Economy & Trade, Headlines, Latin America & the Caribbean

TRADE: Andean Community Integration Feels Strain of Discrepancies

Humberto Márquez

CARACAS, Nov 22 2005 (IPS) - Trade agreements are one thing and integration is another, “so dissatisfaction with the former should not deter us from the latter,” according to Allan Wagner, secretary-general of the Andean Community, who is trying to paper over the cracks in Latin America’s oldest trade bloc.

The bloc formed by Bolivia, Colombia, Ecuador, Peru and Venezuela has been experiencing a sort of “Black November,” due to differences expressed this month on the very issues that led to its creation 36 years ago, such as trade negotiations with third party countries and united positions at international forums.

There have also been discrepancies over questions that have arisen more recently, like the best way forward for the incipient South American Community of Nations, or military agreements to combat drug trafficking, terrorism and insurgency.

At the same time, however, there has been progress on energy agreements, and in seeking accords on fulfilling basic social needs.

“Andean integration is not occurring in outer space, it is neither a simple nor an easy matter, but we know where we must place our solidarity and alliances,” said Wagner in Caracas.

It was the very president pro tem of the Andean Community, Venezuela’s leader Hugo Chávez, who said a week ago that his country “has nothing to gain from the present Andean Community,” because “our course is set in the direction of the Mercosur (Southern Common Market), where the axis of South American liberation is to be found: Caracas-Brasilia-Montevideo-Buenos Aires.”

He was referring to the leftist or centre-left governments currently in power in Venezuela, Brazil, Uruguay and Argentina.

Venezuela is set to become a full member of Mercosur – comprised of Argentina, Brazil, Paraguay and Uruguay – in December.

Wagner said Chávez’s remarks “reflect our dissatisfaction with the Andean Community as it is now, because it is quite clear that trade agreements are one thing and integration is another. Integration has to be political, social and economic.”

“If we are seeking integration merely for trading purposes, it’s not worth carrying on, because the bigger markets like the United States and the European Union will have the advantage every time,” he added.

Chávez did not hide his displeasure at the support that Venezuela’s Andean partners gave to the proposal to refloat negotiations in search of a Free Trade Area of the Americas (FTAA), a Washington initiative, the more so because three of the countries – Colombia, Ecuador and Peru – are discussing a free trade treaty with the United States.

At the Summit of the Americas held early this month in the southeastern Argentine resort city of Mar del Plata, Venezuela aligned itself with the full members of Mercosur in rejecting the revival of the FTAA talks, as the other 29 participating countries were pushing for.

To make matters worse, the three heads of state who are discussing a trade treaty with Washington, namely Alvaro Uribe of Colombia, Alfredo Palacio of Ecuador and Alejandro Toledo of Peru, posed for photographs with U.S. President George Bush, who is a fierce opponent of Chávez.

Neither did the summit prove to be the key to finalising the hemisphere-wide free trade treaty.

In the meantime, negotiators from the three Andean countries were working against the clock with their U.S. counterparts in Washington to resolve differences over agricultural exports, textiles, rules of origin, intellectual property rights on medicines, and telecommunications.

Peru, realising that it was further ahead in the talks than its neighbours, suggested that it sign its own treaty with the United States before all of the negotiators pack their bags on Dec. 6 to head to the World Trade Organisation (WTO) ministerial conference in Hong Kong.

And last week, delegates of the military high commands of Bolivia, Colombia, Ecuador and Peru met with the delegate from the United States in Quito, and invited Brazil but excluded the fifth member of the Andean Community, Venezuela.

While renewing its military alliances with the other Andean countries to combat drug trafficking, guerrillas and terrorism, the Bush administration accuses Venezuela – without providing concrete evidence – of trying to destabilise its neighbours and criticises Caracas’s decision to buy Russian, Spanish and Brazilian arms.

Meanwhile, trade has increased among the other Andean countries to a total of more than 5 billion dollars a year.

Wagner, however, believes that “what was born (in 1969, with the additional participation at that time of Chile) as a large-scale development project has ended up as a trading scheme.”

For that reason he welcomed the idea to hold an extraordinary meeting of the Andean Presidential Council on Jan. 12-13, 2006 to invigorate the bloc’s agenda.

In the first place, the presidents will create Petroandina, a platform for cooperation on energy matters. Energy ministers will be meeting to prepare for this at the end of this month.

The leaders will also discuss putting into effect a “humanitarian social fund” for health, housing, education and sanitation programmes targeting the poorest sectors of society, to which Venezuela has offered to contribute 50 million dollars, Wagner pointed out. The other countries may contribute cash, goods or labour.

“We need a strategy for social cohesion across the Andean countries, and we need integration to reach the people on the ground, who have not even realised that the process exists. Integration has been a topic for the owners of export businesses,” rather than for the public at large, Wagner admitted.

“A new agenda will allow us to build a new Andean Community. In time, however, the emergence of the South American Community of Nations will fuse us all together and neither the Andean Community nor the Mercosur will be needed any longer,” he stated.