In the week beginning Monday 30th March, negotiators representing Central America (CA) and the European Union (EU) met in Tegucigalpa in the seventh round of talks to discuss the formation of a biregional Association Agreement between the two blocks. All 27 EU member states will be represented, as will Honduras, Costa Rica, El Salvador, Guatemala, and Nicaragua, the Central American nations opting to negotiate as a regional block, partly at the behest of the EU, to maximise negotiating leverage and as part of an ongoing process of regional economic integration. This is expected to be the penultimate round of negotiations, matters hopefully being concluded at a final meeting in Brussels this May.

An EU Association Agreement (AA) is one that goes beyond the usual commercial parameters and extends into the fields of political, social, and ideological co-operation as well. Talks for the EU-CA agreement began in Costa Rica in October 2007.

The commercial pillar makes up the main body of such an agreement and it is in this field that discussion will be fiercest over the week. In respect to economics, the most significant theme of a deal would be the greater and tariff-reduced access to European markets for Central American products. What has already been confirmed in previous rounds is the consolidation of tariff benefits conceded to over 7000 Central American products under the Generalised System of Preferences for developing nations. An AA would be expected to build on this, removing further excises and other obstacles to free trade between the two regions, hopefully increasing the $2510 million worth of exports that already enter Europe from CA.

At a seminar the preceding week, the EU were keen to promote what is perceived as the successful example of Chile, with whom such an agreement was signed in 2002. Ninety percent of tariffs and quota restrictions were removed when the first part of the deal came into force in 2003, more products being added over time, with a view to almost 100% free trade between the two parties by 2010. The deal led to a doubling of Chile - EU trade between 2002 and 2008.

The main concern for the Central American block at this stage is how their ‘sensitive products’ – i.e. the exports upon which their economies depend – will be affected by such a deal. For Honduras, the concern lies with bananas and sugar. Melvin Redondo, Honduras’ chief negotiator, said the CA block is looking for free trade access into the European market for this fruit, something not being offered by the EU at this stage. As regards sugar, CA seeks a role as a primary provider for the 1.2million ton deficit of the product the EU expects to have over the coming years. Redondo hopes there will be room for negotiation here since these products are not part of the internal economy of the EU, the main obstacle being competition from other former European colonies. This being a current sticking point, EU delegate in Honduras, Germano Straniero Sergio, hinted that they may be about to offer a better deal.

The Honduran Council of Private Business (COHEP) has expressed disapproval of the agreement however, and disgruntlement at the lack of consultation during the negotiation process. One of their main concerns, as communicated by spokeswoman Lidabel Almendárez, is that the CA block is conceding more than they will be gaining. An AA will lead to a flow of European goods into the region as well as vice-versa, which they fear will be detrimental to local markets, particularly as regards agricultural products, a sentiment reiterated by FECARGO president Carlos Enrique Zúñiga. This effect may be redoubled by the fact that the EU retains protectionist mechanisms for its own agriculture sector, whilst demanding that AA signatories forego such measures. Almendárez expressed malcontent at the EU’s demands for reductions in 90% of tariffs for EU goods entering CA, whereas previous counterpart deals, for example that with CARIFORUM, have only asked for 80%.

An Association Agreement going above and beyond the components of a basic trade deal, COHEP also feel that Central America simply does not have the infrastructure to deal with some of the EU conditions. The AA will include clauses obliging CA nations to make certain developments as regards, for example, sanitary and phytosanitary measures relating to production methods or animal welfare, which, Almendárez believes, “our countries cannot execute” due to the realities of poverty that affect the region, and thus it “will restrict [our] access to the European market, particularly our agricultural sector products”. However, the EU says that by incorporating such elements they agree to provide funding and technical support, as in two projects being discussed last week, one regarding sanitary conditions and another technical standards.

The other two ‘pillars’ of the Association Agreement are politics and co-operation. The EU has initiated the process of an AA with Central America as opposed to an ordinary trade agreement because it feels that the regions have shared interests on issues such as democracy, security, terrorism, small arms, poverty alleviation, etc. In this round of talks there are two themes that stand out in particular: migration, and integration.

The CA block has made sure migration is a central theme as a reaction to the Return Directive on Immigration enacted by the European Union last year, which effectively criminalised illegal immigrants found in the EU with the possibility of 18 months internment. The European Commission delegate wished to stress last week that the Return Directive was a generalised policy to combat illegal immigration from all areas of the globe, and that irregular Central American migration was not an issue for Europe due to the continents being separated by an ocean; thus it was not expected that CA migrants would be greatly affected by the Return Directive. Nevertheless, CA negotiators hoped to use the talks as an opportunity to negate the possibility of criminalisation of migrants from the region.

The second key theme is that of integration, both economic and political. Central America is a region with a history of integration, some of it successful, some considerably less so. The EU is using the biregional dialogue to promote the integrationist model in Central America as a means to more stable democracy and security. Straniero commented “Small and separate countries like the CA ones don’t have a very solid or successful future. We can’t give lessons to anybody, but the EU comes from a successful experience in the field of regional integration; we are offering this same model to CA”.

Central America has made some progress towards integration of its own accord, with bodies such as the Organisation of Central American States (ODECA) and the Central American Bank, and a common market already functioning between the five states that form the negotiating block. Some will to go beyond economics has been demonstrated, with four of the states, Costa Rica the exemption, forming a treaty to create common internal borders.

However, there may just not be the resolve to take integration into the political arena. The Parlacen, a Central American parliament, is a lacklustre organisation frequently referred to as a ‘white elephant’. There is also natural suspicion in this part of the world of such European manoeuvring, given not only the colonial past, but the Cold War context that exacerbated the conflicts of the 1980s. And many feel that CA simply does not have the resources or infrastructure to create a system of integration like that of Europe, given the vast economic and social diversities between the two regions.

The results were awaited as the Tegucigalpa round concluded on Friday 3rd April.