Complementarity Agreement in the Automotive Sector
The Governments of Colombia,
Ecuador and Venezuela,
HAVING SEEN: Articles 62 and 63 of the Cartagena Agreement, Commission
Decisions 298, 370 and 444, Resolutions 355 of the Board and 163 of the
General Secretariat, and articles 1 and 43 of the Treaty Creating the
Court of Justice of the Cartagena Agreement as amended by the Cochabamba
The advances being made by Andean integration call for instruments to be
devised for promoting actions to link up industrial production and
specialization processes more closely, in order to contribute to the
economic and social objectives set out in the Cartagena Agreement;
It has therefore become necessary to reinforce and boost the development
of the subregion’s automotive industry, take advantage of the enlarged
subregional market, promote automotive exports, meet the needs of regional
integration agreements, and make use of the opportunities those agreements
The Participating Countries in the Agreement have decided to launch a
comprehensive strategy designed to give shape to an automotive industry
that is responsive to international demands;
Article 1.- The signing of the following Industrial Complementarity
Agreement in the Automotive Sector which is geared toward the adoption of
a Community policy for building stronger links among subregional
producers, making the most of the enlarged markets in the region, and
contributing to the creation of equitable conditions for competition in
the subregional market and to the growth of competitiveness and
Article 2.- The benefits offered by this Agreement to the
automotive industries are aimed at:
Compliance with these objectives will be evaluated annually and the
results will be used by the Governments to decide upon any necessary
adjustments and corrections, including the suspension of the benefits
provided for herein, if necessary.
- Bringing about a transfer of technology that will guarantee an increase in
their productivity and competitiveness.
- Generating further investments in production.
- Advancing development programs for the subregion’s suppliers, and
- Offering Andean consumers higher quality products at better prices.
Article 3.- Annex 1 sets out the types of vehicles covered by this
Article 4.- The following categories are adopted for the vehicles
stipulated in Annex 1:
Category 1: Passenger vehicles for transporting up to 16 persons,
including the driver, and cargo vehicles with a maximum loaded weight of
not over 4,537 tons (or 10,000 U.S. pounds), together with their cabined
Category 2a: Passenger vehicles for transporting more than 16 persons,
including the driver.
Category 2b: All other vehicles not included in categories 1 and 2a.
Article 5.- The Participating Countries shall establish a Common External
Tariff of 35% for Category 1 vehicles and for Categories 2ª and 2b
vehicles, a Common External Tariff of 15% in the cases of Colombia and
Venezuela, and 10% in that of Ecuador.
Article 6.- In order to guarantee minimum safety, environmental
conservation, consumer defense, and industrial property conditions, the
Participating Countries shall authorize the importation of new vehicles of
the current or following model and year only. Furthermore, only new
components, parts, and pieces that have not been rebuilt or overhauled
shall be authorized for import.
Article 7.- For purposes of this Industrial Complementarity Agreement, the
Participating Countries shall apply a duty-free customs regime to
automotive manufacturers that request it after fulfilling the
corresponding provisions. Under this regime, automotive goods are produced
and/or assembled in a customs zone and then enter the subregion’s customs
territory by paying the pertinent customs tariff.
The competent official agency of each Participating Country shall register
with the Andean Community General Secretariat those companies availing
themselves of the regime established by this article.
Article 8.- An Automotive Committee made up of the Participant Countries
in this Agreement is hereby created with the same composition as the
Subregional Automotive Committee set up through Commission Decision 298.
According to its regulations, set out in Annex 2, the main functions of
this Committee are to contribute to the development of the automotive and
related industries and to recommend to the governments or to Community
bodies the actions it deems advisable for the fulfillment of this
Agreement and of the objectives of this integration effort and the
development of the enlarged joint production offering.
The Andean Community General Secretariat shall act as the Automotive
Committee’s technical secretariat.
The Committee shall have the following additional terms of reference:
- To assess the impact of this Agreement on the development of the sector.
- To carry out activities designed to promote trade within the subregion.
- To evaluate the application of the Common External Tariff to goods that
are related to the automotive sector in order to propose its modification
if circumstances so counsel.
- To evaluate the application of the Specific Requirements of Origin
demanded of automotive products and to recommend their change if needed.
- To promote the application of mechanisms for promoting the subregion’s
- To create subcommittees to study specialized aspects having to do with the
- To formulate specific recommendations and proposals for automotive policy
harmonization among the Participating Countries with regard to the
environment, technical and technological improvement, quality
standardization and certification, and industrial modernization, among
- To evaluate the performance of automotive imports from third countries and
to request the Participating Countries to take remedial measures.
- To recommend the establishment of an automotive export policy.
- To propose the amendments it deems necessary to the NANDINA.
- To recommend a common negotiation policy with third parties.
- To monitor compliance with the commitments emanating from this Agreement
by including on its agenda cases of noncompliance determined by the
General Secretariat, in order to make recommendations to national
authorities or community bodies for resolving the problem and for
interpreting the stipulations of the Agreement, if necessary.
- All others assigned to it by the competent bodies.
The Committee shall also promote the establishment of agreements on
co-production, subcontracting, joint foreign trade operations, labor
training, and joint developments, as well as other types of agreements
conducive to closer dovetailing of the production processes.
Article 9.- Any Andean Community Member Country that is not a participant
in the Agreement may request its incorporation. To that end, the
Participating Countries shall approve the conditions for that
incorporation, which shall be reported to the Commission. These conditions
for incorporation shall be published by General Secretariat Resolution in
the Cartagena Agreement’s Official Gazette.
Article 10.- This Agreement shall be reported to the Commission and shall
have a duration of ten years, which may be renewed for like periods. Any
party to the Agreement may withdraw from it by informing the other
Participating Countries of its intention through the offices of the
General Secretariat no less than one year before the effective date of its
Article 11.- Any such agreement as the Participating Countries may sign
for the application and implementation of this Agreement shall be
published by Resolution of the Andean Community General Secretariat.
Article 12.- This Agreement shall be published in the Official Gazette of
the Cartagena Agreement pursuant to article 43 of the Treaty Creating the
Court of Justice of the Cartagena Agreement as amended by the Cochabamba
Protocol, and shall enter into effect on January 1, 2000.
Temporary Provision.- The Government of Venezuela shall study the
mechanisms for implementing the Agreement in the customs and tariff areas,
in order to ensure that is consonant with the country’s legal provisions
and shall pay special attention to exploring the adoption of a suspensive
or special customs regime. It accordingly reserves the right to propose to
the other countries signing the Agreement, instrumental adjustments to the
Agreement that would guarantee that consonance.
FOR THE GOVERNMENT OF COLOMBIA
Marta Lucía Ramírez de Rincón
Minister of Foreign Trade
Jaime Alberto Cabal Sanclemente
Minister of Economic Development
FOR THE GOVERNMENT OF ECUADOR
Julián García Miranda
Assistant Secretary of Foreign Trade and Integration
FOR THE GOVERNMENT OF VENEZUELA
Juan de Jesús Montilla Saldivia
Minister of Production and Trade