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    ECONOMIC COMMUNITY THAT RIVALS EU CREATED IN SOUTH AMERICA

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    BUENOS AIRES, April 7, 2004 (RIA Novosti) - Member states of the Southern Common Market (Mercosur) Agreement and the Andes Community are being integrated into a common economic space. After the eight years of negotiations, members of the Andes Community (Colombia, Ecuador and Venezuela) have agreed to create a free trade zone with Mercosur countries. Earlier, Bolivia and Peru, Andes Community members, joined the agreement, which will come into force on July 1. This agreement provides for ending customs duties on 80% of goods in the next ten years. This free trade zone, which comprises 350 million people, is analogous to the European Union.

    Mercosur countries account for more than a half of Russia's trade with South America. Experts believe that the integration of the markets of nine South American countries opens new possibilities for the development of trade with Russia.

    One concrete step toward the new market was the assembly of the Niva sport utility vehicle in Uruguay. Three models of the car will be sold under the name, Diva. Annually, 5,000 cars will be assembled in the next three years. The production of Russian cars in Uruguay will make it possible to export them duty-free to Mercosur and Andes Community countries.

    The South American market also attracts Russian agricultural producers. Rostselmash, a company based in Rostov-on-Don in southern Russia, took part in FeriAgro 2004, a large agricultural exhibition in Argentina, for the first time in many years. The company plans to sell the Vektor, Russian grain harvester, on the Argentinean and South American markets. The trade representative of the Russian Federation in Argentina, Viktor Kokarev, described the appearance of such a big Russian agricultural producer on the Argentine market as a key event.

    "It is very gratifying that for the first time in many years a serious program has been developed for Russian hi-tech products to appear on Argentina's market and then on the markets of other countries of South America," he told RIA Novosti.

    The Russian Embassy in Argentina told RIA Novosti that Russian Deputy Foreign Minister Sergei Kislyak will conduct consultations with representatives of Mercosur countries in April in Buenos Aires. They will discuss the practical development of business cooperation between Russia and this community. In the opinion of the Russian diplomats, it is necessary, as soon as possible, to determine the concrete spheres and trends of cooperation with new and perspective economic communities.

    Mercosur was founded in 1995. Argentina, Brazil, Paraguay and Uruguay are members of the agreement. Customs and other restrictions on 90% of goods have been abolished in this free trade zone. Mercosur is the biggest integrated market in South America. Forty-five percent of the population of the continent and 50% of the aggregate GDP are concentrated in the Mercosur free trade zone.

    The Andes Community (Bolivia, Colombia, Peru, Ecuador and Venezuela) was founded in 1965 and contains more than 100 million people. - 0 - (kos/cor)

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