I. The initial legal framework of the Andean Pact, signed on 26 May 1969 by Bolivia, Chile, Colombia, Ecuador and Peru, the Cartagena Agreement, which officially entered into force the Andean Pact.  Venezuela joined in 1973. The Andean Pact was a direct response to the frustration of many Andean countries with the shortcomings of the Latin American Free Trade Area (ALALC), an economic integration programme that began in 1960 and included all Spanish-speaking republics in South America, as well as Brazil and Mexico.  In particular, many believed that ALALC would only benefit larger and more industrialized member states, such as Argentina, Brazil and Mexico, to the detriment of smaller, less industrialized members.  Despite this announcement, Venezuela had not yet formally completed all necessary withdrawal procedures. According to Venezuelan Trade Minister Cristina Iglesias, the whole process is expected to take five years. Until then, Venezuela and its partners have remained bound by the effects of the Community`s existing trade agreements.  The Andean Community and Mercosur are the two main trading blocs in South America.
In 1999, these organizations began merger negotiations for the creation of a Free Trade Area (SAFTA). On 8 December 2004, the Andean Community (CAN) signed a cooperation agreement with Mercosur and issued a joint letter of intent for future negotiations on the integration of all of South America into a Union of South American Nations (USAN) which was drawn up according to the European Union. The aim of the Andean Pact countries, when they signed the Cartagena Agreement in 1969, was to create a customs union.  To achieve this objective, the Cartagena Agreement provided, among other things, for the phasing out of all customs barriers and quantitative restrictions on goods that are present and traded in the Andean region, in order to be completely eliminated by 31 December 1980.  Bolivia and Ecuador have had more time to lift their import restrictions by recognizing their less developed status.  For the five countries, specific lists of goods excluded from the general list of tariff reductions were allowed, but only until 1985.  The Cartagena Agreement also required, by 31 December 1980, the introduction of a common external tariff (CET) for all products imported from all non-andean countries that did not receive pre-existing preferential tariff treatment under ALALC.  The Andean Community (Spanish: Comunidad Andina, CAN) is a free trade area with the aim of creating a customs union comprising Bolivia, Colombia, Ecuador and Peru. The trading bloc was called the Andean Pact until 1969 and was born when the Cartagena Agreement was signed in 1996. The headquarters are in Lima, Peru. For the purposes of the previous paragraph, agreements may include measures such as production distribution, common production, production capacity, marketing agreements and common trade measures, as well as any other measures that may facilitate closer coordination between production processes and business activity.
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