Good morning. It is a real pleasure to be in Ottawa to present the Andean Community and to jointly explore, with such a distinguished audience, opportunities to enhance our trade and economic ties with Canada.

This year marks the 30th Anniversary of the Andean Community and there is much to celebrate. The Andean Community has made historic strides in these 30 years and especially during this decade. The recent peace agreement between two of our Member States, Peru and Ecuador, paves the way for future progress in the integration process. Today, I can confidently state that the Andean Community is the most solid and sophisticated integration project in our hemisphere.

My presentation will focus on the institutional and legal framework of the Andean Community and our perspectives for the future. Nevertheless, I would like to begin by highlighting some of our most important achievements.

The Andean Community's Main Accomplishments

Perhaps our most important achievement is the creation of a Free Trade Area. Trade among the Andean countries grew 300% between 1990 and 1998. A unique feature of the trade within the Andean Subregion is the heavy predominance of manufactured goods, which account for almost 90% of the total.

In 1998, the value of intra-Andean trade exceeded 5 billion United States dollars and there is evidence that suggests that integration helped ameliorate the effects of the global economic crisis. For instance, while Andean exports to the rest of the world fell dramatically in 1998, intra-Andean trade remained stable.

Trade expansion also has been accompanied by a surge of foreign investment and has given rise to significant investment flows among the Member States. Andean enterprises have forged numerous strategic alliances to take advantage of the expanded market.

In addition to the Free Trade Area, we are consolidating our Common External Tariff, which is currently applied by the majority of our Member States. Furthermore, we have adopted common disciplines in such diverse areas as intellectual property, transportation, competition, customs procedures, rules of origin, sanitary measures, technical standards, foreign investment, among others.

These achievements have been possible largely because the Andean Community also has a solid institutional and legal framework.

The Andean Community's Institutional and Legal Framework

The highest-level, political body of the Andean Community is the Andean Presidential Council, comprised of the Heads of States of the five Member Countries. The Andean Presidential Council oversees the integration process and provides political guidance by issuing Directives.

The Andean Council of Foreign Ministers and the Andean Commission - comprised of the Ministers of Trade and Industry - are policymaking bodies. They also legislate by adopting laws, called Decisions, that are directly and immediately applicable throughout the five Member States. Moreover, Andean Decisions prevail over domestic legislation.

The General Secretariat is the executive body of the Andean Community. As a supranational body, it acts only according to the interests of the subregion as a whole. The General Secretariat's responsibilities include providing technical assistance to the Member States, issuing binding rules called Resolutions, proposing draft legislation to the Council of Foreign Ministers and the Commission, and ensuring compliance with Andean Community Law.

The judicial body of the Andean Community is the Andean Court of Justice. It is comprised of one judge from each Member State and it sits permanently in Quito, Ecuador. The Andean Court of Justice has jurisdiction over two types of claims: those alleging that a Member State is violating Andean Community Law and those seeking to invalidate a Resolution or a Decision.

Claims alleging a violation may be filed by a Member State or by the General Secretariat. Private parties can seek redress through the General Secretariat. Prior to filing this type of claim with the Andean Court of Justice, the General Secretariat must first issue an administrative ruling. Those claims alleging that a Resolution or Decision is invalid may be filed by a Member State, the General Secretariat or directly by private parties.

The Andean Court of Justice plays another important role. Whenever a domestic court must apply Andean Community Law, it must first request the interpretation of the Andean Court of Justice. This ensures that Andean Community Law is applied uniformly throughout the five Member States.

Amendments to the Andean Court of Justice's Treaty, adopted under the Cochabamba Protocol, will soon enter in force. Among other things, the amendments will expand the Andean Court of Justice's jurisdiction, they will create arbitration procedures, and they will allow private parties to directly file claims alleging that a Member State is violating Andean Community Law.

Thanks to these procedures, the Andean Community is characterized by a high-degree of legality and transparency. In turn, this affords exporters and importers the legal security that their investments require.

The Andean Community also includes the Andean Parliament - its deliberative body, the Andean Development Corporation and the Latin American Reserve Fund its financial institutions, the Business and Labor Advisory Councils, the Simon Bolivar Andean University, and various Social Agreements responsible for promoting integration in specific fields.

Looking Ahead

As we approach the next millennium, the Andean Community is setting new goals for itself. The first goal is the creation of an Andean Common Market. This will require ensuring the free movement of goods, services, capital and labor.

We have already agreed on the free movement of goods. Also, last year the Commission adopted a framework for the liberalization of the trade in services. Under this framework, all services must be completely liberalized by the year 2005. The Andean Community is already carrying out negotiations in strategic sectors such as financial and value-added telecommunications services.

Discussions regarding the movement of capital and labor have already begun. With respect to the movement of capital, I want to highlight that the Andean Advisory Council of Ministers of Finance, Central Bank Presidents, and Officials Responsible for Economic Planning has met twice to discuss the harmonization of macroeconomic policies. They will soon meet for a third time to continue discussions on this important topic.

In addition to moving toward a Common Market, we also hope to launch a Common Foreign Policy at the next Presidential Summit that will take place this upcoming May. In fact, the Andean Council of Ministers of Foreign Affairs has been working intensely in this area and they have already agreed on the general principles and objectives.

We hope to move swiftly in our trade negotiations with other countries and economic blocks. The Andean Community has been participating actively in the negotiations toward a Free Trade Area of the Americas (FTAA). I should note that in these negotiations the five Andean countries are participating as a block with a single voice.

As you may be aware, the Andean Community is also negotiating as a block with Mercosur. These negotiations are very complex. However, the situation has changed recently when Brazil offered to negotiate individually with the Andean Community. We have accepted Brazil's offer and have proposed dates for an initial meeting. We have also conveyed to Argentina, Uruguay and Paraguay, our interest in moving forward in the negotiations with them as well.

It is also important to stress the Andean Community's commitment to a global economic system that is open to trade and investment. The Andean countries are Members of the World Trade Organization (WTO) and will actively participate in future multilateral trade negotiations such as the Millennium Round.

The Trade and Investment Arrangement currently being discussed between the Andean Community and Canada will provide an appropriate framework to pursue this goal.

I would like to conclude by taking this opportunity to pledge the General Secretariat's full support for all the initiatives that seek to enhance trade and economic ties between the Andean Community and Canada.

Thank you.