NAFTA & Inter-American Trade Monitor
Produced by the Institute for Agriculture and Trade Policy
April 5, 1996
Volume 3, Number 7
Chile will sign an agreement to become an associate member of Mercosur, the South American customs union of Argentina, Brazil, Paraguay and Uruguay, on June 25. After two years of tough negotiations, foreign ministers of the two countries reached an agreement at meetings in Cartagena, Colombia in late March.
Chile is also continuing negotiations with Canada on a bilateral free trade agreement, since negotiations on NAFTA accession for Chile have stalled over the U.S. failure to obtain Congressional approval of fast-track negotiating authority. Chile and Canada agreed in February to negotiate side agreements on the environment and labor similar to the agreements created with NAFTA. The Chile-Mercosur agreement will take effect on July 1, and a Chilean-Canadian agreement is predicted by year's end.
Caribbean Community (Caricom) members, 14 English- speaking nations and Suriname, are creating a single market and customs union, and have also concluded treaties with Colombia and Venezuela to allow preferential entry to those markets. According to Ralph Maraj, foreign minister of Trinidad and Tobago, Caricom is seeking bilateral free-trade agreements with several Latin American states, planning the agreements as "building blocks" for the Free Trade Area of the Americas. He said that the agreements will be flexible in making allowances for smaller and weaker economies of Caricom.
The bankrupt and nearly moribund 26-year-old Andean Pact gave way to a new Andean Community made up of Bolivia, Colombia, Ecuador, Peru and Venezuela in March. The presidents of the five countries said the Andean Community will resemble the European Union, and will begin negotiations with other trade blocs in Europe and Asia. Plans call for a new secretariat, based in Lima, and for a parliament directly elected by the Andean Community's 100 million-plus inhabitants within five years. Although trade between the countries accounts for only about 10 percent of their overall international trade, it has grown steadily over the past three years, increasing from $1.8 billion in 1991 to $4.6 billion in 1995.
David Pilling and Stephen Fidler, "Chile Makes Progress Toward Free Trade Pacts," FINANCIAL TIMES, March 25, 1996; Raul Ronzoni, "Accord With Chile Expands the Horizons of Mercosur," INTERPRESS SERVICE, March 26, 1996; "Chile to Sign Trade Deal With Mercosur on June 25," REUTER, March 22, 1996; Canute James, "Caricom Seeks to Expand Treaties to Latin America," JOURNAL OF COMMERCE, March 22, 1996; "Latin American Leaders OK Andean Community," JOURNAL OF COMMERCE, March 12, 1996; Sally Bowen, "New 'Andean Community' to be Modelled on EU," FINANCIAL TIMES, March 12, 1996; Abraham Lama, "Andean Pact Limps to Meeting Tired and Out of Pocket," INTERPRESS SERVICE, March 7, 1996.
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