EU Signs Trade Deal With Peru, Colombia

by Ulrika Lomas, Tax-News.com, Brussels

21 May 2010

Peru and Colombia have signed up to a free trade agreement (FTA) with the European Union (EU) at a ceremony in Madrid.

The signings followed a summit between the EU, Latin America and the Caribbean on Tuesday, which brought the representatives of 60 countries - including more than 30 heads of state or government - to the Spanish capital.

Negotiations on trade between the EU and the Andean Community, which includes Colombia, Peru, Ecuador, and Bolivia, were launched in June 2007, but talks broke down in June 2008 when Andean countries could not agree on common objectives.

Colombia, Peru and Ecuador restarted talks in January 2009, aimed at a multi-party trade agreement for progressive and reciprocal liberalization in accordance with the rules and obligations of the World Trade Organisation.

Enhanced trade between the two regions is expected to attract investment to the Andean countries and help local businesses strengthen their regional markets to compete internationally. Unfortunately, in July 2009, Ecuador withdrew from the talks. The trade agreement negotiated with Colombia and Peru may enter into force as early as 2011.

Colombian President Alvaro Uribe described the agreement as a very important step for Colombia's economic and social development. Ecuadorian President Rafael Correa announced that negotiations with the EU will be relaunched in June, but for an association agreement with the EU rather than a full free trade agreement.

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