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CENTRAL AMERICA: “It’s Up to the EU Whether the Deal Is Signed”

Danilo Valladares

GUATEMALA CITY, Apr 23 2010 (IPS) - “We do not see a real willingness on the part of Europe to take Central America’s interests seriously,” Guatemalan deputy minister for integration and foreign trade Raúl Trejo said in Brussels, at the final round of negotiations for a treaty between the two regions.

The Association Agreement between the blocs addresses three fields: enhancing political dialogue, stepping up cooperation, and creating a free trade area between the European Union and Central America. But the third is proving to be a source of friction.

The countries of Central America are calling for a reduction in European import duties for bananas and larger annual quotas for sensitive items like dairy products, meat, sugar and rice, but so far no understanding has been reached.

Also in dispute are rules of origin — used to determine what products can benefit from preferential duties — on coffee, tuna, plastics, fuel alcohol and ethyl alcohol.

In spite of “the obvious differences in economic development (between the regions), the countries of Central America are not yet seeing a positive response from Europe in regard to the interests of this region,” which is asking the European Union to recognise the asymmetries and be more flexible in the negotiations, Trejo told IPS.

“We are still a long way from reaching agreements on access for sugar quotas, textiles and apparel, and beef. It is up to the EU whether or not this treaty will be signed,” said Trejo, who warned that “if Central American interests are not duly addressed, our recommendation is that the agreement should not be signed.”

While Central America wants to increase its sugar quota to 300,000 tonnes a year, the EU is offering half that quantity.

The Central American bloc is also requesting an annual quota of 80,000 tonnes for rice, and 48,000 tonnes for beef, whereas Europe is only willing to accept 4,000 tonnes for each commodity.

The final and decisive round of negotiations opened Monday in Brussels between Costa Rica, El Salvador, Honduras, Nicaragua, Guatemala, Panama and the 27 member countries of the EU.

The talks are also covering the fields of political dialogue and cooperation. Central America has asked for a development aid fund of 60 billion euros (80.7 billion dollars), to bolster infrastructure and social cohesion in the region.

The parties are aiming for a satisfactory conclusion to the negotiations by the end of April,so that the agreement can be signed May 18 in Madrid, at the sixth European Union-Latin America and the Caribbean (EU-LAC) Summit.

However, doubts persist. “My main concern is the question of export subsidies,” the head of the National Horticultural Corporation of Costa Rica, Giovanni Masís, told IPS.

As an example, he mentioned the subsidies paid to farmers in the Netherlands, which “exports potatoes and onions to our region at prices below those of the United States and Canada,” he said.

“The Costa Rican farming sector has a high export potential, but Europe must make its rules for the entry of our products more flexible,” Masís said.

The EU, with its 500 million consumers, is a major market for Central America. In 2008, the region’s trade with the European bloc was worth over 10 billion euros (13.5 billion dollars).

Central American civil society organisations have been sceptical about the supposed advantages of the Association Agreement with the EU.

On Apr. 16, the Mesoamerican Initiative for Trade, Integration and Sustainable Development (CID), made up of non-governmental organisations (NGOs) in Guatemala, El Salvador, Honduras and Nicaragua, asked the Central American governments to “suspend” negotiations on the agreement.

“The negotiations should be suspended until Central America achieves an appropriate equilibrium in the fields of political dialogue, cooperation, and above all, trade,” said José Ángel Tolentino, a representative of El Salvador’s National Foundation for Development (FUNDE) and a member of CID.

On the other side of the Atlantic, conservative Spanish Member of the European Parliament (MEP) José Ignacio Salafranca called Tuesday for “a greater measure of generosity in the agreement under negotiation” with Central America, since 25 percent of this region’s exports are sold to the European market, while it absorbs only two percent of EU exports.

He also urged that the talks be concluded ahead of the EU-LAC Summit.

The Association Agreement with the EU “is harmful, especially for the most vulnerable population of small business owners and producers,” because it does not take their interests into account, Norayda Ponce of the non-governmental Coordination of NGOs and Cooperatives (CONGCOOP) of Guatemala, told IPS.

However, she recognised that at this stage it makes no sense to call off the talks. Instead, “we should carry out a social audit and take steps to protect our interests,” actions that were not taken when the Dominican Republic-Central American Free Trade Agreement (DR-CAFTA) was signed with the United States in 2004, she concluded.

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