Latin American Integration

By Andres Aguilera Choi Ye Na Lee Sang Woo

Caribbean Community

CARICOM Brief Historical Background
‡ West Indies Federation (1958-1962) Political Union between
former British colonies but this process was not consolidated because of internal disagreements over Federal Taxation and other policies. ‡ CARICOM started as CARIFTA (Caribbean Free Trade Area) formalized by the Dickenson Bay Agreement between Antigua and Barbuda, Barbados, Guyana, and Trinidad and Tobago (1965) ‡ In 1968 the FTA is extended to Dominica, Grenada, St KittsNevis-Anguilla, Saint Lucia, St Vincent and the Grenadines, Montserrat and Jamaica. ‡ Belize joined in 1971. ‡ Gran Anse Declaration (1989) that outlined CSME Caribbean Single Market and Economy

Treaty of Chaguaramas (1973)
From CARIFTA to CARICOM ‡ Signed by Barbados, Jamaica, Guyana and Trinidad &
Tobago ‡ The general objectives as given by this the Treaty on Article 4 ³(i) economic integration by the establishment of a common market; (ii) coordination and regulation of the economic and trade relations; (iii) coordination of the foreign policies´ ‡ Article 4 makes a difference between ³less developed countries and more developed countries´
Less Developed Countries Antigua & Barbuda Belize Commonwealth of Dominica Grenada Haiti Montserrat St. Kitts & Nevis St. Lucia St. Vincent & the Grenadines More Developed Countries Bahamas Barbados Guyana Jamaica Suriname Trinidad & Tobago

Revised Treaty of Chaguaramas (2001)
Single Market and Economy ‡ Article 6: ³(i) economic development and convergence (ii)
enhanced co-ordination in foreign economic policies (iii) expansion of trade and economic relations with third States´ ‡ From Common Market to Single Market

‡The common agreements are: ‡ Free movement of goods and services Eliminate barriers, harmonize standards ‡ Right of Establishment ‡ Common External Tariff and Free Circulation Shared custom revenue ‡ Free movement of Factors Capital (foreign exchange, common currency or regional stock market) and Labor (transfer of social security benefits, standards on health and education) ‡ Common trade policy ‡ Harmonization of Laws

meteorology.Organizational Structure Main Bodies ‡ Conference of Heads of Government (highest decision making body) ‡ Community Council of Ministers both assisted by: ± Council for Finance and Planning (COFAP) ± Council for Trade and Economic Development (COTED) ± Council for Foreign and Community Relations (COFCOR) ± Council for Human and Social Development (COHSOD) ‡ Other institutions address issues like: Education. emergencies (hurricane belt). agriculture & food. tourism. research and development. health. security (drugs & illicit arms) ‡Caribbean Court of Justice .

CARICOM BASIC STATS Source: Wikipedia (arranged by population size) . .3B) in 2006. Source: www.1B (US$2.3B in 2001 (US$1.TRADE STATS Trade Volume given in East Caribbean Dollars EC$ US$1 = EC$2.2B) to EC$6.7 Intra-Regional Imports grew from EC$3.

org .caricomstats. What is traded? Source: www.TRADE STATS Cont.

caricomstats.Intra Regional Importers/Exporters Source: .

sustainable tourism. agro-tourism. Investment Regime and Financial Services Agreement and moves to a Regional Stock Exchange ‡ Rose Hall Declaration on Governance and Mature Regionalism (i) Creation of a CARICOM Commission with Executive Authority. (ii) Creation and implementation of the Assembly of Caribbean Community Parliamentarians as a deliberative body. ‡ Free movement of labor. transport and new export services. Signed July 2006 by 13 of the 15 members. ‡ Technical work on regional policy frameworks for energy. ‡ Imp. Regional Development Fund ‡ Imp. ‡ Full implementation CARICOM Single Market and Source: Wikipedia CARICOM Single Market and Economy . service providers.What¶s next for CARICOM? Economy (CSME). agriculture.

Andean Community of Nations .

] the regional integration process ‡ Andean Council of Foreign Ministers. Colombia.Andean Community of Nations Brief Historical Background (Bolivia. Andean Parliament Andean Justice Tribunal (1979) ‡The 1980s was a ³lost decade´ due to the Latin American debt crisis Change in the development model & the end of Latin American Dictatorships ‡ Originally the Andean Pact. (iii) to facilitate [. Ecuador y Peru) Venezuela becomes part in 1973 then retires in in 2006. Chile. Chile retires in 1976..htm .. (ii) to accelerate [. Cartagena Agreement 1969 Source: http://www. ‡ Objectives of the Cartagena Agreement are: (i) to promote the balanced and harmonious development..] growth and the rate of creation of

Historical Background Cont. established the Andean System of Integration (Institutions) ‡ Trujillo Protocol Andean Council of Presidents. Source: . ‡ Trujillo Protocol (1997) changed the name from Andean Pact to Andean Community of Nations.comunidadandina. Ecuador (1989) change economic model from closed development with one of open development Trade and Market Liberalization ‡ Elimination of Tariffs (1993) Trade in services was also liberalized (Transportation). ‡ By Presidential mandate in 2003 the integration process was given a social content with the Integral Plan for Social Development. ‡Galapagos.

Institutions of the Andean Community Source: http://www.html .org/ingles/sai/que.comunidadandina.

8. Venezuela 17.6% .4% 4. 35.7% 5.S.wto.4% 5. U. Switzerland 3. EU(27) 7.2% Source: WTO Trade Profiles 2008. Argentina 8. EU(27) 15. Ecuador 4.Members¶ Major Trading Partners By Exports 1.S.3% 3. Brazil 36.7% 1. Japan 8. U.0% Colombia 2. Found online at www.5% 3.9% Bolivia 2.

4% 5. Found online at www.8% Peru 2. U.8% 4. Colombia 4. EU(27) 18.S. Chile 4. 19.S 43.7% Ecuador . Peru 10.Members¶ Major Trading Partners By Exports (cont.7% 5.9% Source: WTO Trade Profiles 2008.3% 1. U. China 10.8% 3.wto.0% 4.) ‡ 1.4% 3. Japan 7. EU(27) 12. Switzerland 8.

Intrarregional Trade Andean Community 6000 5000 4000 3000 2000 1000 0 1980 1990 1995 2000 2005 2006 Exports in Millions of USD Source: UNCTAD HANDBOOK OF STATISTICS 2008 .

environment and deeper integration. UNASUR. ‡ Successfully conclude the negotiations between the Community and the European Union.Working Plan 2008-2009 Challenges and Goals of the Community ‡ New priorities on social development. ‡ Bring back Chile as a member and accelerate accession of Panama and Mexico. climate change and fight to corruption and crime to the original charter. food security. Peru) Source: http://www.pdf .org/quienes/Programa_de%20trabajo. migration. CACM. ‡ Add citizenship.comunidadandina. (Last round was in March 2009 in Lima. ‡ Come closer with other trade blocs in the region MERCOSUR.

alternativabolivariana. .Other Initiatives: Bolivarian Alternative for Latin America and the Caribbean / ALBA Source: Wikipedia.

www. Part of the purchases can be paid with other commodities ( . .org. ‡ Focus on food security. intellectual property rights (pharmaceutical patents generic drugs) ‡ Compensatory Funds for Structural Convergence to reduce the asymmetries of the countries involved in trade. Sources: Wikipedia.pdvsa.Main Objectives ‡ In opposition inititiaves. rice. etc) ‡ Single Currency "Sucre" by Jan 2010. www. ALBA proposes "struggle against poverty and social exclusion´ with special emphasis on social welfare and economic aid. agricultural development. Xinhua News Agency. ‡ Free trade vs. Fair trade debate (agricultural subsidies by developed countries) ‡ Oil diplomacy Petrocaribe / Preferencial payment system Low interest rates.alternativabolivariana.



common market or economic union impose on non members. .‡ Common market A customs union which permits the free movement of capital and labor between member states ‡ Common External Tariff The common tariff that members of a customs union.

Common Market of the South .

Cooperation Development (1988) ‡ Treaty of Asuncion (1991) ‡ Treaty of Ouro Preto (1994) and .Brief historical background ALALC (= LAFTA) signed in 1960 ALADI (= LAIA) created in 1980 to replace ALALC MERCOSUR (= Southern Common Market ) ‡ Declaration of Iguacu (1985) ‡ Treaty for Integration.

bbc.Member countries ‡ Full members: Argentina. Paraguay. Peru ‡ Headquarters (secretariat): Montevideo.stm (2008) . Uruguay ‡ Official languages: Spanish. Portuguese ‡ Combined GDP: US $ 2. Uruguay ‡ Full member pending ratification: Venezuela ‡ Associate members: Bolivia. Brazil.4 trillion Source: Colombia. Ecuador.

Common Market Council .Starting from May 2007 Source: http://actrav. ‡ The MERCOSUR Institutions: Market Group ‡ The MERCOSUR Parliament: .Inaugurated in December 2006 .htm#Trade opening programme .Institutional Situation ‡ The MERCOSUR Presidency: Rotating among member states every 6 months.

Proposing draft resolutions to the CMC ‡ Making the necessary arrangements Common Market Group ‡ ‡ ‡ ‡ Trade Commission Joint Parliamentary Committee Economic and Social Consultation Forum Work Sub-groups .Institutional structure Common Market Council ‡ MERCOSUR's highest policy-making body ‡ Act as the legal representative of the group ‡ Principal body.

and industrial policies ‡ Long term-targeting term1) Creating a continent-wide free-trade area 2) Creating of a MERCOSUR development bank Source: :Danny M.‡ Objectives : Establishing a free-trade area with common external tariff(CET) and coordinated labor. R&D. tax. monetary. regional development. Leipziger et al. trade. (2004) µMercosur: Integration and Industrial Policy µ .

training and safety Coordination of monetary policies to reduce real exchange rate fluctuations and resulting disruptions in trade flows Harmonization of Tax policy Capital mobility Labor mobility Monetary/ Exchange rate policy Tax policy .Policy Area Trade of Goods MERCOSUR Objectives -100% elimination of tariff and non-tariff barriers -Implementation of Common External Tariff -Harmonization of customs administration . migration.Establishment of rules of origin criteria Free movement of capital Coordination of policies on labor relations.

Unfair trade practices Establishment of common norms for administering anti-dumping measures and countervailing duties Establishment of dispute resolution mechanism and procedures to resolve trade controversies among member countries Establishment of CMG. CMC and intergovernmental working groups in several policy area Coordination of science and technology policies Harmonization of regional development policies Harmonization of industrial development policies Dispute resolution Decision-making body Research and Development Regional Development Industrial policy .

Macroeconomic stability .The impact of MERCOSUR ‡ Success story to the Argentina Crisis .Strong economic growth ‡ Reducing barriers to foreign investment ‡ Increasing flow of intra-regional investments ‡ Strengthening small economies .

MERCOSUR TRADE (US $ billion) Source: Argentine Ministry of Foreign Affairs¶ Center of International Economics (2006) .

MERCOSUR (Trade with the World) Source: IMF (Dots) . ‡ Disputes among its members. Argentina ‡ Argentina vs. ‡ Brazil's car industry (1999) vs.stm (2008) .bbc. Uruguay¶s pulp mills (2006) ‡ Paraguay and Uruguay violated the organization's rules Source: http://news.

CHALLENGES ‡ Overcoming economical and political agenda among the member states ‡ Creating and consolidating a solid institutional arrangement ‡ Deepening the process of regional and global integration of MERCOSUR .

FTAA Free trade area of the Americas .

FTAA (Free Trade Area of the Americas) Reducing or eliminating the trade barriers Being negotiated by 34 countries of the Americas Formally launched in 1998 Based on the model of the NAFTA Nine FTAA Negotiating Groups .

php3?id_article=5650 .Current status ‡ The FTAA missed the targeted deadline of 2005 ‡ 5 Summit of the Americas ‡ 8 FTAA Trade Ministerial Meetings ‡ FTAA is failed or Not? Source: http://www.

CACM .Central American Common Market.

It has a standing invitation to participate as observers in the sessions and the work of the United Nations General Assembly and maintaining permanent offices at UN Headquarters. Sometimes it is called as Central American Integration System (CAIS). CACM is an intergovernmental organization of Central American states like Mercosur or Andean community.Brief Introduction of CACM What is CACM? CACM means that Central American Common Market. .

Member Country Membership Four countries. Costa Rica. Belize 5 observers Chile. Nicaragua. and Nicaragua Going through a process of economic. El Salvador. Honduras. Honduras. more 4 nations joined this common market. (Costa Rica joined in 1963) Regular member & observers Official Language: Spanish Member nations: 8 members Guatemala. The CA4 is joined by Costa Rica in matters of economic integration and regional friendship. Later. political. which has introduced common internal borders. Dominican Republic. Guatemala. Republic of China. cultural. and migratory integration Formed the CA4 union. Germany . Spain. Panama. El Salvador. Mexico.

integrity and unity in Central America. to better sanitary conditions for member nations. to economic cooperation. and Nicaragua signed a new treaty creating the Organization of Central American States to promote regional cooperation. a new interest in integrating the Central American governments began. The Charter of San Salvador was ratified by all the governments of Central America.Timeline of CACM Timeline of CACM Following the end of World War II. and to continued progress in the ´integral unionµ of the Central American nations. . In 1951 5 nations such as Costa Rica. Honduras. In 1952 ODECA's charter was altered to create a new Central American Court of Justice without the time limitation of its previous incarnation. There ensued the Declaration of Antigua Guatemala to help establish systems of organization and procedure so there would be no restrictions to free intercourse. El Salvador. Guatemala. and In 1955 The foreign ministers held their first meeting in Antigua Guatemala.

Vice Presidents Summit Secretariat General (SG-SICA) .Organization for Central American States System Bodies ‡Central American Bank for Economic Integration ‡Central American Common Market ‡Central American Court of Justice (Central American Parliament. Council of Ministers of Foreign Affairs Executive Committee (CE-SICA). Secretariat) ‡Presidents Summit Comité Consultivo (CC-SICA). Board of Parliament. Plenum.

Union of South American Nations. UNASUR .

The Bank of South will be located in Venezuela. The South American Parliament will be located in Bolivia. It is modeled on the European Union.Brief Introduction of UNASUR What is UNASUR? UNASUR(Union of South American Nation) means an intergovernmental union integrating two existing customs unions: Mercosur and the Andean Community of Nations. East African Community (EAC). as part of a continuing process of South American integration. Key location of UNASUR·s Organization Constitutive Treaty The Union's headquarters will be located in Ecuador. Caribbean Community (CARICOM). List of customs unions: Andean Community (CAN). Southern Common Market (MERCOSUR) .

‡Observers: Panama and Mexico. former Secretary General of the Andean Community. ‡An important operating condition of UNASUR is that no new institutions will be created in the first phase. In 2008 The UNASUR Constitutive Treaty was signed at the Third Summit of Heads of State.Historical Overview In 2004 Representatives from 12 South American nations signed the Cuzco Declaration. and the community will use the existing institutions belonging to the previous trade blocs. held in Brazil. ‡Intention: To model the new community after the European Union including a common currency. parliament. a complete union like that of the EU should be possible by 2019. and passport. . ‡According to Allan Wagner Tizón. announcing the foundation of the South American Community.

Peru ‡Members of Mercosur²: Brazil.Membership of UNASUR Members group could be divided into two parts as below: ‡Members of the Andean Community of Nations ¹: Bolivia. Suriname ¹ These countries are also considered to be associate members of Mercosur ² These countries are also considered to be associate members of the Andean Community. Uruguay ‡Other countries: Chile. Guyana. Argentina. Venezuela. Colombia. Ecuador. . Paraguay.

(The meetings will be developed according to Mercosur's and CAN's mechanisms. Ecuador.) . The second meeting(Bolivia in 2006). (In 2005 a special commission was established in charge of advancing the process of South American Integration It consists of 12 members. ‡Sectorial Ministers' meeting will be called upon by the presidents. (formulate concrete proposals of action and of executive decision. The third meeting (Brazil in 2008). ‡The ministers of foreign affairs of each country will meet once every six months.Provisional Structure of the UNASUR The temporary structure of the UNASUR is as follows: ‡The presidents of each member nation will have an annual meeting.) ‡The temporary Presidency will be held for a year and will rotate among the member countries between each UNASUR meeting. (The first meeting(Brazil in 2005).) ‡A Secretary General would be elected to establish a permanent secretariat in Quito.

members of UNASUR. a road. 12 nations. beginning with the elimination of tariffs for non-sensitive products by 2014 and sensitive products by 2019. corrido and so on. ‡Single market One of the initiatives of UNASUR is the creation of a single market. The signing of the treaty was delayed from March until late May due to a Colombian raid on a FARC camp in Ecuador. (Visits by South American citizens to any South American country of up to 90 days require only the presentation of an identity card issued by the respective authority of the travellers' country of origin) . ‡Free movement of people After 2006. ‡Infrastructure cooperation ADB & ADC is giving assistance to develop infrastructure such as highway.Current Work in Progress and Initiatives At the present time the union exists only on paper. waived visa requirements for tourism travel between nationals of said countries.