The fast pace of regional integration in Latin America has broadened its markets, diversified exports and raised productivity, employment and capital investment. The passion for a regionally integrated Latin America was always loud in the teachings of Simon Bolivar, the liberator of South America, who, even before its independence in 1820, had advocated a political union of the countries in that region. Early attempts made in the fifties and sixties for regional and sub-regional integration were not very effective. However, the 1980s and 1990s saw the Latin Americans hastening the process and creating viable trade blocs and revitalizing those created earlier. All countries (except Cuba) from Brazil to the tiny Monteserrat are now part of one or the other trade blocs. Individual countries and regional groups have entered into Free Trade Agreements with other countries and blocs within as well as outside the region.

There are four regional groups in LAC region.

MERCOSUR (Mercado Comun de Sur-Southern Common Market)

It is the fourth largest integrated market after EU, NAFTA and ASEAN. Mercosur’s role model is European Union. Its integration envisages coordination of macro economic policies, common currency, Mercosur Bank, common citizenship and cooperation in development of infrastructure culture and education. Mercosur has its primary focus on eliminating obstacles to internal trade, like high tariffs, income inequalities, or conflicting technical requirements for bringing products to market. Brazil, Argentina, Uruguay and Paraguay are the main members; Chile and Bolivia are associate members. Montevideo in Uruguay houses its secretariat. Formed in 1991 with the objective of free movement of goods, services, capital and people. Mercosur became a customs union in January 1995. It is pursuing the third stage of its integration as ‘Common Market’. Intra-Mercosur trade is duty-free while Common External Tariff (CET) is in force for imports from other countries.

Visit the Website of MERCOSUR www.mercosur.org.uy

ANDEAN COMMUNITY

Among the sub-regional groups, the Andean Community has the strongest institutional framework. Andean community is a community of four South-American countries, which decided to voluntarily join together for the purpose of achieving more rapid, better-balanced and more autonomous development through Andean, South American and Latin American integration.

The community consists of Colombia, Ecuador, Peru and Venezuela, which has uniformly destined to move ahead in deepening an integral integration process. This will further substantiate the equitable human development. The motto of the formation is to live well, with respect for the diversity and asymmetries that agglutinate the different visions, models and approaches and that will converge in the formation of the Union of South American Nations (UNASUR).

The Andean Community has a total population of 116 million with a combined GDP of US$260 billion. Their total annual imports in 2004 were 50 billion dollars. The intra-Andean trade has grown from US$1.3 billion in 1990 to over US$5 billion in 2004 accounting for 12 percent of their total trade.

This regional market has got the following institutional framework:

Andean Secretariat at Lima: This is the executive body, with a full time Secretary General. Andean Development Corporation (CAF) Caracas.

Central American Integration System (SICA)

SICA is an extension of the Central American Common Market formed by Costa Rica, Guatemala, Nicaragua and El Salvador in 1963. Formed in 1991, this consists of seven countries namely Costa Rica, El Salvador, Guatemala, Honduras, Panama, Belize and Nicaragua. SICA has taken Dominican Republic as an Associate Member. This has a combined population of 44 million and GDP of US$94 billion. A general secretariat located in San Salvador coordinates the process of political, economic, social and environmental integration. Summit meetings and ministerial meetings are held periodically to give political impetus to the integration process.

The Secretariat has prepared a programme of projects for regional development for the period 2001-2020. A Bank for the Economic Integration of Central America has been established. The projects financed by the Bank include Central American Logistical corridor, Central American Electricity Connection and fibre optic network. The main Projects of this bank can be seen in www.bcie.org

The Central American region, which was mired in civil wars, came out of them only in the nineties. Peace Accords were reached in 1990 in Nicaragua, in 1992 in El Salvador and in 1996 in Guatemala. After coming out of civil war situations so late, the Central American countries were quick in taking the path of regional integration. Foreign Direct Investment in SICA region increased from US$400 million in 1991 to US$1.4 billion in 2000. For information on SICA see website www.sgsica.org

Carribean Community (CARICOM)

The Caribbean Community (CARICOM) is an organisation of 15 Caribbean nations and dependencies. The main objective of the formation of CARICOM was the eventual integration of its members and economies, and the creation of a common market. From its inception, the Community has concentrated on the promotion of the integration of the economies of member states, coordinating the foreign policies of the independent members and in functional cooperation, especially in relation to various areas of social and human endeavour.

Its major activities involve coordinating economic policies and development planning; devising and instituting special projects for the less-developed countries within its jurisdiction; operating as a regional single market for many of its members (Caricom Single Market); and handling regional trade disputes. The Secretariat headquarters is based-in Georgetown, Guyana.

Treaty with India

A CARICOM delegation under the leadership of K.D. Knight, Minister of Foreign Affairs and Trade of Jamaica and the then Chairman of the Community Council, visited India in November 2003 and signed an agreement between India and CARICOM Secretariat for establishing a Standing Joint Commission on Consultation, Cooperation and Coordination.