Andean Community – the Andean community used to include Chile and Venezuela, but both have since dropped out. Chile because they sought FTA’s with other nations such as the US and Europe, and Venezuela in retaliation to Peru signing an FTA with the USA. The remaining members include the Andean nations of Colombia, Ecuador, Peru and Bolivia.
In response to the “war on drugs” (Regan era policy), the US instituted a free trade region with the Andean trade pact, later renamed to include the Drug eradication mission. The idea is to offer alternative products to grow and export to the US in effort to eliminate the Cocaine trade. Supply side efforts. The Andean community currently has duty free access to the US market, renewable each year (not a full time, permanent trade agreement). This is the reason that Colombia sought (and Peru achieved) a FTA with the US…in order to reassure long term investors that the agreement was permanent (to attract further FDI).
In its present state, many analysts question the future of the “Andean Community” as a trading block, and wonder if the Andean and the MERCOSUR blocks will eventually be combined into one. As mentioned above, the countries already have access to each others markets, and are just considered “associate” members of Mercosur due to the difference in “external” tariffs.
As discussed above, the agreement with Mercosur allows companies to locate in any of these nations, and to export to others. Access to markets allows economies of scale, and more efficient operations.
Piece by piece, through bilateral FTA’s and regional trading blocks, the entire South American continent is gradually becoming a free trade zone…good for business.
Table of Contents
MAP
Members • Associate members • Observers
History & Future
The original Andean Pact was founded in 1969 by Bolivia, Chile, Colombia, Ecuador and Peru. In 1973, the pact gained its sixth member, Venezuela. In 1976, however, its membership was again reduced to five when Chile withdrew. Venezuela announced its withdrawal in 2006, reducing the Andean Community to four member states.
Recently, with the new cooperation agreement with Mercosur, the Andean Community gained four new associate members: Argentina, Brazil, Paraguay and Uruguay. These four Mercosur members were granted associate membership. This moves reciprocates the actions of Mercosur which granted associate membership to all the Andean Community nations .
On December 8, 2004 it signed a cooperation agreement with Mercosur and they published a joint letter of intention for future negotiations towards integrating all of South America in the context of the Union of South American Nations, patterned after the European Union.
What is the future of Andean Community? (now that Venezuela is out and the Union of South American Comunidad Sudamericana de Naciones (CSN) is being planned). Note: since all the Andean Community countries are also associate members of Mercosur, and have free trade privileges within that, the future seems to be that they will all merge and form the CSN or at least a trade pact amongst themselves.
In fact because associate member status within Mercosur comes with the free trade benefits for anything manufactured in any of these countries, in effect there already is a sort of de facto south american trade community - it's just that the Andean nations have their own external tariff rates which differ from the common external tariff full Mercosur countries share.
Members & Associates
- Current members:
- Associate members:
Argentina (2005), in the framework of CSN
Brazil (2005), in the framework of CSN
Chile (full member 1969-1976, observer 1976-2006, associate member since 2006, stated that it has intentions of rejoining the CAN)[2]
Paraguay (2005), in the framework of CSN
Uruguay (2005), in the framework of CSN
- Observer countries:
- Former full members:
Venezuela (1973-2006), joined Mercosur, president stated that it has intentions of rejoining the CAN
Free flow of people
From January 1, 2005, the citizens of the member countries can enter the other Andean Community member states without the requirement of visa. The passengers should present the authorities their national ID cards.
GloboTrends Links
- Mercosur
- Andean Community: Venezuela joined the Andean pact in 1973, with the promise of reducing trade and investment barriers for regional partners, but increasing barriers for outside countries, and effectively isolating the group from the rest of the world. This fit in nicely with the theory of "dependency", and the desire to be independent from outside influence. The Andean Pact included Venezuela, Colombia, Ecuador, Peru and Bolivia. (But, Venezuela dropped out in retaliation when Peru signed a free trade agreement with the USA)
- Union of South American Nations (União de Nações Sul-Americanas, Spanish: Unión de Naciones Suramericanas, and abbreviated as Unasur and Unasul)
External Links
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