The Council of the European Union on May 31, 2012, adopted a decision approving the signing, and provisional application, of a tripartite free trade agreement with Colombia and Peru.

According to the European Union, the agreement, initialed in March, provides for the elimination of high tariffs, including total trade liberalization in industrial products and fisheries, tackles technical barriers to trade, and opens up the countries' services and public procurement markets.

The Agreement, the Council said, will enable European Union member states to compete with the United States, which also benefits from beneficial trade tariffs under the 2009 US-Peru Trade Promotion Agreement Implementation Act, and the US-Colombia Trade Promotion Agreement.

European exporters will benefit from tariff cuts worth around USD620m a year on trade with the two nations, while Colombia and Peru's economies are projected to expand by 1.3% and 0.7%, respectively, on the back of the agreement's reciprocal benefits.

The agreement also includes commitments from Peru and Colombia on the enforcement of labour and environmental standards, as well as rapid and effective dispute settlement procedures. The European Parliament - which must approve the agreement before it can enter into force - voiced concerns about the fulfillment of these commitments on May 29, ahead of the Council's meeting, and called on Colombian and Peruvian authorities to demonstrate that they are 'stepping up their efforts' towards these agendas.

The European Parliament is due to vote on the agreement at a plenary in the autumn.

June 4, 2012

Source: Tax News

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