| CONCRETE ROADMAPS AND POLITICAL DRIVE AT
THE HIGHEST LEVEL:
Necessary conditions to build effective spaces of regional integration?
by Félix Peña
English translation: Isabel Romero Carranza
The idea of carrying out an initiative aimed at updating,
expanding and deepening the commitments made by the Latin American countries
in the field of economic integration and cooperation, especially within
the framework of the LAIA, has become more relevant in view of the major
challenges and the great opportunities presented by the new international
realities, especially after the Brexit and the election of Donald Trump
as President of the USA.
Based on the experience accumulated in the region regarding regional
integration commitments, it is possible to suggest some recommended approaches
to address priority issues for the preparation of the foundations of a
comprehensive Latin American trade and economic agreement.
It is essential to define a strategic direction to help set clear
objectives for the short, medium and long-term, in order to move forward
in a credible and sustainable manner in the development of a comprehensive
Latin American trade and economic agreement. The cooperation of the countries
of the region, which are members of the WTO, in the redesign and improvement
of the institutions and rules of the multilateral trading system must
be part of the regional cooperation and integration strategy.
The multiplicity of objectives of the initiative promoted by the ALADI
and the dynamics of the changes observed at global and regional scale
will require setting a hierarchy of goals and courses of action for their
achievement, as well as their continuous adaptation to the new realities
that will continue to emerge at both levels.
A strategy aimed at deepening the agreements between countries in
the region will require: (a) roadmaps that indicate concrete steps towards
the set goals and, in each case, the deadlines involved; (b) a strong
political drive expressed at the highest level of each country involved;
(c) participation of the business and social sectors in the negotiations;
and d) great transparency in the negotiations, aimed at achieving the
social legitimacy of the actions undertaken. These requirements can be
considered as necessary conditions for the construction of effective spaces
of regional integration.
The full integration of Cuba into a comprehensive Latin American trade
and economic agreement must also be a priority. This would help give the
ALADI initiative a political and strategic meaning that is currently relevant
for the region.
On April 21, at the ALADI headquarters in Montevideo, a meeting took
place with the aim of beginning to address the bases of a comprehensive
Latin American commercial and economic agreement. It was attended by authorities
and experts from various countries of the region. Representatives from
the ALADI, the ECLAC, the SIECA and the IDB -INTAL participated as well.
These institutions are responsible for carrying out the initiative proposed
by Carlos Chacho Alvarez, Secretary General of the ALADI. The meeting
was organized by Rodolfo Nim Novoa, Chancellor of Uruguay. (For information
on the meeting go to http://www.aladi.org/.
For the background, refer to the March
2017 edition of this newsletter on http://www.felixpena.com.ar/).
The idea of promoting an initiative aimed at updating, expanding and
furthering the commitments made by the Latin American countries in the
area of economic integration and cooperation, especially in the framework
of the LAIA, has become more relevant in view of the challenges and opportunities
posed by the new international realities. The facts brought to light after
the Brexit and the election of Donald Trump as President of the USA have
contributed to make these realities more evident, in particular their
potential effects on the international trading system. (On this topic,
see the September,
2016 issues of this newsletter on www.felixpena.com.ar; and the February
2017 issue on http://www.felixpena.com.ar/).
Based on the experience accumulated in the region in terms of economic
integration and cooperation commitments and in order to contribute to
the necessary debate that should take place in the countries of the region
and in their institutions, it is possible to suggest some recommended
approaches to address priority issues for laying the foundations of a
comprehensive Latin American trade and economic agreement.
In this regard, it would be essential to define a strategic direction
to help clearly define the short, medium and long-term goals in order
to move forward in a credible and sustainable manner in the development
of the mentioned agreement. These objectives should be linked to those
that have mobilized the ALADI member countries since its creation in 1980,
which involve creating a regional environment of cooperation and integration
that is functional to the objectives of economic and social development
of each country individually and of the region as a whole, based on principles
defined in the Treaty of Montevideo. They should also be viewed in the
broader perspective of the profound changes that are taking place in the
world trading system and their impacts on the new challenges and opportunities
present for each Latin American country and for the entire region.
The concerted action of the countries of the region that are members
of the WTO, for the redesign and improvement of the institutions and rules
of the multilateral system of international trade, must be part of the
regional cooperation and integration strategy. The upcoming WTO Ministerial
Conference provides an opportunity to show the region's aspiration to
act in a coordinated manner.
The multiplicity of objectives to be achieved within the scope of this
ALADI initiative and the dynamics of global and regional changes will
require a hierarchy of goals and courses of action and a continuous revision,
in order to ensure the adaptation to the new realities that are emerging
at both levels.
The flexibility that will be required in the instruments will have to
be made compatible with the predictability necessary to generate productive
investments based on national markets inserted in the regional space.
One priority would be to agree on different types of safeguards and safety
valves to help preserve the predictability required for productive investments
and to provide the needed flexibility in the commitments assumed, with
temporary scope and, eventually, with control by impartial technical bodies.
At the same time, connecting the economic and productive systems of the
countries of the region in a sustained manner will require increasing
their physical connectivity and the transport and logistics networks between
the countries committed to generating greater compatibility and convergence
of such systems.
Another priority will be to generate incentives for the convergence of
agreements already in place and concluded within the framework of the
LAIA. This would have to be a convergence towards more advanced objectives
Trade facilitation based on the use of new information technologies,
as well as the necessary climate of trust between all the players in cross-border
trade; customs cooperation; electronic commerce; mechanisms of cumulation
of origin, in particular in relation with agreements concluded with other
countries or regions; commercial defense; intellectual property; government
procurement; trade of services and technical cooperation are some of the
other priority issues to be addressed by deepening existing or future
It would also be appropriate to give priority to different types of actions
aimed at reducing or eliminating the restrictive effect on trade between
interested countries resulting from pronounced disparities in their respective
technical and health standards.
Another priority would be for the countries involved that are in condition
to move forward to take action for the promotion of transnational productive
chains and corridors, especially those that help intensify the internationalization
or regionalization of SMEs.
It would not seem necessary for all the ALADI countries or the Latin
American region as a whole to be always involved in those actions aimed
at deepening regional integration. On the contrary, the strategy to follow
must be of variable geometry and multiple speeds. The countries really
interested in moving towards the objectives pursued in each case must
participate. However, they must be open to the future participation of
those countries that initially do not consider they can participate or
that think it is disadvantageous for them to do so. One function of the
ALADI Secretariat would be to ensure that convergence is as broad as possible.
A strategy aimed at deepening the agreements between the countries of
the region will require: a) roadmaps that indicate concrete steps to be
taken towards the concrete goals set and, in each case, the deadlines
involved; (b) a strong political drive expressed at the highest level
of each participating country; (c) participation in the negotiations of
the respective business and social sectors; and (d) great transparency
in the negotiations, aimed at achieving the social legitimacy of the actions
undertaken. These requirements can be considered as necessary conditions
for the construction of effective regional integration spaces.
The courses of action that are undertaken in order to promote the insertion
of the economies of the region in the international environment will require
a great regional competitive intelligence effort. Here, the coordination
of the LAIA with the various regional agencies, especially the ECLAC,
the CAF, the INTAL-IDB, and SELA among others, could be essential.
The full integration of Cuba into a comprehensive Latin American trade
and economic agreement must be a priority. This will allow the ALADI initiative
to have a political and strategic meaning of current relevance for the
region. To this end, actions aimed at increasing the exchange of goods,
services and technologies as well as investments between the LAIA member
countries that participate in the agreement and Cuba should be promoted.
It would also be necessary to develop multiple forms of economic and technological
cooperation, including those actions aimed at promoting the integration
of local companies in production chains of regional scope.
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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