Taking the opportunity of the FTA signing between the European Union and Colombia and Peru, I will speak about the Free Trade Agreements.
FTAs are agreements between countries and/or economic areas based on free trade. The underlying intention of such agreements are to promote the exchange of goods without any tariff or fee applied on entry to the importing country.
So what is the problem with this? It’s trade, no? And we have been told that trade is good, good for the economy, good for business and therefore good for us.
But looking at the example of the new agreement between Colombia and Peru and the European nations, the latter has a more sophisticated and indirectly subsidised industry which will flood the Colombian and Peruvian markets. And what do the two Latin American countries have to offer in exchange? Natural resources. Natural resources that lack the same added-value than the European imports and thus are overall cheaper. Tilting the trade balance in favour of Europe.
If we look at the history of FTAs, the richer party always wins.
In addition the extraction of these natural resources, provokes contamination of land and rivers, displacement of indigenous communities, health hazards and a series of disastrous consequences that are of no interest to the state nor to the trading partner.
You cannot treat the European Union economy in equal terms with the Colombian or Peruvian economies. And most certainly by uniting these economies in an agreement you cannot expect one to catch the other. See European Union states for instance. So let’s agree on fairer trade agreements, that balance things out between parties.