Integration groups of developing countries and problem of their development

Date: 2015-10-07; view: 480.

The Asociación Latinoamericana de Integración (Latin American Integration Association; known as ALADI or, occasionally, by the English acronym LAIA) is a Latin American trade integration association based in Montevideo, Uruguay. Its main objective is the establishment of a common market, in pursuit of the economic and social development of the region. Signed on August 12, 1960, the Montevideo Treaty is an international legal framework that establishes and governs the Latin American Integration Association. It sets the following general guidelines regarding trade relations between signatory countries: pluralism, convergence, flexibility, differential treatment and multiplicity.

History.The Latin American Free Trade Association (LAFTA) was created in the 1960 Treaty of Montevideo by Argentina, Brazil, Chile, Mexico, Paraguay, Peru, and Uruguay. The signatories hoped to create a common market in Latin America and offered tariff rebates among member nations. LAFTA came into effect on January 2, 1962. When the trade association began, it had seven members and its main goal was to eliminate all duties and restrictions on the majority of their trade within 12 years. By the late 1960s, the area of LAFTA had a population of 220 million and produced about $90 billion of goods and services annually. It also had an average per capita gross national product of $440.

The goal of the LAFTA is the creation of a free trade zone in Latin America. It should foster mutual regional trade among the member states, as well as with the US and Canada, the Pacific Union, the African Union, and the European Union. To achieve these goals, several institutions are foreseen:

- the council of foreign ministers

- a conference of all participating countries

- a permanent council

The LAFTA agreement had important limitations: it only refers to goods, not to services, and it does not include a coordination of policies. Compared to the European Union, the political and economic integration was very limited.

By 1970, LAFTA expanded to include four more Latin American nations: Bolivia, Colombia, Ecuador, and Venezuela. It now consisted of 11 nations. In 1980, LAFTA reorganized into the Latin American Integration Association (ALADI). LAFTA brought many new positive changes to Latin America. With LAFTA in place existing productive capacity could be used more fully to supply regional needs, industries could reduce costs as a result of potential economies through expanded output and regional specialization, and attraction to new investment occurred as a result of the regional market area.

Although LAFTA has brought many constructive results, like other FTAs, it has also brought problems to individual nations and to Latin America as a whole. Some of the problems which individual countries face are the way they are grouped together by their economic strengths according to LAFTA. The grouping was originally Argentina, Brazil, and Chile in one group, Colombia, Chile, Peru, Uruguay, and Venezuela in the second group, and the last group which included Bolivia, Ecuador, and Paraguay. There is a problem in this classification because it ignores the great economic and other differences between the countries. Problems which Latin America faced as a whole had to do with many of the nations in the continent being underdeveloped. The Free Trade Agreement was seen as a way of the countries having greater economic interactions among each other and thus improving the economic state of the poorer nations.

Any Latin-American country can join the 1960 Montevideo Treaty. Cuba was the last to accede, becoming a full member on August 26, 1999. In addition, ALADI is also open to all Latin American countries through agreements with other countries and integration areas of the continent, as well as to other developing countries or their respective integration areas outside Latin America. ALADI is now the largest Latin-American group of integration. It is responsible for regulations on foreign trade which includes regulations on technical measures, sanitary regulations, environment protection measures, quality control measures, automatic licensing measures, price control measures, monopolistic measures, as well as other measures. These regulations are put into place in order for trade to be even handed amongst members of ALADI.

The ALADI promotes the creation of an area of economic preferences in the region, aiming at a Latin American common market, through three mechanisms:

- Regional tariff preference granted to products originating in the member countries, based on the tariffs in force for third countries

- Regional scope agreement, among member countries

- Partial scope agreements, between two or more countries of the area

Either regional or partial scope agreements may cover tariff relief and trade promotion; economic complementation; agricultural trade; financial, fiscal, customs and health cooperation; environmental conservation; scientific and technological cooperation; tourism promotion; technical standards and many other fields. As the Montevideo Treaty is a "framework treaty", by subscribing to it, the governments of the member countries authorize their representatives to legislate through agreements on the economic issues of greatest importance to each country.

A system of preferences — which consists of market opening lists, special cooperation programs (business rounds, preinvestment, financing, technological support) and countervailing measures on behalf of the landlocked countries — has been granted to the countries deemed to be less developed (Bolivia, Ecuador and Paraguay), to favour their full participation in the integration process. As the institutional and normative "umbrella" of regional integration that shelters these agreements as well as the subregional ones (Andean Community, MERCOSUR, G-3 Free Trade Agreement, Bolivarian Alternative for the Americas, etc.) the Association aims to support every effort to create a common economic area.

The Amazon Cooperation Treaty Organization (ACTO) is an international organization aimed at the promotion of sustainable development of theAmazon Basin. Its member states are: Bolivia, Brazil, Colombia, Ecuador, Guyana, Peru, Suriname and Venezuela. The Amazon Cooperation Treaty (ACT) was signed on 3 July 1978 and amended in 1998. ACTO was created in 1995 to strengthen the implementation of the Treaty. The Permanent Secretariat was later established in Brasilia in 2002.

The Andean Community (Spanish: Comunidad Andina, CAN) is a customs union comprising the South American countries of Bolivia,Colombia, Ecuador and Peru. The trade bloc was called the Andean Pact until 1996 and came into existence with the signing of the Cartagena Agreement in 1969. Its headquarters are located in Lima, Peru.

The Andean Community has 98 million inhabitants living in an area of 4,700,000 square kilometers, whose Gross Domestic Product amounted to US$745.3 billion in 2005, including Venezuela, (who was a member at that time). Its estimated GDP PPP for 2011 amounts to US$902.86 billion, excluding Venezuela.

The original Andean Pact was founded in 1969 by Bolivia, Chile, Colombia, Ecuador and Peru. In 1973, the pact gained its sixth member, Venezuela. In 1976, however, its membership was again reduced to five when Chile withdrew. Venezuela announced its withdrawal in 2006, reducing the Andean Community to four member states.

Recently, with the new cooperation agreement with Mercosur, the Andean Community gained four new associate members: Argentina, Brazil, Paraguay and Uruguay. These four Mercosur members were granted associate membership by the Andean Council of Foreign Ministers meeting in an enlarged session with the Commission (of the Andean Community) on July 7, 2005. This moves reciprocates the actions of Mercosur which granted associate membership to all the Andean Community nations by virtue of the Economic Complementarity Agreements (Free Trade agreements) signed between the CAN and individual Mercosur members.

The Association of Caribbean States (ACS; Spanish: Asociación de Estados del Caribe; French: Association des États de la Caraïbe) is a union of nations centered around the Caribbean Basin. It was formed with the aim of promoting consultation, cooperation, and concerted action among all the countries of the Caribbean. The primary purpose of the ACS is to develop greater trade between the nations, enhance transportation, develop sustainable tourism, and facilitate greater and more effective responses to local natural disasters.

It comprises twenty-five member states and four associate members.^[1] The convention establishing the ACS was signed on July 24, 1994 inCartagena de Indias, Colombia. The secretariat of the organisation is located in Port of Spain, Trinidad and Tobago.

The Turks and Caicos Islands formally sought to became the Association's newest associate member on March 28, 2006.

The Bolivarian Alliance for the Peoples of Our America (Spanish: Alianza Bolivariana para los Pueblos de Nuestra América, or ALBA) is an international cooperation organization based on the idea of the social, political and economic integration of the countries of Latin America and theCaribbean. It is associated with socialist and social democratic governments and is an attempt at regional economic integration based on a vision of social welfare, bartering and mutual economic aid. The member nations are Antigua and Barbuda, Bolivia, Cuba, Dominica, Ecuador, Nicaragua,Saint Vincent and the Grenadines and Venezuela. At the February 2012 summit, Suriname and Saint Lucia were admitted to ALBA as guest countries. ALBA nations are in the process of introducing a new regional currency, the SUCRE. It was intended to be the common virtual currency by 2010 and eventually a hard currency. On Tuesday, July 6, 2010, Venezuela and Ecuador conducted the first bilateral trade deal between two ALBA countries using the new trading currency, the Sucre, instead of the US dollar. The name initially contained "Alternative" instead of "Alliance", but was changed on June 24, 2009.

The Caribbean Community (CARICOM) is an organisation of 15 Caribbean nations and dependencies. CARICOM's main purposes are to promote economic integration and cooperation among its members, to ensure that the benefits of integration are equitably shared, and to coordinate foreign policy. Its major activities involve coordinating economic policies and development planning; devising and instituting special projects for the less-developed countries within its jurisdiction; operating as a regional single market for many of its members (Caricom Single Market); and handling regional trade disputes. The secretariat headquarters is based in Georgetown, Guyana.

Since the establishment of the Caribbean Community (CARICOM) by the mainly English-speaking parts of the Caribbean region, CARICOM has become multilingual in practice with the addition of Dutch speaking-Suriname on 4 July 1995 and French- (and Haitian Kreyòl-) speaking Haiti on 2 July 2002. Furthermore, it was suggested that Spanish should also become a working language. In July 2012, CARICOM announced that they were considering making French and Dutch official languages.