June 26, 2017

Association Agreement between Central America and the European Union

By Her Excellency Aida Luz Santos de Escobar, Ambassador of El Salvador to the Kingdom of the Netherlands.

The Association Agreement signed in 2012 between Central America and the European Union, unlike any other political or trade agreement consists of three pillars: Political Dialogue, Cooperation and Trade. Each complements the other two.

In El Salvador Policy and Cooperation are areas under responsibility of the Ministry of Foreign Affairs; Trade is under responsibility of the Ministry of Economy.

Political Dialogue pillar establishes institutional mechanisms between Central America and the European Union, through which common values ​​between the two regions are promoted; within them, respect for democratic principles and fundamental human rights, environmental protection and strengthening the rule of law are counted.

Cooperation pillar aims to regulate the provision of resources, mechanisms, tools and procedures, whose support will allow the fulfillment of the commitments and obligations on both, the pillars of political dialogue and trade in order to promote social cohesion and regional integration in order to achieve an effective partnership between the two regions.

Trade pillar establishes the legal framework within which economic relations between the two regions will be developed.

The Association Agreement between Central America and the European Union has built a solid political, economic and cooperation bridge that has its genesis in the San José Dialogue Agreement, signed in Costa Rica in 1984; a milestone that has led to the development of very profitable initiatives for our people and countries.

Through time, this link has evolved from the Third Summit EU-Latin America and the Caribbean held in Mexico in 2004, when it was agreed the establishment of an Association Agreement between the European Union which would include a Free Trade Treaty; starting with a joint assessment phase of the process of economic integration in Central America. Negotiations began in October 2007 and formally ended in May 2010. The text was initialed in March 2011.

Within the framework of the Thirty-Ninth Summit of the Central American Integration System (SICA), on June 29, 2012, in Honduras, the crucial moment came and the Association Agreement between Central America and the European Union was signed.

The Association Agreement is an historical and innovative milestone for El Salvador, the Central American region and Europe as it is the first Agreement of its kind, negotiated from region to region, which allows the establishment of a strategic alliance, goals achievement and mutual commitments in the political, trade and cooperation components.

It is important to note that the political pillar of the Association Agreement will establish mechanisms intended to promote an intensive dialogue in the areas of democracy, peace, human rights, rule of law, which are fundamental issues to the international convergence of nations.

The Association Agreement is certainly a valuable tool for strengthening political and diplomatic relations. It establishes mechanisms that facilitate the flow of information leading to the adoption of joint positions on issues of global interest.

The Agreement also provides for cooperation, a vital component of the foreign policy in the countries of the SICA region with a view that goes beyond the traditional assistentialist model, to a more comprehensive cooperation, grounded in the social, economic and cultural development, with a perspective that promotes more participation and in where civil society has a special role.

Central America is aware that the European Union is a key strategic partner, taking in account that in recent years, it has allocated more than 60% non-reimbursable cooperation for the development of the region.

With the Association Agreement, cooperation is strengthened as the proposed projects will focus in the maintenance of peace, security, democracy and social equity in the region; as well as in environmental protection, one of the current challenges of the region as a result of climate change. The instrument allows complying, in an integral way, the economic, social and political development of Central America through bilateral strategies and activities; in order to strengthen the national capacities on commercial production and social cohesion.

In the economic and commercial field, the Association Agreement represents an opportunity for the regional market, mainly for the opening of new businesses for Salvadoran exporters. To size this positive effect for trade, during the period 2009-2012, the European Union became the third largest trading partner of El Salvador, after the United States and Central America.

The Association Agreement establishes the conditions for maintaining a mutually beneficial relationship for Central America and the European Union based on trust, cooperation and dialogue between the two regions. Its implementation allows a number of specific benefits for Central America, which among others, includes:

  • Deepening the regional integration process;
  • Free access of Central American exports to the world’s largest market;
  • Increased exchange of services between the two Parties;
  • Attracting foreign direct investment from the EU, with the consequent creation of more and better jobs;
  • Incentives for integrating value chains at the national and regional level;
  • Production diversification and increased competitiveness of Central American enterprises;
  • Strengthening democratic principles in Central America;
  • Consolidation of a legal framework for continuing cooperation granted by the EU.

It is important to recognize that the Association Agreement as well as it creates opportunities for exports attracting investment to the Central American countries, it also poses some challenges, including those related to enhancing capabilities to reach the benefits in an equitable manner, as well as the accomplishment of acquired commitments and preparing for the structural and institutional adjustments required. Particularly those related to the management and implementation of the Agreement.

In El Salvador the Trade pillar is in force since October 1, 2013. The Political and Cooperation pillars depend on individual ratifications of the Member States of the EU.

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Photography by Kim Vermaat.

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