EUROPEISKA GEMENSKAPERNAS KOMMISSION 
Bryssel den 16.06.1995 
KOM(95) 219 slut1ig 
MEDDELANDE FRÅN KOMMISSIONEN 
Europeiska gemenskapens stöd till regional ekonomisk integration i 
·utvecklingsländema · 

SAMMANFATTNING 
Början av 1990-talet kännetecknades av en gradvis ekonomisk globalisering och ett större 
ekonomiskt ömsesidigt beroende mellan olika områden i världen. Ett symptom härpå och 
samtidigt en reaktion på denna utveckling, har varit ett ökat intresse fö.r regional 
integration. 
I Europa har integrationen fördjupats i samband med fullbordandet av den inre 
marknaden och bildandet av Europeiska unionen. På den nordamerikanska kontinenten 
har man enats om ett frihandelsområde som för första gången omfattar både 
industrialiserade marknadsekonomier och utvecklingsekonomier. I större delen av 
tredje världen har intresset för regionalisering ökat kraftigt, i viss mån till följd av 
förändringarna i Europa och Nordamerika, den intraregionala liberaliseringens roll som 
ett medel att bredda marknaderna och skörda vinsterna av större effektivitet och 
storskaleekonomier, samt den regionala integrationens betydelse som ett språngbräde 
mot en integration i världsekonomin. 
Detta meddelande handlar huvudsakligen om regional ekonomisk integration alltunder det 
att det värdesätter det regionalpolitiska samarbetets potentiella bidrag till att främja fred 
och säkerhet. Dessutom behandlar det frågan mot bakgrund av regionalt samarbete som 
ett överordnande koncept. Medan regionalt samarbete kan omfatta alla aktiviteter när en 
grupp länder tar upp frågor av gemensamt intresse, handlar regional ekonomisk 
integration, eller kortare. uttryckt regional integration, huvudsakligen om en minskning 
av "policy"-relaterade handelshinder för rörligheten av varor, tjänster, kapi~l och 
människor. Regional integration rör avskaffande av tullar och tekniska handelshinder, 
upphävande av hinder för regionala partners investeringar samt liberalisering av 
betalningar. Regionalt samarbete i en vidare bemärkelse kan också handla om andra 
frågor som infrastruktur för transporter och telekommunikationer, utbildning och 
förvaltning av gemensamma resurser som till exempel miljö. 
Regional ekonomisk integration är inte ett mål i sig. Den utgör snarare en del av en 
strategi för samordning av den ekonomiska politiken och för att förbättra utsikterna för 
· varaktig utveckling. Trots den inhemska politikens roll som den viktigaste faktorn för 
varje lands ekonomiska tillväxt, är regional integration för de flesta utvecklingsländer, 
speciellt mindre länder, ett viktigt steg mot större integration i världsekonomin. 
Det ökade intresset för de regionala aspekterna sker i ett internationellt klimat av total 
liberalisering av handel och kapitalrörelser. Man har hänvisat till detta som "utåtriktad" 
eller "öppen regionalism" .I motsats till de farhågor som ibland uttryckts, bekräftade 
Marrakeshakten (april 1994) förenligheten mellan regional integration och 
multilateralism. Samtidigt klargjorde och stärkte den de villkor som ska uppfyllas för att 
en regional grupp ska kunna hävda att den handlat enligt multilateralismens principer. 
Trots ökningen av antalet initiativ mot regional integration, visar en undersökning av 
tidigare erfarenheter att man i många fall misslyckats. Man kan dra viktiga slutsatser 
av tidigare erfarenheter både vad gäller lyckade och misslyckade försök. För det första 
är det lättare att genomföra regional integration i vissa regioner än andra. Detta beror 
på ett antal faktorer, bland annat graden av komplementaritet mellan olika ekonomier, 
de geografiska omständigheterna inklus~ve den geografiska närheten och likheten mellan 
de kulturella och historiska aspekterna. För det andra finns det viktiga förutsättningar och 
faktorer som påverkar framgången av regional integration. Bland dessa ska ~nas det 
politiska engagemanget, fred och säkerhet, rättssäkerheten, demokrati, bra ledning och 
makroekonomisk stabilitet. Förutom dessa förutsättningar kräver en framgångsrik 
regional integration också ett marknadsinriktat ekonomiskt klimat, öppenhet gentemot 
tredje land, tillräckligt starka institutioner med klart mandat, tillräckliga resurser och 
politisk stöd. En flexibel institutionell ram som möjliggör framsteg i olika hastigheter 
("variabel geometri"), brett deltagande av den privata sektorn och samhället och en 
struktur där ansvaret föf frågorna ligger så nära den berörda befolkningen som möjligt 
("subsidiaritet"), kan också anses som avgörande inslag för ett lyckat resultat, såsom EUs 
erfarenhet visar. 
EU tar hänsyn till dessa aspekter i sina relationer med utvecklingsländer och grupper i 
utvecklingsländerna. Stöd till regional integration bör motsvara de önskemål som 
parterna uttryckt för sådant stöd. Det bör dessutom inrikta sig på att främja realistiska 
och genomförbara integrationssystem. Slutligen bör det utformas som en stategi med 
flera inbördes förbundna komponen~r eftersom direkt stöd till integration kan ges i form 
av både biståndspolitik och handelspolitik. 
Handelspolitiken kan användas· på olika s~tt för att främja effektiv regional integration 
i utvecklingsländerna. I synnerhet kan tillämpningen av kumulering inom ramen för 
ursprungsreglerna, som flera regionala grupperingar åtnjuter, främja interregional 
produktion och handel. Dessutom kan handelsarrangemang mellan EU och 
integrationsgrupperingar erbjudas de senare under förutsättning att partnergruppe11 har 
en effektiv integrations.struktur. 
För att kunna främja en effektiv regional integration bör å andra sidan biståndspolitiken 
bestå av följande generella inslag: 
1. Kapacitetsuppbyggnad (inklusive utbildning och forskning)· och tekniskt bistånd 
(inom områden som o~fattar utformning av sektoriella strategier, harmonisering 
av normer etc.) för att hjälpa nationella och regionala myndigheter att genomföra 
regionala integrationsåtgärder. · 
2. Anpassning av biståndet. för att hjälpa den privata sektorn att utnyttja de 
möjlig~eter som följer av en regional integration. 
3. Stöd till regeringar i vissa regioner, särskilt i Afrika söder om Sahara, · som 
engagerat sig i att genomföra regionala integrationsåtgärder. 
List of acronyms 
Summary 
Introduction and motivation 
I. Conceptual framework CONTENTS 
II. EC support to integration efforts throughout the 
developing world 
111. Lessons learnt to-date 
1. Preconditions for successful regional integration 
2. Design of regional integration 
3. Implementation of regional integration 
IV. Recommendations on external support for regional integration 
1. Trade policy 
2...--Development cooperation policy 
3. Donor coordination 
Appendix A Overview of EC support for regional integration among icl... 
ii 
2 
6 
8 
9 
10 
· 1 I 
12 
12 
13 
16 
developing countries 17 
Appendix B List of major economic cooperation and integration groupings and 
their membership 25 
ADB 
AEC 
ALADI 
AMU 
APEC 
ASEAN 
BEAC 
CARICOM 
CBI 
CEAO 
CEMAC 
CEPGL -ic;.l-
LIST OF ACRONYMS 
African Development Bank 
African Economic Community 
Latin American Integration Association 
Arab Maghreb Union 
Asia Pacific Economic Cooperation 
Association of South East Asian Nations 
Banque <les Etats d'Afrique Centrale (Bank of Central African States) 
Caribbean Common Market 
Cross-Border Initiative (Eastern and Southern Africa) 
Communaute Economique de l'Afrique de l'Ouest 
(Economic Community of West Africa) 
Communaute Economique et Monetaire de l'Afrique Centrale 
(Economic and Monetary Community of Central Africa) 
Communaute Economique des Pays des Grands Lacs 
(Economic Community of the Great Lakes Countries) 
CMA Common Monetary Area (Rand zone) 
COl'vIESA Common Market for Eastern and Southern Africa 
EAC East African Community 
EC European Community 
ECA Economic Commission for Africa 
ECCAS Economic Community of Central African States 
ECO Economic Cooperation Organisation 
ECOW AS Economic Community of West African States 
EU European Union 
GCA Global Coalition for Africa 
GCC Gulf Cooperation Council 
IOC Indian Ocean Commissjon 
JUNAC Junta del Acuerdo de Cartagena 
MCCA Mercado Comun Centroamericano 
MERCOSUR Mercado Comun del Sur 
NAFTA North American Free Trade Area 
OAU Organisation of African Unity 
OECD Organisation for Economic Cooperation and Development 
OECS Organisation of East Caribbean States 
PT A Preferential Trade Area for Eastern and Southern Africa 
SAARC South Asian Association for Regional Cooperation 
SACU Southern African Customs Union 
SADC Southern African Development Community 
SADCC Southern African Development Coordination Conference 
SICA Sistema de Integraci6n Centroamericano 
UDEAC Union Douaniere et Economique de l'Afrique Centrale 
UEMOA 
UMOA (Customs and Economic Union of Central Africa) 
Union Economique et Monetaire Ouest Africaine 
(Economic and Monetary Union of West Africa) 
Union Monetaire Ouest Africaine (West African Monetary Union) 
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SlJMMARY 
The beginning of the nineties has been characterised by the progressive globalization 
of economic activity and the increased interdependence among economies in various parts of 
the world. A symptom, and at the same time a response to these developments, has been a 
renewed attention towards_ regional integration. 
In Europe, integration has deepened with the completion of the Single Market 
programme and the formation of the European Union (EU). In the North American continent, 
a free trade area has been agreed, comprising for the first time industrialised market 
economies as well as a developing economy. In mast parts of the developing world there has 
also been a greatly increased interest in regionalism, ta same extent stimulated by the changes 
in Europe and North America, the role af intra-regional liberalization as a means of expanding 
markets and reaping efficiency and scale economies gains, and the attractiveness of regional 
integration as a stepping-stone towards integration inta the world economy. 
While recognising the potential contribution af regional political cooperation towards 
peace and security, this Communication deals mostly with regional economic integration. 
Further it approaches it as a subject within the wider category of regional cooperation. 
Whereas regional cooperation can refer to all efforts where a group of countries addresses 
issues of common interest, regional economic integration or for short regional integration 
refers essentially to the reduction af policy-related barriers to the movement of goods, 
services, capital and persons. Regional integration deals with the elimination of tariff and non~ 
tariff barriers to trade, the removal of obstacles to investment from regional partners, and the 
facilitation of payments. Regional cooperation in the wider sense can also deal with other 
subjects such as transport and telecommunication infrastructure, education and the 
management of common resources such as the environment. 
Regional economic integration is not an end in itself. Rather, it is part of a strategy 
to coordinate economic policies and to improve the prospects for sustainable development. 
Notwithstanding the role af domestic policies as the main determinants for any country's 
economic growth, for mast developing countries, especially the smaller ones, regional 
integration is an important step towards better integration into the world economy. 
The renewed attention to regionalism takes place in an international context of global 
liberalisation of trade and capital movements. It has been referred ta as "outward-oriented" 
ar "open regionalism". In contrast with the fears sometimes voiced, the Marrakesh Act (April 
1994) has confirmed the compatibility between regional integration and multilateralism. At 
the same time it has clarified and strengthened the conditions whereby a regional grouping 
can claim ta have acted in accordance with multilateralism. 
Despite the increase in regional integration initiatives, an assessment of past experience 
shows a Jack of success in many cases. Important lessons should be drawn from past 
experiences, both successes and failures. First af all, regional integration is easier in same 
regions than in others. This is the result af a number af factors, notably the degree af 
complementarity among the economies; the nature af geographic conditions, including 
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geographic proximity; and the similarity of the cultural and historical background. Sccondly, 
there are important pre-conditions as well as factors affecting the success of -regional 
integration. Among these are politi~al commitment, peace and security, rule of law, 
democracy, good governance and macroeconomic stability. In addition to these pre-conditions, 
successful regional integration requires a market-friendly economic environment, openness 
towards third countries, institutions which are sufficiently strong and have a clear mandate, 
adequate resources and political support. A flexible institutional framework, permitting 
progress at different speeds ("variable geometry"), broad participation by the private sector 
and civil society, and a set-up where responsibility for dealing with an issue is kept as close 
as possible to the population concerned ("subsidiarity"), can also be seen as critical 
ingredients for success, as the EU experience shows. 
In its relations with developing countries and groupings the EU takes these lessons 
into account. Support for regional integration should respond to the will manifested by its 
partners for such help. Further, it should focus on encouraging realistic and workable 
integration schemes. Lastly, it should be conceived as a strategy with several interrelated 
components, as direct support for integration can be provided through both development 
cooperation policy and trade policy provisions. · 
Trade policy can be used in different ways to promote effective regional integration 
among developing countries. In particular, the application of cumulation in the rules of origin, -­
currently granted to several regional groupings, can encourage intr.a-regional production and 
trade. Further, trading arrangements between the EU and integration groupings could be 
offered to the latter, conditional on the partner grouping having an effective integration 
structure. 
On the other hand, to promote effective regional integration, a development 
cooperation policy should have the following broad components: 
1. capacity building (including training and research), and technical assistance ( on areas 
including the design of sectoral policies, the harmonization of standards, etc.) to help 
national and regional administrations implement regional integration measures~ 
2. adjustment assistance to help the private sector exploit the opportunities that become 
available through regional integration; 
3. in some regions, particularly in Sub-Saharan Africa, support for governments that are 
committed to implementing regional integration measures. 
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INTRODUCTION AND MOTIVATION 
Over the past five years, there has been a remarkable increase of regional integration 
and cooperation as part of a strategy to improve prospects for economic growth. This 
movement has been particularly strong in Europe with the completion of the single market 
programme and the formation of the European Union (EU). It has taken a looser form in 
North America with the creation of NAFTA, which is the first regional arrangement 
comprising industrialised market economies and a developing economy. In most parts of the 
developing world, but most prominently in Latin America, in Africa and in Asia, there have 
also been many attempts to launch regional arrangements. 
Regional integration can form part of a general strategy for encouraging sustained 
economic growth. There are many important benefits which regional integration can bring. 
It is beyond the scope of the present communication to elaborate on these. The most 
important economic benefits include: greater efficiency in production through specialisation, 
reduced unit costs because of scale economies, standardisation and reduction of form.alities, -­
better bargaining position towards the rest of the world and consolidation of macroeconomic 
policy reforms. It has also been demonstrated that outward oriented regional integration is 
compatible with multilateralism. 
Tne EU has encouraged, partly by example, partly through direct support, many of the 
new regional groupings in the developing world. Most of the support provided by the EU has 
been on a case-by-case basis, reflecting the varied reality of regionalism in different zones 
and continents. The intention of the present Communication is to launch a debate in. order to· . 
increase the effectiveness of future EU support to realistic regional integration schemes. 
This communication is structured as follows. A first section sets clown the conceptual 
framework for the analysis and clarifies some of the basic concepts. The second section deals 
with EU support so far in favour of regional integration among developing countries. For the 
sake of brevity, the details of this support are given in Appendix A. The third section 
summarises the lessons that can be derived from past experience. These lessons form the basis 
for the recommendations that are the subject of the final section. These recommendations are 
intended to provide elements for a strategy for the EU and its member states to support 
regional integration in the developing world. As a reference, Appendix B contains a list of 
the most important regional integration groupings and the countries that belong to them. 
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I. CONCEPTUAL FRAMEWORK 
Regionalism is on the increase. even if it covers different situations 
One of the key features of the development of Europe in the past decade, next to the 
collapse of the authorita~ian regimes in the Centrally-Planned economies, has been the 
strengthening of integration in Western Europe. This has taken place in terms of both 
widening the geographic boundaries of the European Community and deepening the 
interdependence among its member countries, via the implementation of the Single Market 
programme, the establishment of the European Union and the creation of the European 
Economic Area. · 
Yet, the developments in this region have not been isolated phenomena. Reflecting 
both technological change and increasing interdependence, regional initiatives have begun to 
either emerge or take on renewed dynamism in various parts of the world. Hence, as 
communications improve, East-West and North-South linkages are becoming. as important as 
the relations among industrialised market economies. Population growth and migration, . 
environmental degradation, global warming, security issues and drug trafficking cannot be 
tackled at the national lev~l and all require international cooperation to be properly addressed. --
On the institutional front, the creation of the World Trade Organisation (WTO) and 
the completion of the Uruguay Round have stimulated renewed interest in regionalism. At 
the sam~_!ime, revised and more precise trade rules have facilitated open regionalism. 
Yet the emerging regionalism is markedly.different from that in Europe. Indeed, even 
though it is committed to strengthening its economic ties with its Eastern and Southern 
neighbours, the EU remains, for the time being, the only _example of a well-developed· . 
regional integration scheme among industrialized.countries. This, together with very specific 
historical factors, and the centuries-long common heritage, underpin the uniqueness of the 
European integration experience. 
Unlike European regionalism, the regional initiatives that are emerging or being 
renewed in the rest of the world are taking place either among industrialized and developing 
countries or among developing countries only. The challenges posed to these arrangements 
differ notably as the discussion below will show. 
Delimitation of the subject 
Regional integration can cover a wide range of issues. Regional groupings often 
embody a blend of both political and economic elements. The motivation of many groupings 
is political, even though concrete goals might be mostly economic. So far, the support granted 
by the EU to regional integration efforts in the developing world has been mostly limited to 
the trade and development cooperation fields. However, it has become more and more 
apparent that many issues of a political nature, such as conflict prevention or drug trafficking 
can be tackled more appropriately by deepening regional efforts. Moreover, the Maastricht 
Treaty has granted the EU new competences in the political sphere: this trend could well 
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increase in the, future. It is therefore unsurprising that more and more developing countries 
are requesting the EU to provide support in the political field of regional integration. An 
example can be found in the Berlin Declaration of September I 994, where SADC countries 
and the EU agreed to collaborate in several areas, including the improvement of regional 
security and the reduction of international crime and drug trafficking. 
The importance of the political field of regional integration cannot be disregarded. 
However, it is a new area of action where the EU has not yet acquired a great deal of 
experience. In order not to reduce the operational character of the present communication and 
its ensuing debate, the coverage is limited to analysis and recommendations on regional 
economic integration issues. 
Even though there is no precise definition of regional cooperation and regional 
integration, there is a broad agreement on what they mean in practice. Regional cooperation 
is a general concept that refers to all efforts on the part of (usually) neighbouring countries 
to address issues of common interest. These efforts or initiatives can be divided into two 
broad groups: those whose objective is the elimination of policy-induced barriers to i~tra­
group movement of goods, services and factors of production (usually referred toas "regional 
integration"), and those aimed at reducing other barriers to the intra-group flows (such as the 
facilitation of transport and communication infrastructures), as welJ as any other -activities 
leading to furthering the interdependence of the economies and to. the better management of -­
common resources (usually referred to as "regional cooperation"). 
The communication focuses on the first sub-group of activities. However, it should be 
clear that this does not mean that only trade aspects are covered. Regional integration efforts 
include ·afl activities that contribute to the establishment of a single market in goods and 
services. For example the coordination of macroeconomic or sectoral policies very much 
influence the formation of a single market and are thus part of regional integration as defined 
above. Establishing a single market clearly has also legal implications for example in the· . 
domain of company law and the agreement on standards. 
Regionalism among industrialized and developing countries 
The mast notable initiatives among these countries are NAFTA, ASEAN and APEC. 
North America has seen the establishment of NAFTA as a free-trade area. Furthermore, with 
the encouragement of both the US and Japan, these two countries, together with some 
advanced developing countries in Pacific Asia, have established APEC. This loose, but 
progressively strengthening organization of many of the countries in the Pacific area including 
some Latin American countries, foresees the elimination of trade and investment barriers 
among its members within the first two decades of the next century. 
In South-East Asia, ASEAN, which encompasses a newly industrialized country such 
as Singapore, together with less advanced countries such as Indonesia and the Philippines, has 
accelerated its efforts, particularly since 1992, to develop further its intra-regional trade via 
the establishment of an ASEAN Free-Trade Area (AFTA)~ further, new members are expected 
to join this grouping in the coming years. 
The disparity among the members of these groupings creates particular challenges that, 
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to same extent, also explain their unwillingness to go beyond a free-trade area. A first 
challcngc dcals with what in Europcan int.cgration terms is known as "cohcsion", i.c., hoth 
the willingness and the . ability to use non-market instruments to cnsure an cquitable 
distribution of the fruits of integration. As the disparity among members increases, the costs 
of cohesion goes up as well. Therefore, initiatives of this nature are less likely than those 
among ·similar partners to evolve much beyond trade-policy measures. A second challenge 
results. from the perceived risks for the more advanced countries· within the gi-ouping of 
environmental and social ?Umping from the less advanced ones. 
While both of these challenges limit the degree of integration, the relatively-high 
institutional sophistication of even the less advanced members of these groupings plays in 
favor of integration success. In other words, the institutional capabilities associated with 
middle and upper income countries ensure a certain degree of implementation and success in 
their integration efforts, once a commitment in that di~ection has been made. 
Regionalism among developing countries 
In parallel to the increased emphasis on regional economic integration in industrialised 
countries, or among the latter and some developing countries, there has recently been a 
revival of regional initiatives among other developing countries and a strengthening of trade -­
within their regional groupings. Over the last two and a half decades world exports have 
increased by a multiple of about 12, while trade within regional groupings of developing 
countries has risen by a multiple of nearly 17. This growth is remarkable, as it is only since 
the end of the 1980s that these groupings began to overcome the great institutional and trade 
crises they experienced throughout the l 980s. 
The move towards the spreading and strengthening of regional initiatives has been the 
strongest in Latin America. New arrangements, such as Mercosur, have advanced very . 
rapidly in the reciprocal lowering of trade barriers. At the same time, oider ones, such as the 
Andean Pact, have finally begun implementing policy steps decided years ago. The results in 
terms of intra-regional trade growth have been remarkable in both cases. Likewise, the free­
trade area already established among the most integration-minded members of the Central 
American Common Market, has begun to bear fruit. In CARICOM, the share of intra­
regional trade in total trade has been around 10% in recent year after a long period of 
stagnation at a much lower level. 
In Africa, over the past few years, there has been a great increase in regionalism, 
which however has not yet led to a significant rise in recorded regional trade. Countries in 
Eastern and Southern Africa and the Indian Ocean have signed a Treaty on the Common 
Market for Eastern and Southern Africa (COMESA). In Southern Africa, SADC has adopted 
a new explicit integration agenda. With South Africa becoming a member, SADC is now the 
regional grouping in Africa with the highest share of intra-regional trade. In West and Central 
Africa the various monetary unions are seeking to evolve into fully fledged economic unions 
(UEMOA and CEMAC, respectively). 
In Asia, SAARC and ECO are showing renewed interest in strengthening their 
integration efforts, the second grouping now including countries that used to be part of the 
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Soviet Union. Other regional initiatives that have begun to take shape in the region of the 
former Soviet Union include those involving the Caspian and Black Sea countries. · 
Lasl, h11l nol lcast, although still in its infancy, regional coopcration and integration 
are seen as a cornerstone in the Middle East peace process as well as in the economic 
development of the Mediterranean Basin and Western Asia. The Gulf Cooperation Council 
and the Union du Maghreb Arabe, also in this area, are examples of regional schemes still 
in their early stages of evolution. 
Even among the group of developing countries, integration schemes face different 
challenges. At the risk of excessive generalization, it can be said that some of these 
groupings, such as those in Sub-Saharan Africa, face particular difficulties. Firstly, some of 
their (potential or actual) member countries are themselves weakly integrated, both in 
economic and in political terms, and institutionally weak. Secondly, same of their members' 
public finances rely particularly on customs' duties: the liberalization involved in the process 
of integration can thus create problems for pub lie sector finance. Thirdly, weaknesses in the 
financial sector, including the non-convertibility of several currencies, make exporting to the 
industrialized countries (from whom hard currency can be obtained) more attractive than 
exporting to regional partners. 
International support for regional initiatives among developing countries 
The renewed interest in regional integration amongst developing countries is being 
actively supported by several development cooperation agencies. This is particularly 
noteworthy, as in the past some of these agencies had been reluctant to appreciate the 
development value of regional integration initiatives. Indeed, their past support for national 
structural adjustment programmes had often placed ari insufficient emphasis on the regional 
and subregional obligations of these countries. Moreover, structural adjustment programmes· 
have generally failed to take into account the regional dimension of the reforms. 
By emphasising that regionalism is not an alternative to integration in the world 
economy, the European Commission has been influential in making both the IMF and the 
World Bank more sympathetic to regional initiatives. Indeed, the Commission's support for 
the new regionalism is based on the view that outward looking or open regional integration 
is a complement and a facilitator of multilateral trade liberalization. The contribution of the 
EU has often been recognised by numerous regional groupings and international organisations, 
as well as by fora of donors and beneficiaries, notably the Global Coalition for Africa (GCA). 
Likewise, the OECD has been following with interest the move towards regionalization 
in the developing world. In the first meeting ever held by its Development Assistance 
Committee on this issue, in 1992, its members encouraged the donar community to be more 
supportive of these efforts. Similarly, UNCT AD, the international institution that has been 
most outspoken in its support for these initiatives, has begun to push for the establishment 
of some form of a dialogue forum where donors and regional institutions can analyze and 
encourage the support of regional integration initiatives among the developing countries. 
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Regional integration and multilateral tradc liheralisation 
Until recently, the history of reg!onal integration among developing countries has been 
dominated almost consistently by a great gap between the rhetoric of expressed. intentions and 
the hard fäets of the unwillingness or inability to carry out these intentions. The strength of 
current efforts and a number of their features seem to suggest that, in some promising 
instances, past difficulties are being overcome~ in contrast, other attempts remain nalfbearted. 
Successful regionalism owes much to the context of global liberalization of trade and 
multilateralization of concessions. Some liberalization initiatives have been unilateral, even 
if undertaken on the advice (and even pressure or conditionality) of the Bretton Woods 
institutions. Others have taken place in the context of GATT negotiations. Unsurprisingly, 
this new approach to regional efforts has been referred to as "open regionalism". Another 
feature of successful schemes has been the built-in automaticity and clearly-set deadlines for 
the dismantling of barriers. 
These features tend to reduce possible shortcomings in terms of trade diversion and 
other inefficiencies, as well as to short-circuit efforts at slowing down the liberalization 
process. At the same time, they can facilitate the compatibility of regional integration with 
multilateralism as long as they comply with the minimum requirements set forth by GA TT's 
Art. XXIV. 
As recognised already in the recent Commission Communication "Free Trade Areas: 
An Appraisal", the Marrakesh Act which concluded the Uruguay Round confirmed the 
compatibility of regional integration and multilateralism while strengthening the conditions 
whereby a regional grouping can claim to have acted in accordance with multilateralism when 
establishing itself or expanding geographically. The Act reaffirmed that regional integration 
initiatives must cover substantially all trade. Furthermore, it has established that the 
dismantling of mutual trade barriers should only exceed ten years in exceptional 
circumstances. In addition, the resulting arrangement, once fully implemented, should result . 
in reciprocal and symmetrical trade liberalisation. Within the framework of the World Trade 
Organisation (WTO) regional integration initiatives must be notified for scrutiny without 
delay, and periodic reports have to be given by the parties involved on the functioning of the 
agreement. Differences between WTO members on regional integration can be referred to 
WTO dispute settlement. 
Il. EUROPEAN COMMUNITY SUPPORT TO INTEGRATION EFFORTS 
THROUGHOUT THE DEVELOPING WORLD 
The European Union is a "natural" supporter of regional initiatives. Furthermore, its 
success as a regional grouping has, in tum, fuelled demands by developing countries for 
political and financial support for these regional initiatives. Thus i\ is not surprising that the 
support for regional integration and regional cooperation appear frequently in EEC and EU 
documents on development policy. 
This support can be traced back at least to 1969, when the Second Yaounde 
Convention established that the regional organizations of the Convention's signatories could 
be beneficiaries of Community aid, that special preferences could be granted to African 
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regional cntcrpriscs hidding for EC-financcd contracts, and forcsaw the possibility of 
cxtcnding prcfcrcntial duty-ratcs on imports from regional groupings of Convention 
signatories. Five years later, the Development Council meeting of April 1974 adopted a 
"Resolution on regional integration among developing countries"1 in which the Community 
expressed its willingness to respond favourably to development aid requests·from countries 
th.at were undertaking regional integration and cooperation initiatives. 
More recently, th~ Lisbon European Summit of 1992 gave a new emphasis to 
regionalism. At this summit, the Heads of State and Govemment confirmed, the importance 
of pursuing policies in support of integration efforts in Latin America, selected the support 
for moves towards regional integration as one of the five priorities for the Union in the 
Maghreb, and declared their willingness to contribute to regional cooperation and integration 
in Central and Eastern Europe. Several Summits since then have referred to regional 
integration in the context of EU externa! relations. Thus, the last European Summit of 
December 1994 in Essen spoke of the need to support Mercosur's integration efforts and 
endorsed the Commission's proposal to establish a Mediterranean-wide free-trade area. 
So, regional cooperation and integration support has been a cornerstone of EU 
development policy, particularly in those countries and areas that have shown a special 
interest in receiving part of their assistance in such form. 
The dialogue from region-to-region (Rio Group-EU, San Jose, ASEAN-EU, SADC­
EU) has also contributed in a major way to enhancing the political status and the economic 
bargaining power of EU regional partners, thereby strengthening their commitment to deepen 
and to fl:~her institutionalize their own integration arrangements (Mercosur, ASEAN, SADC). 
Article 130u of the Maastricht Treaty specifies that policy in the sphere of 
development cooperation shall foster "the smooth and gradual integration of the developing 
countries into the world economy". One way this can be achieved is by a process of regional . 
integration which can pave the way for multilateral integration. By competing in regional 
markets, developing countries can gradually and smoothly increase their competitiveness so 
as to become integrated into the world economy in a sustainable way. 
Currently, all major strate.gy documents and undertakings ofthe European Commission 
addressing the problems of developing countries, and the EU's relations with them, place a 
high priority on the support of regional initiatives. This was true for the 4th Lome 
Convention, whose present mid-term review has confirmed the importance of regional 
integration to address the development problems of the ACP countries. It was true of the 
1992 Guidelines for Cooperation with Latin America and Asia. Similar considerations 
underlie the Mediterranean Basin and the Asia strategy papers issued by the European 
Commission in the second semester of 1994. 
The above reflections provide a comprehensive overview of the strong commitment 
1 "The Community will respond favourably to requests for assistance coming from developing countries or 
groups of developing countries that are in the process of carrying out the creation or consolidation of economic 
cooperation or regional integration, in cases where it is anticipated that it can make an efficient contribution." 
-8 -
that the EU has made to support regional initiatives among developing countries. Whatever 
the instruments chosen (trade policy, financial and technical cooperation, political dialogue), 
the main purpose of this support until now has been to facilitate the development process of 
th~se countries. Yet as some of the more recent regional initiatives involving the EU have 
shown, the latter's role has changed with the Union becoming an active · partner in the 
integration process rather than remaining a supportive and interested, but essentially non­
participating outsider. This is the case regarding the new regional initiatives concerning the 
EU and Mercosur, as well_ as the new strategy for the Mediterranean. 
This development has two important implications which distinguish these recent efforts 
from earlier EU support for regional initiatives among developing countries. Firstly, as these 
initiatives are based on the idea of partnership, they respond to interests of particular 
importance to the EU as well as to the grouping of developong countries. Secondly, they 
involve a negotiation process anda change of policies, not only on the part of the developing 
countries, but on that of the EU as well. While it is perhaps too early in this new process to 
derive useful lessons or recommendations for the future, it is nonetheless important to keep 
in mind that the challenges posed by those initiatives differ from those that arise in the e~rlier 
approach. Moreover, it is not anticipated that one approach should replace the other, rather 
the specific circumstances of the developing countries concemed as well as the interest of the 
EU should determine the line to take. 
The efforts of the EU to promote and support regional integration among developing 
countries should not at all be interpreted as an attempt to "export" the European integration 
model. Clearly, there are different approaches towards integration and economic development. 
It should be recognised that the European model, shaped by the continent's history, is not 
easily transferable nor necessarily appropriate for other regions. On the other hand, to the 
extent that the European model of integration has become an unavoidable "reference medel" 
for virtually all regional initiatives, the EU should share with other interested parties its 
experience on: improving the functioning of regional instituti_ons, absorbing_ the adjustment' . 
costs originated by lowering barriers, and sharing the benefits from integration. 
The details of EU support for the promotion of regional integration among developing 
countries are given in Appendix A. 
ITI. LESSONS LEARNT TO DA TE 
There are a number of lessons that can be drawn from the experience of regional 
integration in various parts of the world. Probably the most important lessons can be derived 
from the European experience, not only on account of its relatively-long history but also 
because, to a large extent, it can be considered as the only successful example of regional 
integration so far. However, an examination of the European experience should not be limited 
to the highly advanced character of the European Union following the Maastricht Treaty. It 
is the evolution over time of European integration and the way in which various obstacles 
were surmounted in the process that are most relevant, rather than its specific institutional set­
up. In addition to the European experience, there are also important insights to be gained from 
the relative success of some regional integration initiatives and the failure so far of many 
others in various parts of the developing world. 
-9 -
The lessons learnt can be subdivided into those related to the preconditions and 
success factors, the design and the implementation of regional integration initiatives. 
1. Preconditions and success factors for regional integration 
Regiqnal integrati~n is not the only strategy for developing countries to follow: to 
make a success of regionalism, countries must be both able and willing to strive for the 
benefits of integration and accept the costs that such a path implies. As a result, the chances 
of success vary widely and have to be analyzed on a case-by-case basis. Thus, while 
regionalism might be working for some countries, others might prefer or might need to chose 
other arrangements or diff erent routes for· insertion in the world economy. 
To start with, geographical constraints might pJay a key role in limiting integration 
. options. Physical barriers such as the Andean Cordillera or the Himalayas are enormous 
obstacles to trade: the costs of overcoming them might induce countries to look else~here 
rather than for neighbouring partners. 
Furthermore, two sets of preconditions as well as factors affecting the success can be 
distinguished: 
a. Preconditions as regards the actual and potential relationship among partners 
Existence of genuine common interests. Such common interests can arise in very 
diverse areas: a common horder, a common river basin or a shared natural reso1,1rce. In many 
cases the common interest is a function of proximity so that regional integration often starts 
with neighbouring countries. A common interest can also take the form of reacting to a 
common threat as integration makes it possible to pool reso~rces in order to be better able· . 
to cope with a threat, be it economical or political. The protection of the Amazonian Basin, 
which has given rise to the Amazonian ·Pact, exemplifies the idea of a common interest 
resulting from a shared natural resource. The same can be said of the regional use of water 
as a building block for peace and cooperation in the Middle East. Similarly, the struggle 
against desertification may constitute a stimulus for integration among several African 
countries in the Sahelian zone. As the threat of an extension of Soviet hegemony constituted 
an important encouragement for economic integration in Western Europe, the SADC was 
formed to better cope with the destabilisation of the apartheid regime. Both the GCC and 
ASEAN also rose with the aim of strengthening cohesion because of a security threat. 
Compatible historie, cultural and political patterns. Common interests or even physical 
proximity are nota guarantee for integration, or for it to be the best option for every country. 
As relations between neighbours such as the countries of South America, or lndia and 
Pakistan, or Israelis and Palestinians, or as Iran and Iraq show, both culture and history can 
work as incentives or as disincentives for regional integration. ECO's relaunching on the 
basis of Islamic solidarity and Yugoslavia's breakdown are alternative examples on the role 
that a cultural factor such as religion can play, as either a binder or a diluter of regional 
initiatives. 
-lO -
b. Preconditions as regards the internat political and economic situation in partner countries. 
Political commitment: Integration calls for a strong political will to that effect. In · 
addition, this political will should be sustained in order to be credible for economic actors and 
trigger self-fulfilling expectations among society at large. Political commitment also implies 
the willingness to share certain aspects of sovereignty. 
Peace and security: Progress on regional integration a~d peace, security and stability 
within the members of the grouping are closely interlinked. Lacking both the resources and 
the incentives to implement the necessary policy reforms, countries that suffer from civil strife 
or conflict will not be able to participate effectively in integration initiatives. By the same 
logic, political and economic migration will transfer some of their problems to their 
neighbours. 
c. Factors that facilitate the success of regional integration. 
Rule of law, democracy and good governance are necessary fora meaningful poli_tical 
dialogue among partners that will ensure the irreversibility of the process. They are also 
necessary for giving confidence about the predictability of policies and of the economic 
environment. Rule of law and good governance are essential for the proper functioning of 
basic economic institutions, while democratic legitimacy provides the necessary political -­
underpinning. Without confidence in government there will be no long-term investment, but 
rather there will be a tendency towards capital flight and plunder. 
Macroeconomic stability: Integration should be accompanied by compatible economic 
policy ffämeworks. These include reasonably stable exchange and inflation rates, and adequate 
management of public finances and of the balance of payments. 
It has often been observed that there are important fee~back effects, once integration . 
is successful, to help "lock-in" the above preconditions. In other words, once integration is 
working it becomes easier for countries to maintain security and macroeconomic.stability. In 
the European case integration could only start because peace and security, as well as 
democracy, were reasonably assured. However, at the same time, European integration further 
consolidated this peace and security as it became inconceivable that there would again be a 
serious conflict among the EU member states. 
The above preconditions and success factors appear not to be satisfied in many 
developing countries. Therefore, it is not surprising that the results of integration efforts have, 
so far, been disappointing. 
2. Design of regional integration 
Two basic alternative approaches, intergovernmentalism or supranationalism, may 
secure an institutional framework for regional integration. Intergovernmentalism means that 
governments continue to exert their full sovereignty: institutions are only created to act as a 
Secretariat, preparing and implementing integration policies. Supranationalism means that 
governments decide to share jointly, through an institution, some specific aspects of 
sovereignty. Under supranationalism, the legal provisions for integration take precedence over 
-11 -
national Iaws, and these provisions are enforceable through the courts if necessary. In this 
case the budget to carry out integration policies is determined, implemented and cöntrolled 
by common institutions. Under interg~vernmentalism, states agree on certa-in matters that 
become part of their national legislation, but there is no body of common law. 
European integration is a blend of supranationalism and intergovernmentalism. 
Virtually all other integration initiatives, including those among developing cotintries, are 
alm ost fully intergovernmental, even if there area few exceptions in the monetary field ( e.g., 
the cases of the CF A zone. and the CMA). 
The lesson to be learnt in relation to the design of regional integration is not that 
organisations should be supranational or intergovernmental, but that whichever approach is 
taken the institutions should have a realistic mandate. They should also have availab)e 
adequate resources to fulfil this mandate. It helps if own-resources are · generated 
automatically, via, for instance, the proceeds of a common external tariff, rather than paid out 
of national budgets. It seems likely that mest of the integration initiatives among developing 
countries will remain by and large intergovemmental. Still, the complexity of integration calls 
for institutions that are capable of formulating and implementing regional policies. Human 
and financial resources should be in line with the objectives. Finally, there should be no 
conflict or overlapping between the mandates of diff erent institutions, as is presently the case 
for example in Sub-Saharan Africa, because this leads to inefficiency and waste of resources. 
Other lessons learnt from experience refer to the principles of subsidiarity and variable 
geometry. The subsidiarity principle implies that the responsibility for dealing with an issue 
should be kept as close to the population concemed as possible. The logic of this principle 
is very strong, as it is difficult for civil society to accept that those decisions that can be mest 
effectively be taken at a low level should be referred to an intergovemmental or supranational 
body. This principle may also offer some guidance for determining a realistic and appropriate 
mandate for different regional organisations. 
Furthermore, the framework for regional integration should allow enough flexibility 
to permit progress at different speeds. Ifall member states of a regional grouping must move 
at the same speed, progress will be determined by the speed of the slowest moving member 
state. In contrast, the principle of variable geometry implies that, within a grouping, some 
sub-groups of countries may move faster than others towards the integration objectives. 
Hence, variable geometry makes it possible for a grouping with a large number of member 
states to contain one or more sub-groups that have a more ambitious programme, while all 
share the same core programme. Variable geometry is not compatible with overlapping 
groupings, because in that case there will be inconsistencies in the policies to be implemented. 
3. Implementation of regional integration 
One of the mast important lessons from the limited success of past integration efforts 
among developing countries is that there should be sufficient openness towards third 
countries. While regional integration introduces, by definition, a preferential treatment for 
partner countries, regional markets should remain open. A balance should be struck between 
openness and regional preference. Past experience demonstrates that success does not result 
from very high regional protection levets that encourage expensive trade diversion. 
-12 -
Furthermore, integration should not only or mainly be an official affair. The private 
sector and civil society should participate fully in the process. If integration does not retlect 
the aspirations of the private sector and civil society, it has little chance of success. 
Finally, an aspect of implementation to which much attention has been devoted 
cancerns the distribution of costs and benefits of integration over the participating countries. 
As with economic liberalisation in general, there is a tendency for costs to be concentrated 
and short-term, while ben~fits are likely to be more dispersed and long-term. In the European 
case, the importance of regional and social policies designed to facilitate adjustment and 
reduce transition costs has increased gradually. These policies amount toa redistribution from 
the wealthier parts and groups of the Union, that normally benefit from the large European 
single market, to less prosperous parts and groups that need to adapt so as to benefit from the 
integration opportunities. Some of the integration groupings of developing countries have 
devised a redistribution policy (e.g. the CEAO in West Africa). In most cases, these 
redistribution policies have not been successful. Altematively, transition could be facilitated 
by allowing longer transition periods for countries facing a high adjustment cost. Extemal 
support could also play an important role. 
IV. RECOMMENDATIONS ON EXTERNAL SUPPORT FOR REGIONAL 
INTEGRATION 
In spite of the k.nown benefits of regionalism and despite sizeable externa! support, 
many of the earlier regional integration initiatives among developing countries did not fulfil 
their expectations. The lessons outlined above help to explain this situation. The question to 
be raiset· then is how EU external support for regional integration can be made more 
effective. An important aspect is to see what external support can do about the pre-conditions 
described above, hearing in mind that the promotion of peace and security, good governance 
and macro-economic stability are outside the scope of the present Communication. · 
The recommendations below address the design and implementation of integration 
arrangements. Recent initiatives to promote more effective regional integration among 
developing countries, in which the EU was involved and included in the overview presented 
in appendix A, provide essential elements for these recommendations. 
These recommendations take inta account the existence of three broad categories of 
developing countries' integration groupings. Firstly, neighbouring regions whose own regional 
integration is closely connected to the European Union's integration, e.g. the Mediterranean 
region. Secondly, the middle-income developing countries, mainly in Latin America and 
Asia, that are relatively advanced along the integration path. Thirdly, the other developing 
countries, especially in Africa, where regional integration, while badly needed, faces difficult 
challenges for economic, institutional and political reasons. 
I. EC trade policy as a way of promoting regional integ~ation with and among 
developing countries 
As regional integration consists mainly of lowering or eliminating tariff and non-tariff 
-13 -
barriers, it is of crucial importance for the region to receive proper trade treatment from the 
EC, which is the main world trading partner. Two dimensions of trade policy can be 
particularly relevant in this respect: 
a) Establishment of free-trade agreements with developing countries of a certain region 
There are important arguments for moving gradually towards less· unilateral 
preferences and more reciprocity in the trade regimes between industrialised and developing 
countries. A reciprocal arrangement increases transparancy and facilitates regional integration 
and integration of developing countries into the world economy. A reciprocal arrangement 
also improves the credibility of economic policy reform, which is a necessary condition for 
long-term investments to take place. 
The prospect of a free-trade area such as the one already proposed for the 
Mediterranean Basin, starting with bilateral agreements with Morocco, Tunisia and others, 
could act as a major incentive for the partner countries tö lower intra-regional trade barriers 
in order to get into a region-to-region liberalization deal with the EC. This will apply, a~ the 
Peace Process evolves, to the Middle East and is being contemplated for the EU-Mercosur. 
Evidently, the offer of a free trade area arrangement must generally be supplemented by a 
series of actions aiming at legislative convergence, harmonisation of standards ~nd easing the 
restructuring of the partner economies so as to avoid major distributional imbalances. 1'his -­
is why the policy package proposed for the Mediterranean region and for Mercosur includes 
the promotion of European investment in the region, technological cooperation, the · 
encouragement of small and medium enterprises, as well as assistance for the alleviation of 
the social Jmpact of liberalization policies and for the improvement of regional infrastructures. 
b) Grartting of cumulation in the rules of origin and other concessions within the Generalized 
Svstem of Preferences regime 
Neither the Lome Convention nor the Generalised System of Preferences imply 
conditionality on the beneficiary countries in terms of regional integration. However, the GSP 
provides for the cumulation of rules of origin for regional groupings that request this 
privilege. In the case of Lome, the cumulation of rules of origin applies automatically to the 
full ACP group. This cumulation provides an indirect, yet significant support for intra-regional 
trade and investment liberalization. Efforts to extend and improve its use should continue. 
Moreover, some special GSP regimes such as the drug scheme granted to the Andean and 
Central American countries are also proving supportive of these regions' efforts towards 
integration. 
2. Oevelopment cooperation policy 
Externa! support for regional integration under the heading of cooperation policy could 
be subdivided into the following broad categories that will be described below: a) support for 
capacity building and institutional strengthening; b) aid for the private sector to strengthen 
competitiveness~ and c) assistance for govemments to facilitate policy reform. 
a) Capacitv Building and institutional strengthening 
-14 -
The design and implementation of regional integration proposals are not 
straightforwan.J. The availability of thc ncccssary skills cannot be taken for grantcd, but must 
be developed. The EC is in a unique position to be able to offer assistance and advice based 
on its own experience. This is clearly demonstrated in the demands for technical support 
addressed to the EC by Mercosur, ASEAN, UEMOA, SADC and the Andean·Pact countries, 
among others. 
Attention should continue to be devoted to technical assistance and to trainin~ with 
a view to increasing the local capacity to formulate and implement regional integration 
policies. This should be directed at both national and regional administrations. Exchange of 
staff between European institutions and those in developing countries to deal with specific 
technical subjects could be beneficial in strengthening integration initiatives. 
The eventual success of regional integration initiatives will depend on how well the 
measures are internalised. This is particularly relevant in Africa where it is crucial to help 
build up the local capacity to undertake and implement the reform agenda. In UEMOA, 
assistance to set up a multilateral surveillance scheme offers an example of how this might 
be approached. Similarly, at a more basic level, the assistance provided to national Technical 
Working Groups in the countries that participate in the Cross-Border Initiative offers a useful 
model of how to build up local capacity and a "constituency" in favour of the reförms. 
Another aspect of capacity building is related to research. Endogenous research on 
regional integration, which the EC has supported for years particularly in Latin America { e.g., 
SELA -Sistema Econ6mico Latinoamericano-, ALADI) 'should be promoted in other regions 
as well. T_his should preferably be done in a research programme frarnework, rather than in 
a fragmented ad hoc way. Programmes should also be set up to raise awareness and the 
involvement of the private sector and civil society (including trade unions) in the subject of 
regional integration. Easily accessible databases on regional regulations and procedures 
should be developed for the benefit of private sector operators. 
b) Direct support to the private sector to help finns exploit the opportunities resulting from 
regional integration 
As with any liberalisation process, regional integration will inevitably lead to 
adjustments at the level of the private sector. Some firms will be able to expand and benefit 
from the new opportunities, and new firms will emerge. At the same time, other firms will 
suffer from the increased competition and may have to close down. The lobbying of those 
who are likely to suffer might diminish the political will to sustain integration. It is therefore 
crucial to provide same form of adjustment assistance to the private sector to support the 
integration effort. Given budgetary pressures, external support becomes important as most 
governments in developing countries will not be in a position to offer much help. This is 
especially true as regards both the poorer countries of Sub-Saharan Africa and those 
Mediterranean countries facing the formidable challenge of creating an FT A with the 
European Community. 
Support in this area can take a variety of forms including e.g. financing meetings of 
entrepreneurs to encourage joint ventures, setting-up advisory and information centres on 
market opportunities, providing training for acquiring new skills, and facilitating seed-and 
-15 -
risk-capital activities. The EC has already developed programmes along these lines for Latin 
america and the Mediterranean (AL-INVEST, MED-INVEST and ECIP). . 
In the Indian Ocean region, as a complement to the policy reforms already underway 
as part of a more general process of regional integration, a pilot project is presently being set 
up to assist the private sector. The project offers a combination of small loans and grants to 
finance services which firms may need to reorganize their activities. A similar pilot operation 
is being examined for Southem Africa. Such projects should become an essential comp~ment 
of an EC strategy to support regional integration efforts in those countries with weak private 
sectors. 
The absence of compensation mechanisms makes some countries or sectors face a 
disproportionately high adjustment cost. Donor support could supplement intra-regional 
solidarity and much improve the cohesion of an integration grouping. 
Another important way to assist the private sector with the integration process is to 
improve the availability and efficiency of financial services. In most cases, Northern exports 
to the South are generally appropriately covered in terms of credit guarantees. However, it 
is usually difficult and very costly to secure finance for exports from the South to the North 
and even more for South-South intra-regional trade and investment. Thus, in many countries, 
the actual implementation of increased cross-border economic activity by the private sector -­
is likely to be impeded by weak financial and payments systems. Especially in view of the 
need for open integration efforts, rather than excessive regional preferences, it is important 
to improve the financial instruments available to exporters from the. South. Otherwise, 
southem firms will continue to face a serious competitive disadvantage. Some work under­
taken in-the context of the CBI could be useful in developing projects for other integration 
efforts. 
c) Balance of payments/budget support to help meet net transitional costs 
Intra-regional economic liberalisation implies policy reform that will lead to costs to 
the public s~ctor and the balance of payments of the integrating countries. One of the main 
impacts on the public sector budget is the reduction in tariff revenue. The costs occur mainly 
in the short run, and they are likely be offset by gains resulting from the expected supply 
response. However, the tariff revenue loss might still have to be compensated by increased 
indirect taxes of another type (for example. the introduction of a value added tax). 
Nevertheless, these transitional costs contribute to explaining why the political will has been 
lacking in many developing countries to implement the decisions agreed in past attempts at 
regional integration. 
Externa\ assistance can play a crucial role in getting the process moving. This is 
especially the case for the smaller and poorer developing countries, largely concentrated in 
the ACP group, for which it will be difficult to implement regional integration without 
transitional externa! support. The Cross-Border Initiative (in Eastern/Southern Africa and the 
Indian Ocean) has developed an approach to using balance of payments/budget support for 
the countries undertaking regional liberalisation as a complement to their national adjustment. 
This approach could be relevant for other parts of the developing world. 
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3. Donar coordination 
Regional coopcration in general; and regional integration in particular, are areas wherc 
donor,s often act in an uncoordinated and sometimes conflicting way. In some cases <lonors 
support a particular organisation without looking at the wider context. This situation 
diminishes the need for the organisations themselves to harmonise and rationalise their 
programmes. Rather, they are encouraged to formulate duplicating requests in as many 
domains as possible in order to maximise their own external funding. Some critics even 
attribute the proliferation of regional institutions in the developing countries (particularly in 
Africa) to the role of donors in creating and keeping them afloat. 
There should be more effective donar coordination on the promotion of regional 
integration. In view of the Maastricht treaty, the Commission should take the initiative to 
improve coordination already at the EU level. The Commission should also continue 
coordination efforts in other fora such as the Special Programme of Assistance for Africa 
(SPA) of the World Bank, the Global Coalition for Africa (GCA), the DAC and UNCTAD. 
Under a mandate from the Global Coalition for Africa the Commission initiated efforts 
to formulate recommendations to rationalise and strengthen integration institutions in Africa. 
It may be useful to carry out a similar exercise for other parts of the developing world. 
As regards donor coordination, the EU has been instrumental in developing a navel 
approach towards Africa. EU member states with a keen interest in the subject and the multi­
lateral agencies have formed steering committees together with the Commission ( e.g. in 
UEMOA)_, This is a way to achieve the coordination of policies envisaged under the 
Maastricht Treaty. Indeed, the EU is now committed to ensuring the coordination of 
development cooperation policy of the Member States and the Union, as well as the overall 
coherence of EU policies with the objectives of development cooperation. This applies to all. 
aspects of development cooperation policy including initiatives. regarding support for· regional 
integration and cooperation. 
It is also worthwhile to develop a mechanism to inform the EC member states 
collectively through an annual report prepared by the Commission. Such a report would have 
the added benefit of keeping the public informed of developments, and of the results of EC 
support to integration efforts in developing countries. 
Appendix A -17 -
OVERVIEW OF EC SUPPORT FOR REGIONAL INTEGRATION 
AMONG DEVELOPING·COUNTRIES 
The European Union has supported regional initiatives and projects of-all kinds, 
without making distinctions between support for regional cooperation or for regional 
integration. However, in line with the subject of the Communication, this appendix deals with 
EU support for regional integration, rather than for regional cooperation in the wider sense. 
The emphasis is on recent initiatives that are relevant for the formulation of recommendations 
on how to increase the effectiveness of externa! support for regional integration. 
a. Latin America 
Latin America is the developing region which has traditionally received the largest 
portion of EC development assistance in the form of technical and financial aid for regional 
initiatives. There are two main reasons for this: firstly, in Latin America, the idea of regional 
integration has strong cultural and political connotations; secondly, it is also a region which 
has shown strong interest in receiving support for regional initiatives as opposed to national 
projects. Support for regional initiatives has mostly focused on three regional groupings: the 
Central American Integration System (SICA), the Andean Pact and Mercosur. -
As regards the Central American Common Market, the most visible component of 
SICA, the European Community was the key external player in the efforts to revive it, after 
its near-collapse resulting from the effects of war and the debt crisis of the region. Much of 
the support has come in the form of politicaland economic dialogue with the region (the "San 
Jose diafogue"), based on annual ministerial level and more frequent technical-level meetings. 
A cooperation agreement between the EC and the Central American countries has also 
facilitated European cooperation with the region and contributed to reinforce regional efforts .. 
Aside from political support, assistance also came at the beginning of the l 990s in the form . 
af financing for the restart of the payments clearing facility; this financing was made 
conditional on the elimination of intra-regional trade barriers. When the need for this facility 
became unnecessary, the remaining funds where reconverted and used for a program ta 
encourage intra-and extra-regional exports of the weakest members. By channelling the 
management of a number of regional projects through institutions of SICA, and by supporting 
the Central American Parliament, the EC has also contributed to the institutional strengthening 
af the grouping. 
In the area af trade, the EC granted the Central American Common Market in the mid­
l 980s, the possibility of regional cumulation in the rules of origin, thus providing incentives 
for intra-regional production and trade. Similar support for integration comes from the fäet 
that all af the members af SICA receive the same special preferential treatment within the 
EC's GSP scheme. 
Far many years now, the EC has been an instrumental supporter af the Andean Pact. 
Much of the assistance has been in the form of institutional support, mainly of JUNAC (Junta 
del Acuerdo de Cartagena), the executive arm of the grouping: 85% of the funding received 
by this grouping is provided by the EC. This has taken the form of both technical assistance 
and the financing af regional projects managed by this institution. While some af these 
-18 -
projccts havc ernphasizcd regional coopcration in a general sense or have contribtJted to a 
strengthening of the general economic fabric of the region, others explicitly emphasized 
production and trade links within the region. Projects being currently prepared deal with the 
harmonisation of Andean standards and with assistance for the implementation of the Andean 
Common Externa! Tariff. · 
As with the Central American region, the EC maintains a cooperation agreement with 
the Andean Pact, rather -than with each country individually, thus contributing to the 
reinforcement of regional identity and of the regional institutions. The Andean Pact has also 
been granted the possibility of regional cumulation in the rules of origin. In response to 
requests by the region to avoid any adverse effects on their integration efforts, the EC has 
extended to Venezuela (in spite of its relatively high per capita income) the special 
preferential treatment that its other Member countries receive within the GSP scheme. 
Support to Mercosur is the most recent regional intervention of the EC in Latin 
America. Until recently, much of the support for this grouping was political and high-profile, 
by choice of both Mercosur and the European Community. Thus Mercosur roade its official 
entry on the international scene in Brussels, when the Foreign Ministers of its four Member 
countries visited the European Commission and Council in April 1991 and aske~ for EC 
technical assistance to strengthen their emerging regional initiative. The EU has since then 
been a committed supporter of this integration initiative which, against many odds, and in 
record time, has eliminated most barriers to intra-regional trade. 
Although the EU has signed cooperation agreements with each of the Member 
countri~~___,of Mercosur, a separate inter-institutional agreement was signed between the 
Commission and Mercosur at the request of the latter, so as to pave the way for the European 
Union's funding of training and technical assistance in priority areas of regional integration 
and for a consultation mechanism. Currently, the EU supports Mercosur in three main areas: 
the coordination of some important aspects of agricultural policy, customs management and · 
the harmonization of technical norms.· The EU has also provided financial support for the 
strengthening of some of the institutions of Mercosur in the form of technical assistance in 
policy design, of human resources management and for the evaluation of administrative 
support needs. 
The EU is now in the process of further strengthening its relations with Mercosur via 
the establishment of an inter-regional agreement for trade and economic cooperation that 
foresees a deepening of the current political dialogue, an expansion of EU cooperation with 
the region to strategic areas of common interest, a consultation mechanism on trade issues and 
the preparation of reciprocal trade liberalization. Current strategy towards Mercosur, already 
approved by the European Commission and currently under discussion by the Council, 
foresees for the more distant future the possibility of establishing a Free Trade Area between 
the EU and Mercosur.• 
b. Mediterranean Basin (including the Middle East) 
While numerous factors (historical, cultural) make it possible to consider the 
Mediterranean Basin as a cohesive region, it is nevertheless characterised by a low level of 
economic interdependence among its countries. Evidently, there have been some initiatives, 
-19 -
both political and economic, to redress this situation. The North-Western African ~ountrics 
with the Maghreb Arab Union (MAU) as well as the Gulf region with the Gulf Cooperation 
Council (GCC), and more recently a m1mber of non-Arab Muslim statesin Western/Central 
Asia have roade eff orts at establishing regional groupings. 
In a recent Communication, calling for a Euro-Mediterranean Partnership, the 
Commission placed high priority on encouraging regional integration and cooperation 
throughout this area. The Commission envisages this area to be a zone of peace and stability, 
based on economic arrangements comprising a Free Trade Area (FT A) and wide-ranging 
economic cooperation between the EC and its Mediterranean partners. 
The FT A, which should be completed by about 20 I 0, would provide for free 
circulation of manufactured products, progressive liberalisation of trade in agricultural 
products of interest to both parties, liberalisation of the right of establishment for companies, 
provision of trans-horder services, and free movement of capital. There would be largely 
identical rules of origin among the parties, mutual recognition of standards, a high leve) of 
protection of intellectual property rights and provisions concerning rules of competition. 
The first steps.in this process are already under way, with negotiations nearly finished 
with several countries. Negotiations with other countries are to start soon. Once these 
negotiations are completed, the EC hopes tbat similar free trade arrangements will be 
negotiated among the Mediterranean countries themselves, and between them and the 
European countries that are not members of the EU. 
The process towards free trade is intended to be complemented by a substantial 
cooperation effort on the part of the EU in favour of these countries, including assistance for 
the modernisation of the private sector and for the alleviation of the social effects resulting 
from the transition to more open economies, as well as for the improvement of regional. 
infrastructures. 
Regional integration and cooperation occupies a significant place in the EC's 
participation in the Middle East peace process. The EC supports an eventual free trade area 
between Israel, Jordan, Egypt and the Palestinian Territories with a view to taking advantage 
of the complementarities in the region and using them as a vehicle for stability and growth. 
As regards the Gulf Cooperation Council (GCC), the EC always strongly supported 
the process of regional integration. This support reflects the economic importance and 
strategic significance of the Gulf region. A stronger and more integrated GCC would 
contribute to stabilising the Gulf area and providing an institutional framework for an 
economic, energy and security partnership with the EU. The EC support for the GCC's 
regional integration has so far been concretised by the conclusion of a region to region 
cooperation agreement in 1989 and the launching of a number of cooperation activities 
intended to strengthen the GCC's regional integration including technical assistance for the 
development of a GCC customs union. In addition, negotiations are under way on a free-trade 
agreement between both regions. 
The EC's relationship with the Economic Cooperation Organization (ECO), a nearly 
dormant group until very recently, is still in its infancy. However, the EU has an interest in 
-20 -
following closely the evolution of this grouping which might help stabilize this geopo1itically 
volatile region, and has shown a willingness in assisting in the development of its institutions 
and in providing technical assistance for furthering its economic integration. 
c. Asia 
Of all developing areas, Asia is so far, the one which has shown the least interest in 
regional integration. The existing groupings such as SAARC and ASEAN have on the whole 
been loose cooperation arrangements, rather than integration undertakings. In some cases, this 
is due to the relative economic size of some of the countries in this region, not necessitating 
regional integration to be able to exploit economies of scale. With national development 
becoming more successful, especially in the ASEAN region, and the increased need to 
develop their own markets, the incentives for regional integration have recently increased. 
There are now moves towards tighter integration arrangements. In its recent Asia Strategy the 
Commission has emphasized its willingness to support these moves, whenever required. 
As regards the South Asian Association for Regional Cooperation (SAARC), it has 
recently expressed its intention to establish itself as a preferential trade area. Hence,_although 
some major operational questions still need to be decided, its member states signed an 
agreement to that effect in 1993 under the name of SAPT A (South Asia Preferential Trade 
Arrangement). lts first förmal contacts with the EU date only from 1994. The fruit of these 
contacts has been the ~ expressed intention of the European Commission to assist in the 
strengthening of SAARC institutions via technical assistance and training of officials. 
The Association of South East Asian Nations (ASEAN) was founded in 1967 to encourage 
economic cooperation between its member countries, as well as to promote peace and stability 
in the region. Aside from strengthening their political, social, cultural and overall economic. 
ties, ASEAN established itself as a preferential trade area. An agreement to deepen this trade · 
arrangement into an ASEAN Free Trade Area {AFT A) was reached in l, 992. While the 
original target date was the year 2008, the conclusion of the Uruguay round has brought it 
forward to the year 2003. 
The förmal basis for ASEAN's relations with the EC is provided by a cooperation 
agreement, between the EU and the ASEAN countries as a group. The overall political and 
economic relations are dealt with at the foreign ministers level every two years. The EU also 
participates together with the other main "dialogue partners" in the Post-Ministerial 
Conference and in the recently created ASEAN Regional Forum which deals with security 
issues. These periodic meetings together with the operations of the joint sub-committees 
established by the cooperation agreement have served to increase ASEAN's internat 
coordination in same of these areas. Additionally, financial assistance for institutional support· 
is currently granted to ASEAN's Secretariat, reinforcing its structure and establishirtg links 
with the EC and several other leading international organisations. Furthermore, the EC has 
already offered assistance and is currently considering a proposal for a project in support of 
the AFTA integration scheme. Finally, in the trade field, ASEAN countries also enjoy 
regional cumulation in the application of the rules of origin in the context of the GSP. 
-21 -
d Suh-Saharan Africa (SSA) 
Sub-Saharan Africa has a long tradition of regional integration and cooperation. Since 
1960 a large number of regional organisations have been created för this purpose. There is 
also a trend of Pan-Africanism, exemplified by the signing in 1991 of the Abuja Treaty on 
a Pan-African Economic Community. The Pan-African Community can be considered as a 
long-term goal, that first requires progress towards integration at sub-regional level. The EU 
has a long tradition of support for regional initiatives in SSA through the Lome Convention 
provisions for regional cooperation. in terms of cooperation projects, attention has been 
focused on cross-border infrastructure, education and the struggle against endemic cattle 
diseases. 
Despite the attention for regional integration in SSA, so far progress has been limited 
and disappointing. The Global Coalition for Africa (GCA) from its creation in 1991 has re­
iterated the need for effective regional integration as a crucial component of a strategy to 
overcome the constraints facing the African economies. Over the past few years, the 
Commission has collaborated with the GCA on defining ways to increase the effectiveness 
of regional integration in Africa. The brief overview below reflects that coHaboration. 
Regional integration efforts in Eastern and Southern Africa and the Indian Ocean have __ 
been mainly conceived through four organisations: the Pref erential Trade Area for Eastern and 
Southern Africa (PT A), the Southern African Development Community (SADC), the Southern 
African Customs Union (SACU) and the Indian Ocean Commission (IOC). In addition, there 
have been steps towards a revival of the former East African Community (EAC). The PT A 
has rec~_otly been transformed into the Common Market of Eastern and Southern Africa 
(COl\ffiSA) . 
. EC support for integration efforts in this sub-tegion has come in a variety of forms. 
Of the institutions mentioned above, the COMESA has been the first to develop an explicit · 
integration agenda. The EU supported work on items such as trade preferences, non-tariff 
barriers, transport and insurance documentation and regional clearing of payments through 
studies and technical assistance. 
Until 1992, EC support for SADC has focused on sectoral cooperation including 
mainly transport infrastructure. The present orientation of SADC is to develop and implement 
an agenda of market integration. There has not yet been significant EU support for integration 
of SADC, hut it intends to make this an important priority for the future (in line with the 
Berlin Declaration signed in S~ptember 1994 by SADC and th'e EU). Support for integration 
could also be provided to facilitate the restructuring of SACU. 
As regards the IOC, its members have agreed that one of their main priorities in the 
1990s will be the promotion of trade in the context of regional integration. An important, 
project is under preparation (PRIDE) to enable its private sector to reposition itself and 
enhance its competitiveness on regional and international markets. 
Additionally, since 1992, EC support for regional integration in this sub-region has 
been focused on a broad initiative to facilitate regional trade, investment and payments in 
Eastern and Southern Africa and the Indian Ocean under the name of Cross-Border I_nitiative, 
-22 -
CBl. This initiative is gcarcd t.o mcmbe~s of COMESA, SADC and/or IOC. It intends to 
promote regional integration in a novcl and pragmatic way and address the regional dim~nsion 
of adjustment. The initiative is co-sponsored by the African Development Bank, the 
International Monetary Pund and the World Bank. Reflections on its development have 
involved various regional and sub-regional organisations in Africa. · 
The participating countries were asked to set up Technical Working Groups consisting 
of public and private sector representatives. These working groups made an inventory of the 
most important obstacles to cross-border business. They also made recommendations on how 
to remove these obstacles. The emphasis has been 011 identifying the regulatory constraints 
that increase the cost of private sector cross-border business. Examples of such constraints 
are licensing and duties for imports, complex procedures for the. allocation of foreign 
exchange and time-consuming arrangements for approving investments. The country level 
recommendations were synthesised in a common programme of action that was subsequently 
endorsed at a ministerial meeting in August 1993, in Kampala, Uganda. 
Many of the recommendations on removing the obstacles to cross-border pusiness 
dealt with issues that were already on the agenda of the above-mentioned organisations. 
However, practical implementation was lagging behind. CBI therefore suppq_rts · these 
organisations in carrying out their work programme. The emphasis on removing regulatory 
constraints is not meant to forget the importance of diminishing physical obstacles ( e.g. in the 
area of transport and communications infrastructure). Progress should be made in both areas. 
However, removing regulatory constraints can lead to very rapid results at a low budgetary 
cost and should not be postponed. The Commission intends to maintain the priority for 
removing., the physical obstacles to cross-border economic activity through its regional 
cooperati on programmes. 
The CBI co-sponsors, including the EU, have indicated their willingness to support 
the initiative by helping to cover the short-run transitional costs that may arise at country · 
level from this implementation. This will mainly be in the form of balance of payments 
assistance. In addition, work i's under way to set up complementary support projects with the 
regional organisations. Some of these projects are aimed at facilitating the restructuring of 
the private sector in view ofthe wider regional and world markets. Other projects will address 
the facilitation of payments through an export credit guarantee system. Finally, there are also 
projects to strengthen or build the capacity to deal with regional integration issues, particularly 
at regional organisation level. 
The strong awareness in the West African Region of the need for in-depth regional 
integration encouraged the seven member States of the West African Monetar:y Union 
(UMOA) to transform their monetary union into a fully-fledged Economic and Monetary 
Union (UEMOA) in 1990. The main axes are: to work towards the convergence of macro­
economic policies, to establish a macro-economic surveillance mechanism, to harmonise the 
legal and regulatory framework, to create a single market and to adept common sectoral 
policies. External support for the initiative is being provided by the EU as well as by France, 
the Th1F and the W orld Bank. 
The initiative foresees a progressive implementation of this integration scheme, based 
on the existing core of a monetary union. It is open to other countries in the region and is 
-23 -
compatible with the integration efforts pursued by the Economic Community of West African 
States (ECOW AS). 
Beyond the integration created by opening economies to each other, the most 
innovative aspect of these .reforms is the regional multilateral surveillance mechanism, which 
will permit the coordination and harmonisation of economic policy .. The. UEMOA 
Commission, set up at the beginning of 1995, should quickly take decisions relating to the 
implementation of the planned reforms, notably in the field of multilateral surveillance and 
the establishment of a customs union. 
Within the framework of the Regional Indicative Programme of Lome IV, the Central 
African region has decided to focus on the economic integration process by building on an 
existing regional initiative, the Central African Customs and Economic Union (UDEAC). The 
UDEAC was already founded in 1964 and benefited from the start from a single currency (the 
CFA franc). Nevertheless, national policies pursued by its members progressively withdrew 
all substance from the Union, resulting in the fragmentation of the regional market. Negative 
repercussions were felt by firms and were reflected in public finances, employment. and 
investment levels, and the förmal economy in general. In view of this situation, the six heads 
of State of UDEAC approved in 1990 a Regional Programme of Reforms (RPR) ~upported 
jointly by the EC, France, the World Bank and the UvlF. The aim of these reforms was 
notably to restore a Customs Union, with a Common Externa! Tariff together with the 
harmonisation of interna! indirect taxation. Another area of reform, directly supported by the 
EU, has been inter-state transit transport. 
~pllowing the devaluation of the CF A Franc in early 1994, the UDEAC members 
expressed their desire to create a more ambitious framework for economic integration, and 
signed a Treaty to establish the Central African Economic and Monetary Community 
(CEMAC). CEMAC is still at an embryonic stage, but aims at the creation of a fully-fledged. 
economic and monetary union in the region. 
e. The Caribbean 
The Caribbean region is characterised by a large diversity in the history and ethnic 
background of its population. Several regional integration initiatives have taken shape in the 
region. The Organisation of East Caribbean States (OECS) groups the smaller and least 
developed anglophone Caribbean states, which all share a common currency. Almost all of 
the OECS members are also members of the Caribbean Common Market (CARICOM). which 
includes most of the other anglophone Caribbean states. The Association of Caribbean States 
(ACS) was founded recently, in 1994, and groups all the countries of the insular Caribbean · 
and of the Central American and Latin American coastline of the Caribbeari Sea. 
CARIFORUM is a grouping of the Caribbean ACP states, ie CARICOM plus 
Dominican Republic and Haiti. It acts mainly as a coordination body for regional cooperation 
under the Lome Convention. Since 1992, the EU cooperation with the Caribbean Lome states 
includes regional integration as an important component. Operational programmes are focused 
on regional trade and tourism development. 
The potential for regional integration within CAR1COM is constrained by the small 
-24 -
size of the market reflecting a population of around five million. However, thcrc h~ve bcen 
same significant achievements including the strengthening of the Caribbean voice in 
international fora, the joint promotion of exports with EU support and the attraction of 
investment through the Caribbean Development Bank. The EU is currently preparing further 
work on trade development at the wider CARIFORUM level. · 
f. The South Pacific region 
The South Pacific region is highly diverse, and distances are huge in comparison to 
virtually any other region. This probably explains the absence of an integration framework. 
There are however some loose regional groupings that have mainly a cooperation objective. 
The South Pacific Forum (SPF) groups mast of the states in the region and has an important 
role for the implementation of Lome regional cooperation. Another grouping is the 
Melanesian Spearhead Group. The eventual possibility of regional economic integration in the 
South Pacific region will depend greatly on the efforts of Australia and New Zealand. 
. ' -25 -
Appendix B 
LIST OF MAJOR ECONOMIC INTEGRATION GROUPINGS 
INVOLVING DEVELOPING COUNTRIES AND THEIR MEMBERSHIP 
A. AFRICA 
Arab Maghreb Union (UMA) 
Algeria, Libyan Arab Jamahiriya, Mauritania, Morocco, Tunisia 
Economic Community of West African states (ECOWAS) 
Benin, Burkina Faso, Cape Verde, Cöte d'Ivoire, Gambia, Ghana, Guinea, Guinea-Bissau, 
Liberia, Mali, Mauritania, Niger, Nigeria, Senegal, Sierra Leone, Togo 
West African Economic Community (CEAO) 
Benin, Burkina Faso, Cöte d'Ivoire, Mali, Mauritania, Niger, Senegal 
Preferential Trade Area for Eastern and Southern African States (PTA) 
Angola, Burundi, Comoros, Djibouti, Eritrea, Ethiopia, Kenya, Lesotho, Madagascar: Malawi, 
,Mauritius, Mozambique, Namibia, Rwanda, Seychelles, Somalia, Sudan, Swaziland, Uganda, -­
Tanzania, Zambia, Zimbabwe 
Southern African Development Community (SADC) 
Angola, !;3otswana, Lesotho, Malawi, Mozambique, Namibia, South Africa, Swaziland, 
Tanzani'a~ Zambia, Zimbabwe 
Southern African Customs Union (SACU) 
. Botswana, Lesotho, Namibia, Swaziland, South Africa 
Indian Ocean Commission (IOC) 
Comoros, Madagascar, Mauritius, Reunion, Seychelles 
B. ASIA AND THE PACIFIC 
Cooperation Council for the Arab States of the Gulf (GCC) 
Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, United Arab Emirates 
Economic Cooperation Organization (ECO) 
Afghanistan, Azerbaijan, Islamic Republic of Iran, Kazakhastan, Kyrgystan, Pakistan, 
Tajikistan, Turkmenistan, Turkey, Uzbekistan 
South Asian Association of Regional Cooperation (SAARC) 
Banghladesh, Bhutan, lndia, Maldives, Nepal, Pakistan, Sri Lanka 
Association of South East Asian Nations (ASEAN) 
Brunei Darussalam, Indonesia, Malaysia, Philippines, Singapore, Thailand 
-26 -
Melanesian Spearhead Group (MSG) 
Papua New Guinea, Solomon Islands, Vanuatu 
C. LATIN AMERICA AND THE CARIBBEAN 
Latin American Integration Association (ALADI) 
Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Mexico, Paraguay, Peru, Uruguay, 
Venezuela 
Central American Integration System (SICA) 
Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, Panama 
Central American Common Market (CACM) 
Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua 
Andean Group 
Bolivia, Colombia, Ecuador, Peru, Venezuela 
Southern Cone Common Market (MERCOSUR) 
Argentina, Brazil, Paraguay, Uruguay 
Caribbean Community (CARICOM) 
Antigua and Barbuda, Bahamas, Barbados, Belize, Dominica, Grenada, Guyana, Jamaica, 
Montser~_c!t, St. Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Trinidad and 
Tobago 
Organization of Eastern Caribbean States (OECS) 
Antigua and Barbuda, Dominica, Grenada, Montserrat, Saint. Kitts and Nevis, Saint Lucia, -
Saint Vincent and the Grenadines 
D. OTHER GROUPINGS 
Asia Pacific Economic Cooperation (APEC) 
Australia, Brunei Darussalam, Canada, China, Hong Kong, Indonesia, Republic of Korea, 
Japan, Malaysia, Mexico, New Zealand, Papua New Guinea, Philippines, Singapore, Taiwan, 
Province of China, Thailand, United States of America 
North American Free Trade Area (NAFTA) 
Canada, Mexico, United States of America 
South Pacific Forum (SPF) 
Australia, Cook Islands, Federated States of Micronesia, Fiji, Kiribati, Marshall Islands, 
Nauru, New Zealand, Niue Island, Papua New Guinea, Western Samoa, Solomon Islands, 
T onga, Tuval u, Vanuatu 

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DOKUMENT 
sv 11 
Katalognummer : CB-C0-95-246-SV-C 
ISBN 92-77-89336-2 
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