The EU Trade Agreements. Colombia. with. Peru. & and with. Central America. Trade

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1 The EU Trade Agreements Colombia with Peru & and with Central America Trade

2 Europe Direct is a service to help you find answers to your questions about the European Union. Freephone number (*): (*) Certain mobile telephone operators do not allow access to numbers or these calls may be billed. More information on the European Union is available on the Internet ( Cataloguing data can be found at the end of this publication. Luxembourg: Publications Office of the European Union, 2012 ISBN doi: /41420 European Union, 2012 Reproduction is authorised provided the source is acknowledged. Printed in Belgium Printed on elemental chlorine-free bleached paper (ecf) Photos: cover: photo istockphoto.com / Frank van den Bergh illustration Mi Ran Collin p2-3: fotolia.com / ra2 studio p4-5: fotolia.com / Victoria p6-7: fotolia.com / il-fede p8-9: fotolia.com / uwimages p10-11: fotolia.com / Kristian Peetz p13: fotolia.com / fotoeg p14-15: fotolia.com / lassedesignen p17: fotolia.com / Cozyta p18-19: fotolia.com / Subbotina Anna

3 Foreword The Trade Agreement with Colombia and Peru and the Association Agreement with the six Central American countries (Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama) mark an important step in the EU s trade relations with Latin America and will strengthen the deep-rooted political and economic as well as cultural ties Europeans and Latin Americans share. They represent a milestone in the bi-regional relationship and deliver on the joint commitment by the EU and Latin America to forge closer relations, as set out in the first EU-Latin America and Caribbean Summit in While the Agreement with Colombia and Peru specifically focuses on trade, the Agreement with Central America also covers political dialogue and cooperation, in addition to trade. Together, these Agreements will establish a stable and enforceable set of trading conditions that will generate EU-Latin American trade, boost investment and business opportunities as well as foster enhanced technology and know-how transfers. Furthermore, the Agreements will contribute to inclusive, sustainable economic development and the promotion of regional integration in the Central American and Andean regions. In time, all tariffs on industrial and fishery products will be removed so that exporters and importers will be able to trade without paying duties. After a slightly longer period, exporters will also benefit from the liberalisation of tariffs on many agricultural products. In addition to this, the Agreements will break new ground in facilitating trade by tackling nontariff barriers and improving regulatory and procedural transparency. They will also create enhanced market access opportunities in services, investment and government procurement. Rules in the area of competition and the protection of intellectual property, including geographical indications, will be strengthened. The Commission has produced this brochure in order to allow business to fully take advantage of the strengthened commercial links between the EU and Latin America. It is designed to serve as a user-friendly guide to the practical application of the Agreements and the wide range of trade and investment opportunities they offer. Karel De Gucht, T h e E U T r a d e A g r e e m e n t s w i t h C o l o m b i a & P e r u a n d w i t h C e n t r a l A m e r i c a 1

4 What s in it for European companies? The Trade Agreement with Colombia and Peru as well as the trade part of the Association Agreement with Central America will improve, in concrete terms, the access for European operators to the highly dynamic and increasingly competitive markets of Latin America and will add to the network of agreements that already exists between the EU and other Latin American countries, such as Chile and Mexico. The Agreements are also stepping stones for future liberalisation as they go beyond the market opening that can currently be achieved in the multilateral context. The two Agreements are expected to create substantial new export opportunities for the EU, which - according to an independent study - will amount to a total value of 5.5 billion. Over the course of their implementation, the two Agreements will remove all customs duties on European industrial and fishery products exported to both regions in 10 years. For a 2 T h e E U T r a d e A g r e e m e n t s w i t h C o l o m b i a & P e r u a n d w i t h C e n t r a l A m e r i c a

5 enterprises - in particular SMEs - perceive to be significant behind-the-border obstacles to trade. For instance, measures have been agreed to improve the transparency of technical regulations and standards as well as conformity assessment procedures. Furthermore, innovative provisions aimed at simplifying labelling requirements feature in both Agreements. Tackling red tape and technical trade barriers is expected to bring considerable gains for European businesses. Moreover, the two Agreements each comprise a series of trade rules and disciplines that will build a level playing field for European operators when competing with local business or other foreign firms. These consist of measures on e.g. sanitary and phytosanitary (SPS) requirements or the protection of intellectual property rights, including EU geographical indications. very limited number of sensitive products some longer transition periods have been provided for. This will allow European businesses exporting non-agricultural products to see annual tariff savings of up to 335 million. Over the years, these substantial gains will be supplemented by the dismantling of tariffs on agricultural and processed agricultural goods, with tariff savings eventually amounting to 43 million. Far-reaching liberalisation of trade in services will enable European firms to benefit from enhanced market access for cross-border services and establishment in areas such as financial services and telecommunication services. European operators will also enjoy improved access to the national and local government procurement markets. Besides goods and services, the Agreements contain specific commitments to address non-tariff barriers, which Finally, the Agreements seek to reinforce regional economic integration and facilitate the movement of goods within and between the Latin American sub-regions. The trade part of the Association Agreement includes measures to promote regional integration amongst the Central American countries on matters relating to SPS, technical regulations and customs procedures. The EU has left the door open for Ecuador and Bolivia to join the Trade Agreement with Colombia and Peru, with the aim of supporting the Andean Community s integration. Although not analysed in detail in this brochure, the Agreements also comprise provisions on competition and subsidies that will prohibit distortive practices, including restrictive arrangements and cartels. Furthermore, both the Trade Agreement and the trade pillar of the Association Agreement include a comprehensive sustainable development chapter aimed at furthering environmental protection and ensuring the protection of labour rights. The following sections of this brochure give a non-technical overview of the each of the relevant elements of the Agreements - including the institutional structure that will work for their implementation - and provide guidance on some of the practical steps that businesses will need to take in order to make the best use of the Agreements provisions. T h e E U T r a d e A g r e e m e n t s w i t h C o l o m b i a & P e r u a n d w i t h C e n t r a l A m e r i c a 3

6 Chapter 1 Tariff elimination for goods Over the course of their implementation, the two Agreements will completely eliminate all customs duties on European industrial and fishery products (non-agricultural market access, NAMA) exported to Colombia, Peru and Central America. Taking due account of differences in development levels between the EU and its trading partners, the EU has granted 100 % coverage for Central American and Andean industrial goods and fisheries at entry into force of the Agreements. The EU has obtained immediate preferential treatment on a range of key export sectors. From day one, 80 % of EU exports of industrial and fishery products to Peru and 65 % of exports to Colombia will benefit from full liberalisation. After 10 years, all NAMA products exported to Colombia and Peru will be completely liberalised. The Central American countries will immediately eliminate tariffs on EU industrial and fishery products covering 68 % of existing trade. The Central American countries have agreed to liberalise 95 % of existing NAMA imports from the EU after 10 years, another 4 % after 13 years and the rest after 15 years. In time, agricultural products and processed agricultural goods of key interest to European producers will face zero tariffs at the end of the transition periods. In many cases full liberalisation of these products will take less than 10 years, with the exception of a few sensitive products that will either benefit from valuable duty-free quotas or be liberalised over a somewhat longer period. These tariff eliminations will create significant savings for European operators trading with Central America, Colombia and Peru - eventually totalling 378 million annually. The potential for EU exporters to improve and consolidate their competitive position in the Latin American markets is therefore considerable and it is estimated that the Agreements will boost trade in goods and services by 5.5 billion for the EU, 730 million for Colombia and Peru and 1.6 billion for the Central American countries. Owing to the expansion of trade, the gains from tariff savings can be expected to be even higher in the long run. 4 T h e E U T r a d e A g r e e m e n t s w i t h C o l o m b i a & P e r u a n d w i t h C e n t r a l A m e r i c a

7 Key examples of tariff dismantling benefits for European exporters: A high share of product categories in a range of industrial sectors will benefit from no longer having to pay customs duties at entry into force of the Agreements. The EU has obtained this high share of coverage in key EU export sectors, including, for example, construction equipment, medical devices, optical instruments, machinery, electrical and electronic equipment, pharmaceuticals, chemicals, textiles and clothing, footwear, ceramics as well as cosmetics. Once fully implemented, the Agreements will relieve exporters in the motor vehicles and parts sector from paying customs duties worth more than 65 million each year. For more sensitive products, such as passenger cars with small to medium- sized engines, Colombia, Peru and Central America will dismantle tariffs gradually and within a 10 year limit. In the chemical, rubber and plastic sector, the two Agreements will generate annual tariff savings worth more than 92 million when they fully enter into force. In addition, as a result of the two Agreements, European exporters of pharmaceutical products will see tariffs fall by more than 24 million annually. From the start, European producers will be able to export whisk(e)y to Panama and Peru without having to pay customs duties. Vodka exports will enter Peru duty-free from day one. Central America will liberalise whisk(e)y after 6 and vodka after 10 years, whilst Colombia will liberalise both spirits after 10 years. All other spirits (except rum) will be liberalised from the outset. Wine, another key product for European producers, will have immediate duty-free access to the Central American and Colombian markets. Nonsparkling bottled wines and sparkling wines will enter the Peruvian market duty-free after 3 and 5 years. As of day one, European producers will fully be relieved of having to pay duties for their olive oil exports to Central America, Colombia and Peru. Duties on whey will be fully eliminated in Peru at entry into force and in a maximum of 3 years in Colombia and the six Central American countries. There will be valuable immediate zeroduty tariff rate quotas for e.g. milk powder, some cheeses and processed dairy products. These quotas will cover more than existing trade and grow each year by 5 % in Central America and 10 % in Colombia as well as Peru. Processed pork meat, such as hams, will have duty-free access after 5 and 5 to 7 years in Colombia and Peru, respectively. The Central American countries will open a duty-free tariff quota covering more than existing trade and allowing for eventual full liberalisation. T h e E U T r a d e A g r e e m e n t s w i t h C o l o m b i a & P e r u a n d w i t h C e n t r a l A m e r i c a 5

8 Rules of Origin: How can European exporters benefit from tariff elimination? Rules of Origin are an important aspect of any trade agreement. In order for goods exported from the EU to Colombia, Peru or Central America to benefit from the trade preferences granted under the Agreements, various conditions have to be fulfilled. When does a product originate in the EU, Central America, Colombia and/or Peru? There are two main scenarios for a product to be considered as originating in the EU or in Colombia, Peru or Central America: It has been wholly obtained in the EU or Colombia, Peru or Central America (cf. plants, animals born and raised, fish when caught in the territorial waters or beyond the 12-mile limit by a vessel considered as Colombian, Peruvian (with some specificities), Central American or European); or It has been sufficiently processed in the EU or in Colombia, Peru or Central America. The criteria for determining sufficient processing are outlined for each product in the product-specific rules. Change of tariff heading. E.g. a ceramic product will originate in the EU if it is made from imported materials of any other heading. Value added. E.g. a vapour turbine will originate in the EU if no more than 40 % of the value of the inputs has been imported from outside the EU or Central America when exporting to Central America, or imported from outside the EU, Peru or Colombia when exporting to Colombia or Peru to manufacture it. Specific operations. E.g. smart cards will originate in the EU if the operation of diffusion is carried out there Combination of these different rules. The different rules have to be fulfilled alternatively or in combination. It should be noted that due to the negotiation process and despite there being an overlap in most areas, some of the product-specific rules are not identical in two Agreements. 6 T h e E U T r a d e A g r e e m e n t s w i t h C o l o m b i a & P e r u a n d w i t h C e n t r a l A m e r i c a

9 For example: Yarns originating in Central America can be imported into the EU and considered as originating in the EU when further processed there beyond minimal operations and exported from the EU to Central America. It is also possible to import some parts originating in Peru into Central America and then treat those parts as originating in Peru, when exporting the final product, e.g. a machine, to the EU. The processing which took place in either the EU or Central America, Peru or Colombia must go beyond minimal operations. For instance, washing is an operation which, in itself, will never be enough to confer origin. Goods have to be transported directly from the EU to Central America or to Peru and Colombia (or vice versa). Nevertheless, goods in a single consignment can transit through another country, be transhipped or kept in a warehouse there and still be eligible for preferential treatment, if: they are not released into free circulation in the country of transit or warehousing; they do not undergo any operations other than unloading, reloading or operations to preserve them in good condition. What additional conditions have to be fulfilled? Several additional criteria have to be met for a product to be considered as originating in the EU or in Colombia or Peru or in Central America: The different processing procedures normally have to be carried out either in the EU or in Central America, Peru or Colombia. However, EU producers can also use inputs originating in the Central America when exporting to Central America, or originating in Peru or Colombia when exporting to Peru or Colombia (or vice versa) to help them comply with the rules. This is called cumulation. Additional possibilities are foreseen to use inputs originating in Andean countries when processing in Central America and exporting to the EU. Moreover, it will be possible to use inputs originating in other third countries when processing in the EU, Central America or Peru and Colombia - provided that certain conditions are fulfilled. This may be relevant in cases where companies have a regional distribution centre outside Central America, Peru or Colombia. In practice, for such goods to benefit from preferential treatment granted under the Agreements with Colombia and Peru or Central America respectively, they have to be accompanied by a transport document which will prove their point of departure and the point of final destination. Otherwise, it would be necessary to obtain from the customs authorities in the third country an appropriate document stating, for instance, the conditions under which the consignment was stored there and the types of operation which have been carried out on the goods. Proof of origin A proof of origin needs to be presented at importation if companies want to make use of preferential treatment under either of the two Agreements. This proof may be a EUR 1 certificate issued by the customs authorities or the competent authorities of the EU, Central America, Colombia or Peru or an invoice declaration made out by the exporters for consignments of less than Euros. An invoice declaration may still be made out by approved exporters for consignments exceeding Euros. T h e E U T r a d e A g r e e m e n t s w i t h C o l o m b i a & P e r u a n d w i t h C e n t r a l A m e r i c a 7

10 Chapter 2 Non-tariff barriers to trade Alongside tariffs, technical issues represent the single most important barrier to international trade. Behind-the-border issues, such as technical regulations, standards, and conformity assessment procedures can be a considerable burden for exporters. The Agreements with Colombia and Peru and Central America, respectively, contain a number of general commitments on technical barriers to trade - including cooperation on standards and regulatory issues as well as transparency and marking/labelling - that go beyond the obligations contained in the WTO Agreement on Technical Barriers to Trade. The Agreement with Central America - as well as the Agreement with Colombia and Peru - sets the framework for stepping up bilateral cooperation between national and regional authorities from both Parties dealing with technical regulations, standards metrology, accreditation and conformity assessment procedures. This will increase mutual unders- Simplified Labelling Requirements Burdensome labelling provisions have been identified as one of the main non-tariff barrier in the textile and footwear sector. Both Agreements contain labelling provisions that will considerably facilitate the marketing of textiles, clothing and footwear products. The text foresees that only the most essential consumer information is required in permanent labels (e.g. stitched labels). For instance, fibre composition, country of origin, safety instructions for specific uses and care instructions will be required on permanent labels of clothing products. Other information, such as the name of the importer or sizes will be provided by means of non-permanent labels (e.g. stickers). Other labelling provisions of a more horizontal nature, i.e. applicable to the generality of industrial products, are also present. As an example, there is a commitment for the Parties to allow information in other languages in addition to the language required in the country of destination of the goods (multi-language labels being allowed). Producers will also be allowed to use international nomenclatures, pictograms, symbols or graphics. Therefore, exporters will be able to design labels suitable for clients located in different continents. Owing to the Agreements, it will also be possible for labelling and corrections to labelling to take place in the country of destination, prior to the commercialisation of the goods and as an alternative to labelling in the country of origin. In this situation, the importer will be able to add to the label before placing the product on the market. This is particularly interesting for products exported in small quantities or where the final destination is not known at the time of production. the Parties agree that, when a Party requires marking or labelling of textiles, clothing or footwear, the following information alone may be required to be permanently marked: in the case of textiles and clothing: fibre content, country of origin, safety instructions for specific uses and care instructions; and in the case of footwear: the predominant materials of the main parts, safety instructions for specific uses and country of origin. 8 T h e E U T r a d e A g r e e m e n t s w i t h C o l o m b i a & P e r u a n d w i t h C e n t r a l A m e r i c a

11 tanding of the Parties respective systems and, if possible, progress towards convergence of their regulatory requirements. For that purpose the Parties may establish regulatory dialogues at both horizontal and sectoral levels and organise joint actions. These may include: the exchange of information, expertise and data, on technical regulations, standards and conformity assessment procedures; scientific and technical co-operation with a view to improving the way technical regulations are developed, in terms of transparency and consultation, in view of making an efficient use of regulatory resources; exploring ways to facilitate trade between the Parties, notably by cooperating on simplifying technical requirements and conformity assessment procedures; direct bilateral co-operation between non-governmental actors such as standard bodies, accreditators and certifiers. The Agreement with Colombia and Peru proposes certain additional steps that can be taken in order to facilitate trade between the Parties. In particular, in terms of conformity assessment procedures the Parties commit to encourage their respective conformity assessment bodies (CABs) to enter into private agreements in order to subcontract part of the conformity assessment tasks (e.g. testing) to the other Party s CABs. Should those private agreements between CABs materialise, testing could be carried out in the country of origin instead of in the country of final destination of the product. Nevertheless, the CAB of the country of final destination would remain legally responsible for the conformity of the products and for issuing the conformity assessment certificate. T h e E U T r a d e A g r e e m e n t s w i t h C o l o m b i a & P e r u a n d w i t h C e n t r a l A m e r i c a 9

12 These systemic improvements will facilitate the free movement of goods and will have a positive impact on pharmaceutical exports but also on the sale of medical devices, optical instruments, automotive and other types of machinery in which the EU is highly competitive. Customs and Trade Facilitation In the area of Customs and Trade Facilitation, the two Agreements aim at facilitating trade by introducing specific commitments on modern and non-discriminatory customs legislation and procedures (including transit), based on international standards and recent developments, as well as transparency and the obligatory consultation of the business community. At the same time both Agreements provide for the resolving of any related problems within the framework of the Sub-Committee on Customs, Trade Facilitation and Rules of Origin. The Agreement with Central America, in particular, contains substantial commitments on regional economic integration and provides the basis for free circulation of goods originating in the EU within Central America. The Agreement also provides for the effective single payment of customs duties for goods originating in the EU and eliminates double payments of duties (establishing a mechanism of reimbursement at internal borders) after a transitional period of 2 years from the entry into force of the Agreement. Moreover, the Agreement establishes the use of a single administrative document or electronic equivalent after 3 years and a commitment to harmonise customs legislation, procedures and customs related requirements at Harmonization of technical regulations at the regional level in Central America Another trade-facilitating aspect brought about by the Agreement with Central America relates to the harmonisation of technical regulations. The Parties will formally undertake to develop regional technical regulations in order that a regional standard fully replaces all existing national standards, once it is adopted. Having recourse to common technical requirements in the geographical areas concerned will relieve producers of the need to adapt their products to different markets. In fact, a uniform requirement means that the same product will be suitable for different markets without undergoing product or design adaptations. 10 T h e E U T r a d e A g r e e m e n t s w i t h C o l o m b i a & P e r u a n d w i t h C e n t r a l A m e r i c a

13 of all EU Member States. This provides the building blocks for addressing SPS questions relating to the application of international standards. import at regional level after 5 years. This will significantly improve the conditions for EU exporters wanting to do business in Central America. Sanitary and Phytosanitary Requirements The Agreements will also create new opportunities for trade between the EU and its Central American and Andean partner countries in animals and animal products, plant and plant products and other food products, while maintaining high levels of human, animal and plant health safety. The Agreements contain specific commitments on import procedures, transparency and exchange of information, consultation and measures to promote the development of a common understanding on Sanitary and Phytosanitary (SPS) international standards as well as ensuring equal treatment A specific procedure for the approval of establishments for products of animal origin - so called prelisting - is set up, based on the trust between competent authorities of countries of origin and destination. The objective is for the six Central American countries as well as Colombia and Peru to authorise new lists of European exporting establishments - that have been transmitted by EU Member States and for which sanitary guarantees are provided in advance - without carrying out on-the-spot inspections of one establishment at a time. This will bring greater speed and predictability to the approval process, which will be of great help to European agricultural producers. Trade facilitation tools are also established such as the recognition of disease or pest-free areas. This should significantly increase predictability for European exporters and mitigate the negative effects of measures which Central American countries as well as Colombia and Peru could feel compelled to take in the event of local outbreaks of certain animal diseases in the EU. Alternative import measures can also be agreed upon, in the event of specific difficulties in complying with individual import requirements. Promoting regional SPS standards in Central America In the case of Central America, the Agreement will also promote regional economic integration in the SPS field. It includes a range of measures aimed at improving conditions to allow goods subjected to SPS requirements to move more freely in both regions as well as at promoting the harmonisation of SPS legislation and procedures. From the date of entry into force, all EU products exported to Central America will benefit from regional transit facilitation within the region, i.e. those products will be inspected only at the Central American country of destination. Moreover, a maximum five years after entry into force of the Agreement, the SPS inspections for a limited list of EU priority products entering into Central American territory will be performed in a random base at the entry point of the Central American country of destination. T h e E U T r a d e A g r e e m e n t s w i t h C o l o m b i a & P e r u a n d w i t h C e n t r a l A m e r i c a 11

14 Chapter 3 Government Procurement Government procurement represents 12 to 15 % of GDP among OECD members and even more in emerging and developing countries. Consequently, the transparency and openness of procurement procedures are important. They allow public authorities to buy best value at the lowest prices and are important tools to fight corruption. For businesses operating internationally, they ensure equal access to foreign markets, where they can then compete with domestic suppliers and service providers without being discriminated against. Neither Colombia, nor Peru, nor any of the six Central American countries are parties to the WTO Government Procurement Agreement (GPA). For this reason, no mutual commitments between the EU and any of these countries regarding the transparency of procurement procedures existed, nor were there any guarantees regarding mutual discriminationfree market access. The trade pillar of the Association Agreement with Central America and the Trade Agreement with Colombia and Peru change this situation. From now on, European companies wishing to participate in public procurement procedures in these countries can rely on the procedural guarantees and the market access commitments enshrined in the Government Procurement Chapters of the two Agreements. To a large extent, the procedural guarantees in both Agreements correspond to the international standards set out in the GPA. The scope of the mutually guaranteed market access varies according to the economic development and the willingness of each of the eight countries to commit. It is more narrow in the smaller and less developed countries (such as Nicaragua and Honduras), while it is widest in Peru and Colombia. Indeed, the Agreement with the two Andean countries contains mutual market access commitments of a scope which is unprecedented for any trading partner outside Europe. It contains the full array of central and sub-central government authorities as well as many other entities, notably in the utilities sector. It concerns all goods, all services relevant for trans-border procurement, and construction works. Further information: Websites of procuring entities Each of the eight countries has its own internet website dedicated to public procurement, where interested companies can find all relevant information on tendering opportunities: Peru: and Colombia: Panama: Costa Rica: Nicaragua: Honduras: El Salvador: Guatemala: 12 T h e E U T r a d e A g r e e m e n t s w i t h C o l o m b i a & P e r u a n d w i t h C e n t r a l A m e r i c a

15 Chapter 4 Intellectual Property The Trade Agreement between the EU and Colombia and Peru as well as the Association Agreement between the EU and Central America build upon the WTO TRIPS (traderelated aspects of intellectual property rights) Agreement. The two Agreements each contain a separate chapter on intellectual property rights which sets out a number of fundamental rules for the protection and enforcement of intellectual property rights in the respective Parties. The Agreements aim to ensure that right-holders in the Parties benefit from an adequate level of protection for their intellectual property rights and have effective means available to enforce these rights through civil, administrative and border measures and procedures. The protection of intellectual property is crucial to stimulate innovation, ensure competitiveness and bolster growth in the economies of both the EU and its Latin American trading partners in the context of a rapidly changing global economic environment. To this end, the Agreement with Central America, for instance, establishes mechanisms for the promotion of cooperation and technology transfer to the benefit of the Central American Parties. The Agreement with Colombia and Peru contains rules on the protection of authors, performers, producers of phonograms or films and broadcasting organizations. It provides that protection applies for 70 years after the author s death T h e E U T r a d e A g r e e m e n t s w i t h C o l o m b i a & P e r u a n d w i t h C e n t r a l A m e r i c a 13

16 and sets out the right to a single equitable remuneration for performers and producers of phonograms. It also provides for cooperation between the Parties on collective management of intellectual property rights. Similarly, the Agreement between the EU and Central America sets out minimum standards for the protection of intellectual property such as the protection of authors works for 70 years following the death of the author and the right to a single equitable remuneration for performers and producers of music records. To encourage business activity, the Agreements establish rules for the registration of trademarks in Colombia, Peru and Central America respectively - such as the possibility to oppose a trademark application or to contest a refusal for registration. In the Agreement with Colombia and Peru there are additional rules related to the registration requirements and rights conferred on the holders of design rights (a right often used by small textile producers). The Agreement with Central America contains equivalent rules concerning registration requirements and rights conferred on the holders of registered and unregistered industrial designs. Moreover, the Agreement with Colombia and Peru establishes measures regulating the liability of intermediate service providers. Finally, the two Agreements each foresee the implementation of a set of measures to ensure effective enforcement of intellectual property rights. Enforcement measures include minimum rules on civil and administrative proceedings and remedies and, in some cases, criminal procedures and sanctions. The Agreements also foresee that measures can be taken at the border upon request or on the initiative of the authorities in case of suspicion that goods infringing intellectual property rights are being imported or exported. Regular dialogue will take place between the EU and Colombia and Peru to monitor the implementation of the provisions related to intellectual property rights. The EU and the Central American countries will also engage in regular dialogue to oversee the implementation of the Agreement, in particular as regards the provisions concerning GIs and the steps taken to promote technology transfer. The Agreement with Colombia and Peru aims to facilitate registration and ensure full protection of EU and Colombian and Peruvian geographical indications (GIs) on the territory of the Parties. The Central American countries will also introduce or improve domestic legislation on protection of GIs. A number of EU and Central American GIs will enjoy a high level of protection in their respective markets to the benefit of the respective producers and consumers. Effective protection of GIs can substantially contribute to the development of rural communities as well as to high quality, value-added agriculture. The Agreements will establish high levels of protection for European GIs, such as: Champagne, Grappa, Irish and Scotch whisk(e)y, Ouzo Münchener Bier Prosciutto di Parma, Jambon de Bayonne Roquefort, Parmiggiano Reggiano, Feta Vinho Verde and Tokaj wines as well as wines from the Bordeaux, Rioja, and many other regions The Agreement with Colombia and Peru protects from disclosure and other unfair use test data of both pharmaceutical products and pesticides for, respectively, 5 and 10 years. Both Agreements also underline the importance of promoting access to medicines and protecting biological diversity and traditional knowledge, and provide for active cooperation between the respective Parties in this field. 14 T h e E U T r a d e A g r e e m e n t s w i t h C o l o m b i a & P e r u a n d w i t h C e n t r a l A m e r i c a

17 Chapter 5 Services The Agreements create opportunities for European service suppliers to invest in the growing Colombian and Peruvian as well as Central American markets and to benefit from the growing demand of services imports. The Agreements also provide the legal certainty necessary for harnessing these opportunities by guaranteeing market access in numerous sectors of interest to European companies and equal treatment vis-à-vis local competitors. Colombia and Peru Through its broad sectoral coverage and deep market access commitments, the Agreement with Colombia and Peru provides EU companies with the same and sometimes even stronger guarantees than those previously obtained from Colombia and Peru by other countries. The Agreement provides for the freedom to establish in almost all services and non-services sectors. It is the first time that Colombia and Peru have chosen to include non-services sectors such as manufacturing, agriculture and mining in a trade agreement. These commitments on establishment are accompanied by commitments on the temporary entry of key personnel. For services, the Agreement with Colombia and Peru covers a wide range of sectors, including telecommunications, maritime transport, banking and insurance, distribution, environmental, engineering and other professional services. T h e E U T r a d e A g r e e m e n t s w i t h C o l o m b i a & P e r u a n d w i t h C e n t r a l A m e r i c a 15

18 Examples of benefits in services for European operators in Colombia and Peru EU financial service suppliers will have the right to operate in a broader range of financial services. In telecommunication, Colombia has relaxed conditions for market access, in particular by eliminating foreign equity limitations and allowing full foreign ownership. In addition, EU satellite operators will be able to supply telephone and TV services directly cross-border. Companies in the broad field of transport and logistics from shipping firms to retailers to providers of express delivery services will benefit from secure access and non-discrimination commitments for their operations. There will be new opportunities in airport operation and other auxiliary services to air transport. Regulatory provisions underpin market access commitments and include specific provisions in telecommunications, postal and courier, and financial services. The Agreement also includes provisions on electronic commerce which improve legal certainty in this fast-growing area of economic transactions. Central America The broad services commitments (in e.g. business, engineering, telecommunication, construction, distribution, banking and insurance and transport services) obtained from all Central American countries largely capture their autonomous level of liberalisation and grant the EU investors and service suppliers effective parity with the treatment granted by the Central American countries to their other key trading partners. This treatment was obtained especially in areas such as market access in non-services sectors (with specific commitments by Panama and Honduras, and a unilateral MFN clause granting the EU any market access granted by Costa Rica, El Salvador, Guatemala and Nicaragua to third countries in future agreements). It was also obtained through commitments in telecom services and maritime services as well as in other transport services. Moreover, the agreement covers market access commitments for key personnel; graduate trainees (Honduras, Costa Rica, Panama and Guatemala) as well as for Business Service Sellers (Honduras, Costa Rica, Panama, Guatemala and Nicaragua). This is an important interest for the EU, as it complements the market access and national treatment commitments obtained on market access and national treatment for EU investments in services and non-services sectors. Example of benefits in services for European operators in Central America Regulatory provisions strengthen market access commitments and include specific provisions on mutual recognition, telecommunications, courier, financial and international maritime transport services. The Agreement includes also provisions on electronic commerce which improve legal certainty in this fast-growing area of economic transactions. The Agreement also regulates current payments and capital movements between the parties by means of the separate capital movement title. New business opportunities for European companies will arise with respect to a large number of other business services commitments (advertising, technical testing, placement services, maintenance and repair services, translation etc.) as well as of transport auxiliary services (especially in air transport). EU computer services providers will be able to establish and operate on a cross border basis. EU providers of international express delivery services will have access to the market and EU postal services suppliers will have access to the market in Guatemala. In telecommunication, conditions for market access were relaxed and in addition, EU satellite operators will be able to supply telephone and TV services directly cross-border. EU financial service suppliers will have the right to operate in a wider range of financial services and branching will be allowed. EU travel agencies and tour operators will be able to establish in Costa Rica and hotel services providers will be able to establish in Panama. EU services providers in the field of transport will benefit from market access commitments and right of establishment. Finally, the two Agreements also provide for the freedom to supply services on a cross-border basis, e.g. via the internet. Where technically feasible, this can be particularly interesting for SMEs for whom establishing themselves in Colombia, Peru or the six Central American countries might be too costly. 16 T h e E U T r a d e A g r e e m e n t s w i t h C o l o m b i a & P e r u a n d w i t h C e n t r a l A m e r i c a

19 Chapter 6 Institutional framework, contact points & online resources An institutional structure for coordination and cooperation The trade pillar of the Association Agreement with Central America is embedded in the wider institutional framework of the Association Agreement, which foresees the creation of an Association Council, where Parties will be represented at the ministerial level, and an Association Committee. Furthermore, the Agreement sets up a number of specialised sub-committees responsible for the different trade areas covered in the trade part of the Association Agreement. The Trade Agreement with Colombia and Peru foresees a Trade Committee, where meetings will take place annually and at the ministerial level. A significant number of sectoral sub-committees will monitor the implementation of the Agreement. These institutional structures will create a framework for regular meeting that will allow each Party to address trade barriers and coordinate positions on technical matters. It will provide Parties with an opportunity to engage in closer regulatory cooperation and to adapt the mechanisms of the Agreements to changing realities, and solve any dispute at an early stage before it escalates. T h e E U T r a d e A g r e e m e n t s w i t h C o l o m b i a & P e r u a n d w i t h C e n t r a l A m e r i c a 17

20 Trade Agreement with Colombia and Peru: Specialised Sub-Committees Market Access Agriculture Technical Obstacles to Trade Customs, Trade Facilitation, Rules of Origin Government Procurement Trade and Sustainable Development Sanitary and Phytosanitary Measures Intellectual Property Association Agreement with Central America: Specialised Sub-Committees in the trade pillar Market Access for Goods Customs, Trade Facilitation, Rules of Origin Technical Barriers to Trade Sanitary and Phytosanitary Measures Intellectual Property Board on Trade and Sustainable Development 18 T h e E U T r a d e A g r e e m e n t s w i t h C o l o m b i a & P e r u a n d w i t h C e n t r a l A m e r i c a

21 Dispute Settlement Both Agreements provide for an efficient and streamlined dispute settlement system that will function in accordance with basic principles such as transparency (open hearings and amicus curiae briefs) and sequencing (no right to impose retaliation until such time as non-compliance is verified). This system is intended as a last resort should Parties fail to resolve disagreements relating to the interpretation and implementation of the Agreement s commercial provisions by other means. Once a case has been filed, it proceeds along a fixed set of procedures and time-frames. Should Parties fail to reach an agreement through formal consultations, they can request the establishment of an arbitration panel, made up of independent legal experts. In addition, the Agreements each include a mediation mechanism for non-tariff barriers to trade in goods. Impartial mediators with expertise in the issues at hand will assist Parties in their efforts to a reach a mutually agreed solution to their differences. T h e E U T r a d e A g r e e m e n t s w i t h C o l o m b i a & P e r u a n d w i t h C e n t r a l A m e r i c a 19

22 Online tools How to export to Colombia, Peru and Central America? The Market Access Database The Market Access Database is a free, web-based service that provides European companies with information on export conditions to more than 100 countries. European exporters will have access to substantial amounts of practical information that will help them do business with Central America, Colombia or Peru. This includes wide-ranging and up-to-date information on: applied tariffs, internal taxes and import facilities, such as customs procedures, packaging, marking and labelling requirements, as well as technical regulations and standards. To access information on the preferential tariff rates available for any given product, select the relevant country of destination in the Applied Tariff Database and enter the product code(s). It is also possible to search the complete tariff nomenclature in the English language for product descriptions to identify product codes. You will also have access to further information, including current internal taxation measures in the Central American countries, Colombia or Peru. The Market Access Database also fully reflects that the Agreements will remove many non-tariff barriers. The Exporter s Guide to import facilities provides detailed information on import procedures and gives an overview of the documents required for imports. The section contains information on general requirements applicable to all goods as well as a range of product-specific requirements. More information, including a detailed step-by-step userguide available in all EU languages, can be found on the website: madb.europa.eu. How to import from Colombia, Peru and Central America? The Export Helpdesk The European Commission launched the Export Helpdesk (EH) in 2004 to inform business in developing countries on how to export to the EU. Since then, not only Latin American business but also European business has used the Export Helpdesk as their one-stop-shop to find all necessary information to import from Latin America to the EU. This free online service provides EU importers, trade associations and governments with updated information on: the requirements you have to fulfil and the documents you need in order to import from Colombia, Peru and Central America to the EU (including SPS, technical standards and labelling); the applied import tariffs for a given product or country; the quotas or antidumping measures applying to a given product; the preferential agreement applying to each product or country; the rules of origin per product that will apply under the Agreements (including cumulation and derogations) and the relevant documents you will need to supply; statistics on EU-Latin American trade flows as well as product-specific figures; a contact service to reply to your specific questions. This information, available for free and online, is constantly updated and translated in order to provide you with the latest figures and regulations in English, French, Spanish and Portuguese, amongst other languages. Moreover, a main advantage of the EH is its search functionality. It allows you to search for product- or country-specific information, giving you access to the targeted information you need for your specific case. More information can be found online: exporthelp.europa.eu. 20 T h e E U T r a d e A g r e e m e n t s w i t h C o l o m b i a & P e r u a n d w i t h C e n t r a l A m e r i c a

23 European Commission The EU Trade Agreements with Colombia & Peru and with Central America Luxembourg: Publications Office of the European Union pp. 21 x 29,7 cm ISBN doi: /41420 Free publications: via EU Bookshop ( HOW TO OBTAIN EU PUBLICATIONS at the European Commission s representations or delegations. You can obtain their contact details on the Internet ( or by sending a fax to Priced publications: via EU Bookshop ( Priced subscriptions (e.g. annual series of the Official Journal of the European Union and reports of cases before the Court of Justice of the European Union): via one of the sales agents of the Publications Office of the European Union (