Andean Ministers advance new Common External Tariff to October

Lima, June 18, 2002. The Andean Community Foreign Ministers approved a schedule of activities and took substantive steps to advance the defining of the new Common External Tariff (CET) to October of this year, with a view toward reinforcing the integration process and negotiations with third countries.

So announced Bolivia’s acting Foreign Minister and Chair of the Enlarged Council of Ministers of Foreign Affairs and of Foreign Trade, Alberto Zelada, on reporting the results of the meeting that closed today at CAN headquarters in Lima.

Bolivian Foreign Trade Minister and Commission Chair, Claudio Mansilla, for his part, announced that with the strides made in arriving at criteria for definitions on the normative part, as well as on the tariff structure, based on the agreements reached at the Presidential Summit in Santa Cruz de la Sierra, held in January of this year, “as of today we have clearly defined elements for negotiating the Common External Tariff.”

The Andean Heads of State established at the Santa Cruz Summit that the new CET would have a four-tier structure of zero, five, ten and twenty percent. Bolivia is authorized not to apply the twenty percent level.

The Ministers of Foreign Affairs and of Foreign Trade agreed today on a target date of October 15, 2002 for defining the CET structure -in other words, which products would be included at each level. On the cited date, the CAN will present the basic tariffs for negotiating access to the Free Trade Area of the Americas (FTAA).

In order to accomplish this aim, it was decided that the countries would present their complete lists of products with proposed tariff levels, including flexibility criteria, no later than June 28. The CAN Members will then carry out internal consultations during the week of July 1 to 5.

The technical negotiating group will meet on July 8 to 12 to dovetail approaches to the list of products. The Trade Ministers will examine the results at a meeting to be held on July 18 and 19 in Santa Cruz de la Sierra.

The CAN General Secretariat was instructed, in regard to the basic norms of the CET, to forward to the negotiating group a series of technical analyses on tariff deferrals, goods not produced in the subregion and trade preferences with third countries.

Those studies will make it possible to evaluate the impact of the use of those mechanisms on the customs union and to formulate proposals to correct any distortions.

The General Secretariat should also present to that meeting of the Negotiating Group on July 8 to 12, a proposal for the treatment of Special Tariff Systems in the CAN, based on the methods being used in the European Union and in other trading blocs.

Mansilla reported in regard to the Andean System of Price Bands (ASPB) that technical and legal studies have been commissioned to look into the possibility of reducing its present sphere of application and the calculation methods used, as well as its implications for World Trade Organization (WTO) agreements.

According to Zelada, what is involved is setting up “a sound system for stabilizing agricultural prices in the face of fluctuations that could cause damage to producers.”

In the course of the meeting, the alternate special representative of the President of the Federative Republic of Brazil, Ambassador Alberto Simas Magalhaes, communicated his country’s interest in making “significant advances” in the negotiation of the free trade agreement between Mercosur and the CAN as of the second half of this year and in strengthening the dialogue and cooperation between the two blocs for building the South American space.

Zelada, for his part, stressed the importance of the meeting held yesterday between the Foreign Ministers and Defense Ministers of the Andean Countries, considering that it “opens up a new prospect for cooperation on security and defense measures.”

He went on to add that the cited meeting, an unprecedented event in the 33-year history of the Andean integration process, “would have been unthinkable 15 years ago” and advocated continuing the dialogue on the subject “dynamically and creatively,” in order to achieve an Andean peace zone and reinforce the Common Foreign Policy.

The Foreign Ministers and Defense Ministers yesterday approved the Andean Charter for Peace and Security, which establishes the principles and commitments for the formulation of a Community policy on security in the subregion, the establishment of a zone of peace, regional actions in the war against terrorism, and the limitation of external defense spending, the control of conventional arms and transparency.

The Andean Charter also envisages a series of commitments aimed at getting Latin America declared a zone free from visual range air missiles and medium and long-range strategic missiles.

Other provisions of the Charter refer to the consolidation of the banning of nuclear, chemical and biological weapons; the eradication of illegal trafficking in firearms, ammunition, explosives and other related materials, as well as anti-personnel mines; the expansion and reinforcement of confidence-building measures and the establishment of follow-up and verification mechanisms to deepen dialogue and concerted efforts in these spheres.