deal with this issue with the CAN in the Brussels round, it does not show much respect for its Andean "partners", and it reveals the EU's negotiation style: make it sound democratic, but act conversely when it comes to facts.

It is scarcely probable that Uribe or Garcia will go any further than expressing their "unease" (and they can't help but do so, with close to two million Andean immigrants in Europe). But Correa, in his function as pro tempore president of the CAN, subordinated the negotiations to the need to repeal this directive. In his own words, "In the case that (…)migrants' rights are seriously violated (…) my government will seriously consider withdrawing from the negotiation of the Association Agreement" [10].

In reality, although the forces that promote the neoliberal free-trade project are strong, the return directive which has fueled a certain reciprocal mistrust as well as the serious internal crisis of the CAN, exacerbated by the pressures from Brussels, have led to a situation where the cancelling of negotiations is not surprising. It would not even be surprising if they were definitely abandoned, while the EU and the Peru-Colombia axis can seek another formula to reach their longed-for FTA.

The question is: When will the dialogue be revived? On what basis?  Will there be insistance on the block-to-block negotiation formula, or will individual negotiations begin, or only with certain CAN countries?  Whatever it will be, the probability is small that the EU will give in to the formulae through which Bolivia or Ecuador seek to mitigate the most harmful aspects of international trade and to modify, even if only tentatively, the neo-colonial relationship of dependence that governs North-South trade.  We cannot expect the EU, which is already consolidating its imperial project of a "Global Europe" (despite the Irish slip-up with the Lisbon referendum), to look for solidarity-based models of exchange, which can only be built from the grassroots.  (Translation:  ALAI).

(Note:   The Spanish version  http://alainet.org/active/26042 includes additional referencias).

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[1] http://www.adnmundo.com/contenidos/comercio/evo_morales_tlc_colonizacion_dominio_garcia_uribe_ue_can_referendum_colombia_peru_ecuador_bolivia_ce_160508.html

[2] http://www.asc-hsa.org/node/574

[3] http://www.elcomercio.com.pe/ediciononline/html/2008-05-27/union-europea-aceptaria-negociar-pactos-comerciales-peru-y-colombia-dentro-can.html

[4] http://www.adnmundo.com/contenidos/comercio/peru_acelerar_tlc_ue_ecuador_bolivia_chavez_can_estados_unidos_ce_140508.html

[5]http://adnmundo.com/contenidos/comercio/alan_garcia_tlc_ue_can_bolivia_ecuador_peru_mexico_calderon_ce_150508.html

[6]http://www.adnmundo.com/contenidos/comercio/evo_morales_tlc_colonizacion_dominio_garcia_uribe_ue_can_referendum_colombia_peru_ecuador_bolivia_ce_160508.html

[7]http://www.adnmundo.com/contenidos/comercio/peru_acelerar_tlc_ue_ecuador_bolivia_chavez_can_estados_unidos_ce_140508.html

[8] "RECOMMENDATION FROM THE COMMISSION TO THE COUNCIL  authorising the Commission to open negotiations for the conclusion of an Association Agreement between the European Community and its Member States and the Andean Community and its Member Countries". p.6

[9] http://www.gloobal.net/iepala/gloobal/tematicas/crearpdf.php?id=5151 see p.4

[10] http://www.gloobal.net/iepala/gloobal/tematicas/crearpdf.php?id=5151 see p.3