Andean Community, Andean Pact

The Andean Community is an internationally legally recognized subregional integration organization comprising Bolivia, Colombia, Ecuador, and Peru. Venezuela withdrew in April 2004 to protest Andean country trade deals with the United States. The primary goal of the Andean Community is to bring about a pattern of balanced and harmonious development for its member states through a process of increased economic integration and social cooperation. To this end, intra-bloc trade in goods has been liberalized and external trade relations harmonized behind a four-level common external tariff (zero, five, ten, and twenty percent, with the bloc's poorest member, Bolivia, being exempt from charging the twenty percent level). These joint economic policies are bolstered by increasing levels of political cooperation, particularly on the foreign policy front, which has resulted in common negotiating positions for the Free Trade Area of the Americas talks, discussions about a free trade agreement with Mercosur, and strategies for continuing the Andean Trade Preferences Act. A General Secretariat in Lima, Peru, coordinates the activities of the bloc and serves as a clearinghouse for the detailed technical information needed by the member states.

The Andean Community is in effect a second attempt at integration in the Andes, replacing the Andean Pact that was formed by the May 26, 1969, Cartagena Agreement. By the 1970s, it quickly became [Page 20]apparent that there was a strong structural asymmetry within the bloc, resulting in the three Northern states of Colombia, Ecuador, and Venezuela dominating intra-bloc trade with a market share of seventy percent. This distorted trade pattern was not helped by Peru's reluctance to engage fully in the first common external tariff project, persistent border conflicts between Ecuador and Peru, or the recession that struck Bolivia and Peru in the 1980s. The Andean Pact consequently languished as an ineffective integration movement until the increasing pressures of accelerating globalization in the 1990s forced a reaction from the member states. In an effort to cope with the pressures of the Free Trade Area of the Americas (FTAA) negotiations, the growing strength of Mercosur to the South, and the fragmenting nature of the international economy, the Andean Pact members signed the Protocols of Trujillo and Sucre, which in turn led to the birth of the Andean Community on August 1, 1997. The result is an open regionalist movement with defensive origins that seeks to exploit internal synergies to maximize the possibilities of external economic interaction. Despite the political will that the bloc's presidents have brought to the project, the central challenge that plagued the Andean Pact remains: geography. The member states are stretched along the forbidding terrain of the Andean Cordillera, a situation that is exacerbated by the parlous state of transnational infrastructure linkages. Although the Andean Community is devoting serious effort to improving transportation and energy networks, the combination of a lack of intra-bloc production chains and the distances between national production centers suggests that the bloc will have more importance in the future as a political coordination mechanism than as a dynamic engine for economic growth.

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