Speech of the President of the Republic of Colombia, Alvaro Uribe Vélez, in the Opening Ceremony of the 15th Andean Presidential Summit

Quito, July 12, 2004

Distinguished fellow Andean citizens,

First of all, I wish to express my affection to the Ecuadorian people who have come out today with such degree of hospitality, behind their leader, President Gutiérrez, who is presiding over this Andean meeting, and to the people of Quito, led by its Mayor, General Paco Moncayo.

Integration forces are unstoppable all over the world, but they need a framework, and such framework must be fully respectful for democratic rule and the sustainability of democratic rule.

The capacity of democratic rule, of building governability all over, depends on whether or not, in addition to democratic processes being consolidated, there is progress made with social cohesion. Democratic governability is unsustainable, in the long term, meaning a peaceful democratic system, which is stable, without disturbances, in absence of social cohesion. The construction of social cohesion is as simple as the construction of equality.

This integration and this social cohesion must begin at home, it must go from the closest thing to as far away as possible. There is the importance of the Andean Community. There are two questions: why strengthen it? and how to strengthen it?

We were able to proceed towards negotiation with MERCOSUR, due to the political will to strengthen the Andean Community and to integrate the Americas on the basis of the Andean Community and MERCOSUR.

What we ought to expect with Europe is to have a very much reinforced Andean Community to be able to obtain – as from October – a proper result in Europe concerning the General Preferred Tariffs System.

In our agenda, that has to be the first objective: for Europe to grant us the General Preferred Tariffs System for ten years, under more flexible terms, with easier access to the European market. But we cannot remain there; as soon as that happens – and it will only happen on the basis of a strengthened Andean Community, of an Andean Community with a single and very sound voice -, we must begin negotiating the agreement with the European Union.

Each time we meet with European Union spokesmen, the objection is: the Andean Community is not organized, the Andean Community does not abide by the rules. That is the constant speech of the Europeans to reject a process of agreements with the Andean Community.

If they approve the extension of the General Preferred Tariffs System for ten years – on this type of thing, ten years is a very short period of time -, we cannot remain dormant. We have to fully use those10 years to be able to achieve the negotiation with the European Union. Ten years do not ease down investors. These days, ten years to carry out large investments is not a long enough period.

We have to demonstrate our capacity to negotiate with the European Union, and that could only happen with a reinforced Andean Community.

Let’s tell the world that as soon as those ten years related to the General Preferred Tariffs System are over, there will be an agreement with the European Union!

We have to reinforce the Andean Community to achieve greater results in the Free Trade Agreement with the United States. How to reinforce the Andean Community?

Today I am going to propose three points to reinforce the Andean Community in the immediate future.

Step Number One: Let us start with the standardization of our customs regimens. Any third party would encounter an obstacle with the different customs tariffs. We have to take that step. We have to carry out the task of putting together customs tariffs, a common customs system, where these regulatory dispersion and differences will be spared.

Step Number Two: We should not issue any negative signals within or to the outside. One such negative signal is that nothing happens here when there is non-compliance with the regulations. That nothing happens here with the convictions of the Andean Court of Justice. The signal is negative as it has indicated that any one can ignore the regulations and the rulings of the Andean Court of Justice.

When there is no institution ensuring compliance with the regulations by all the signatories, it appears as though there is no agreement and there is no community. Outsiders see that as a weak process, as a process without a real institutional power.

This is why it is necessary for us to adopt a system for the automatic sanctioning of cases of non-compliance with Andean legislation, we must adopt a system which is capable of immediately applying, without hesitation, the sentences and rulings resulting from the Andean Court of Justice. Otherwise, we would continue without projecting credibility to the institution which we ourselves have created.

A good part of our discrepancies derives from the fact that each country wants to be part of the Andean Community, but at the same time, it wants to keep its very own trade systems, ignoring Andean legislation.

Then, what we need to do is be honest with ourselves, just as we proposed a year ago in Rionegro, to take an inventory of the regulations which go against the Andean Community and let each of us make a decision, simultaneously, to get rid of such problems.

For example, Colombia is willing to get rid of anything that has to do with the relationship between the Vallejo Plan and the Andean Community, as long as every country of the Andean Community does the same within its internal system, whatever the equivalent to Colombia’s Vallejo Plan happens to be.

My proposition is for us to get rid of all the problems which allow a country, in its relationship with a third party, to cause damages to the other Andean Community countries. All the problems related to intra Andean trade.

But this cannot remain as a theory; since, if we repeat it each year and make no progress, will be the equivalent to keeping on plowing in the sea, it will be a repeat of speeches that do not have any credibility.

We have taken a great step, as it was said by President Carlos Mesa and Secretary General Alan Wagner, much quicker than expected, for Andean Community - MERCOSUR integration. That step gives a signal of our political integration will in the Americas. I welcome that step and I welcome anything else we have to do to complement it with the political agenda and with the social agenda.

The Free Trade Agreement we are presently negotiating with the United States, some of our countries, (say) that it has to be a treaty that will guarantee equality. To guarantee equality, that Treaty cannot deny opportunity – quite the contrary, it has to give all the opportunity possible – to small businesses and farmers. That Treaty cannot postpone the solution of any eventual conflicts to the regulations to be adopted in Doha.

In my opinion, that Treaty must include clauses that will enlighten the way to introduce equality in world trade, instead of waiting for the World Trade Organization to supply them, it must introduce them here so we can enlighten the World Trade Organization.

Our countries’ farmers ask the question: what will happen if a certain product becomes duty-free? What will happen if the duty-free status comes along with subsidies for exports from the United States for the same product, with subsidies to the production of the same product and such production subsidies cause a distortion in the international prices of the product, and our countries do not have the fiscal capacity to compete with such production subsidies?

These answers have to be specifically dealt with by the regulations. A treaty may not attempt to prohibit one of the signatory countries to make political decisions to protect any of its production sectors. But the treat does have to guarantee that whenever one of the signatory countries makes a decision to protect one of its sectors, the other signatory countries could draw tools from the treaty to offset such decisions and to guarantee equality.

Such tools are common in periods when products are going duty-free, but they disappear once the duty-free period is concluded. For the first time, the CAN - MERCOSUR treaty has incorporated such instruments and it is very important to be able to incorporate them in the treaty of some of our countries with the United States.

The trade which integrates the economies is sustainable if it is equitable. If it is equitable it will build consensus in all the signatory countries; otherwise, instead of building consensus it will encourage discord, which will be more and more insurmountable by the day. Such discord may act against democratic governability.

Today, in the current situation and in the years to come, democratic governability is well tied to our capacity of making sure that trade agreements will contain equality clauses, to demonstrate to our people that integration is not a capricious idea, that integration is not to be used to open up markets for the transnational enterprises, that integration has a purpose called the building of social equality.

It is true that our agenda needs to look further to Central America; and if there is a country which ought to claim that, is Colombia, since it is the bridge between our Andean Community and Central America. Because Colombia and Panama are sister and neighboring nations, where physical land flow between the Americas is interrupted.

First of all, I wish to propose for our Andean Community to integrate itself to the Panama - Puebla Plan; and secondly, for our Andean Community to already start considering the negotiation of a trade agreement with the Central American countries.

I believe, that since they have a trade agreement with the United States and some of us have a trade agreement with the United States, but there is no trade agreement between the Andean Community and Central America, there will be distortions, conflicts and complaints in each of our countries. This is why I want to urge on the need to start exploring this agreement with Central America.

Concerning the initial step for the integration of our Andean Community and the Panama - Puebla Plan, it is essential to do it on the basis of infrastructure, electricity transmission, gas and roads.

With regard to gas, I am hopeful that in the next few days, President Chávez, the outgoing and incoming governments of Panama, will be signing an agreement for a gas pipeline of great importance, from La Guajira (Colombia) to the Venezuelan City of Maracaibo, so that once Venezuela integrates its East with its West, it may also feed gas to Colombia as well - which Colombia would initially feed to Maracaibo – and that Venezuela can integrate itself to Central America through a gas pipeline constructed through Colombian territory.

As our sister nation of Bolivia clears out its political and social issues for the exploitation and sale of gas, I believe that this integration is not only going to go towards Central America and to the North, but we could also integrate ourselves based on gas, with the South.

Energy transmission integration is of great importance. Colombia has such integration with Ecuador, we have to boost it – as has been defined – in the bilateral agenda with the government of President Gutiérrez. Ecuador has such integration with Peru. We need such type of integration all the way to Patagonia, with the least possible (cost?) of the voltage and power.

Last Saturday, with the government of President Chávez, we had an inauguration ceremony about something which had seemed a dream some years ago: the integration of Puerto Páez (Venezuela) and Puerto Carreño ( Colombia).

Now we are studying the transmission line between Colombia and Panama. That line cannot be between the two countries, it has to be a fundamental link between Patagonia and Alaska. It has to be in the immediate future, a fundamental link between the Andean Community and the Panama - Puebla Plan, we have to accelerate this.

I wish to remind you that one of the great obstacles for the performance of the world’s economy, in the years to come, is the anticipated shortage of energy resources.

Here we have sister countries with great possibilities to make exception to such shortages, such as the nation where we are today, Ecuador, and the sister Republics of Venezuela and Bolivia. Other like Colombia, have serious difficulties in the case of petroleum, and great advantages in the case of carbon.

Our countries have to integrate themselves as far as energy policy is concerned, to become better, to obtain better results in the world’s energy market, to more efficiently contribute to the solution of such a threat to the world’s economy.

We see how Argentina and Chile have had many a gray cloud in the performance of their economies, because of the energy problem. We must not lose sight of that.

It is important to build a road with Central America. This is why I urge you today, to consider the integration of the Andean Community and the Panama - Puebla Plan. This road should not continue to be a dream of the past, a forgotten issue; we have to build it. That road will not only join Colombia and Panama, but also Patagonia and Alaska. It splits in Colombia. On the Caribbean side it expands to the sister Republic of Venezuela; and through all the Andean valleys, when traveling south bound – to the sister Republic of Ecuador.

As the Andean Community we are, here we need to define with the International Monetary Fund, the variations to be introduced, so that we could make progress on these works already. Works of such significance cannot form part of limits imposed on investments and expenses by the International Monetary Fund. We also need to fun them.

We also require a specific social agenda. Little has the Andean Community done towards the harmonization of the macroeconomic indicators. This has to be overcome, but also, we have to add the social indicators.

At the Andean Community we need certain commitments with respect to inflation, certain commitments concerning the exchange rate. Certainly, we have to have consideration for the decisions made by Ecuador in an autonomous manner and as part of its sovereignty, by implementing the dollarization of its economy. We need a decision to harmonize the ceilings in terms of deficits and indebtedness. Now these macroeconomic indicators must also have the commitment to show an accelerated improvement in the social indicators, in employment, in social security, in the improvement of income, in the elimination of poverty.

If we adopt indicators, if we have accountability, periodically, as to the path followed by these indicators, we will be building the social cohesion required to have democratic governability, a necessary element for these integration processes.

Thank you very much.