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  Félix Peña

INTERNATIONAL TRADE RELATIONS NEWSLETTER
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RESULTS OF A TIMELY AND CONSTRUCTIVE DIALOGUE:
Progress towards a regional strategy for convergence in diversity.

by Félix Peña
December 2014

English translation: Isabel Romero Carranza


 

Convergence or confrontation? Two options evoked by the relation between Mercosur and the Pacific Alliance. Choosing one or the other transcends the economic and the commercial level It delves deep into the political as it is closely related with regional governance and the prevalence of a climate of harmony functional to democracy and to the economic and social development of the member countries.

This topic was addressed at the seminar held last 24 November in Santiago de Chile. It involved the active participation of the Ministers of Foreign Affairs and Trade of countries of the Pacific Alliance and of Mercosur, as well as representatives from business and labor institutions and the academia.

As a result of the dialogue that took place, it was made clear that the participants value the idea of "convergence in diversity". It is considered the most appropriate strategy in the current global economic and political context, and a reflection of how much has been accumulated in the relations between the member countries of both schemes after more than fifty years of regional integration efforts. It was noted that convergence does not imply unifying Mercosur with the Pacific Alliance, nor engaging in tariff negotiations between the two schemes (without prejudice of furthering the existing ones within the framework of LAIA). It does imply, however, recognizing the differences between the objectives and methods of both schemes, and even among the strategies and policies for development and trade of its member countries. It also involves developing short agendas and roadmaps to advance in areas and issues that may be of most interest for countries participating in either scheme, or in the remaining integration agreements of the region.

The meeting was constructive and left positive results. The first of them was to place both schemes -each with its own objectives and methodologies-, in the broader context of the challenges posed at the global level and of the opportunities that are open to a region, that counts as one of its main assets the fact that it belongs both to the Pacific and to the Atlantic, and that has a strong potential for the development of products and services linked with agribusiness, energy, and mining. The second result was to identify some issues and sectors where shared approaches are feasible. And the third was to show that the dialogue and the exchange of views, with the participation of representatives from various sectors of each country, is the most recommended way to broaden the agenda for the construction of a region in which convergence in diversity prevails.


Convergence or confrontation? Two options evoked by the relation between Mercosur and the Pacific Alliance. Choosing one or the other transcends the economic and the commercial level. It delves deep into the political, as it is closely related with regional governance and the prevalence of a climate of harmony functional to democracy and to the economic and social development of the member countries.

It is an issue that, moreover, requires accurate data on the realities of the relations between the countries of both regional spaces. Hence the importance of the recent publication of a new ECLAC report entitled "The Pacific Alliance and Mercosur. Towards convergence in diversity" (http://repositorio.cepal.org/), which provides the necessary information for an approach based on the realities of the relations between what are currently the main institutional frameworks of integration in Latin America: Mercosur and the Pacific Alliance.

The report was specially prepared to be presented at the Seminar on "Dialogue on Regional Integration: Pacific Alliance and Mercosur," which was held on November 24, 2014 in Santiago de Chile. Summoned by Heraldo Muñoz, Chile's Minister of Foreign Affairs, among the participants in its three discussion panels were the Ministers of Foreign Affairs of Argentina, Brazil, Chile, Guatemala (which represented the Central American and the Caribbean integration spaces), Mexico, Paraguay, Peru and Uruguay; the Ministers or Deputy Ministers of Trade of Argentina, Colombia, Peru and Mexico, and six representatives of the civil society of countries in the region (business institutions, trade unions and independent experts). These panels for dialogue were moderated by the Secretary General of the OAS, the President of the CAF Development Bank of Latin America and the Secretary General of LAIA, respectively.

The seminar was held at the Centro Cultural Gabriela Mistral with the presence of public and journalism. It was opened by Michelle Bachelet, President of Chile, who also hosted a luncheon. In her opening remarks she urged for dialogue and to "dream out loud". The initial presentation was then made by Chancellor Heraldo Muñoz. He suggested the main outlines for the strategic idea of convergence in diversity and the objectives of the dialogue that was to take place at the Seminar (for the text of his presentation go to http://www.minrel.gob.cl/). In this regard, it should be noted that the Ministers of Foreign Affairs of the member countries of both schemes had had a working meeting two weeks earlier, in Cartagena de Indias, Colombia, in which the central theme of the seminar was addressed, as had been previously proposed at the Summit of the Pacific Alliance in Punta Mita, Mexico. (Refer to the July 2014 issue of this Newsletter on http://www.felixpena.com.ar/).

At the time, we noted about the initiative of the Chilean government that "while it refers specifically to the necessary articulation between Mercosur -especially if the methodological renewal is achieved- and the Pacific Alliance -especially if its incipient commitments are fulfilled-, its approach focuses on the idea of differentiated commitments and speeds that, if inserted in common institutional and regulatory frameworks such as LAIA at the regional Latin American level or a renewed and strengthened WTO at the global multilateral level, would neutralize the systemic fragmentation trends observed today."

And we added that: "It is an idea that may be central so that the agreements that are being negotiated contribute to the goal of achieving reasonable guidelines for regional and global governance. It involves reconciling the partial scope approaches with a joint vision that is essential for promoting world trade in a favorable context for peace and political stability and, at the same time, for the economic and social development of all countries. Showing that this is possible might be a worthy goal to nourish the agenda of cooperation between Latin American countries. Its effects would then transcend the regional scope. It will require, though, a good dose of perseverance, technical imagination and political will." (See the March 2014 issue of this Newsletter).

The aforementioned ECLAC report helps verify the density of the network of agreements and existing relations between the countries from the Alliance and from Mercosur. It is a network that has intensified in recent decades, especially in some of its connections, such as those in the bilateral trade between Chile, Peru and Colombia, on the one hand, and Brazil and Argentina, on the other. For example, the partial agreements concluded between these countries, within the framework of LAIA, and the relations between Mercosur and the Andean Community of Nations have already produced a complete tariff reduction between Chile and Mercosur countries (100%). The percentages are also high in the cases of Peru (88%) and Colombia (90%). (See the texts of these agreements and their respective lists of tariff reductions on http://www.aladi.org/). Another relevant fact is that in 2013 intra-Mercosur trade represented 14% of the global trade of its member countries, while intra-Alliance trade represented only 3.5%. In the first case, the percentages are much more significant if one considers the trade of manufactures. In turn, exports of the countries of the Alliance to Mercosur are higher than intra-Alliance (in 2013, the intra-Alliance were US$19,500 million whereas those destined to Mercosur totaled US$23,700 million). Chile, Colombia and Mexico exported more to Mercosur than to the Alliance countries. Additionally, data on the trade of services and investments -even if incomplete- reveals the intensity of the relations between the Pacific Alliance and Mercosur countries, especially with Argentina and Brazil.

As a result of the rich dialogue generated at the Seminar of Santiago de Chile, it became clear that participants value the idea of "convergence in diversity". They view it as the most appropriate strategy in the current global economic and political context, and as a reflection of how much has been accumulated in the relations between its member countries after more than fifty years of regional integration efforts.

As was pointed out from the beginning of the Seminar, both by President Bachelet and later by Chancellor Muñoz, convergence does not imply unifying the two integration schemes nor engaging in tariff negotiations (without prejudice to strengthening the existing ones within the scope of LAIA). It does imply, however, recognizing and respecting the differences between the objectives and the methods of both schemes, and even between the trade and development strategies and policies of its member countries. Additionally, it also involves setting short agendas and roadmaps to advance in those areas and issues that may be of most interest to countries participating in either scheme, or in the remaining integration agreements of the region such as those of the Caribbean and Central America.

Several issues were identified as deserving priority action. These were mentioned by several participants of the Dialogue of Santiago and also in the ECLAC report. Among others, the main ones were: physical connectivity; trade facilitation; production linkages and SME participation in them; student exchanges, including reciprocal internships between companies; the development of tourism; the diagnostic capabilities on global economic competition; innovation and scientific and technological development, and monitoring and participation in international trade negotiations, both at the global multilateral level and at the interregional level.

With regard to the relations with other regions, the need to coordinate positions on upcoming events of importance for Latin America, such as the China-Latin America Forum to be held in Beijing next year, and the European Union-Latin America Summit to be held in Brussels, was pointed out. In both cases the Community of Latin American and Caribbean States (CELAC) has a central role in coordinating the positions of the countries of the region. The coordination of positions in relation to meetings of the G20 and the Conference on Climate Change (COP21), to be held in Paris in December of 2015, was also mentioned.

The meeting left positive results. The first was to place Mercosur and the Pacific Alliance, each with its own objectives and methodologies, in the broader context of the strong challenges that are emerging at the global level, and also of the opportunities that are opening for a region that counts as one of its main assets the fact that it belongs both to the Pacific and to the Atlantic, and that has a significant potential for developing products and services linked with agribusiness, energy and mining, among others. The second result was to identify those issues and sectors where it is feasible to have shared approaches between all or some of the countries of both schemes. And the third was to show that the dialogue and the exchange of views with the participation of representatives from governments, production and labor sectors, and the academia, is the most recommended way to expand the agenda for the construction of a region in which convergence in diversity predominates.

Perhaps the main challenge that was established as a result of the Santiago de Chile Seminar is to devise and develop short agendas and roadmaps for the priority areas of future joint action between the members of the different integration schemes. It is a challenge that involves governments but also business, labor and academic institutions. On this occasion it was also confirmed that the existing institutional framework of the region opens a wide range of possibilities in terms of the areas through which to harness the momentum and pursue the development of those joint actions identified, as well as of those that are favored in the future.



Recommended Reading:


  • Almeida, Paula Wojcikiewicz, "Mercosul. Desafios para a Implementacão do Direito e Exemplos do Brasil", FGV Direito Rio, Juruá Editora, Curitiba 2014.
  • Anlló, Guillermo; Bisang, Roberto; Campi, Mercedes (coordinadores), "Claves para repensar el agro argentino", Eudeba, Buenos Aires 2013.
  • Banco Interamericano de Desarrollo, "Informe Mercosur N° 19. Segundo Semestre 2013 - Primer Semestre 2014", INT-INTAL, Nota Técnica IDB-TN 719, Noviembre 2014, http://idbdocs.iadb.org/.
  • Basu Das, Sanchita, "Is RCEP the same old trade paradigm?", East Asia Forum, December 6, 2014, http://www.eastasiaforum.org/.
  • Bobbio, Norberto, "Derecha e Izquierda", con prólogo de Joaquín Estefanía, Taurus, Buenos Aires 2014.
  • Buzan, Barry, "An Introduction to the English School of International Relations. The Societal Approach", Polity, Cambridge - Malden 2014.
  • CCAB, "La influencia británica en el desarrollo de la Argentina - British Influence on the Development of Argentina", Cámara de Comercio Argentino-Británica - 100 Años -Buenos Aires 2014.
  • CEFIR, "Hipótesis para el Mercosur que viene", CEFIR - FES, Montevideo 2014.
  • CEPAL, "La Alianza del Pacífico y el Mercosur. Hacia la convergencia en la diversidad", CEPAL, Santiago de Chile, Noviembre 2014, http://repositorio.cepal.org/.
  • Cruz, Manuel, "Adiós, historia, adiós. El abandono del pasado en el mundo actual", Fondo de Cultura Económica, Buenos Aires 2014.
  • CUTS International, "National Foreign Trade Policy of India. Focus on Development Dimensions", CUTS International with support of UKAid, Jaipur, August 2014, http://www.cuts-citee.org/.
  • Duran, Washington, "El Acuerdo de Libre Comercio entre el Mercosur y la Unión Europea. Antecedentes y perspectivas", Consejo Uruguayo de Relaciones Internacionales (CURI), Montevideo, 1° de diciembre de 2014, Análisis N° 06/14, www.curi.org.uy.
  • Frayling, Christopher, "The Yellow Peril. Dr. Fu Manchu & the Rise of Chinaphobia", Thames and Hudson, New York 2014.
  • Grandin, Greg, "The Empire of Necessity. Slavery, Freedom, and Deception in the World", Metropolitan Books, Henry Holt and Company, New York 2014.
  • Harnecker, Marta, "Un mundo a construir. Nuevos caminos", LOM Ediciones, Santiago de Chile 2014.
  • Kavalski, Emilian, "How does Asia perceive China's new approach to international relations", East Asia Forum, December 2, 2014, http://www.eastasiaforum.org/.
  • Moneta, Carlos; Cesarín, Sergio (Editores), "Escenarios de Integración. Sudeste Asiático - América del Sur. Hacia la construcción de vínculos estratégicos", EDUNTREF, Buenos Aires 2014.
  • Senier, André, "Buda y el budismo. Una figura, una doctrina y una filosofía al alcance de todos", De Vecchi Ediciones, Barcelona 2012.
  • Serbin, Andrés, "Squaring the Circle? Transatlantic Relations and New Latin American Regionalism in a Changing Global Environment", in GMF, "Atlantic Currents. An Annual Report on Wider Atlantic Perspectives and Patterns", The German Marshall Fund of the United States (GMF) - OCP Policy Center, Washington - Rabat 2014. pp 61 to 80.
  • Tello, Angel Luis, "Escenarios Mundiales. Situaciones y Conflictos", Editorial de la Universidad de La Plata, La Plata 2013.
  • UNCTAD, "Trade and Development Report, 2014. Global governance and policy space for development", United Nations Conference on Trade and Development (UNCTAD), Geneva, September 2014, http://unctad.org/en/PublicationsLibrary/tdr2014_en.pdf.
  • WTO, "Technical Barriers to Trade", WTO - Agreements Series, Geneva 2014, http://www.wto.org/.
  • WTO, "World Trade Report 2014. Trade and development: recent trends and the role of WTO", WTO, Geneva 2014, http://www.wto.org/.
  • Xi, Jinping, "La Gobernación y Administración de China", Ediciones en Lenguas Extranjeras, Beijing 2014.
  • Yofre, Juan B., "Fue Cuba", Editorial Sudamericana, Buenos Aires 2014.
  • Zerka, Pawell (ed.), Lledó, Elisa; Hassel, Johan, "How does going global come about?", demos Europa - FRIDE - Global Utmaning, Warsaw 2013, http://www.demosservices.home.pl/.

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 information.

http://www.felixpena.com.ar | info@felixpena.com.ar


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