| THE CURVE OF DISENCHANTMENT:
Factors that often lead to frustration in the processes of regional integration
by Félix Peña
English translation: Isabel Romero Carranza
The high expectations that are often generated in
the founding moments of the processes of integration between contiguous
sovereign nations have many times resulted in trends towards frustration
that are difficult to overcome.
This is reflected by what we have called 'the curve
of disenchantment', a phenomenon that can be examined today through the
experiences of both Mercosur and the European Union. These two are very
different regional spaces, projects and processes which have experienced
moments of fervor and enthusiasm as well as of frustration and disenchantment.
The latter seems indeed to be the case of the stage that they have been
going through in recent years. It is a disappointment that is reflected
even in debates of the existential type -about why to work together in
a common project- and not exclusively of the methodological kind -about
how to carry it out.
The founding moments are those that typically generate
higher expectations and illusions. And somewhere in the course of the
project and the process that it embodies, in a moment not always easy
to identify, the stage of disillusionment begins, usually driven by changes
in the realities and by the dilemmas and hurries of the short-term agendas
of the member countries. When the curve of disenchantment is evinced it
does not necessarily lead to the abandonment of the corresponding integration
project, but it can lead to a loss of its relevance.
Two questions will be addressed in this opportunity.
Both are referred to voluntary integration processes between nations sharing
a geographical space and who agree to work on a common long-term project
through methodologies for which there are no predefined or mandatory models.
The questions are: what explains the frustrations, sometimes recurrent,
which often arise when moving forward in the outlined path of deep and
voluntary integration processes between sovereign nations? And, what are
the factors that enable to sustain over time the political will of a group
of sovereign nations that share a regional geographic space to work together
within the scope of a multidimensional integration process intended to
be permanent in time?
In our Newsletter of last June we referred to the enthusiasm that can
be observed regarding the possible development of the so-called Pacific
Alliance (see Mercosur and the alliance of the Pacific: their role in Latin American regional integration ¿Are they opposed or can they be complementary?).
It is being viewed as a novel and intelligent project of deep integration.
At times, it generates an enthusiasm which, however, would not always
seem based on solid facts that transcend the realm of the media.
We noted then that the high expectations that are usually awakened by
the various forms of integration processes have often resulted in trends
towards frustration that are difficult to overcome. We used, in this respect,
the idea of 'disenchantment curve' and we mentioned the case of the Latin
America Free Trade Association (LAFTA) as one of the regional examples
in order to illustrate this assertion. But a more interesting example
is the original Andean Group, later transformed into the Andean Community
of Nations. In both initiatives Chile, Colombia and Peru had an important
participation. These countries, along with Mexico, are the current promoters
and members of the Pacific Alliance.
The phenomenon of the curve of disenchantment, however, can be examined
today through the current experiences of Mercosur and the European Union.
These are regional spaces, projects and processes that are very different
from each other. But in both cases we can observe times of fervor and
enthusiasm followed by others of frustration and disappointment. This
seems, indeed, to be what characterizes the stage that has been developing
in recent years. It is a disappointment that tends to be reflected even
in debates of the existential type -about why to work together in a common
project- and not exclusively of the methodological kind- about how to
carry it out.
We observed also that the curve of disenchantment, when it becomes evident,
does not necessarily lead to the abandonment of the respective integration
project. But it can lead to a growing irrelevance of it. The founding
moments are those that typically generate higher expectations and illusions.
And somewhere in the course of the project and the process that it embodies,
in a moment not always easy to identify, the stage of disillusionment
begins. This is usually driven by changes in the realities and by the
dilemmas and the hurries of the short-term agendas of the member countries.
On this regard we have to remember that, beyond the will of the protagonists,
the political pace in most countries tends to be dominated by short-term
issues. Thus, in a strategic framework which is long-term by definition
there are moments in which there is a predominance of short-term requirements,
such as those determined, for example, by the effects and demands originated
by a change in the global context, an economic crisis or any electoral
process of uncertain results. It is in such moments when doubt begins
regarding the rationality of the stated objectives, or at least about
the possibility of achieving them in reasonable time. Such doubts result
in the erosion, in general gradual, of the relevance attributed to the
integration project in its founding stage. The willingness to comply with
the commitments made with the partners is then weakened. And this is most
acute in those cases when there is, simultaneously, a change in political
staff as a result, for example, of a new government and a weakening of
the impulse originated in companies with competitive interests resulting,
for example, from their participation in trade and production networks
of regional scope.
In order to move forward in the analysis of the phenomenon of the curve
of disenchantment, it becomes relevant to clarify what we mean by 'integration'
between nations in this opportunity. It is a concept that lends itself
to many definitions based on different theories and historical realities.
There is even some confusion about the difference between 'integration'
and 'cooperation', which at times leads to semantic discussions, valuable
to the academia but with little relevance for the management of realities.
In this opportunity, by integration we are referring to a deliberate,
voluntary and institutionalized project and process between nations that
share the same geographic space and whose objective is to attain, within
some sort of common framework, increasing degrees of articulation between
their political, economic and social systems, without necessarily resigning
their national identity or sovereignty. In order to eventually achieve
the desired aims, the goals and time limits that are set are usually long
term; institutions and legal frameworks are created (for which there is
no mandatory model) and in the area of trade preferences, some of the
instruments that make them compatible with the requirements of the multilateral
trading system are used (especially those of article XXIV, paragraph 8
of the GATT, the so-called 'Enabling Clause', and article V of GATS).
These are sufficiently ambiguous in some of its key features so as to
provide a more than reasonable margin of maneuver for a valid and intelligent
legal engineering. These are processes and projects that can generate
overlapping and not necessarily complementary spheres of action of the
participating countries. Elaborating on the basis of what Luuk Van Middelaar
proposes in his stimulating book, included in the Recommended Reading
Section of this Newsletter, we could say that such spheres can be, at
the same time, individual (each nation on its own), collective (nations
acting together but only on certain issues) and common (the so-called,
at least in the European case, 'community space').
What accounts for the frustrations that tend to show when moving forward
in the settled path of this type of integration processes? Most commonly
the curve of disenchantment results from having established very ambitious
objectives and also from having generated high public expectations in
relation to them. Highly ambitious goals are defined, either by specific
commitments, either by the way they are promoted. There may also be a
wrong assessment, either at the time of the launch or during the negotiation
process, of the relative weight of the offensive and defensive interests
within countries. The concepts and operational instruments that are then
used are not always adapted to the specific realities nor to the needs
of the participating countries, but tend to be associated with certain
historical forms that are often based in theoretical and academic views
of the economic, political or legal realities. As a result of this, the
necessary, almost indispensable, balance between flexibility (to adapt
to the continuous changes in the contextual realities and particular interests)
and predictability (to become an incentive for productive investment decisions
in relation to the extended markets and the articulation of productive
networks) is not always achieved. When this balance is not achieved, an
erosion of the effectiveness, efficiency and legitimacy of the agreed
rules can be observed, often as in slow motion. If no adequate response
exists, the relentless march of the common project and process towards
irrelevance or, worse still, towards failure, is accentuated.
When Mercosur was created, for example, some of the protagonists at the
time used to assert that the member countries would achieve in four years
(the transition period established by the Treaty of Asuncion for the start
of the customs union with the adoption of common external tariff, without
defining what such an instrument should consist of) what had taken the
European half a century to accomplish. There was an enthusiasm that time
proved exaggerated, perhaps naïve. It was based on the prevalence
of factors that later became diluted, such as the need to address together
the FTAA negotiations, especially Argentina and Brazil; the relative coincidences
in the economic cycles and in the respective macro-economic and trade
policies, which started to show signs of exhaustion in the second half
of the nineties; and the need to tackle a bi-regional negotiation with
the EU that would diversify international economic relations in view of
the obvious interest of the U.S. to gain preferential trade areas in South
In turn, the weight of the European 'model' was one of the factors that
influenced the level of ambition of the Andean Group, at least in its
initial stage. It was reflected, especially at the institutional level,
in the driving role assumed by the Board of the Cartagena Agreement and
then with the creation of the Andean Court of Justice. It is likely that
the intense European technical cooperation finally tipped the formulation
of this body towards the model of the Court of Justice in Luxembourg,
despite alternative proposals that took into account the enormous distances
existing between the European and Andean regions and their respective
In other cases, the set objectives went beyond the interests of the countries,
reflecting exogenous demands, as was the case with the creation in 1960
of LAFTA. The instrument of the free-trade zone, provided in article XXIV
of GATT, with the freeing of substantially all the trade within a period
of twelve years proved to be too rigid for the region. It conditioned
the construction of a system of trade integration alien to the regional
realities and needs. What was sought originally was a preferential trade
area that would allow to pool and thus replace the network of bilateral
preferential trade agreements threaded since the global economic crisis
of the thirties. It was the U.S. pressure which introduced a figure difficult
to implement. Hence it was then necessary to replace it with the creation
of the Latin America Integration Association (LAIA), twenty years later.
But the damage was done: the bitter taste of a first and notorious failure
in achieving the goal of a greater integration of Latin American markets
remained. And maybe we can find in this experience the origin of a trend
that has endured to the present in regional integration. This consists
of assigning more weight to appearances than realities and, in particular,
of developing a culture of precariousness in the ground rules of inter-regional
trade, which were many times conceived to be complied "only to the
extent that is was possible". No doubt this trend may have affected,
even strongly, the impact of the integration commitments on the adoption
by business firms -especially small and medium-sized and of the relatively
less developed countries- of productive investment decisions that counted
as a true fact the access to the markets promised by governments and,
in particular, by the countries with domestic markets of larger relative
The assimilation of the concept of integration with the creation of a
new unit -be it a new nation or a new common economic space similar to
those of pre-existing national spaces- has also contributed to the sense
of frustration often produced by the attempts of different countries to
move towards common goals. The idea of an end result that in one way or
another involves overcoming the idea of sovereign nations prevails. Hence,
the importance that was attributed, in the integration narrative, to the
confusing and questionable concept of 'supra-nationality'. It was also
understood that such end result could be reached in a period of time that
was considered reasonable and therefore feasible.
What has been proposed assigns importance to a question that requires
collective thinking: what are some of the factors that would enable to
sustain over time the political will of a group of nations to work together
within the scope of an integration process?
Notwithstanding the need for further elaboration we can argue that, as
we pointed out in the aforementioned Newsletter of last June, there are
three factors that would deserve more attention: a) the capacity of adaptation
of the original project and its corresponding process to the continuous
changes that operate in the realities of the participating countries,
the regional environment and the global environment itself; b) the density
and quality of connectivity at all levels, but especially in production,
through networks developed as a result of the commitments made in the
framework of the process of integration, and c) the institutional quality
and, in particular, of the ground rules, measured by their effectiveness
(the ability to penetrate reality), their efficacy (the ability to produce
the results that gave rise to them) and their social legitimacy, (the
capacity to contemplate, through the process of creation of rules, the
social interests of all member countries, reflecting thus a dynamic picture
of perceived mutual gains). Without the sum of these three factors it
is difficult for a voluntary integration process -in the sense of systematic
joint work between sovereign nations that aspire to remain so- to last
in time, at least without undergoing profound changes.
What are the risks of the curve of disenchantment due to its possible
effects on the factors that lead a group of countries to attempt to develop
an integration process? We will return to this question in our upcoming
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Félix Peña Director
of the Institute of International Trade at the ICBC Foundation. Director
of the Masters Degree in International Trade Relations at Tres de Febrero
National University (UNTREF). Member of the Executive Committee of the
Argentine Council for International Relations (CARI). Member of the Evian
Group Brains Trust. More