logo logo

Last rites for Andean Community?

IPS | 19 April 2006

Last Rites for Andean Community?

Humberto Márquez

CARACAS, Apr 19 (IPS) - The Andean Community "is dead" said Presidents Hugo Chávez of Venezuela and Evo Morales of Bolivia Wednesday, referring to the trade bloc that their countries form part of along with Colombia, Ecuador and Peru.

But Chávez, who currently holds the bloc’s rotating presidency, went even further, announcing that his country would withdraw from the Andean Community, which it joined in 1973.

"Although some might argue that the Andean Community exists, it is finished, it is dead, it has been trampled by neoliberalism," Chávez said in Asunción, where he met Wednesday with Morales and Presidents Nicanor Duarte of Paraguay and Tabaré Vázquez of Uruguay.

"I also feel that the Andean Community is dead," said Morales. "Some presidents in the bloc are instruments of disintegration and recolonisation, although we are hopeful, and are staking our bets on South American integration."

The informal summit in Asunción, the Paraguayan capital, reached an agreement on a project through which Bolivia would supply natural gas to Paraguay and Uruguay.

And while the leftist leaders of Venezuela and Bolivia announced the death of the Andean Community, they also issued a warning that the Southern Common Market (Mercosur) trade bloc made up of Argentina, Brazil, Paraguay and Uruguay - and which Venezuela is in the process of joining as the fifth full member - could follow the same route unless it makes some major changes.

Venezuela is preparing to pull out of the Andean Community because two of its members, Colombia and Peru, have signed free trade agreements with the United States. Ecuador is negotiating a similar trade deal.

These agreements with the United States are "little FTAAs", said Chávez, referring to the U.S.-driven Free Trade Agreement of the Americas, to which the Venezuelan leader is staunchly opposed because he considers it an instrument of economic domination by the United States.

"I don’t believe in free trade," said Chávez. "Some of our countries continue to ask the United States and the European Union to phase out their barriers to free trade. Let’s not keep wasting time - they aren’t going to do it."

Morales, meanwhile, lashed out at the free trade agreement that Bogotá and Washington announced in late February, "because it has reduced the market for Bolivian soybeans. If we were to sign a similar trade deal with the United States, many more of our soy farmers would be ruined."

Venezuelan Minister of Integration and Foreign Trade Gustavo Márquez told IPS that "we do not want disintegration, but integration among our peoples and our countries. The damages caused by these free trade agreements is not felt in the walls, but in the very foundations, of the Andean Community."

Colombia "has granted the United States quotas in products that Venezuela sold it, like rice, and has given advantages to the U.S. pharmaceutical industry that could drive up the prices of medicines and generate unemployment," said Márquez.

The Venezuelan government was also annoyed because it was not consulted by Colombia or Peru when they negotiated the free trade accords with the United States, "as they were bound to do, by the Andean Community treaty," said the minister.

By contrast, "Venezuela’s admission to Mercosur was praised by the rest of the Andean partners as an important step towards South American integration."

The first time Chávez said the Andean Community was "dead, and doesn’t exist," was last month, when the bloc’s secretary-general, Peruvian diplomat Allan Wagner, was in Brussels defending the advantages of negotiating a free trade agreement between the bloc as a whole and the European Union (EU).

The Venezuelan leader has practically abandoned the organisation of the regular twice-yearly meeting of Andean presidents, and Morales is likely to decide not to call the special meeting that was meant to establish common positions for the Andean Community to take to the summit of Latin American, Caribbean and EU leaders on May 12 in Vienna.

Venezuela has also effectively quashed a potential EU-Andean Community agreement. "No agreement can be adopted when it has been impossible to find a way within the Andean Community itself to overcome the differences that have arisen among its members over the signing of free trade agreements," said Deputy Foreign Minister Pavel Rondón.

This Thursday and Friday, Andean and EU delegates are scheduled to meet in Brussels to explore the possibility of an agreement between the two blocs, as part of the run-up to the Vienna summit.

Before announcing its decision to leave the Andean Community, the Chávez administration did not consult with the Venezuelan Congress or private economic institutions, although some trade unions had been informed of the government’s stance in their assemblies.

In the meantime, Venezuela’s withdrawal and Bolivia’s veiled threat ruled out the proposal made Tuesday by Colombia for a "relaunch" of the Andean Community, as well as Wagner’s request that the 37th anniversary of the trade bloc this coming May be marked by "a stocktaking of its achievements and challenges."

Colombian Minister of Trade, Industry and Tourism Jorge Humberto Botero called on the Andean Community members to study a 12-point agenda aimed at strengthening the bloc, with initiatives addressing such issues as upgrading the free trade zone, physical integration, combating poverty and convergence with the South American Community of Nations, which was announced in 2004.

Wagner urged members to remember the "strong institutionality" the Andean Community has achieved since its founding in 1969, and to recognise the difficulties in maintaining a common foreign policy given the different approaches adopted by each country in tackling the challenge of development.

The Andean bloc encompasses 125 million inhabitants (one third of the population of South America), and has a combined annual gross domestic product of 260 billion dollars (one fourth of South America’s total GDP) and a total foreign trade volume of 128 billion dollars annually, of which seven percent (some nine billion dollars) is made up of trade among bloc members.

The meeting in Asunción also served as a forum for the "small" members of Mercosur to vent their criticisms of the current state of the largest South American trade bloc, as reflected in speeches by Presidents Duarte and Vázquez that met with strong backing by Morales and Chávez.

"The way things stand now, Mercosur is not useful," said Vázquez. "We need a better Mercosur, in which, for example, the large countries (an allusion to Brazil and Argentina) don’t take care of their energy problems and then inform the rest of us about it," he commented.

He also requested that a Mercosur dispute resolution panel be convened to address the conflict between Uruguay and Argentina over the construction of two large pulp mills on the Uruguayan side of a river that forms part of the border between the two countries.

For his part, Duarte declared that "Mercosur should become a platform for development, integration and solutions, and should consider the equality of rights of its members."

Chávez, meanwhile, lamented the fact that Uruguay must export rice to far-off Iran because it cannot sell it to Brazil, and that trucks transporting Paraguayan meat cannot cross the Argentine border on their way to Chile.

 source: IPS