A3-0140/94

Resolution on economic and trade relations between the European Union and Latin America

The European Parliament,

-having regard to its resolution of 23 January 1987 on economic relations between the European Community and Latin America,

-having regard to the Final Act of the XIth EC-Latin America Interparliamentary Conference,

-having regard to the opinion of the Committee on External Economic Relations on a European Plan for Latin America (B3-1079/90),

-having regard to the motion for a resolution by Mr Escuder Croft on economic and trade relations between the European Union and Latin America (B3-0488/91),

-having regard to the motions for resolutions by Mrs Llorca Vilaplana on the possible establishment of an Atlantic Common Market (B3-1349/93),

-having regard to its resolutions of 13 July 1990, 22 February 1991, 14 February 1992, 15 May 1992, 19 November 1992, 15 July 1993, 10 September 1991 and 15 July 1993 on the conclusion of framework agreements for cooperation between the European Economic Community and the republics of Argentina, Chile, Uruguay, Paraguay, Brazil, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama, the United States of Mexico and the Andean Pact,

-having regard to its resolution of 15 December 1992 on the Free Trade Agreement between the USA, Canada and Mexico (NAFTA),

-having regard to the report by the Committee on External Economic Relations and the opinion of the Committee on Transport and Tourism (A3-0140/94),

A.welcoming the progress made in consolidating democracy in Latin America, with the exception of certain countries, and the prospects for Latin American economic recovery, in the conviction that these developments are not merely parallel but complementary and closely linked,

B.whereas the 'resurrection' of economic and trade integration processes within the American continent should lead to a greater Latin American presence in the international economic and political spheres,

C.whereas the growing interdependence of the world's economy and the emergence of global issues mean that the European Union cannot remain indifferent to the economic and commercial integration processes taking place on the American continent,

D.whereas the economic and financial reform programmes which Latin American governments have been forced to implement have involved high social costs, with broad sections of the population reduced to poverty, and the uneven distribution of income and wealth greatly aggravated,

E.whereas the consolidation of democracy in the region depends to a great extent on the scope and effectiveness of social programmes to combat poverty,

F.whereas the external debt continues to represent a serious obstacle to Latin America's economic and social development, since it limits its capacity for growth by postponing economic modernization and by making it difficult to maintain and modernize its social infrastructures,

G.whereas it is essential to provide technical and financial aid to achieve crop substitution and diversification if the severe destabilizing effects of the 'narcotics economy' on the fragile democracies of the Andean region and Central America are to be kept in check,

H.whereas the majority of Latin American countries which enjoy preferential tariff treatment under the Community's system of generalized preferences (SGP) are unable to take advantage of this status because of the lack of variety in their exports to the Community,

I.whereas Latin America should play a leading role in conserving natural resources and maintaining the environmental equilibrium of the planet,

J.whereas Latin America is gradually regaining the confidence of the international financial markets,

K.whereas in recent years, the countries of Latin America have substantially reduced their customs tariffs as part of a process of opening up and liberalizing their economies,

L.whereas the potential scale of European Union trade with Latin America is far greater than current levels would suggest,

M.whereas the stability of direct European Union investment in Latin America emphasizes the European Union's confidence in and commitment to the region during the most difficult moments of the 1980s,

N.whereas Latin America, with its demographic and economic potential, should be one of the European Union's most significant partners at world level,

1.Is convinced that the results of the Uruguay Round, and, especially, the gradual dismantling of the Multifibre Arrangement, the reduction in the number and level of peak tariff rates and more effective copyright protection should help to boost industrial trade between the two regions;

2.Believes that the final agreement on liberalizing agricultural trade in the Uruguay Round will have highly positive effects on access to international markets for Latin American agricultural products and, therefore, on the whole process of economic reform and modernization in Latin America;

3.Calls on the Commission, when redrafting the SGP, to take account of the need to concentrate the system on a smaller number of beneficiary countries; extend the system to a wider range of manufactured products; achieve greater flexibility in the rules on place of origin, allowing sub-regional accumulation; and develop a more streamlined administrative procedure for applying the system;

4.Believes that it is essential for preferential treatment ('least-developed country status') within the SGP to be prolonged for the Andean countries involved in the fight against drugs ('Colombia Initiative') and for the Central American countries (Central American Common Market and Panama) which are committed to achieving economic recovery in the region;

5.Reiterates its support for the work of the Council and Commission at the San José conferences, whose results have proved highly satisfactory; reiterates also its wish to see an increased effort with regard to development aid for the countries of Central America once peace has been achieved there and democratic processes are well under way;

6.Recognizes that the application of the North American Free Trade Agreement (NAFTA) will affect the nature of the European Union's political, commercial and investment strategies with regard to Latin America, and above all Mexico;

7.Believes it is necessary for the European Union to upgrade its political and economic relations with the countries of Latin America; calls on the Commission to examine the possibility of negotiating a free trade agreement in the near future with its principal suppliers and clients in the region;

8.Supports the Commission's initiative in the matter of granting technical aid, on the basis of its own experience in this field, to help implement the next stages of MERCOSUR integration and believes that priority attention should be specifically given to establishing:

-criteria for harmonizing macroeconomic policies and mechanisms designed to stabilize erratic movements in trade resulting from fluctuations in exchange rates;

-a customs union and criteria for coordinating export promotion policies and safeguard measures;

-criteria for restructuring those economic sectors which are most vulnerable to the trade integration process;

-instruments for achieving cohesion between the participating countries;

9.Recalls that the success of current efforts towards economic and commercial integration in Latin America depends largely on two basic elements: the coordination of legislation to encourage direct foreign investment and a policy encouraging competition within the regional markets in question;

10.Believes that with regard to technical assistance for Latin America, fiscal reform should constitute a priority, and calls on the Commission to set up a task force of fiscal experts to work in close collaboration with those Latin American governments which are reforming their fiscal structures;

11.Believes that the policy decision to allow the EIB to operate in Latin America means that the European Union has provided itself with a basic financial instrument which allows it to undertake greater political commitments in the region and to support the efforts of European undertakings to make a commercial breakthrough in Latin America;

12.Welcomes the fact that the number and quality of the Latin American investment projects which have requested funding from the EIB exceed the funds available under this item, and believes that if this should turn out to be the case at the end of the experimental period, the amount of funding should be substantially increased;

13.Believes that the setting up of joint ventures comprising European and Latin American small and medium-sized undertakings (SMUs) can make a decisive contribution to developing a competitive Latin American industrial network, and, in this respect, supports the boosting of the EC-IIP (EC-International Investment Partners) programme as a particularly useful instrument for encouraging industrial cooperation between undertakings in the two regions;

14.Stresses that greater efforts and new formulae are needed to allow the volume of the Latin American external debt to be adapted to take account of what the economies of these countries can actually afford;

15.Recommends to the Member States of the European Union that they should revise their system of tax relief for the banks' reserves for bad debts, so that the relief is granted only on condition that the contractual obligations of the Third World debtor country are reduced under an adjustment plan agreed with the IMF or the World Bank;

16.Suggests that the Commission should submit an annual implementation report to Parliament, to allow assessment of the extent to which the objectives established in the framework cooperation agreements signed with all the Latin American countries or groups of countries have been met and, especially, to keep Parliament abreast of the results of the meetings of the joint committees;

17.Instructs its President to forward this resolution to the Council, the Commission, the Governments of the Member States and of the States of Latin America and the Latin American Parliament.