Economic Complementation Agreement Andean Community - MERCOSUR

Free Trade Agreements (FTA) MERCOSUR - Free Trade Agreements  Andean Community

Course summary Andean Community and MERCOSUR ACE (Economic Complementation Agreement):

Mercosur (Southern Common Market) is the fourth largest economic Group in the world with a GDP of 1.989 billion U.S. dollars and a population of 242 million in 2008. Brazil is the largest economy with 79% of Mercosur's GDP, followed by Argentina with 18% to 2% for Uruguay and Paraguay with 1%.

The Andean Community (COMUNIDAD ANDINA) is a subregional organization endowed with an international legal status, which is made up of Bolivia, Colombia, Ecuador and Peru and the bodies and institutions comprising the Andean integration system (AIS).

Example of the course Andean Community and MERCOSUR ACE (Economic Complementation Agreement):

Relations between the Andean Community and MERCOSUR, integration blocs whose membership includes nine of the twelve South American countries, have evolved rapidly toward a convergence process that will benefit the 350 million inhabitants of their member countries.

In 2008, trade between the Andean Community (Bolivia, Colombia, Ecuador and Peru) and Mercosur amounted 16,430 million dollars, which represents an increase of 27 percent over the previous year's trade (12,923 million USD). The Andean Community imports from Mercosur 10.844 million USD in 2008, exceeding by 21 percent over those recorded in 2007.

Chile's return to CAN as an associate member state on 20 September 2006, has been one of the most significant events for the process of integration. In 2008, trade between the Andean Community (Bolivia, Colombia, Ecuador and Peru) and Chile amounted to 7.134 million USD, representing an increase of 43 percent over the previous year's trade (5.003 million dollars).

The first concrete step in that direction was the signing, on April 16, 1998, of a Framework Agreement for the creation of a Free Trade Area between the Andean Community and MERCOSUR.

As a result of those negotiations, Colombia, Ecuador, Peru and Venezuela signed a Partial Scope Economic Complementarity Agreement with Brazil on August 12, 1999, establishing fixed margins of preference as an initial step toward creating a Free Trade Area between the CAN and MERCOSUR.

It should be pointed out that on December 17, 1996, Bolivia and MERCOSUR signed Economic Complementarity Agreement Nº 36 to establish a Free Trade Area between the two parties and on August 25, 2003, Peru and MERCOSUR signed Economic Complementarity Agreement No.58 for the same purpose.

The Free Trade Agreement between Bolivia and MERCOSUR was signed on 17 December 1996 and entered into force on 28 February 1997. This Agreement, registered with the ALADI Secretariat as Economic Complementation Agreement Nº 36 (ACE36), superseded and replaced ACE 34.

MERCOSUR and the other Andean countries have also continued the process of deepening their trade relationship through negotiations within an Andean Community-MERCOSUR framework resulting in the conclusion of Economic Complementation Agreement Nº 58, between Peru and MERCOSUR and Economic Complementation Agreement Nº 59 between Colombia, Ecuador and Venezuela and MERCOSUR.

MERCOSUR and Peru undertook negotiations towards a free trade agreement within the framework agreement between the Andean Community and MERCOSUR. Negotiations between MERCOSUR and Peru concluded on 25 August 2005 with the signing of Economic Complementation Agreement No 58.

The free trade agreement between Colombia, Ecuador and Venezuela (of the Andean Community) and the member states of MERCOSUR was signed on 18 October 2004 and registered with the ALADI as Economic Complementation Agreement Nº59.

Example of the course Andean Community and MERCOSUR ACE (Economic Complementation Agreement) (Spanish):