Andean Leaders Respond to Bush

Free-trade, drug war top summit agenda for Peru, Bolivia, Colombia, Venezuela, Ecuador REGIONAL COOPERATION

COCAINE and President Bush's ``Initiative for the Americas'' are set to dominate the agenda at the summit of the five presidents of the Andean Pact countries being held in La Paz today and tomorrow. A priority for Presidents Jaime Paz Zamora of Bolivia, Cesar Gaviria Trujillo of Colombia, Carlos Andres Perez of Venezuela, Alberto Fujimori of Peru, and Rodrigo Borja Cevallos of Ecuador is to give more political relevance to the Andean Pact. Critics say the Pact has achieved little in economic integration during its 21-year history, except to provide jobs for technocrats.

Officials from all five countries agree they must accelerate regional integration if the Pact, which offers a potential market of 88 million Latin Americans, is not to be left behind by the world trend to create economic blocs.

The leaders are working on a joint response to President Bush's June initiative, the main proposal of which is a continent-wide free-trade zone from Alaska to Tierra del Fuego.

``President Bush has thrown down the gauntlet,'' says Mr. Paz Zamora. ``But so far Latin America has not fully taken up the challenge.'' All five presidents have expressed a cautious welcome to the Bush plan, but a joint detailed response is yet to emerge from Latin America.

When the Pact was first launched in 1969, the basic economic idea was heavy state protection and subsidies for regional industries, and barriers against foreign investment. But for the first time in the Pact's history, all five governments are talking the same language on the need for market-oriented reforms and more liberalized trade - two key components of the Bush plan.

``It's a perfect moment to give a new impetus to the Pact,'' says Samuel Doria Medina, chief economic adviser to Paz Zamora. ``All five countries are pursuing the neo-liberal path.''

Bolivia, which has the lowest tariffs in the region, is proposing a free-trade zone for the Andean Pact countries. But officials say they need time to decide if President Bush's plan for a free-trade bloc will serve the interests of the United States more than Latin America.

The three presidents from the drug-producing countries of Peru, Bolivia, and Colombia also have their first opportunity to discuss face-to-face joint antidrug efforts. Despite noble declarations in the past, coordination between the countries has been ineffective.

``We tend to form an Indian file to go and talk to the US,'' complains Mr. Doria Medina. ``We ought to talk together first and form a joint strategy.''

The leaders are likely to agree to set up a permanent coordinating body on drugs and to propose joint measures to combat cocaine flights between Peru and Bolivia, where coca is grown, and Colombia, where it is processed.

Bolivian officials say a joint strategy is now politically more feasible. They point out that Mr. Fujimori and Paz Zamora agree on the need to give coca growers real economic alternatives as the best way of tackling the drug problem.

Fujimori is bringing a proposal to the summit that includes incentives for peasants, such as land titling and credit programs. Bolivia's plan rests on giving coca farmers ``real jobs.''

Fujimori recently rejected $36 million in US aid to equip six Army and marine battalions to support antidrug operations. Paz Zamora is also dragging his feet on a similar offer, though analysts predict he will eventually accept the aid. (See story below.)

Colombia, Bolivia, and Peru agree that consumer countries should provide much more economic aid. But despite moves toward greater harmony, officials stress they are not forming a ``producer country bloc'' with which to criticize the US.