By Estrella Gutiérrez
CARACAS, Jul 4 1996 (IPS)

Andean Community members of the Mercosur common market agreed this week to make trade liberalization a priority through “harmonious and coordinated” negotiations, with each country setting its own pace for removing tariffs.

They announced their decision at a meeting here of the Andean Community held one week after Bolivia agreed on a liberalisation pact with Mercosur (Southern Common Market) effective January next year.

Trade ministers from Andean members Bolivia, Colombia, Ecuador, Peru and Venezuela were in attendance.

Peruvian Minister Liliana Canale confirmed that her country will remain in the Andean Community — as the Pact founded in 1969 and revived in 1989 is now called — and that its commitment to the bloc is “evident, solid, and explicit”.

Canale made an informal presentation of a proposal to resolve pending tariff differences, which will be finalized in August.

The agreement between Bolivia, on the one hand, and Mercosur members Argentina, Brazil, Paraguay and Uruguay on the other, is the first result of a collective agreement said to be “of the highest priority” by all countries involved, and a show of unity of Andean countries, said the president of the Andean Ministerial Committee, Jose Vicente Maldonado of Ecuador.

Maldonado also emphasized that Andean nations have already agreed on a common framework for negotiation, as well as on the bases for the norms that will govern free trade. The year 2005 has been set as the deadline for the establishment of an extended free trade zone between the nine countries, including Chile.

Last week, Santiago signed a liberalization agreement with Mercosur. Bilateral treaties have already been established with four of the Andean countries.

But negotiation schedules will be different, according to each country’s position vis-a-vis Mercosur, which operates as a bloc in all phases of the negotiation. However, deadlines have been set for some phases.

In this sense, the five Andean members have decided that in the coming semester they will all be ready to negotiate with Mercosur the terms of lifting tariffs and the elimination of import taxes, which are currently blocking free trade in real terms.

This is the second phase of negotiation, which will begin after the four Mercosur countries and each Andean nation “multilateralize” their so-called “historical patrimony” before December.

This is the term used to describe the extension of “mutual bilateral preference” between the members of both blocs — before each one can have access to free trade zones and common tariffs for imports from the rest of the world.

Until now, Peru had refused to modify its flat tariff of 15 per cent, but has now consented in order to join the Andean customs agreement, for a tax of 25 percent on a group of products based, as with Mercosur, on a schedule of four levels: five, 10, 15 and 20 percent.

The Peruvian proposal, according to some present at the meeting, will leave only a small group of highly refined products with a difference of five points over the agreed upon tax schedule “and this will not hurt the trading bloc.”

Other topics decided at the Caracas meeting were the synchronization of indirect taxes, as incentives for exports, an element that distorted free exchange in a totally untaxed market of 90 million people.

Also, rules were established to limit the application of safeguards and a common system for access to genetic resources which promote a balance between environmental and economic needs was adopted, preserving the great biological diversity of the region and preventing the indiscriminate flight of these resources.

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