The Andean Community and the Mercosur are moving with increasing
rapidity toward their target of forming a free trade area that
will benefit the 300 million inhabitants of their nine member
countries.
The first concrete
step in that direction was the signing, on April 16, 1998, of a
Framework Agreement for the creation of a Free Trade Area between
the Andean Community and the Mercosur, which established the bases
for this enlarged market.
The Agreement
stipulated that the negotiations would be conducted in two stages.
In the first, a Fixed Tariff Preferences Agreement would be
negotiated based on already existing accords and in the second, a
Free Trade Agreement would be worked out.
In regard to
Bolivia, the Agreement stated that, without prejudice to
Complementarity Agreement No. 36 previously signed by that
country, it would participate in the negotiations between the
Andean Community and the Mercosur in order to bring that agreement
into line, in all pertinent matters, with those that the parties
sign.
Negotiation of
the Tariff Preferences Agreement
The Andean
Community and the Mercosur launched the negotiation of a Tariff
Preferences Agreement in June 1998, based on the guidelines set
out in the Framework Agreement.
The negotiating
arrangement initially used (4 + 4 system) was changed at Brazil’s
suggestion to one in which the Andean countries as a whole
negotiated with each of the Mercosur countries separately (4 + 1),
but always with the final objective in mind.
As a result of
these negotiations, on August 12, 1999, Colombia, Ecuador, Peru,
and Venezuela signed a Partial Scope Economic Complementarity
Agreement with Brazil that entered into effect four days later, on
August 16.
Under that
agreement, the two parties established fixed margins of preference
as an initial step toward creating a Free Trade Area between the
CAN and the Mercosur.
With the same aim
in mind, Argentina and the CAN negotiated a Tariff Preferences
Agreement that was signed on June 29, 2000 and became effective on
August 1 of that same year.
Negotiation of
the Free Trade Agreement
The second stage of
negotiations, leading to the final objective of signing a Free
Trade Agreement, is now underway. The first two meetings between
the five Andean and four Mercosur countries were held on April 27
and August 24, 2001.
At both meetings,
the two parties negotiated specific aspects of the Free Trade
Agreement and expressed their intention to conclude negotiations
before December 31, 2001, in keeping with the mandate handed down
by the South American Presidents and the Andean Presidential
Council.
Political boost
The negotiations
between the Andean Community and the Mercosur for the formation of
a free trade area have received special attention from the
Presidents of the member countries of both groups.
At the South
American Summit in Brasilia, the Heads of State of the CAN and the
Mercosur decided to "start negotiations for the
establishment, as soon as possible and before January 2002, of a
free trade area between the MERCOSUR and the CAN" and
recognized that the agreements signed by the CAN with Brazil and
with Argentina "will represent a decisive boost toward the
shared goal of forming an enlarged economic and commercial space
in South America."
They went on to
reaffirm "the understanding that the process of creating an
enlarged economic area in the region will be the result of
principles of open regionalism and will strengthen the positions
of the South American countries in important negotiations that the
region wishes to carry out successfully, such as those of a free
trade area of the Americas, the negotiations involving the
development of closer relations with the European Union, or those
within the sphere of the World Trade Organization, among
others."
At the Thirteenth
Andean Presidential Council, held in Valencia, Venezuela, in June
2001, the leaders committed themselves to "do their
utmost" to conclude those negotiations before December 31 of
this year.
The Presidents
attending the Twentieth Meeting of the Common Market Council and
Summit of Heads of State of the Mercosur, held in June 2001 in
Asuncion, Paraguay, for their part, underscored "the
importance of continuing negotiations for the signing of an
Agreement between the Mercosur and the Andean Community of Nations
that will make it possible to establish strategic and progressive
relations between the two subregional integration movements
shortly."
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