Alegrett: CAN-Mercosur relationship is the keystone in the construction of the South American space

Lima, Aug. 25, 2000. Andean Community Secretary General Sebastián Alegrett pointed out today that the relationship between CAN and Mercosur " is the keystone in the construction of the South American space" and expressed the hope that the free trade area between the two trade blocs will become operational in mid 2001.

He referred to the subject on being consulted by journalists with regard to the initiative of Brazilian President Fernando Henrique Cardozo to convene a Summit of South American Heads of State for August 31 to September 1, in order to open up a space for economic relations and cooperation.

For Alegrett, the Brazilian initiative adds "a new dimension to Latin American integration and development processes and represents the most important challenge to be met by our countries in the initial decades of this century."

He considered the South American space, consisting of an area of "over 17 million kilometers, inhabited by 341 million persons with a Gross Domestic Product topping 1.2 billion dollars, and with exports totaling 134 billion dollars" to hold a "significant potential."

"This huge territorial, economic, and social space holds out major prospects for the growth of our countries and, at the same time, reflects a significant power of negotiation to attain a more favorable and competitive position on the world scene," he went on to add.

In referring to the weight of CAN vis-à-vis all of South America, he pointed out that the five Andean countries "cover 27 percent of the land area, have 33 percent of the population, contribute approximately one-quarter of the GDP, and account for 33 percent of South America’s exports. "

In April 1998, following a long period of approaches, CAN and Mercosur signed a Framework Agreement in Buenos Aires for the creation of a Free Trade Area that provided, as well, for other spheres of cooperation and harmonization between the two trade blocs.

In August 1999, CAN concluded a series of tariff preference agreements with Brazil and in June of that same year brought a similar process with Argentina to a close. These agreements, in Alegrett’s opinion, "clear the way for directly addressing the negotiation of the free trade area if the consent of the two other Mercosur partners, Paraguay and Uruguay, can be obtained,

If negotiations can be led in this new direction, the CAN Secretary hopes that the free trade agreement between the two blocs "could enter into operation toward mid 2001 for the benefit of more than 300 million consumers."

After stressing the importance of the relationship between CAN and Mercosur, Alegrett stated that this link should be grounded simultaneously in "deepening and consolidation within each bloc, at the same time as the two blocs gradually move towards the common aim of building the South American space."

He was of the opinion that the relationship between CAN and Mercosur can be advanced through the inclusion, as of this moment, of a series of specific and useful aspects," such as "the interconnection of the telecommunications and transportation systems, technical and health provisions, and the development of the physical infrastructure."

Other issues that he considers extremely important are cooperating on monetary and financial matters and boosting the advance of telecommunications and computer technology, which offer an "enormous potential if the interactions between the economies of the two blocs are exploited to the fullest."

Alegrett considered that the strengthening of relations between CAN and Mercosur and the construction of the South American space should be "harmonized with Latin American and Caribbean integration, so that we can act more effectively on the international scene."

Asked about the impact at the hemispheric level, Alegrett answered that the consolidation of the South American space "can be made the focal point for a concerted regional effort to give us more balanced participation" in the negotiations for the creation of the Free Trade Area of the Americas in the year 2005.