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Legal Environment / Trade and Integration
Trade and Integration
- The agreements signed by Venezuela reflect different economic integration degrees which contribute to the trade and country´s development. These include partial scope agreements of economic complementation and free trade. The most important agreements are: OMC, MERCOSUR, ALBA, ALADI, CELAC, UNASUR, among others.WORLD TRADE ORGANIZATION (WTO) Is a multilateral body which establishes the rules that govern world trade. Is a negotiaton forum. Its base lie son General Agreement in tariffs and Trade – GATT along with related agreements whose purpose is develop trade relationships among member countries, assuming the administration and applying of multilateral agreements.Venezuela is member of WTO since 1994.ALADIUnder Montevideo Treaty signed on August 12th, 1980, and in force since March 18th, 1981, emerges Latin-American Integration Association (ALADI in Spanish).
ALADI is the largest group of integration. It currently has 12 members: Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Mexico, Paraguay, Peru, Uruguay, Venezuela and Cuba.
The treaty establishes a functioning legal system to strengthen integration process and it is aimed to configuration a Free Trade Area for the establishment an Area of Economic Preferences.
The Economic Preferences Area comprises three mechanisms: The Regional Tariff Preference; Regional Scope Agreements; and the Partial Scope Agreements. The basic functions of these mechanisms are summarized in the promotion and regulation of mutual trade of the countries of the region, the economic complementation among its members, and the development of economic cooperative actions that contribute to the expansion of markets.
The Common Market of South was created on March 26th, 1991 with the sign of Asuncion Treaty by the Republic of Argentina, The Federative Republic of Brazil, Republic of Paraguay and the Oriental Republic of Uruguay. However, is only until December 1994 with the signature of Ouro Preto Protocol is granted to MERCOSUR International Legal Personality and it establishes it institutional structure.
With Ouro Preto Protocol the fundamental tools of mutual trade policies were adopted that grant the free trade area, establishing a mutual external tariff and a FTA tariff for its members since 1999, with the only exception of sugar and automotive sector. The purpose of MERCOSUR is to promote free interchange and movement of goods, people and capital among the members and partners.
Venezuela between 2004 and 2006 was a MERCOSUR partner, however, on July 4th, 2006 signed the protocol of accession to MERCOSUR and finally becomes a full member of this scheme on July 31st. 2012.
Bolivarian Alternative for Latin-America and the Caribbean stablished in 2004 by Venezuela and Cuba, is an integration proposal aimed for Latin-American countries which emphasizes in the fight against poverty and social exclusion, under a collaboration Project and political, social and economic complementation among its members.
This scheme is based on mechanisms of creation that take cooperative advantages among different associated nations to compensate asymmetries among these countries. This is done through matching funds intended for correcting intrinsic disabilities among the member countries and the application of People’s Trade Treaty (PTT). At the same time, formed among its members the Economic Space ALBA-PPT (ECOALBA), as an economic zone of mutual development and plans the Single System of Regional Compensation Payments (SUCRE in Spanish).
Currently the members of ALBA are the following countries: Antigua and Barbuda, Bolivia, Cuba, Dominica, Ecuador, Grenada, Nicaragua, Saint Kitts and Neves, Saint Lucia, San Vicent and the Grenadines, Suriname and Venezuela.
Under ALBA scheme ALBA – PTT, Venezuela has signed the following special agreements:
- With Bolivia: People´s Trade Agreement for Economic Productive Complementarity (2011)
- With Ecuador: Cooperation Frame Agreement between The Bolivarian Republic of Venezuela and The Republic of Ecuador for deepen Trade and Development Ties (2011)
The Constitute Treaty of South American Nations Union– UNASUR, was signed on May 23rd, 2008 by a group of 12 South American countries, which are: Argentina, Bolivia, Brazil, Chile, Ecuador, Guyana, Paraguay, Peru, Suriname, Uruguay, Colombia and Venezuela.
UNASUR aims to build in a participatory and consensual manner, an integration and unión space in the cultural, social, economic and polítical field. Prioritizing to political dialogue, social policies, education, energy, infrastructure, funding and environment through strengthen of democracy and asymmetry reduction among participants.
Under this functional scheme the Bank of South (Banco del Sur) whose purpose is funding economic, social and environmental development, make use of regional internal and external savings; strengthen integration; reducing asymmetries and promoting equal distribution of investments among member countries.
Additionally, UNASUR has a South-American Defense Counsel (CDS in Spanish), proposed by Venezuela and Brazil to serve as mechanism for regional security; promoting military cooperation and regional defense.
Latin-American and Caribbean States Community- CELAC, is a polítical integration effort of regional character that pursues the promotion of integration and development of Latin-American and Caribbean countries. CELAC is formed by the 33 government chiefs of Latin-America and the Caribbean.
OTHER RELEVANT AGREEMENTS OF COMMERCIAL NATURE
- Partial scope Agreement of Commercial Nature between The Republic of Peru and The Bolivarian Republic of Venezuela (2011)
- Partial scope Agreement of Commercial Nature between The Republic of Colombia and The Bolivarian Republic of Venezuela (2011)
- Economic Complementation Agreement with Chile (ACE Nº 23)
- Economic Complementation Agreement with Cuba.
- Agreement over Commerce and Investments between The Bolivarian Republic of Venezuela and The Caribbean Community (CARICOM)
- Partial scope Agreements with Central-America, Guyana and Trinidad and Tobago.