A3-0215/94

Resolution on the economic and commercial implications for the Community of the situation in Central America

The European Parliament,

-having regard to its resolution of 22 February 1991 on relations with the countries of Central America including Cuba,

-having regard to its resolution of 16 September 1993 on the embargo against Cuba and the Torricelli Act,

-having regard to the motion for a resolution tabled by Mrs Braun-Moser on the economic and commercial implications of the situation in Central America for the Community (B3-0651/90),

-having regard to Rule 45 of its Rules of Procedure,

-having regard to the report of the Committee on External Economic Relations and the opinion of the Committee on Development and Cooperation (A3-0215/94),

A.having regard to the historical links between the states of Central America and Europe,

B.aware that Central America is still living through politically and economically difficult periods which are in part characterized by war and civil war and their consequences,

C.whereas, in the 1970s and 1980s, the region was strongly affected by the East-West conflict,

D.recognizing the progress achieved, albeit not without setbacks, since the second half of the 1980s in the peace and democratization processes,

E.having regard to the constructive role played by the EU, notably in the political dialogue of the San José process,

F.emphasizing in particular the importance of respect for human rights and democratic fundamental freedoms as a basis for any peaceful development in Central America and for further strengthening of cooperation with the European Union,

G.concerned at the great social burdens which the states of Central America have had to assume in connection with the stabilization programmes agreed on with the IMF and the World Bank, which have resulted in a noticeable reduction in incomes and in a worrying increase in both officially recognized and hidden unemployment,

1.Acknowledges with satisfaction that, since the conclusion of the agreement on commercial and political and economic cooperation in 1987, there has been a noticeable improvement in cooperation between the EU and the states of Central America (Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama) in many areas;

2.Is convinced that this cooperation has helped to bring peace to the region as a whole and that it will continue to be an important pillar for the stabilization of political, social and economic development;

3.Stresses in this connection the great significance of the political dialogue between the EU and the states of Central America and the states of the Contadora Group which allowed the regional efforts at achieving peace to be provided with a supportive political platform;

4.Emphasizes, with reference to its abovementioned resolution of 16 September 1993, Central America's function as a bridge to Cuba and believes that the Central American countries will play an important role in terms of promoting democracy, encouraging respect for human rights and developing a market economy in Cuba's reintegration into the international community;

5.Hopes that the progress achieved in bringing to an end the civil wars, notably in El Salvador and Nicaragua, will be further consolidated and that respect for human rights will be further improved;

6.Recognizes specifically the assistance provided by the EU for the demobilization and repatriation efforts in the regions affected by civil war, but nevertheless stresses that they can only prove successful in the long term if the people affected are provided with lasting means to support themselves;

7.Considers the new EC-Central America Framework Agreement, which entered into force in 1993, to be a suitable basis for the further development of economic and commercial relations between both parties and that an important precondition for this is confidence in reliable economic development;

8.Welcomes in particular the explicit enshrining of human rights and democratic fundamental freedoms as the basis for such strengthened cooperation in the new Agreement;

9.Draws attention to certain shortcomings which remain in the new Agreement, such as the failure to place the political dialogue on a contractual basis, to provide for parliamentary involvement and to append a financial protocol;

10.Draws attention to the special position in the region of Costa Rica, which was spared from acts of war and which, as a result of its close economic relations with the United States of America and the varied range of tourist services it offers, has a higher standard of living than its neighbouring states;

11.Draws attention as well to the special position of Panama which has made a name for itself as an international centre for financial transactions and which has major, albeit diminishing, source of income in the Panama Canal which the United States of America are due to hand back to Panama at the beginning of the next millennium;

12.Considers that assistance should be given to Panama in the development of a forward-looking transport concept for the Canal Zone, which takes account of environmental aspects;

13.Notes in connection with trade relations that, as the region's second largest trading partner after the United States of America, the EU imports mainly tropical agricultural goods from Central America which are, however, limited to a small number of products, as a result of which the states of Central America are very vulnerable to price fluctuations and strongly dependent on the opening up of Community markets for these products;

14.Notes that, despite the granting of most-favoured nation status and additional preferences within the generalized system of preferences since the beginning of the 1980s, the volume of trade has not grown significantly, registering an average trade surplus for Central America of ECU 250 million to 300 million per annum, which, however, was distributed very unevenly among the states of Central America;

15.Regrets that the new Community organization of the market in bananas has resulted in a conflict between the EU and Central America, which is the subject of an arbitration procedure under the GATT, and hopes that any adverse effects on the market prospects for Central American suppliers may be reduced by raising the basic tariff quota and by means of accompanying measures as provided for in the EU budget for 1994;

16.Advocates in this connection a broadening of the production structure and of the range of exports of the states of Central America, to which the EU should contribute as part of the contractually agreed cooperation;

17.Considers that, given the competitive advantages of the states of Central America with regard to tropical agricultural products, there are good prospects for the establishment and development of processing industries for these products and for the improvement of transport and marketing, with particular emphasis being placed on non-traditional products;

18.Welcomes the fact that all the states of Central America are members of the GATT with the exception of Honduras and Panama, whose applications for membership are currently under consideration, and hopes that Honduras and Panama will without delay become members of the GATT world trade system which was significantly strengthened by the conclusion of the Uruguay Round;

19.Draws attention as well to the importance of intensifying intra-regional trade and, in this connection, welcomes the efforts being made towards the completion of the Central American common market through the elimination of trade barriers between Guatemala, Honduras and El Salvador;

20.Warns of the danger of new trade barriers for Central America as a result of the creation of trade blocs to the North (NAFTA) and South (Andean Pact, Mercosur) and calls on all the states concerned to work towards a pan-American free trade zone;

21.Calls on the Commission to give priority to economic cooperation projects of regional importance when implementing the framework programme, particularly in the fields of infrastructure (transport and telecommunications), education and further training, and health;

22.Notes with satisfaction that the financial resources which the EU has provided for the states of Central America, totalling approximately ECU 150 million per annum in recent years, have seen a significant increase in comparison to the level at the beginning of the contractual cooperation and hopes that this trend will continue under the new Agreement;

23.Regrets that the EU was not prepared to give any specific undertakings to do so by appending a financial protocol to the framework agreement;

24.Welcomes the fact that the European Investment Bank has finally been able to begin activities in Central America and hopes that this involvement will be significantly increased;

25.Hopes that this will constitute an effective contribution, particularly in cooperation with the Inter-American Development Bank and the Central American Bank for Economic Integration, to the reduction of the capital shortage which continues to hinder economic development in Central America;

26.Draws attention in this connection to the large external debt of the states of Central America and calls on private and public creditors to contribute to a reduction in the debt burden through generous offers for the rescheduling of debts;

27.Stresses the great importance of open markets for products from Central America, not only in the EU but also in all other western industrialized nations, which will enable Central America to service its external debt through the achievement of trade surpluses;

28.Draws the attention of the states of Central America to the importance of a fair and effective system of taxation for the development of a stable democracy and economy;

29.Considers above all that the promotion and development of processing industries for local raw materials is a promising approach for the development of the economic infrastructure;

30.Notes that such a structural policy can only prove successful if it is accompanied by an effective economic policy to safeguard fair competition;

31.Notes that political and economic stabilization is only possible if, at the same time, provision is made for a fair distribution of wealth, particularly as regards land ownership in agriculture and in industry; encourages the states of Central America to strive for a just land reform;

32.Calls in particular on the states of Central America to enshrine the right of free trade unions to operate in their economic systems and to facilitate this in practice;

33.Calls on the Commission to provide technical assistance for the states of Central America for the development of the contractually agreed investments for economic integration and to promote measures in the areas of quality guidance and control as well as marketing and distribution strategies in order to enhance the competitiveness and marketability of domestic products;

34.Calls on the Commission to focus economic assistance on the development of small and medium-sized undertakings, for example through the creation of a venture capital fund, taking account of the local conditions with regard to the size of the undertaking and its capitalization;

35.Welcomes the activities of the Commission's delegation in Costa Rica, which has made a positive contribution to relations between the European Union and Central America, and believes that a second delegation needs to be established in Nicaragua;

36.Calls on its delegation for relations with the countries of Central America to provide effective assistance to the development of the Central American Parliament as the most important democratic institution for regional integration; considers at the same time that targeted assistance to promote democracy for the national parliaments and institutions, particularly in the administration of justice, is vital;

37.Calls in this connection on Costa Rica as the last contracting party to ratify the agreement establishing the Central American Parliament;

38.Instructs its President to forward this resolution to the Commission, the Council, the ministers responsible for the CFSP, and the governments of the Member States of the EU and of the states of Central America.