Colombian President Alvaro Uribe said Wednesday that the signing of a free trade agreement (FTA) with the European Union (EU) is “a very important step for Colombia’s economic and social development.”
Uribe said he hoped the agreement will create “sustainable growth of above 5% or 6%, which will result in a substantial reduction in unemployment, and that poverty will be overcome.”
The head of state gave a press conference after the signing of the agreement in Madrid earlier Wednesday.
Investment opportunities
Uribe also stressed the importance of Colombia’s entry into a market of 500 million consumers and said he hoped that the pact would also result in increased international investment in Colombia.
“Last year [Colombia] had the highest rate of investment in Latin America. This year foreign investment in the first trimester grew 23% and investment in active industries grew 3%,” Uribe said.
Uribe reiterated that the agreement includes a clause committing his country to upholding human rights standards and protection of the environment.
Addressing dairy industry concerns
The president also released a statement promising to protect the Colombian dairy industry, which has expressed concern that the FTA will see the end of local dairy businesses, who are unable to compete with the heavily-subsidized European dairy producers.
“The EU commits to providing great support to the Colombian dairy sector, including this announcement: The EU has committed €30 million to support the dairy industry over the next seven years,” Uribe said.
The EU has also promised to help the Colombian dairy industry to access the European market by helping it to reach required health standards.
A new clause added to the agreement Tuesday states that both Colombia and the EU are obliged to make any necessary adjustments to help the South American country’s dairy industry, at any time, after the agreement has been in effect for three years.
The Spanish government also pledged “economic support” for the Colombian dairy industry, according to the statement.
On Monday May 24 the National Council on Economic and Social Policy will adopt the document, thereby obligating the Colombian government to support the dairy industry, the statement continues.
“I want this message to reach the 400,000 Colombian dairy farmers. But I also want to give them an invitation: It is time think about modernizing and industrializing,” the statement reads.
Dairy industry response
Thousands of members of the dairy industry are holding protests around Colombia Wednesday, to denounce the FTA.
As well as marches and rallies, farmers will walk the streets of Medellin, handing out 6,000 liters of milk to the city’s poor in symbolic protest.
Sebastian Londoño, the president of the Central Farmers Committee, said that the FTA spells a death sentence for many small-scale dairy farms, particularly in Colombia’s central coffee growing region, which is compromised entirely of businesses of less than 50 people.
“There are no extensions of deadlines or aid funds that can help, the effects will be seen for themselves, sooner or later,” Londoño said.
Now signed, the FTA must now be judicially assessed and translated, processes expected to take several months. Then it must be passed by the European Parliament and Colombian and Peruvian Congresses before it comes into effect.
Negotiations over the FTA were finalized at the end of February, after nine rounds of talks.
The EU originally began negotiations with all members of the Community of Andean Nations – Colombia, Peru, Bolivia and Ecuador – but the two latter countries pulled out in 2008.