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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(80)82 final
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RECOMMENDATION FORACOUNCILDECISION
AUTHORIZING THEOPENING OFNEGOTIATIONS WITHTHEANDEANGROUP
(BOLIVIA/COLOMBIA-ECUADOR,PERUANDVENEZUELA)
(presentedbytheCommission totheCouncil)
C0M(80)82final

EXPLANATORY MEMORANDUM
I•Back Trourid *
InJuly 1979 ,ontheoccasion ofhisvisit totheCommission ,-thePresident
ofColombia ,MrJulio Cesar Turbay Ayala proposed ,onbehalf ofallthe
member countries oftheAndean Group (Bolivia ,Colombia ,Ecuador ,Peru and
Venezuela ),theconclusion ofacooperation agreement between theAndean
Group andtheEuropean Community .Subsequently ,inNovember 19T9 »
MrSebastian Alegrett ,President oftheCommission oftheCartagena *
Agreement -^,again ontheoccasion ofavisit totheCommission ,stated that
theAndean Group wished toconclude anon–preferential cooperation agreement ,
onabasis ofequality andreciprocity ,which would take account ofthe
different levels ofdevelopment ofthetwogroups -ofcountries ,besufficiently
broad toembrace allareas ofcooperation ,yet atthe same time substantive ,
andpermit further development .
Itisonthebasis oftheexploratory discussions which then started between
„ . . .2adelegation from theJunta oftheCartagena Agreement andadelegation
from theCommission oftheEuropean Communities tostudy thepossible form
andcontent ofsuch anagreement that theCommission presents to'theCouncil
the recommendation which follows .
1TheCommission ,made upofaplenipotentiary representative oftheGovernment
ofeach member country ,isthepolitical anddecision –making body .
2_, ... 'TheJunta ,*consisting ofthree members ,isthetechnical body ;ithasto
ensure that theAgreement ifsimplemented andthat theCommission 'sdecisions
are carried out :itmakes proposals totheCommission .

II.TheCartarrena "Agreementandtheeconomicintegration oftheAndean
Sub-re ,r:ion ,
1.The.machineryofintegration andanewstimulus
£ •"
TheprocessofAndeaneconomicintegrationbeganin1969withthesignin"of
1theCartagenaAgreementandmovedastagefurtherinMay1979,whenthefive
HeadsofState,meetingagaininCartagenaonthetenthanniversaryofthe
Agreement,adoptedtheCartagenaMandate,whichdefinedbroadpoliticaland
economicguidelinesfoffutureAndeanintegration.
Lastyear,too,theinstitutional frameworkoftheAndeanPa-'twasexpanded
withthesetting-upof,,theAndeanCourtofJusticeandthesigningof"the
Treatyestablishing theAndeanParliament ;furthermore ,itwasin1979that
themeetingsofForeignAffairsMinistersofthefivemembercountrieswere
institutionalized throughtheformationoftheAndeanCouncil,theaimof
whichistoformulatejointforeignpolicyforthemembercountries.
TheCartagenaAgreementaimstoachievebalancedandharmonious development
ofthemembercountries,fastereconomicgrowthandconstantimprovement of
thestandardofliving.The'machinerybywhichsuchobjectivesaretobe
2fulfilledincludestheliberalization oftrade,acommonexternaltariff,
industrialprogrammingoverallandsectoral(metalproducts,petrochemicals
andmotorvehicles)^thetreatmentofforeigncapital,agriculturalplanning,
(
1„...,...TheoriginalsignatoriestotheAgreementwereBolivia,'Chile,Colombia,
EcuadorandPeru;Venezuelaaccededin1973andChilewithdrewin1976.
Theintegration oftheAndeansub–regionextendsalsotofinancear.d,forthispurpose,theAndeanDevelopmentCorporation (ADC)wassetupin1968
andtheAndeanReserveFundin1976.
2Thedismantlingoftariffbarriersisduetobecompletedby31December1983
andacommonexternaltariffwillenterintoforceforColombia,Peruand
Venezuela;thedatefixedforBoliviaandEcuador-is31December1988.

harmonization ofeconomic and .social policies ,and soforth . -One ofthe
striking features ofAndean integration hasbeen thepreferential treatment ,
specified intheAgreement ,forBolivia andEcuador ,thetwocountries
least economically developed inrelative terms ,and inparticular the
special support programme forBolivia ,which comprises aseries ofmeasures
topromote thecountry *sdevelopment .
Bytheir solemn endorsement ofthese objectives intheCartagena Mandate ,the
five Heads ofState have sought togive fresh impetus tothe integration
process which ,inrecent years ,hasencountered various difficulties .The
Mandate also gives high priority totheAndean Group 'sexternal relations .
(notably thedevelopment ofrelations with other organizations grouping' .
countries pursuing integration )andstates theneed forincreasing political
cooperation within the *Group .
s
Itiswithin this context that theAndean Group iscurrently activating its
external relations andseeking toestablish closer ties with theCommunity .
2.Basic data
The combined land area ofthemember countries oftheAndean Group
is4*7million .sq.km ,(more than three times thearea oftheCommunity ),and ,
thepopulation ofover 70million ,whose life expectancy is61years ,is
growing attherate of2>%peryear ;10%ofthepopulation ,i.e. 50million
persons ,arebelow 30years ofage ;65%aretown-dwellers ;infant mortality
is71f°o.23million persons make uptheeconomically active population .
Percapita income in1977 was^1100 (butincome inVenezuela isfour
•times that inBolivia ).

The Andean Group isthedeveloping world 'sseventh largest producer
(after India ,Saudi Arabia ,Iran ,Brazil ,theASEAN countries andMexico ).
Intrade ,asanimporter andexporter ,theGroup ranks fourth among
developing countries (after Saudi Arabia ,theASEAN countries andIran ),
1Itisamajor supplier ofrawmaterials •Thefive Andean countries -
produce petroleum and oneofthem ranks among the -world 'sleading
producers andexporters ofpetroleum#
In1977 "theAndean Group 'sexternal trade amounted to$31000million ,
with atrade surplus of$63million ;in1978 thefigure forexternal
trade was$32800million ,andthere wasaslight trade deficit of
$53million .Trade with theEEC–theGroup 'ssecond largest trading
partner after theUSA–was$5600million in1977 and$6100million
in1978 ;in1977 "theAndean Group 'sdeficit was$1J00million andin
1978 $1600million . "
ι
TheGroup also hadatrade deficit with theUSAin1977 ($324 million )
andalarge deficit with Japan ($1400million ),dueprincipally tothe
fact that imports from Japan accounted for11.5$ ofalltheAndean Group 's
imports whereas Japan took barely 2,5% oftheGroup 'sexports .
Netprivate foreign investment inthemember countries oftheAndean Group
byDACcountries in1977wasoftheorder of$400 million (onefifth of
total investments inLatin America ),ofwhioh $354 million oame from the
USA2. - '
t - '
TheAndean Group possesses particularly large mineral resources :copper ,
iron ,zinc ,tin ,gold ,silver ,molybdenum ,tungsten andantimony .
2. .. . .. _ . -According totheJunta ,asof1977 total foreign investment inthe
Andean Group added upto$8000million distributed asfollows :
Venezuala $3600million ;Perù$2000million ;Colombia $1400million ,
Ecuador $380 million ;Bolivia $120 million ;$1800million ofthetotal
investment went tothe industrial sector . *

Ill *Relations with the EEC
The EEC istherefore theAndean Group 'ssecond largest customer and
supplier (even iftrade with thesub-region accounts forbarely 1.4$
1oftheCommunity *sexternal trade ),andthesecond largest source
ofinvestment (despite thefact that ,Community investment inthe
sub–region hasnever exceeded 8$ofallforeign investment in"
2Latin America )•-
y r
With regard tothestructure ofEECimports from theAndean Group ,the
largest item (approximately 50$)consists ofagricultural products ?'
next inorder ispetroleum andpetroleum by-product s^followed bymineral
products .Certain items imported from thesub-region represent a
significant proportion 6ftheCommunity 'simports ofthat item from all •
sources ,notably :bananas (20$),coffee (12%),copper matte (20$),
lead ore (14$),zinc oreandconcentrates (1?$)» "tinoreandconcentrates
(45$)*tungsten oreandconcentrates (8$),ores andconcentrates of
non-ferrous metals (6$).
The .EEChastraditionally had atrade deficit with theAndean Group
(except foraslight surplus in1973 and1975 )»since 1977 »however ,
thedeficit hasbeen replaced byasignificant ^surplus due tothe
sharply increased deficit recorded byVenezuala ,which ,apart from
Ecuador ,istheonly member ofthe Group traditionally torunatrade
deficit with theCommunity .
/■ '
With Latin America asawhole ,theEEChascontinued tohave adeficit
trade balance except in1974 and 1975 *
Prom 1970 to1977 ,inSlECtrade with Latin America ,theAndean Group 's
share ofEECimports fell from 39*2$ to18.7$ -andofEECexports rose *
from 30.7$ to36.7$ . .
2Netprivate direct investment bytheEECintheAndean Group amounted
toS&6million in1977 *

TwomembercountriesoftjjeAndeanGroup,ColombiaandPeru,haveconcluded
voluntaryrestraintagreementswiththeCommunityontradeintextile
products;negotiationsaresoontobeopenedwithBoliviaforthe
conclusionofasimilaragreement. _
Withregardtogeneralizedpreferences ,theAndeancountriesseemalong
wayfrommakingfulluseoftheopportunities offeredbythesystem.
ThedefactocooperationlinksbetweentheCommunityandtheAndeanGroup,
forinstancebetweentheCommissionandtheJunta,havecertainlyshown
goodresultsovertheyearsintheareasinwhichcooperationhasbeen
possible-suchass -.
(a)tradepromotion;
(b)trainingandtechnicalassistanceaimedatpromotingregional
integration,especiallyschemes -undertakeninconjunctionwiththe
^ Â. ■
Junta;
1(c)financialandtechnicalassistance. '
Itisfelt,nevertheless ,thataninstitutional frameworkisneededand
thatmorepreciseobjectivesshouldbefixedcommitingthetwoparties.
Theconclusionofaframeworkeconomicandtradecooperation agreement
wouldmeetthisneed. ,
1AidchannelledtotheAndeancountries(eitherindividually ,orthrough
theJunta,orthroughbodiesoperatingonacontinentalscale)amounts
toover20millionEUA,whichrepresentsapproximately ofaidfor
thewholeofLatinAmerica. ''

-7-
IV.Proposal for acooperation agreement
Inthelight oftheforegoing ,theCommission affirms that itisinthe
general interest oftheCommunity toopen negotiations with the
Andean Group with aview totheconclusion ofaframework cooperation
*
agreement which :
(i)would "benon–preferential ,
'*
(ii)would beofanevolutive nature andnotexclude inadvance any -
field ofCommunity competence ,
(iii)would take account ofthelevel ofdevelopment ofthemember countries
;oftheAndean Group ,.
(iv)would include application ofthemost-favoured -nation clause (while
taking account ofthefaot that only Peru ,andColombia provisionally ,
arecurrently members of.theGATT ),
". . . .
(v)would aimtoconsolidate ,intensify anddiversify trade relations
between thetworegions ,
(vi)would ,laythefoundations foreconomio cooperation inallfields
1deemed desirable bythe Parties .
TheAndean Group hasindicated theneed forfinancial cooperation to
enable theobjectives ofeconomio cooperation tobeachieved .Intheview
oftheCommission theCommunity could take these wishes into consideration in
thecontext ofthefinancial resources ,avai lable forNon-Associate developing
countries .
FortheAndean Group theconclusion ofsuch an'agreement would meet with
itsrepeatedly expressed wishes toestablish closer links with the
European Community with the<aim ofimproving thebalance ofitsexternal
relations ,and -Wius constitutes apolitical aswell asaneconomic
priority .
Aseparate protocol extending theprovisions oftheagreement tofields
covered bytheECSC would beannexed totheagreement .

-8-
Onthe pari :oftheCommunity ,theagreement would demonstrate -particularly
following theconclusion oftheCooperation Agreement with theASEAN countries -
that theCommunity iswilling todiversify 1itscooperation with theThird World
countries andthat itconsiders theAndean Group anatural partner ,particu lariy
inview ofthesimilarities intheir integration processes .
During theexploratory talks ,therepresentatives oftheAndean Croup
made itknown that they wished theGroup toparticipate assuch inthe *
conclusion ofthe agreement .Given that ininternational lawthecapacity
ofaninternational organization toconclude agreements isdetermined "by
therelevant rules ofthat organization ,andbyitsownpractice ,and
taking into account the fact that theAndean Group recently concluded
with theUnited States atrade agreement which was signed bythe
President oftheCommission oftheCartagena Agreement and "bythe N
representatives ofthefive member countries ,theCommission considers
_that there are nogrounds forexcluding thepossibility ofanagreement
which ,ontheAndean Group side ,would bea"mixed-type "agreement in
the Community sense ofthe'term .
TheCommission believes that itisinthe interests oftheCommunity
toencourage theprocess ofintegration already begun within the
Andean Group .This solution would therefore combine two advantages :
first ,recognition that theAndean Group assuch isentitled toconclude
agreements ,andsecond ,the legal certainty provided bytheparticipation
ofthemember countries oftheGroup that undertakings will behonoured .
The Commission therefore recommends that the Council :
authorize theopening ofnegotiations with theAndean Group
with aview totheconclusion ofacooperation agreement ,
adopt thenegotiating directives annexed hereto .

Recommendation fora'CouncilDecisionauthorizing the
openingofnegotiationswiththeAndeanGroup(Bolivia,
Colombia,Ecuador,PeruandVenezuela)
THECOUNCILOPTHEEUROPEANCOMMUNITIES ,-
-HavingregardtotheTreatyestablishing theEuropeanEconomicCommunity,
HavingregardtotheCommissionRecommendation , .
Whereasnegotiations shouldbeopenedwiththeAndeanGroup(Bolivia,
Colombia,Ecuador,PeruandVenezuela)withaviewtotheconclusion
ofacooperation agreement,' ■'
V
•HASDECIDEDASFOLLOWS:'
tArticle1
TheCommissionisherebyauthorizedtoopennegotiations withtheAndeanGroup
(Bolivia,Colombia,Ecuador,PeruandVenezuela)withaviewtoconcluding
acooperation agreementbetweentheCommunityandtheAndeanGroup.
Article2
TheCommissionshallconductthesenegotiations inaccordancewiththe
negotiatingdirectivesannexedtothisDecisionandinconsultation with
therepresentatives oftheMemberStates. v „
DoneatBrussels, *
- ' " \ '■ ' ."
FortheCouncil
S L

ATOÏEX I
FSGOTIATIKG DIRECTIVES
A. NATURE OFTHE AGREERENT
/ ' . -
1.Scope .
The object ofthenegotiations istheconclusion ofaframework
cooperation agreement between theEuropean Economic Community andthe
Andean Group .Theagreement will benon-preferential ,
2.Evolutive nature
> '
Theagreement should beofanevolutive nature and flexible inorder to
allow foradjustment tochanges inthepolitical and economic development
ofthecontracting parties .Nopotential field ofeconomic cooperation
within thesphere ofCommunity competence should beexcluded inadvance ,
theparties totheagreement intending toexplore jointly ,within the
Joint Committee ,ai?y specific opportunities forcooperation .
i
Durât ion
Theagreement will run initially forfive years ;itwill then berenewable
tacitly forperiods oftwoyears ,unless terminated "byoneoftheparties .
B. CONTENT OFTHE AGREEMENT
1.Preamble
Itwill berecorded inthepreamble that theagreement isconcluded between
equal partners ,account being taken ofthedifferent levels ofdevelopment
ofthecontracting parties andofthenature oftheAndean Group asan
economic integration entity .

-2-
AÎJÎ7EX I
2.Most–favoured-nation clause . -*
Themost-favoured -nation clause should beinserted intheagreement ,
account being taken ofthe fact that themajority oftheAndean Group
member countries arenotyet members' oftheGATT . ,
3.Commercial cooperation _ .
Theparties undertake topromote thedevelopment anddiversification oftrade
between them tothe extent that their respective economic situations permit .
Theparties undertake also to:
(i)study ways andmeans ofovercoming trade barriers (inparticular
_existing non-tariff andquasi tariff barriers )taking into account
thework ofinternational organizations ; -
(ii)seek means ofbilaterdl andmultilateral cooperation inorder toresolve
ei- ~
common trade problems ,including those related tocommodities ;
(iii)usetheir best endeavours togrant each otfter thewidest ,facilities for
commercial transactions ;
(iv)take fully into account their respective requirements andinterests "
arising from theneed forimproved access totheir markets forraw
materials SLnd semi-manufactured andmanufactured products aswell as
from theprocessing ofmineral -resources :

-3- AÎ7ÎÏEXT
(v)bringtogethereconomicoperatorsinthetworegionswiththe.■
aimofcreatingnewtradeflows;
4. /
(vi)studyandrecommendtradepromotionmeasureslikelytoencourage
theexpansionofimportsand-exports; (
(vii)seekinsofaraspossibletheothercontractingparty'sviews
onmeasureswhichcouldhaveanadverseeffectontradebetween
thetworegions.,' *
4«Economiccooperation ',•
TheParties,takingaccountoftheirmutualinterestsandinaccordance
withthelong-termobjective^oftheireconomies,willundertaketosetup
economiccooperation which,withinthelimitsoftheirresponsibilities ,
shouldnotexcludeanyfieic 1inadvance.
Suchcooperation would,inparticular,coverthefollowingfields:
(i)industrialdevelopment ;
(ii)developmentofagricultureandtheagriculturalprocessingindustry
(iii)scientificandtechnological development ;
(iv)infrastructure ;»
■Τ
Itmustaiminteraliato:
(i)promotethedevelopmentofindustryinEuropeandtheAndean
subregion:

(ii)encouragetechnological andscieritificprogress;
(iii)openupnewsourcesofsupplyandnewmarkets;
(iv)createnewemploymentopportunities ;
(v)helpgenerallytodeveloptheeconomiesofthecountries .
concernedandraisethestandardofliving;
t
(vi)encourageregionaldevelopment ;,
(vii)protectandimprovetheenvironment.
Asmeanstosuchends,thecontractingpartieswillasappropriate seek
toencourageandfacilitateinparticular:
(i)theexchangeofinformationrelevanttoeconomiccooperationas
wellasthedevelopment ofcontactsandpromotionactivities
betweenfirmsandorganizations inbothregions;
s.
(ii)closerlinks"betweentheirrespectiveindustries,including
mining,notablyintheformofjointprojects; -'
(iii)cooperationinthefieldsofscienceandtechnology ,"environment ,
s■ •
transportandcommunications ,,agriculture ,fisheriesandforestry;
(iv)cooperationinthefieldofenergy,includingthedevelopmentof
newenergysources,takingintoaccountworkofthesamenatureby
international organizations ;
(v)mutualrecognitionoftheneedtomaintainandimprovefurtherthe
favourableinvestmentclimate,inparticularthroughagreements
aimedatinvestmentpromotionandprotection ;

(vi)cooperation with and innon-member countries ;
Cvii )financial cooperation toenable the Community 'scontribution tothe
development ofthe Andean group tobeintensified inthe context of,
ft
theprogrammes which theCommunity isapplying toNon-Associate developing
countries ;
(viii )cooperation between sources offinance inthe two regions
/
C.INSTITUTIONS'
AJoint Cooperation Committee will beset uptofacilitate the implementation
oftheAgreement ;itstask will beinparticular topromote and keep under review
1thevarious cooperation activities envisaged .
D.TERRITORIAL CLAUSE
E.AUTHENTIC LANGUAGES 1
ι
F.OTHER AGREEMENTS
Itwasnot considered necessary tospecify inthenegotiating directives that
theJoint Committee may,ifnecessary ,setupsubcommittees ,since inthe
event thecustomary procedures will apply .

AMEXTT
Protocolto"beconcludedbetweentheEuropeanCoal
andSteelCommunityandtheMemberStatesthereof
andtheAndeanGroup(Bolivia,Colombia,Ecuador,
PeruandVenezuela)
"TheprovisionsoftheCooperation AgreementbetweentheEuropeanEconomic
CommunityandtheAndeanGroup(Bolivia,Colombia,Eduador,Peruand
Venezuela)shallalsoapplyinthefieldcoveredbytheTreatyestablishing
theEuropeanCoalandSteelCommunity."
% .^
*