EU-Latin America summit vows no protectionism

18th May 2010, Comments 0 comments

The European Union and countries of Latin America and the Caribbean pledged to avoid protectionism at a summit Tuesday, as the bloc and several Central American nations reached their first free trade deal.

"We remain determined to favour an open non-discriminatory, rules-based multilateral trade system and fully respect its disciplines," the government leaders and representatives said in a final statement at the Madrid meeting.

"We are committed to avoid protectionism in all its forms."

They also pledged cooperation "to confront the global consequences of the economic and financial crisis and avoid a return to a crisis of this type.

"In this context we confirm our commitment to work together for a new international financial framework that includes the reform of financial institutions."

Spain, which has close ties with its former colonies in Latin America, hoped the summit would be a high point of its six-month presidency of the European Union, which runs through June.

As the conference formally opened, the EU and Central American nations of Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama announced their first ever trade deal.

"The trade ministers of Central America and the EU express their full satisfaction with the outcome, which will result in an ambitious, comprehensive and balanced trade pillar of the Association Agreement," both sides said in a statement early Tuesday.

The negotiations are to be formally concluded by EU and Central American leaders at their summit meeting on Wednesday.

The deal envisages "100 percent market opening for industrial products on both sides" and export quotas for milk powder and cheese from Europe and for bananas, beef and rice from Central America, according to the European Commission.

European motor vehicles will also be given "free access to the Central American market over a period of 10 years."

El Salvador's cabinet secretary Alexander Segovia said the EU's "flexibility" led to the deal.

"There was a show of flexibility by the European Union and with that we managed to get to an agreement," El Salvador television quoted him as saying from Madrid.

The six Central American countries have been in talks on a free trade deal with the European Union since 2007.

The announcement follows an agreement late Monday between the EU and the South American trading bloc Mercosur to resume talks aimed at reaching a free trade deal, despite opposition from a number of European nations led by France.

The EU and Mercosur, which is made up of Argentina, Brazil, Uruguay and Paraguay, began free trade talks in 1999 but they stalled in 2004 due to disagreement over tariffs and subsidies paid to European farmers.

Spanish Prime Minister Jose Luis Rodriguez Zapatero said a free trade agreement between the two blocs would lead to an extra five billion euros (6.2 billion dollars) in exports per year.

Last week, 10 EU nations issued a statement opposing the resumption of the talks with Mercosur because "the strategic agricultural interests of the European Union are clearly at stake."

The statement was backed by Austria, Cyprus, Finland, France, Greece, Hungary, Ireland, Luxembourg, Poland and Romania.

France is the main beneficiary of the EU's Common Agricultural Policy, which pays billions of euros each year in subsidies for food production.

Peruvian President Alan Garcia, whose country hosted the last EU-Latin America summit in 2008, welcomed "the opening of a difficult dialogue" between the EU and Mercosur at a time when "the world and Europe is being shaken by crisis."

Argentine President Cristina Kirchner also warned the negotiations would be "difficult" due to "protectionist" tendencies of some European nations.

Other leaders attending the summit include French President Nicolas Sarkozy, Brazilian President Luiz Inacio Lula da Silva and Bolivia's Evo Morales and Chile's Sebastian Pinera, whose country will host the next summit in 2012.

© 2010 AFP

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