APPENDIX 28
Further supplementary Memorandum submitted
by UKTI
CAN/MERCOSUR
CAN and Mercosur formally agreed a FTA between
the two groupings should be a priority as far back as 1998. The
intention was restated in 2001. In 2002 the two groups agreed
to an economic complementation agreement (signed in Oct 2004),
as a step towards a FTA.
Separately Bolivia and Mercosur also signed
an economic complementation agreement in 1996. In 2003 Peru (then
not a member of CAN) and Mercosur signed a similar agreement.
The key decision is from 7 July 2005—CAN members agreed
with the CAN Commission to grant the four existing members of
Mercosur associate membership status of CAN. The founding agreements
of CAN and Mercosur both require these groupings to give associate
membership status to those countries of the region which have
expressed an interest in joining and have agreed to sign an FTA
with the group. The economic complementation agreements between
the bodies were considered a sufficient sign of intention to sign
an FTA so associate membership status was granted. The official
document (decision 613) is available here in Spanish (English
version not available).
http://www.comunidadandina.org/normativa/dec/D613.htm
Associate membership actually means very little
free trade terms. The intention to work together so as to construct
a South American community of nations, and to invite associate
members to regular meetings for consultation, but little more
in terms of preferential access.
In summary there has been a lot of political
intent to move forward on allowing preferential market access,
especially between 1998-2002, between Mercosur and CAN. But beyond
political intent there does not seem to be a great deal of progress.
Further detail can be found on the following weblinks, in English:
http://www.comunidadandina.org/ingles/Exterior/mercosur.htm
http://www.comunidadandina.org/ingles/Exterior/mercosur3.htm
VENEZUELA
Venezuela's benefits as a Mercosur member and
preferential access to CAN would end when the requirement for
Venezuela to continue to hold to previous CAN agreements ends.
That we understand is a transitional period of 10 years, but is
under dispute.
CHILE/MERCOSUR
Mercosur started in 1991, when Brazil, Argentina,
Uruguay and Paraguay signed an agreement to create a free trade
zone among the partners.
The Economic Complementary Agreement was signed
between Member States of the Southern Common Market, Mercosur,
and the Republic of Chile on 25 June 1996 and became in effect
on 1 October the same year, within the context of the integration
process, established in the Treaty of Montevideo from 1980, (ACE
35).
The main objectives of the Agreement bear relation
to the creation of an open economical niche that tends to facilitate
the free movement of goods and services as well as a full employment
of productive factors; the creation of a free trade zone between
the parties in a ten year period; the promotion of the development
and use of the physical structure; the promotion of mutual investments
and encouragement of the economical, energetic, scientific and
technological complementation and cooperation".
The free trade zone established progressive,
annual and automatic reduction of customs tariffs for the products
originating in each of the Mercosur countries. Reduction of tariffs
for over 90% of the products started in October 1996 and should
have ended in 2004. Regarding sensitive products, total exemption
should be reached no later than 2014.
Regarding economic issues, the agreement addresses
following: services, investment, foreign trade rules, consumer
rights, and physical integration. As for political issues, the
agreement's objectives are to broaden political cooperation between
the parties, examine specific subjects to try to find a common
standing, and consider political issues of common interest related
to third countries, groups of countries, or international organisations.
Chile was incorporated into the Consultation and Political Discussion
Forum in 1998
14 May 2007
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