The European Commission has hailed an EU trade agreement signed Tuesday (26 June) with Colombia and Peru as an exciting investment opportunity but NGOs and trade unions have expressed concerns over social and human rights record of the Latin American countries.

EU Trade Commissioner Karel De Gucht signed the deal on Tuesday (26 June) together with Danish Ambassador Jonas Bering Liisberg representing the Presidency of the Council of the EU, the Colombian Minister for Trade Sergio Díaz-Granados and the Peruvian Minister for Foreign Trade José Luis Silva Martinot.

Once fully implemented, the European Commission estimates that the trade deal will relieve EU exporters of €270 million in duties annually.

But the trade deal has got trade unions worried about social dumping and human rights abuses in those countries.

"In Colombia, union leaders and labour activists continue to be assassinated, threatened, and intimidated, and the perpetrators enjoy almost complete impunity," the European Trade Union Confederation (ETUC) said in a statement.

"The appalling levels of violence negate in reality any promises for the free exercise of fundamental labour rights, including freedom of association,” it added.

Although the European Parliament has called for a binding action plan on the improvement of labour and other human rights, ETUC calls for “this to be undertaken before further hasty steps are taken.”

In February, the ETUC sent a letter to Members of the European Parliament urging them not to support the agreement at this time, saying that a vote for the EU-Colombia Free Trade Agreement (FTA) would “disregard the terrible human rights record in Colombia and would damage the EU’s reputation as a leading force in the promotion of human rights and basic freedoms.”

A group of Central American, Andean and European organisations and social movements has released a manifesto criticising the trade deal after negotiations were concluded in May last year.

The manifesto, signed by the International Office on Human Rights and Oxfam among others, said the current FTA model could “negatively affect the existing inequalities between the EU and Central American countries together with Colombia and Peru,” adding that the results would “favour interests in Europe while diminishing development programmes and the regional growth of those regions.”

Commission: Benefits outweigh costs

The European Commission contends that the agreement does not favour European interests, saying, “Given the relative size of our economies the economic and social impact in Colombia and Peru of the proposed Trade Agreement will by far outweigh – in relative terms – the benefits it will generate for the EU.”

The European Parliament tried addressing concerns by putting forth a resolution on 13 June asking Colombia and Peru to define a “roadmap” to guarantee the protection of labour rights, the environment, and human rights in the FTA ratification process.

The Commission says that civil society organisations will monitor the implementation of the human and labour rights commitments included in the deal.

The trade agreement, which will eliminate tariffs between the two regions and increase market access, will provisionally take effect once the European Parliament has given its consent and the ratification process is concluded in Peru and Colombia.

Businesses will hope that the newly signed agreement will open trade markets on both sides and will hope to build on the trade relationship that was worth €21.1 billion in 2011.

Brazil businessmen eye separate trade track

Frustrated by slowing trade negotiations within the Mercosur multilateral track (Argentina, Brazil, Paraguay and Uruguay), EU and Brazilian businessmen vowed to move ahead without an FTA.

“Business has a different timing than politics,” said Eurochambres’ Arnaldo Abruzzini, who also lamented the lack of progress of the EU-Mercosur dialogue towards a free trade agreement.

Speaking at an EU-Brazil conference organised by the Brazilian Trade and Investment promotion agency,  Abruzzini stressed that companies need a business-friendly environment for boosting trade and cannot wait for an FTA.

“We need a forum with an institutional side to take advantage of the potential that business can bring to the table,” he underlined, noting that both Brazilian and EU business communities are committed to provide suggestions to move ahead without an FTA.

His comments were echoed by Rui Faria de Cunha, from the Brazilian Business Affairs, who said yearly EU-Brazil summits are not enough to advance a mutual understanding.  “We need more forums to develop cooperation as the EU is a very important market for Brazil,” he said.