By Jorge Castro Bernieri
Professor at the Catholic University of Peru Law School
Legal Counsel to the Andean Community General Secretariat
Lima, January 24, 2002

The government of Bolivia, currently occupying the rotating chair of the Andean Community, has called a Summit Meeting of the five Member Countries of the group for this coming January 30 in Santa Cruz.

The Santa Cruz Meeting may be the most important event in the region since the December 1991 Presidential Council in Cartagena. On that occasion, in order to give new life to Andean integration, the Heads of State decided to establish a free trade zone without any exception and an initial common external tariff.

The Cartagena Meeting ushered in important benefits for integration that we still enjoy today. Over a few short years, intra-Community trade multiplied more than four-fold amidst a situation of worldwide economic uncertainty. Trade among the countries in the region at present generates almost six billion dollars and provides jobs for roughly half a million people.

Even so, and despite how advanced they were for the period, the agreements reached in 1991 are no longer sufficient. The trading system decided upon in Cartagena has been implemented only marginally over the past ten years. If we want to keep this integration process effective, so that the people living in the region can obtain increasing benefits from it, the Andean countries must make a serious effort to build upon it.

The next step, as the Heads of State have been announcing for some years now, is to transform the Andean Community into a Common Market, in which the factors of production will circulate freely. This means extending to Andean capital, services, and workers the benefits that goods currently enjoy. In other words, the Andean Community would operate, trade-wise, like a national market. This is a process similar to the one Europe underwent at one time and which has brought so many benefits to that region.

In practice, the Common Market will produce two kinds of benefits. On the one hand, it will help to allocate the subregion’s resources more efficiently, so that they generate more wealth and greater well-being. In that way, specialization will increase, regional competition will be stimulated, and the competitiveness and capacity for consumption of the region’s inhabitants will improve.

On the other, the Common Market will boost the capacity of the Andean countries to jointly deal effectively with far more important commercial scenarios in the next few years: the negotiations with Mercosur, the FTAA hemispheric agreement, relations with Europe and other country blocs and the negotiations that have just been launched in the WTO.

Only by acting jointly will the Andean countries be able to take advantage constructively of the opportunities offered by these forums.

The system that we put together ten years ago was a very good one at that time. But integration has moved ahead and we need a new system. The Santa Cruz Meeting poses a historical challenge to the Andean governments equivalent to the one they faced in 1991 in Cartagena.