Quito, July 12, 2004

This Presidential Summit is being held in the historical and ever welcoming City of San Francisco de Quito, at a time which is crucial for Andean integration.

Following 35 years of the passing of the Cartagena Agreement, with appreciable achievements having been made, in spite of persistent problems, the process’ impact cannot be evaluated as if it was an external or residual factor. It is the very same Member Countries who have determined its characteristics and depth, although now, as in the past, they must do it in the midst of major domestic and international transition processes.

Accordingly, once again, we are seeking the orientation and political decision of the Presidents attending this Summit, to issue the type of realistic and solidary directives that will make it possible to reinstate trust and leave our path free of uncertainties.

I understand that this is no easy task. Andean countries face rather complex domestic situations, which therefore require a fresh approach and the earnest desire to overcome any and all challenges and snares.

Persisting poverty and an aggravated lack of equality are factors contributing to the erosion of democratic governability in our region. The main macroeconomic forecasts, which augur growth rates in excess of 4%, on average, for this year, are not very optimistic about the impact on the generation of new jobs and on the improvement of the quality of existing jobs.

Furthermore, the globalization process is placing an added burden on our backs, with the need to anticipate agendas and ready up resources, which in many cases surpass the capacity of our States.

It was on this subject that I decided to make a call for reflection when I took over as Secretary General on January 15 of this year.

During these months of full integration-oriented thrust, I have reinforced my conviction – which I have had since before the celebration of the Cartagena Agreement – that integration represents a condition which is necessary for the overall development of our peoples. Today, more than ever, integration can and must become a powerful instrument for the blending of the internal agendas and the external agendas of our countries, with the view to putting together a single agenda for development and international insertion, where all the Member Countries have an interest and are represented, permitting the fair and equal insertion of our countries into the new international system, abetting the democratic consolidation process being experienced by our nations.

This is, by all means, a political task; therefore, the Presidents must define the path to be followed from now on, by our integration process.

Consequently, it is timely and indispensable to move forward towards a new Andean Integration agenda: a new Strategic Design for Andean Integration, which main pillars should be:

At present, all five Andean countries are engaged in active international trade negotiations going on in at least four scenarios: the WTO Round, FTAA, free trade agreements with the United States and soon with the EU, and MERCOSUR. This is to say, four scenarios - one agenda, because the issues are similar and the bases are closely inter-related. An essential support must be added, which is the Andean situation and our own community agenda.

These negotiations require major efforts from the participating countries to retain the values, principles and advantages of integration, without subjecting the expansion of our process to free trade agreements with third parties; preserve the most favored nation clause, to prevent discrimination among Andeans; and conduct an exchange of information and consultations within a framework of transparency and solidarity, and jointly adapt and enhance community laws to the new situations resulting from these international agreements.

Additionally, such negotiations offer an opportunity to expand integration in aspects which facilitate the creation of a single, harmonic market, with evident advantages for the Member Countries as well as for any dealings with third parties. The most imminent of these are technical standards, sanitary standards, customs tariffs, recognition of titles, financial services, international road transport and the improvement of safeguards and dispute solution systems, upholding and strengthening our advanced judicial institutionality.

As far as international trade negotiations are concerned, statistics speak for themselves. Between the nearly 200 trade partners involved in the two-way exchange with the United States in the year 2003, individually, Andean countries only rank 16^th or worse; and this is only thanks to Venezuelan oil exports, since the next Andean country only ranks 32nd. On the other hand, the Andean Community combined ranks 10^th, a notable position, which we should reflect upon.

The figures representing our performance in European trade are just as telling of our capacity as a community. As a whole, Andean countries rank Number 35 in imports and exports trading. At the individual level, we do not show in the radar.

In this case, there is an obvious interest of the European Union in an Andean Community giving clear signs about the building of a harmonized market, including an external common duty.

As can be appreciated, never before have international trade negotiations been as interweaved or integration-aimed efforts as keen as they are at present.

The above context lends itself in the Andean integration process to the recovery of the development agenda with the view of achieving a type of insertion which is effective and including, in the new world scenarios.

A focus on competitiveness with social cohesion must form an integral part of a new Strategic Design for integration, where special relevance is attached to matters relating to infrastructure, in harmony with the IIRSA program; the design of territorial development strategies which turn our Andean cities and region into the leaders of integration and international insertion; as well as innovative strategies for micro, small and medium size businesses, rural development and agricultural competitiveness.

Our nations have strategic comparative advantages in the international context, which could broaden our autonomy margins in our development and international insertion policies.

An Andean Energy Alliance and an Andean Alliance for Sustainable Development could become a set of strengths for the well-being of our people and a pressing factor in Andean political and economic dealings with third party countries.

In addition, there is an urgent need to put together and implement an Andean strategy to blend the initiatives from both the public and private sectors to effectively take advantage of information and communication technology (ICT), to gain access to the benefits of this culture, production and trade frontier.

A sound integration is achieved as a result of political, economic and socio – cultural cooperation, turning us into relevant players on multiple planes, in harmony with the expansion of our integration.

Among these, the South American environment has the highest priority to increase the complements to production, the boost of technological innovation and the blending of regional physical infrastructure, as well as to strengthen our international negotiation capacity.

Sound integration feeds on trust, principles and shared values, which translate into the defense and promotion of interests which are common to the Member Countries, in such fundamental aspects as the strengthening of democracy, the promotion of social cohesion, the protection of human rights and the reinforcement of Andean security. The Andean integration process contributes with an important added value to the individual and potential of its five Member Countries in these areas.

Honorable Presidents,

I believe I share with you the conviction that this Summit will be decisive for the future of our Andean Community, as a coordination forum which will:

• boost our overall development, projecting us with a greater emphasis in the defense of a multilateral international system, based on law and cooperation;
   

• secure for us an actual participation in the design of a multipolar, domination free world order;
   

• allow us to develop the abilities necessary for insertion into the world economy, within a framework of equality and social inclusion; and
   

• contribute to the welfare of common, everyday Andean people and to a stronger and more legitimate democracy.

The outcome of this aspiration will make the difference between a static group and an Andean Community which consolidates itself and expands as a great political movement: the “Republics Nation”, which is the legacy of our Liberator Simón Bolívar.

That is the historical task for this 15th Summit, which once again calls for crucial decisions to be made by the Andean Presidents for our integration project.

Thank you very much.