We, the Presidents of Bolivia, Colombia, Ecuador, Peru and Venezuela, assembled at the Special Meeting of the Andean Presidential Council, in reaffirming the commitment to establish a Common Market, have approved the following:

FREE TRADE AREA

1. Agreement to consolidate and perfect the free trade area by June 1, 2002 at the latest.

2. Peru will move the dates ahead for reducing customs duties on oil and fuels to December 31, 2003. Agricultural products will be free of customs duties on December 31, 2005.

3. To make all possible efforts not to place any new restrictions on free trade and to carry out agricultural, agroindustrial and industrial complementarity programs.

4. Agreement to revise the Community’s rules of origin within 60 days and/or to set up compensatory mechanisms or specific origin requirements, as the case may be, as a condition for eliminating quotas and any restriction on quantity that is currently in effect, based on an analysis of the production chains.

5. Agreement not to extend to third countries concessions that are more favorable than those granted to Andean Community Member Countries.

6. Application of the principle of positive administrative silence for short periods of time to ensure rapid handling of administrative procedures for importing goods from the subregion.

7. Agreement to settle conflicts created by the imposition of sanitary and phytosanitary restrictions.

8. Agreement to harmonize sanitary and phytosanitary requirements within a period of sixty days.

9. Agreement to ensure cargo transportation by road and to adopt the necessary internal mechanisms for that purpose.

10. To set up a conciliation body to supplement the work of the Andean Court of Justice and to commit themselves to carry out fully all judgments handed down by that jurisdictional organ. They agreed to call a meeting for the purpose of examining the reasons why judgments of the Andean Court of Justice fail to be carried out and for arranging for the political and administrative measures that are needed to ensure their fulfillment.

CUSTOMS UNION

11. Bolivia, Colombia, Ecuador, Peru and Venezuela will put a common external tariff into effect no later than December 31, 2003. It will have a four-level structure: 0, 5, 10 and 20%. Bolivia will not apply the 20% level.

12. Agreement whereby each country will, in the degree to which its fiscal possibilities permit, apply a 0 tariff to the capital goods it does not produce. Ecuador is authorized to gradually reduce customs duties on raw materials and inputs that are not produced in the subregion, to allow it to maintain the competitiveness of its exchange policy. Any distortion created by this authorization will be corrected through the application of requirements of origin or countervailing duties that will avoid generating unfair competition with the other Andean partners and that will not cancel the application of the agricultural price stabilization mechanism.

13. Agreement to harmonize temporary importation regimes for active perfecting that the five countries apply to the importation of capital goods, raw materials and inputs that are used to produce goods intended for export to the Andean Community. In order to apply this special Community export-import customs mechanism, the appropriate rules of origin must be defined to avoid creating distortions in intra-Community trade. A Commission Decision must be approved within 60 days to review and define the afore-mentioned mechanism, after which it will be immediately applied.

14. Agreement to harmonize the special intra-subregional trade regimes and to create common trade defense mechanisms for safeguarding the CET and counteracting the effects of the application of such regimes by third countries.

COMMON AGRICULTURAL POLICY

15. Agreement for the adoption of a common agricultural policy.

16. Agreement for the adoption of agricultural price stabilization mechanisms by all of the countries, reducing product coverage and establishing mechanisms to guarantee their more transparent application.

17. Agreements among the production sectors will be taken into account if they reflect the sensitivity of the agricultural products and provided that they maintain the overall competitiveness of the agroindustrial chains.

MACROECONOMIC POLICY HARMONIZATION

18. Agreement to harmonize macroeconomic policies and to fulfill the criteria for macroeconomic convergence within a period of two years, as an essential element for the formation of the Andean Common Market.

19. Agreement to extend the coverage of article 110 of the Cartagena Agreement with regard to the foreign exchange safeguard, in order to make it applicable to competitive devaluations of Andean Community Member Countries.

COMMON FOREIGN POLICY

20. They reiterated the need for continued diplomatic overtures to secure the United States Congress’ renewal and expansion of the Act governing Andean Trade Preferences that are granted due to the continuous efforts of the countries in the subregion to control the world drug problem, by including products and sectors that are of fundamental importance to the Andean countries. They likewise reiterated the importance to the subregion of Venezuela’s incorporation in that preferential system. In this connection, they instructed their Foreign Ministers to reiterate these proposals in the course of their meetings in Washington in February with the Secretary of State, the US Trade Representative, the National Security Council, and Congressional officials.

21. The Presidents underscored the need to continue high-level political overtures and the corresponding technical efforts for the purpose of consolidating an association with the European Union that will open up a new dimension in relations between the two regions in the political, economic, and cooperation spheres. They requested the Pro Tempore Secretariat to coordinate the position of the Andean countries for the forthcoming Madrid Summit. They likewise instructed their Foreign Ministers to make overtures for the same purpose to the Chair of the European Union, the Troika and other member countries of the Union.

22. They reaffirmed the need to perfect a comprehensive strategy for the participation of the Andean countries in the FTAA negotiations and reiterated their willingness to continue negotiating jointly and with a single voice in that process.

23. They consider that the best way to make advances in the subregion’s negotiations in the WTO is to arrive at concerted positions. They accordingly decided to adopt a common strategy on the pertinent issues, in order to address the commitments acquired in Doha in a coordinated way.

24. In light of the importance to the Andean Community of its political dialogue with the MERCOSUR, the Presidents reiterate their full solidarity with the Republic of Argentina in the face of the political situation it confronts and express their unrestricted backing for the democratic institutions and the Constitutional Government of that country.

The Presidents agreed to ask the President of Bolivia, as Chairman of the Andean Presidential Council, to transmit to the Presidents of the MERCOSUR member countries at the next Summit Meeting of MERCOSUR, Bolivia and Chile, to be held in Buenos Aires on February 18, the intention of the Andean Community countries to continue the trade negotiations between the two groups.

25. The Presidents drew attention to the sustained and financially sound growth of the Andean Development Corporation and to the role it plays as the principal source of multilateral financing for the Andean countries and as an important promoter and coordinator of the Latin American integration process.

They expressed their satisfaction at the incorporation of all of the MERCOSUR member countries as shareholders of the Andean Development Corporation’s C Series, which will facilitate the financing of regional integration programs and projects, particularly in the areas of infrastructure and logistics. They also welcomed the forthcoming accession of Costa Rica and Spain to the Corporation’s shareholding. Convinced of the need to substantially broaden the role played by the Andean Development Corporation in the sustainable development and integration of the region, the Presidents ordered an increase in its authorized capital from 3 to 5 billion dollars and the underwriting and respective payments in keeping with a timetable prepared to meet future financing needs.

26. The Presidents discussed the issues to be addressed at the Summit on Development Financing to be held in Monterrey, Mexico in March and decided that their Foreign Ministers would propose the consideration of this subject at the next meeting of Foreign Ministers of the Rio Group, for which they would have access to the studies entrusted to the Andean Development Corporation. They also deem it necessary for the Foreign and Treasury Ministers to take part in the Monterrey Meeting because of the political and financial connotations of that event.

27. The Presidents agreed that their countries would put forward a common proposal on the topics of the agenda for the Summit on Drugs, in which the Andean countries, the United States, Brazil, Mexico, Panama and the Chair of the European Union will participate. The results of the drug control efforts made since the meeting in Cartagena de Indias in 1990 are to be evaluated at that Summit. The Andean Foreign Ministers will take up those issues at the Meeting of the Foreign Ministers of the Rio Group, scheduled for this coming February 15 in San José, Costa Rica.

28. They underscored the immense challenge for the developing countries and especially the Andean countries, of effectively implementing the concept of sustainable development in both the multilateral and the national spheres. As a result, they decided to start Andean coordination efforts in preparation for the South Africa Meeting on Sustainable Development.

29. Aware of the growing strategic importance of energy to the hemisphere and of its interest in boosting Andean Subregional, Latin American and hemispheric integration, the Presidents agreed to request the Andean Development Corporation, the Latin American Energy Organization, the Inter-American Development Bank and the United Nations Conference on Trade and Development to prepare a comprehensive examination of the subregion’s energy potential as a strategic factor in regional and hemispheric energy security. In this connection, the Andean leaders asked for an initial report to be presented at the Second Summit of Heads of State and of Government of South America, to be held in Guayaquil, Ecuador on July 26, 2002.

SOCIAL AND POLITICAL AGENDA

30. The Presidents consider it a priority to move ahead with the tasks on the social agenda. To that end, they instructed the pertinent Ministers to meet during the course of this semester for the purpose of designing a Community strategy to supplement national efforts in this area.

31. The Heads of State welcomed the initiative of Peruvian President Alejandro Toledo to hold a Conference of Foreign and Defense Ministers of the Andean Community Member Countries in Lima this coming April in order to examine the proposal for reducing spending on defense, bearing in mind domestic security needs and existing spending levels, in order to allocate more funds for social investment and anti-poverty efforts.

32. The Presidents agreed to hold a Summit Meeting in Caracas on May 4, 2002 to examine the issues of Andean political integration and the standards and guidelines for its treatment.

Santa Cruz de la Sierra, Bolivia, January 30, 2002

Jorge Quiroga Ramírez
President of the Republic of Bolivia

Andrés Pastrana Arango
President of the Republic of Colombia

Gustavo Noboa Bejarano
President of the Republic of Ecuador

Alejandro Toledo Manrique
President of the Republic of Peru

Hugo Chávez Frías
President of the Bolivarian Republic of Venezuela