ANDEAN COMMUNITY: In Search of a Strong, United Image

By Estrella Gutiérrez Reprint | | Print |

Estrella Gutierrez

CARACAS, Jul 2 1996 (IPS) - The Andean Community is trying to fix its weakened image and give off signals of strength and cohesion, after Bolivia’s recent signing of an accord with the MERCOSUR to negotiate an association with that bloc.

Peru is slowly but surely returning to the fold and accepting the discipline of the Andean Community, Bolivia will remain a partner, and the five member nations – Bolivia, Colombia, Ecuador, Peru and Venezuela – have agreed to negotiate free trade accords with the MERCOSUR as a bloc.

The ministers and heads of integration of the five member countries of the Andean Community – previously known as the Andean Pact, created albeit in a different form in 1969 – are meeting this week in Caracas for the first time since Chile and Bolivia signed accords with the MERCOSUR (Southern Common Market) last week.

During the ministerial Commission, Bolivia will report on its negotiations with the MERCOSUR – Argentina, Brazil, Paraguay and Uruguay – at the presidential summit that ended Jun. 25 in Argentina. The framework accord reached is to lead to the start of a phased lifting of tariffs three months from now.

The understanding between Bolivia and the MERCOSUR gave rise to distrustful statements in Colombia and Ecuador, in spite of the fact that the government of La Paz had informed its Andean partners two days before signing the accord, and that the Community’s own technical body acted as a consultant to the negotiations.

A year ago, the members of the Community had agreed to negotiate the creation of a South American free trade area with the MERCOSUR, to be fully operative by 2005, Community spokespersons told IPS.

The norms for the lifting of tariffs for that free trade area would be worked out between the Community and the MERCOSUR as blocs, while the actual reduction of duties would be bilateral between the MERCOSUR and each Andean nation.

The members of the Andean Community hope that will be sufficient to clear up doubts over whether they are gradually and bilaterally drifting towards membership with the MERCOSUR – which would undo the Andean bloc.

What will define a truly free and transparent trade is the aspect of the norms, participants in a preparatory meeting of the Commission said Monday, which are what set non-tariff restrictions and lists of exceptions that limit trade.

Another Andean proposal toward the creation of a wider South American free trade zone is that norms of origin consider everything produced in the nine countries involved plus Chile as a “national input.”

That position is very different from that of the MERCOSUR, which in its negotiations with Bolivia has insisted that for duties on a product to be removed, it must have inputs only from the five countries directly involved in the lifting of tariffs.

Another positive signal is Peru’s decision to take a clear step back toward participation in the free trade area and customs union functioning between the other four members of the Community. Lima had pulled away from its commercial commitments in 1992, and only began to reassume them reluctantly in 1994.

Trade between Peru and its Andean partners has been liberalised with respect to more than 80 percent of products, while articles with the highest level of elaboration have been left out of that opening.

But Peru is now willing to accept the common foreign tariff for non-Andean Community countries, in three of its four levels – 5, 10 and 15 percent – but not the 20 percent group of products, for which Lima wants to maintain a 25 percent duty for the time being.

The unified customs systems of the MERCOSUR and the Andean Community, in force since 1995, are based on four levels of tariffs ranging from 5 to 20 percent, a formula that Peru had previously rejected, holding to its two categories of 15 and 25 percent.

Delegates from other countries, relieved that Peru has given a clear signal that it will remain in the bloc, say the small difference it wants to maintain will not hurt liberalisation nor the unified customs system.

Andean trade has increased more than twofold over the past four years, to its present level of close to five billion dollars a year, and is dominated by the private sector rather than based on traditional export products.

Other questions the Caracas meeting will decide on this week will be measures to reinforce norms of inter-Community transport and a pioneer norm on plant resources that will make the Community the first bloc with common measures to control and defend its biogenetics, including the recognition of the rights of indigenous people regarding their ancestral knowledge of plant use.

This will be the last session of the Commission to be presided over by Ecuador’s outgoing minister of Commerce and Integration, because on Aug. 10 there will be a change of government in that country, which this year is holding the bloc’s rotating presidency.

But the biggest problem hanging over the meeting, one that will be difficult to resolve, is the ability of Andean Community partners to present – both among themselves and to the rest of the world – an image of strength and cohesion, something they have been unable to do over the past three years.

ANDEAN COMMUNITY: In Search of a Strong, United Image

By Estrella Gutiérrez Reprint | | Print |

Estrella Gutierrez

CARACAS, Jul 2 1996 (IPS) - The Andean Community is trying to fix its weakened image and give off signals of strength and cohesion, after Bolivia’s recent signing of an accord with the MERCOSUR to negotiate an association with that bloc.
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