Andean Ministers to deepen integration in light of changes on the world scene

Lima, Oct 30, 2001. Given the changes that have taken place in the world economy and on the international scene since September 11, the Andean Community countries (CAN) today sent a clear message about the need "to deepen integration, strengthen the political will, and move together toward common objectives, now more than ever," in the words of Bolivian Foreign Trade and Investment Minister Carlos Mansilla.

Mansilla referred to the subject at a press conference held today in Lima after the two-day Symposium for Reflection that brought together the Ministers of Foreign Trade and Integration with their counterparts in the Ministries of Economy and Finance and officials from the CAN General Secretariat.

A variety of issues were addressed during the meeting: the advisability of adopting a new Common External Tariff (CET), the need to harmonize financial and tax policies, the stand to be taken by the Andean countries at the forthcoming World Trade Organization Ministerial Conference planned for November in Qatar, and the CAN’s strategy for the negotiation of the Free Trade Area of the Americas (FTAA).

As a result of the deliberations, considered by Mansilla a "sincere and open reflection on the integration process," agreements were reached on the importance of establishing the Andean Common Market by the year 2005 and the commitment to a new Common External Tariff was ratified.

The Ministers were of the opinion that the distinguishing features of the new CET will be its "small spread and the involvement of the five CAN member countries," while they study the number of levels to be established and their actual percentages. They were in agreement that the tariff policy would encompass other important aspects, "such as the customs regimes, Community safeguards, and standards of origin."

Bolivian Treasury Minister Jacques Trigo, for his part, underscored the importance of "working together and negotiating jointly, in light of the extremely complicated world situation." He warned that the "U.S. economy is suffering a sharp slowdown and the European is also to a lesser extent, while Japan has entered a recession."

Although improvements are to be expected by the second half of 2002, Trigo noted that "the demand for raw materials will remain depressed" and did not rule out the possibility that the countries will have to "adopt active policies by creating fiscal stimuli."

The CAN Economy Ministers reaffirmed the need to move ahead with financial policy harmonization by adopting prudential banking standards, and on macroeconomic policy convergence by reducing inflation to the single-digit figure targeted and bringing down the fiscal deficit to 3.5 percent.

In regard to the forthcoming WTO Conference, Mansilla expressed his assurance that the Andean countries "will reach agreements on subjects of interest, such as agriculture, intellectual property, special and differentiated treatment, services, trade facilitation, and the environment."

The members of the CAN feel that these issues are given "insufficient treatment in the draft Declaration of Qatar" and are prepared to "form a bloc with Mercosur and by expressing a firm opinion about these matters to bring the developed countries around to their way of thinking."

Mansilla went on to stress that the Andean countries "are interested in maintaining the multilateral system," and for that reason have given their support to the launching of a new round of trade negotiations and have committed themselves to "coordinate fully in order to present a single unified proposal."

The Chairmen of the Commission and of the Andean Council of Foreign Ministers will accordingly meet next Monday with members of the CAN General Secretariat to continue defining the position the Andean countries will adopt in Qatar.

"September’s events have done much to change the attitude of the wealthy countries toward the rest of the world," Mansilla added, expressing his optimism about the possibility of making headway on issues of priority to the Andean countries, like the removal of agricultural subsidies, although these aspects will be addressed during the negotiations.

The Trade Ministers will meet together as a Commission this afternoon to study the harmonizing of statistical data in the Andean Community and the inventory of measures that restrict trade in services. They will also address other subjects such as oil seeds and the amendment of decisions on Agricultural Health and Registries of Cosmetic Products.