Open regionalism in the Andean countries: existing and divergent treaty arrangements and approaches and it's consequences for the trade in financial services
The Andean Countries i.e., Bolivia, Colombia, Ecuador, Peru and Venezuela are immersed in an unprecedented environment of unilateral openness to foreign markets (including financial markets) and in simultaneous deeper sub-regional economic integration through the Andean Community as well as in the gradual implementation of a range of multilateral and bilateral, extra-sub-regional commitments and advancing negotiations with non-member countries as to a variety of trade/investment/economic integration schemes. This complex integration matrix, which affects the provision of financial services in the sub-region, has its roots in the original Andean integration process and it is based upon the policy of open regionalism. In this sense, this memo firstly studies the policy of open regionalism as it is understood in Latin America. Secondly, it introduces the main features of the Andean integration process underlying the strong political influence that marked the origin and development of the Andean Pact and its subsequent transformation into the Andean Community. Third, it focuses on the Andean Countries’ different approaches towards liberalisation of financial services that are converging as their various obligations are being implemented. To that end, through a comprehensive view of the origins of the Andean integration as well as by differentiating the approaches, commitments and clauses of the several treaties and agreements actually in place, this memo tries to address some of the questions issued by the conference organisers. Readers and discussants have to bear in mind that the integration of financial services by means of treaties is a subject that has come to the international scene quiterecently. At the same time, developing countries have been extremely cautious when undertaking commitments at multilateral, regional and sub-regional levels related to the opening of their boundaries to the provision of financial services. In the Andean countries case, there is evidence of nesting institutions related to the provision of financial and banking services. However, due to the lack of regulation in the field of financial services provision at sub-regional level (the Andean Commission has not issued it yet) as well as in all NAFTA-like type of agreements individually signed by some of the Andean countries (no Protocols or Annexes found), the evidence of conflicting overlapping institutions and rules is still theoretical. This author foresees that the result of the negotiations undertaken by some Andean countries and USA towards the establishment of a NAFTA-like Free Trade Area will pave the way for the harmonisation of rules regarding the trade in banking and financial services intra sub-region and with the global economy. Such outcome is not the consequence of thoroughly designed economic, financial and external policies at Andean domestic and supranational levels. It almost happened by chance. Hopefully, this circumstance will help avoiding the complexity of the nesting evidenced.
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