MercoPress. South Atlantic News Agency

Venezuela makes it official: leaves CAN to join Mercosur

The Andean Nations Community, (CAN), secretariat received last weekend Venezuela's official relinquishment from the regional bloc and a request for a meeting to discuss trade.

CAN Secretary General Allan Wagner said that after receiving the Venezuelan announcement, which arrived earlier than had been expected, he informed "member countries and the institutions of the Andean integration system" of Caracas' decision.

Wagner also revealed Venezuela requested a top level meeting with trade officials from CAN remaining members, Bolivia, Ecuador, Colombia and Peru, before April 26.

However Mr. Wagner said despite Venezuela's pullout, Caracas "must maintain effective for at least five years, the liberalization program regulating the free trade zone that is in place among Andean countries". Article 135 of the Cartagena Accord says that Venezuela will have to import and export goods under the current customs conditions for the next five years.

Venezuela's withdrawal from the regional bloc was the result of the recent signing by Peru and Colombia of free trade accords with Washington, said Venezuelan President Hugo Chavez last Wednesday in Paraguay.

Apparently Bolivia has decided to convene a CAN presidential summit to consider the Venezuelan decision, but no date has been fixed. "It's up to president Evo Morales to host the meeting", said Mr. Wagner. Mr. Morales is scheduled to take the chair next June of the CAN Presidential Council, a position currently held by Chavez.

Wagner said that the organization was taking "the necessary steps to find the best solutions possible under the circumstances" before June, adding with certain remorse that the Andean Pact should "have advanced much more in these 37 years". The Andean Pact was originally founded 37 years ago in Cartagena, Colombia and in 1996 changed its name to Community of Andean Nations.

Wagner underlined that Venezuela's withdrawal would reduce the size of the Andean market since Caracas "represents practically a third of the Andean market and Colombian-Venezuelan trade is more or less 50% of the bloc's total trade".

As to the future Mr. Wagner insisted he was confident that "the best scenario possible" would be found recalling certain similar situations in the past: Peru's temporary withdrawal over tariff differences in the early 1990s or even how the bloc managed in 1976 to address the Chile's pullout. Chile's withdrawal was the result of "incompatibility" between the Andean bloc's integration policies and the new economic approach implemented by then-dictator Augusto Pinochet, who had come to power in 1973 and his "Chicago boys". However a number of agreements relating to health and cultural affairs, among others, remained.

Furthermore Mr. Wagner revealed that the European Union has decided to continue trade talks with CAN despite President Chavez announcement and pointed out that the "political launch" of the EU/CAN free trade treaty "is still scheduled for 2007".

Last week president declared the "death" of CAN following the recent signing by Colombia and Peru of bilateral free trade pacts with the United States, "it doesn't make sense to continue". He said Venezuela would instead seek a closer alliance with Mercosur, whose full members are Brazil, Argentina, Paraguay and Uruguay.