(Sample Material) Study Kit on Current Affairs for UPSC Mains Exam: India and World Organizations: Andean Community (CAN)

(Sample Material) Study Kit on Current Affairs for UPSC Mains Examination

India and World Organizations: Andean Community (CAN)

The Andean Community is a trade bloc of four countries - Bolivia, Colombia, Ecuador and Peru. Chile, Argentina, Brazil, Paraguay and Uruguay are associate members while Panama, Mexico, and Spain are Observers. The Headquarters of CAN are located in Lima, Peru. Colombia assumed the Presidency Pro-Tempore of CAN for the period 2011-2012. The regional integration in the Andean countries began with the signing of the Cartagena Agreement (by Bolivia, Chile, Colombia, Ecuador and Peru) in 1969 creating the Andean Pact with the objective of creating a Customs Union and a Common Market. Venezuela joined the Pact in 1973 but withdrew in 2006 after Colombia and Peru signed Free Trade Agreements with USA. Chile withdrew in 1976 claiming economic incompatibilities. In 1979, the Andean Council of Foreign Ministers, the Andean Court of Justice, and the Andean Parliament were created. In 1985 the Andean Parliament agreed to the establishment of the Simon Bolivar Andean University located in Sucre, former capital of Bolivia. In 1990, the Andean Presidential Council was created. In 1991, they approved an open skies policy. In 1993, four members (except Peru which was temporarily suspended) established a free trade zone. In 1995, the members adopted a Common External Tariff.

In 1996, the Protocol of Trujillo renamed the Pact as the Andean Community. It also converted the Board of the Cartagena Agreement into a General Secretariat based in Lima, Peru, with not only technical but also political functions giving a new political direction to the integration process. In 2001, the Andean Passport was created, enabling citizens of member states to travel between the countries without visa. In 2005, the integration of Latin American and Caribbean regions gained priority in the agenda of Andean Community. In 2006, the Andean Free Trade Area became fully operational after Peru was fully incorporated. CAN community deals with the following issues:

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  • Trade in Goods
  • Trade in Services
  • Customs Union
  •  Circulation of Persons
  • Common Market
  • Common Foreign Policy
  • Border Development
  • Social Agenda
  • Sustainable Development
  • Economic Policies

In July 2011 the CAN Presidents reaffirmed their commitment to deepen Andean integration and launched the reengineering of the Andean Integration System (SAI). The Andean Parliament met in Lima on 29th October to discuss and agree on joint measures to solve the problems faced by migrants abroad. The meeting, which includes the participation of 20 Parliamentarians from Bolivia, Colombia, Ecuador, Peru and Chile, also assessed regulations in the functioning of the Parliament of the Union of South American Nations (UNASUR)

Important Institutional Bodies within the Andean Community

Besides the Andean Council of Presidents and the Council of Foreign Ministers, CAN has the following institutions:

(i) General Secretariat - This is the executive body, with a full time Secretary General. At present Adalid Contreras Baspineiro (of Bolivia) is the Acting Secretary General. The Secretariat is in Lima, Peru.
(ii) Andean Parliament - is the policy advisory body and is situated in Bogota, Colombia. It consists of 5 Members of Parliament from each member country, directly elected for a period of 5 years.
(iii) Andean Court of Justice - This body in Quito, Ecuador resolves disputes among member countries.
(iv) Latin American Development Bank (CAF) –Although CAF is much larger and has 18 Latin American and Caribbean nations as shareholder countries, it is the leading source of external financing for members, contributing more than 40% of their requirements. The annual total credit given by CAF is over US$ 2 billion. The credit is given to regional integration projects and financing of international commerce of companies and banks and government projects. CAF has established its reputation as a successful regional fund with strong fundamentals and good credit rating. Exim Bank of India has extended a US$ 10 million line of credit to CAF. CAF is situated in Caracas, Venezuela.
(v) Latin American Reserve Fund (FLAR) – is a common reserve fund that seeks the stability of member countries by improving their external position and strengthening regional support. Initially called the Andean Reserve Fund, it began operations in 1978. In 1988, accession of other Latin American countries was permitted. Besides the 4 CAN members, FLAR presently also has Costa Rica, Uruguay and Venezuela as its members. It is headquartered in Bogota.
(vi) Simón Bolívar Andean University – With its main campus in Sucre (Bolivia), it also has branches in Quito, La Paz, Caracas and Cali.

Market

The Andean Community has a total population of 100 million with a combined GDP of US$ 580 billion. Although formed in 1969, CAN became operational in the nineties with the establishment of a Free Trade Area in 1993 and Customs Union in February 1995. Internal problems in these countries in the last few years have slowed down the integration process.

Today 100% of the goods of Andean origin circulate dutyfree within the CAN. During the period January-November 2012, the exports of Andean community to the world were US $ 116 billion – an increase of 2% as compared to the same period last year. During the period January-November 2012, the intra-community exports increased by 13% (from US $ 8.4 billion to US $ 9.5 billion) as compared to the same period last year.

Free Flow of People

Since January 1, 2005, the citizens of the member countries can enter the other Andean Community member states without the requirement of visa. Passengers only need to present their national ID cards. The Andean passport was created in June 2001. Passports of all 4 member countries are issued based on a standard model which contains harmonized features of nomenclature and security.

CAN and Mercosur

Mercosur

The Andean Community and Mercosur (Argentina, Brazil, Uruguay and Paraguay) comprise the two main trading blocs of South America. In April 1998, they signed a Framework Agreement for the creation of a Free Trade Area between each other and launched negotiations. The first stage of signing by CAN of economic complementarity or tariff preferences agreements with individual Mercosur members were concluded, followed by each CAN member signing a free trade agreement with Mercosur. Subsequently, CAN and Mercosur, along with nations like Chile, have been spearheading deeper integration of all South America through the Union of South American Nations(UNASUR) patterned on the European Union.

CAN and India

In June 2003, India and CAN established a Political Dialogue and Cooperation Mechanism for the purpose of strengthening and diversifying their friendship, understanding and cooperation and developing mutual trade and investment relations and cultural and scientific exchanges. During his official visit to Peru, MOS Dr. Shashi Tharoor met CAN Secretary General Freddy Ehlers, the then Chair Pro Tempore (Peru) of CAN and the Andean Ambassadors accredited to Lima on 21 January 2010. MOS Dr. Tharoor expressed India’s interest in strengthening political and economic relations and cooperation with the Andean Community. The CAN Secretary General wished to cooperate in the fields of environment, energy and food security, rural development and science and technology. The CAN Chair Pro Tempore reiterated the interest of the member countries in holding the First Meeting of the Political Dialogue and Cooperation Mechanism.

The objectives of the Political Dialogue and Cooperation Mechanism are, among others, to:

  • Deepen the Parties’ knowledge of each other;
  • Conduct the political dialogue and cooperation in areas of mutual interest;
  • Expand and diversify trade and investment and study mechanisms to facilitate the Parties’ access to each other’s markets; 
  • Promote scientific, technical and technological cooperation; and
  • Foster cultural and tourist exchanges.

The Andean Community, aware of the dynamic role India is called upon to play on the world scene, would like to reinforce the subregion’s projection toward that country by starting up the Political Dialogue and Cooperation Mechanism, together with other instruments that could be developed within the framework of its Common Foreign Policy.  

History

  • The groundwork for the Community was established in 1969 in the Cartagena Agreement
  • In 1973 Venezuela joins Andean Pact
  • In 1976, Augusto Pinochet withdrew Chile from the Andean Community claiming economic incompatibilities
  • In 1979, the treaty creating the Court of Justice was signed and the Andean Parliament created and the Andean Council of Foreign Ministers were created
  • In 1983, the treaty creating the Court of Justice entered into effect
  • In 1991, the presidents approved the open skies policy and agree to intensify integration
  • In 1992, Peru temporarily suspended its obligations under the Liberalization Program
  • In 1993, the Free Trade Zone entered into full operation for Bolivia, Colombia, Ecuador, and Venezuela
  • In 1994, the Common External Tariff was approved
  • In 1996, the Cartagena Agreement Commission approved the regulatory context for the establishment, operation, and exploitation of the Simón Bolívar Satellite System
  • In 1997, an agreement was reached for Peru’s gradual incorporation into the Andean Free Trade Zone
  • In 1998, the Framework Agreement for the creation of a Free Trade Area between the Andean Community and the Mercosur was signed in Buenos Aires
  • In 2000, a meeting of the South American Presidents, at which the Andean Community Heads of State and Mercosur decide to launch negotiations for establishing a free trade area between the two blocs as rapidly as possible and by January 2002 at the latest
  • In August 2003, the Andean Community and Mercosur Foreign Ministers, during a meeting in Montevideo at which the CAN delivered a working proposal containing guidelines for the negotiation, reaffirmed their governments’ political determination to move ahead with the negotiation of a free trade agreement between the two blocs
  • In April 2006 President Hugo Chávez announced that Venezuela would withdraw from the Andean Community, claiming the FTA agreements signed by Colombia and Peru with the USA caused irreparable damage to the community

Bimstec

Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) comprising Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka, Thailand brings together 1.5 billion people – 21% of the world population, and a combined GDP of over US$ 2.5 trillion.

Evolution of Bimstec

BIST-EC (Bangladesh, India, Sri Lanka, Thailand - Economic Cooperation) was formed at a meeting in Jun 1997 in Bangkok. Myanmar was admitted in Dec 1997 and the organization was renamed as BIMST-EC. The grouping expanded when Nepal and Bhutan were admitted in Feb 2004. The grouping’s name was changed to BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation) at 1st Summit Meeting held in Bangkok in Jul 2004.

Functioning of Bimstec

BIMSTEC organizes inter-governmental interactions through Summits, Ministerial Meetings, Senior Officials Meetings and Expert Group Meetings and through BIMSTEC Working Group (BWG) based in Bangkok. There have been two BIMSTEC Summit meetings (Bangkok Jul 2004, New Delhi Nov 2008), and 13 Foreign Ministerial meetings (13th MM held in Nay Pyi Taw in Jan 2011) and 15 SOMs so far. Myanmar is hosting the 3rd BIMSTEC Summit, 14th Ministerial Meeting, 16th SOM and 2nd Preparatory meetings from 1-4 March, 2014 in Nay Pyi Taw. BIMSTEC Chairmanship rotates among member countries (alphabetically). Myanmar is Chair of the Group since Dec 2009 and took over from previous chair India (Aug 2006-Dec 2009). Nepal has agreed to Chair after 3rd Summit.

Bimstec Permanent Secretariat

The BIMSTEC Permanent Secretariat is to be established in Dhaka with first SG to be nominated by Sri Lanka. India would be contributing 32% of the cost of Secretariat reflecting its strong commitment to BIMSTEC process.

Areas of Cooperation

BIMSTEC has identified 14 priority areas where a member country takes lead. India is lead country for Transport & Communication, Tourism, Environment & Disaster Management and Counter Terrorism & Transnational Crime.

Transport and Communications (India)

BIMSTEC Transport Infrastructure and Logistics Study (BTILS) conducted by ADB in 2007 was endorsed in 12th Ministerial Meeting (Dec 2009). The Report was finalised in Dec 2013. ADB organised Inception Workshop on BTILS updating and 1st meeting of Expert Group on Road Development in Yangon in Jun 2013.

Tourism (India)

A BIMSTEC Information Centre has been established in Jul 2007 in New Delhi. Ministry of Tourism organized a meeting on BIMSTEC Information Centre and contribution to Tourism Fund (1st JWG on Tourism) in Sep 2013 in New Delhi. 1st Round Table and Workshop of Tourism Ministers was held in Kolkata in Feb 2005; Nepal held 2nd Meeting in Kathmandu in Aug 2006; Bangladesh will host next meeting.
Counter-Terrorism and

Transnational Crime (CTTC)

BIMSTEC cooperation under CTTC has been divided into 4 sub-groups with lead shepherds - Intelligence Sharing (Sri Lanka); Combating Financing of Terrorism (Thailand), Legal and Law Enforcement Issues (India) and Prevention of Illicit Trafficking in Narcotics Drugs, Psychotropic Substances and Precursors (Myanmar).

L&T Division of MEA hosted 5th Sub-group on Legal & Law enforcement issues in Jan 2013 in New Delhi where draft Convention on Mutual Legal Assistance in Criminal Matters was finalised. Members signed ‘BIMSTEC Convention on Combating International Terrorism, Transnational Organized Crime and Illicit Drug Trafficking’ in Dec 2009; India has ratified it.

Environment and Disaster Management

10. Ministry of Earth Sciences in association with MEA conducted a Workshop on “Seasonal Prediction and Application to Society” in June 2011. India is establishing BIMSTEC Weather and Climate Centre at National Weather Forecasting Centre at NOIDA. The MOA for establishment of the Centre was finalized at 10th Ministerial meeting in New Delhi in Aug 2008 and is expected to be signed during 3rd Summit.

Trade & Investment (Bangladesh)

A Framework Agreement for BIMSTEC Free Trade Area was signed in Phuket, Thailand in Feb 2004. The Framework Agreement commits the parties to negotiate FTAs in goods, services and investments. An agreement on Trade in Goods and other provisions relating to Rules of Origin, Operational Certification Procedures and agreement on Customs Cooperation was finalised in Jun 2009 at 18th Trade Negotiating Committee (TNC) meeting in Phuket. 19th TNC was held in Bangkok in Feb 2011.India has exchanged its tariff preference schedules with member countries.

The 6th meeting of BIMSTEC Business and Economic Forum were held in Feb 2011 in Bangkok. India hosted a Business Summit meeting in Nov 2008 in association with CII, FICCI, and ASSOCHAM. India hosts an annual Integrating BIMSTEC Seminar held in the North East (Shillong 2013, Imphal 2014). To facilitate business travel among BIMSTEC member countries, three meetings of the Expert Group have been held on BIMSTEC Visa Scheme.

Cultural Cooperation (Bhutan)

Members are expected to sign MoU on establishment of BIMSTEC Cultural Industries Commission (BCIC) and BIMSTEC Cultural Industries Observatory (BCIO), Bhutan during 3rd Summit. India hosted the 1st Expert Group Meeting BCIC&O in 2006 in New Delhi. The first BIMSTEC Ministerial meeting on Culture was held in Paro, Bhutan in May 2006.

Energy (Myanmar)

Thailand hosted BIMSTEC Regional Workshop and Study Visit on Bio-Fuels Production and Utilization in Jun 2012 in Bangkok. Ministry of Power hosted 4th meeting of Task Force on Power Exchange in Jan 2013 in New Delhi which discussed the draft text of MOU on Grid Inter-connection. Meeting of Energy Ministers took place in Oct 2005 in New Delhi and in March 4-5, 2010 in Bangkok, Thailand.
India also hosted Task Force Meeting in Feb 2011 in Bengaluru and SOM in Feb 2011 in New Delhi on operationalisation of BIMSTEC Energy Centre (MOA signed during 13th MM). A land for the Centre has been allocated in premises of Central Power Research Institute, Bengaluru.

Agriculture (Myanmar)

Sri Lanka hosted the 3rd meeting on Agriculture in Kandy in Nov 2010. Earlier, at the 2nd Expert Group Meeting held in New Delhi in Apr 2008, nine priority areas (along with lead countries), were finalised; India will lead in Prevention and control of transboundary animal diseases (India); Affiliation of Universities/Research Institutions (India); Development of agricultural biotechnology including bio-safety (India); Development of Seeds (India).

Poverty Alleviation (Nepal)

Nepal hosted the 2nd Ministerial Meeting in Jan 2012 in Kathmandu where Plan of Poverty Alleviation was adopted.

Technology (Sri Lanka)

Sri Lanka hosted the 3rd meeting on May 9-10, 2011 in Colombo on establishment of BIMSTEC Technology Transfer Exchange Facility. The meeting discussed the draft Concept Paper.

Fisheries (Thailand)

Thailand organized a training programme on Advance Aquatic Plants Tissue Culture in Aug 2013 in Bangkok.

Public Health (Thailand)

Deptt. Of AYUSH in association with MEA hosted two Workshops on IPR issues and Regulatory issues in Traditional Medicines in October 2011 in New Delhi. Since 2005, India has granted 30 slots of AYUSH scholarships to study in India in the fields of traditional medicine in undergraduate, post-graduate and doctorate programs.

Thailand hosted 2nd meeting of Network of National centres of Coordination in Traditional Medicine in Aug 2010 in Nonthaburi; Institute of PG Teaching and Research in Ayurveda (IPGTRA), Jamnagar is the Indian nominee.

People-to-People Contact (Thailand)

At India offers 1440 (Civilian), 274 (Defence) and 18 slots in NDC & DSSC under ITEC programme to BIMSTEC countries and the utilisation is almost 1200. India has set up BIMSTEC Network of Think Tanks with RIS as nodal agency. RIS hosted a two-day meeting of think tanks on 12-13 Feb, 2010.

Climate Change (Bangladesh)

Bangladesh will be circulating a concept paper on cooperation in this area soon.

India signed three agreements with the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) members on culture exchanges, weather warning and establishment of permanent secretariat.

The documents were signed by External Affairs Minister Salman Khurshid, Bangladesh Foreign Affairs Minister Md. Shahriar Alam, Bhutan Foreign Affairs Minister Lyonpo Rinzin Dorje, Myanmar Foreign Affairs Minister U Wunna Maung Lwin, Nepal Foreign Affairs Minister Mahendra Bahadur Pandey, Sri Lanka External Affairs Ministry Secretary Kshenuka Senewiratne and Thailand Foreign Affairs Ministry Permanent Secretary Sihasak Phuangketkeow.

Member countries signed a Memorandum of Association (MoA) on the establishment of the BIMSTEC Permanent Secretariat. The objective of MoA is to establish Secretariat at Dhaka, Bangladesh, which will coordinate and facilitate the implementation of the BIMSTEC activities and projects and to service meetings of BIMSTEC. The Secretariat is expected to function from May 2014 with Sumith Nakandala of Sri Lanka as the first Secretary General of BIMSTEC.

The members also signed another MoA on the establishment of a BIMSTEC centre for weather and climate. The document aims to establish the weather and climate centre in India which will promote cooperation in identified areas of fundamental and applied scientific research in weather prediction and climate modeling and capacity building in weather and climate research. Ministry of Earth Sciences is establishing the centre in premises of National Centre for Medium Range Weather Forecasting, NOIDA.

The nations signed a Memorandum of Understanding (MoU) on the establishment of the BIMSTEC Cultural Industries Commission (BCIC) and BIMSTEC Cultural Industries Observatory (BCIO).

The objective of this MoU is to set up Observatory in Bhutan, which will serve as a repository for information on cultural industries, disseminate such information and facilitate its access by the member countries. The Cultural Industries Commission is a high level oversight mechanism for the observatory, which will develop plans and programmes in this area.

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