It is a real pleasure to be in Geneva and to have the opportunity to hold this discussion with such distinguished audience.

In my presentation I would like to focus on the following three areas. First, I would like to tell you about the Andean Community. Next, I would like to refer to our efforts to strengthen our economic ties with our regional partners. Finally, I would like to briefly discuss how we are proceeding with the liberalization of Intra-Andean trade in services, particularly in the telecommunications sector.

What is the Andean Community?

The Andean Community is a political, economic and social integration process undertaken by Bolivia, Colombia, Ecuador, Peru and Venezuela and encompassing the bodies and institutions of the Andean Integration System (SAI).

The Andean Community began 30 years ago with the signing of the Agreement of Cartagena. This treaty creating the Andean integration process was successively updated and enlarged until it concluded with the establishment of the Andean Community in June 1997.

The five Members States occupy a total area of approximately 4,710,000 square kilometers stretching from the Caribbean coast to the Pacific, which is linked up by the Andes mountains. The region possesses vast energy, mineral, fishing and agriculture resources. Populated by some 105 million inhabitants, the Andean Community enjoys a Gross Domestic Product in excess of 286 billion dollars. Worldwide Andean exports in 1998 totaled 38 billion dollars.

In the last several years, the Andean countries have established a Free Trade Area that has resulted in a strong growth of trade within the subregion, from 1.3 billion dollars in 1990 to 5.6 billion in 1998, of which a large percentage consists of manufactured goods.

This growth in trade has gone hand-in-hand with a substantial increase in foreign investment, which rose sharply from 2.6 billion dollars in 1993 to 10.6 billion in 1998 and included sizeable investment flows between member countries.

In addition, three of our five Member Countries have adopted a Common External Tariff that we hope will be extended to the other two Member Countries in the coming years. Furthermore, the Andean countries have adopted common legislation in a number of areas such as intellectual property, investment, technical standards, sanitary and phytosanitary measures, transportation, competition, customs procedures, among others.

I should also emphasize that the Andean Community has succeeded in creating a strong institutional and legal framework. It includes an autonomous General Secretariat that acts as its executive body, a Court of Justice, a Parliament, two financial institutions, as well Business and Labor Advisory Councils that ensure an active role for these two sectors in the integration process. The Andean Community's legal system is perhaps the most sophisticated of those established by the integration blocks in our region. Andean legislation is automatically binding in all five Member States and disputes are solved through a highly legalistic process administered by the General Secretariat and the Andean Court of Justice.

Unfortunately, the Andean Community has not escaped the effects of the global economic crisis. This has led to a slowdown in intra-regional trade. Nevertheless, amidst these economic difficulties, our Heads of States decided in their most recent Summit held last May to press ahead with the integration process by setting new higher goals to intensify the Andean Community project and lead it into higher stages of political, economic, social, and cultural integration.

Accordingly, they set as priority tasks the establishment of a Common Market by the year 2005 through the free movement of goods, services, capital and persons in the Andean Community; the implementation of a Common Foreign Policy; the development of a Social Agenda; the execution of a Community Policy of Border Integration; the definition and execution of Sustainable Development policies and the strengthening of our institutions.

Strengthening economic ties with our regional trading partners

Notwithstanding the success of our integration process, our Member Countries have recognized the need to seek markets beyond the Andean Community. In this regard, the Andean Community has emerged as a vehicle through which Bolivia, Colombia, Ecuador, Peru and Venezuela, are jointly exploring ways to strengthen their economic ties with our regional partners.

The Andean Community has been participating actively in the negotiations toward a Free Trade Area of the Americas. I should note that in these negotiations the five Andean countries participate as a block with a single voice.

Recently, we signed a trade agreement with Brazil and we hope to begin negotiations toward a Free Trade Area with Mercosur in the near future. Moreover, the Andean Community is currently engaged in negotiations with several Central American countries and forging new ties with the Caribbean Community.

Liberalization of trade in services

Services account for a rising percentage of the Gross Domestic Product and are instrumental in creating jobs in the Member Countries of the Andean Community and throughout the world.

It has been estimated that in 1997 over 50 percent of foreign investment worldwide went into services. Between 1990 and 1997, the global trade in services surged heavily.

The trade in goods rose an average of 6% per annum.
The trade in services grew nearly 8% a year.
Service exports climbed 8% yearly.
Service imports increased by 7% a year.

In 1997 the world trade in services represented 2.6 trillion dollars and in the developed countries services contribute over 60% of the GDP.

Over this entire decade, the Andean Community has been taking steps that have not passed unnoticed, to deregulate the supply and provision of the universe of services.

Telecommunication has been of key importance in this complex economic and political process, which evolves in harmony with the advances in economic globalization. For it is telecommunication that makes it possible to shorten both physical distances and the time needed for economic transactions and for building up social and political links worldwide.

While it is true that technological advances have played an undeniable role, the diversification and expansion of the investment in these services, which are essential for the functioning of contemporary society, and the market for them have also exerted a heavy influence.

The Member Countries of the Andean Community, for their part, have undertaken, with varying degrees of intensity, the privatization of public enterprises and the economic opening of the telecommunication sector. This has made it possible to redefine the role of the state to concentrate its efforts on regulating the market for these dynamic services.

The legal guidelines have accordingly been laid down, creating the transparent conditions that are boosting the steady growth of private investment, both national and foreign, which is making services one of the most productive, competitive, and rapidly growing sectors in the respective national economies.

Within the sphere of the Andean Community, the existence of a General Framework of Principles and Provisions for Liberalizing the Trade in Services, "Decision 439", on which the various different provisions for deregulating each of the service sectors may be based, lays out the general parameters. These are sufficiently broad and flexible to ensure that this opening at the Community level is transparent and attractive enough to satisfy the commercial expectations of even the most demanding investors in and providers of these services.

In this connection, a Community provision already exists that regulates the supply and provision of satellite services. This Decision 395 "Regulatory Framework for the Commercial Use of the Orbit-Spectrum Resource of the Member Countries with the Establishment, Operation, and Exploitation of Satellite Systems by Andean Enterprises," together with Decision 462, "Provisions Regulating the Integration and Deregulation of the Trade in Telecommunication Services in the Andean Community", constitutes the forward-looking legal framework, which is extraordinarily effective in both the Andean Community market and the interlinking of the Member Countries with the rest of the world.

It will also open up a range of possibilities, among them the creation of the "Andean Information Society" and the establishment, very shortly, of the "Andean Data Transmission Network." The latter will help to incentivate the organization of a multidimensional Project Bank, to which States and private organizations of both the Andean Community itself and public and private actors on the international scene, will have access.

As a result, the Andean Community is taking a giant step toward consolidating the necessary economic and technological conditions in the telecommunication sector for contributing to:

The strengthening of the integration process;
The establishment of the Andean Common Market;
The diversification of communications media among the Member Countries; and

The establishment of its new dimension in the international context as a result of its possession of its own satellite system, the "Simón Bolívar," together with an open market resting on a legal Community framework that ensures the stability of the investments and facilitates the operation of the telecommunication services market over its entire territory.