Economy & Trade, Headlines, Latin America & the Caribbean

ANDEAN COMMUNITY: Setting Out on a New Stage of Integration

Estrella Gutierrez

CARACAS, Apr 1 1998 (IPS) - This weekend’s summit in Guayaquil will capitalise on the current period of smooth sailing towards integration in the Andean Community (CA), and allow the presidents to take on new objectives, after years of internal crises.

The breeze in the Ecuadoran port city of Guayaquil will be a welcome change after the tense climate in Sucre, Bolivia, when Peruvian President Alberto Fujimori was not invited to the 9th summit after he announced his country’s (later aborted) plans to pull out of the bloc.

But in between the Apr. 22-23, 1997 summit in Sucre and this weekend’s gathering of the leaders of Bolivia, Colombia, Ecuador, Peru and Venezuela in Guayaquil, the open wounds of the crisis have been stitched up, the bloc’s institutional base has been overhauled, and the first steps have been taken towards an Andean common market.

For the first time since the turbulent December 1991 summit in Cartagena, Colombia, which gave rise to the split with Peru over differences regarding the common foreign tariff – finally resolved in July 1997 – the presidents will meet without major rifts, neither on the table nor in the closet.

Panamanian President Ernesto Perez Balladares, who has participated in the bloc’s political forums since 1995, will be present in Guayaquil, as he was in Sucre. Panama and the Andean bloc are negotiating a special economic relationship.

The biggest obstacle lies in the fact that most of the presidents are either on their way out or new arrivals: this weekend’s summit will be Bolivian President Hugo Banzer’s first, and the last for Ecuador’s Fabian Alarcon, Venezuela’s Rafael Caldera and Ernesto Samper from Colombia.

But foreign ministries and business organisations in the subregion maintain that the problems that could arise from the changes on the political scene will be compensated for by the fact that the new General Secretariat, functioning since July 1997, has the political clout to further the objectives outlined in Guayaquil.

The bloc’s biggest worry since Sucre were the erratic negotiations with the Southern Common Market (Mercosur), comprised of Argentina, Brazil, Paraguay and Uruguay, which ended in a Framework Accord to be signed Apr. 16 in Buenos Aires. The accord sets a January 2000 deadline for a free trade zone between the two South American blocs to go into effect.

The Guayaquil agenda does not include the negotiations with Mercosur as a specific item, sending out a clear message that the key issue at the summit will not be those talks, but rather the strengthening of the bloc itself, the setting of new objectives and a focus on a broad range of external relations.

The agenda of the presidential gathering – which will run Saturday and Sunday, preceded by meetings Friday among the bloc’s ministers of foreign affairs and trade – includes an evaluation of the state of the subregion’s integration process as its first item.

The second aspect to be discussed is the building of an Andean common market, including the completion of the customs union already operating between all partners except Peru, the opening of trade in services, and physical integration. The CA has a combined Gross Domestic Product (GDP) of 248 billion dollars.

The creation of a common market will also demand harmonisation of macroeconomic policies, with respect to which the heads of state are to work out new objectives, after an early March meeting among the bloc’s finance ministers set the first big goal of reducing the subregion’s combined inflation rate to a one-digit figure.

Statistics made available by the bloc’s Lima-based General Secretariat indicate that the five countries’ average inflation rate was 19.5 percent in 1997, pushed up by high consumer price indexes in Venezuela (38 percent), and Ecuador (30 percent).

A new element to be included in discussions on the common market is socio-labour integration. The Secretary-General of the CA, Venezuela’s Sebastian Alegrett, told IPS that the intention was to begin to discuss ideas on freeing up markets and borders for the subregion’s 104 million inhabitants.

On a stopover in Caracas on his way to Guayaquil, Alegrett said the question of labour integration was “complex, if not taboo,” because for many years countries like Venezuela have suffered an inflow of unwanted immigrants from neighbouring countries.

But things have changed, and the minimum wage in several members of the bloc is even higher today than Venezuela’s, he pointed out, while adding that border controls have not done much to curb flows of undocumented immigrants but have gotten in the way of movements of entrepreneurs and other sectors involved in the integration process.

The General Secretariat proposes an open analysis of the existing situation and its deeper roots, in order to vanquish fears and make progress towards solutions that would allow real controls under a scheme of societies in integration.

The bloc’s Common Foreign Policy and foreign relations is the third point on the Guayaquil agenda, encompassing not only the talks with Mercosur but the growing ties with the European Union and discussions towards accords for the opening of trade with Central America and the English-speaking Caribbean Community.

The fourth item on the agenda of the 10th summit is the strengthening of the institutions of the Andean Integration System, which was given formal life at the last summit, and in which the General Secretariat has included a proposal described as “revolutionary” when it comes to integration schemes.

The idea is to promote autonomous financing of the system of organisations and entities working towards integration, including a subregional court, a parliament and an environmental programme, as well as labour and business forums.

The proposal is to replace government quotas – at times delayed by difficult financial situations, according to Alegrett – with a tax on trade within the bloc, which totalled 5.8 billion dollars in 1997.

The secretary-general pointed out that with the tax, which would amount to around two or three-thousandths of the total turnover of imports and exports, the Andean Integration System would be financed by “those who make the greatest use of integration” – the business community.

Citizen participation in subregional projects is another specific point on the agenda, an initiative by the General Secretariat, which aims to link integration with the society it seeks to benefit, through the support of communication networks.

Alegrett organised a Mar. 14 meeting in Bogota among professionals in communications from the bloc’s member nations to study strategies to help the people of the five countries get to know each other.

The aim, he told IPS, was for an understanding among the people of the Andean subregion that integration would give rise to a broader sense of belonging, as well as a new collective “space for personal, professional, economic development and cultural identity.”

If that is achieved, he added, integration in the subregion would be sustained not only by the political will of the governments and the growing enthusiasm of the business sector, but also “by a political influence that comes from the grassroots.”

The Guayaquil summit will also start to plan the 30th anniversary of the May 26, 1969 signing of the Cartagena Accords, which gave rise to the bloc that acquired a new lease on life under neoliberal schemes for the opening of markets 20 years later.

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