For
several years now, the Andean
Community has been heavily expediting
the integration of the automotive
sector by defining and approving
a common policy for this sector.
This is paving the way for the
development of a competitive
and efficient automotive industry
capable of penetrating other
markets outside the region.
The Industrial Complementarity
Agreement in the Automotive
Sector, by Colombia, Ecuador
and Venezuela, signed in November
1993 and brought it up to date
in September 1999, has made
this possible.
A common external tariff (CET)
applicable to imported vehicles
has been adopted and a common
policy approved for the assembly
of automotive vehicles, thanks
to the start-up of that agreement.
The positive economic and social
effects of this policy have
been reflected in the growth
of trade and the development
of the subregional industry.
Automotive products, vehicles
and autoparts became the foremost
product of trade in the Andean
Community.
New demands brought on by international
agreements and regional trade
negotiations led the three countries
signing the agreement to bring
it up to date, with a view to
giving new life to the sector.
On September 16, 1999, Colombia,
Ecuador and Venezuela signed
the new Automotive Complementarity
Agreement and determined that
it would become effective on
January 1, 2000 and have a duration
of ten years with possible extensions.
 It
is the aspiration of these countries
to raise subregional vehicle
production from 212,000 units
a year to 500,000 in less than
ten years' time, with the implementation
of the agreement. They also
hope to substantially increase
intra-Community trade in vehicles
and autoparts, which in 1998
produced over 600 million dollars.
By not including formulas that
require a subregional content
in local production, among other
things, the new agreement removes
possible incompatibilities with
the World Trade Organization
(WTO). All that will be needed
for vehicles assembled by Andean
producers to have free access
to the subregional market, will
be to fulfill the specific requirement
of origin established by the
General Secretariat.
The new agreement maintains
the common 35 percent external
tariff on category 1 vehicles
–that is, light units
with a maximum carrying capacity
of 16 persons and a maximum
cargo capacity of 4.5 tons.
Category 2 units, which are
heavy vehicles (those surpassing
the maximum capacities cited
above) will bear a 15 percent
CET in the cases of Colombia
and Venezuela and 10 percent
in that of Ecuador.
The countries, in turn, agree
to authorize the importation
of new vehicles and autoparts
only, in order to guarantee
maximum safety, environmental
conservation, consumer defense
and industrial property conditions.
The agreement reinforces the
negotiating position of the
CAN before regional blocs and
brings the Andean automotive
industry into line with international
demands. At the same time, it
replaces the performance requirement
with a provision of origin and
spells out the functions of
the Automotive Committee, comprised
of representatives of each of
the participating countries.
The agreement provides for the
incorporation of the other Andean
Community member countries under
negotiated terms of accession.
It also establishes a regime
suspending customs duties on
the imports of assemblers, allowing
them to incorporate subregional
and imported material so that
the resulting vehicle is able
to circulate through the subregion
duty-fee after fulfilling the
origin requirement. |
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