| HOW TO CAPITALIZE ON A BI-REGIONAL NEGOTIATING
Reflections on the construction of a preferential relation between Mercosur
and the European Union.
by Félix Peña
English translation: Isabel Romero Carranza
A long road has been traveled in the difficult task
of building a special relation between Mercosur and the European Union
(EU). Today, almost thirty years after its outset, it is assumed that
the original goal remains unaltered. It is a path whose journey began
at a particular point in time worth noting, which was the end of the eighties
and the beginning of the nineties last century.
The negotiation and subsequent signing of the Treaty of Asunción
prompted in the EU countries the decision to try to promote the strategic
idea of what was supposed to be a bi-regional agreement, conceived from
the beginning as quite ambitious and of a preferential nature, but of
Several factors influenced the initial momentum of the bi-regional
process. Among others, we can point out the deep historical roots of the
relations between both regions, nourished by European migrations and investments
and by the shared history between our region and Spain and Portugal. The
convergence of cultural, social and political values, especially since
the affirmation of democracy in the Mercosur countries, can be mentioned
On the European side, another relevant factor was the launch of the
so-called Initiative of the Americas, which implied getting the message
that the US was planning to build a preferential trade relationship with
Latin American countries, inserted in the context of the historic triangular
relationship between Europe the US and Latin America.
After almost thirty years, how real has been the interest of both
parties in advancing the bi-regional negotiations? It is quite difficult
to explain why neither side capitalized on the acquired experiences, proposing
and agreeing on changes in the methodologies used to build the preferential
The importance of this bi-regional relation deserves a deep debate
on the way forward. It would have to be a pluralistic, multidimensional
and multidisciplinary debate, not focused on theoretical or academic approaches
but aimed at making practical recommendations oriented to the necessary
and possible course of action.
A long road has been traveled in the difficult task of building a special
relation between Mercosur and the European Union (EU). Today, thirty years
after the outset, it is assumed that the original goal remains unaltered.
This is, to take steps towards the institutionalization of a permanent
relation, with a political and strategic purpose, economic and social
content, and preferential commitments for goods, services, investments
and other issues relevant to bi-regional relations, in accordance with
the concrete interests and the multilateral legal rules accepted by both
parties, especially within the scope of the GATT and the WTO.
It is worthwhile noting that this path began at a very particular point
in time, at the end of the eighties and the beginning of the nineties
last century. This was, on the one hand, the moment in which the EU began
to adapt to the new international and regional reality resulting, among
other factors, from the collapse of the Soviet Union. On the other hand,
the Mercosur founding countries began to follow their own path to build
gradually a regional space of economic integration and preferential trade,
thus deepening the bilateral experience formally initiated by Argentina
and Brazil, in 1986.
The negotiations and subsequent signing of the Treaty of Asuncion prompted
in the EU countries -led by Portugal and Spain- the decision to promote
the strategic idea of what was supposed to be a bi-regional agreement,
imagined in the beginning as quite ambitious and preferential in nature,
but of gradual construction. The visit to Brussels of the Mercosur Foreign
Ministers in 1991, a few days after the signing of the Treaty of Asunción,
and the bi-regional meeting in Guimarães, Portugal, in 1992, were
the first steps taken in the direction of the bi-regional path.
At the same time, the Mercosur countries saw a precedent in the EU -a
"model" according to some enthusiasts-for the existential dimension
of their strategic vision (i.e.: why work together) and also in many aspects
for the methodological dimension of their project of regional integration
(i.e.: how to work together). Even some optimists believed that Mercosur
would achieve in a short time what the Europeans had taken more than thirty
years to accomplish. They were referring, in their youthful enthusiasm,
to the time that they supposed would demand to build the common market
enunciated in the Treaty of Asunción.
During this initial momentum of the bi-regional process, various factors
had a relevant influence, as is often the case in international relations.
Among others, we can point out the deep roots of the relations between
both regions, nourished by European migrations and investments and by
the deeply rooted shared history between our region and Spain and Portugal.
Another factor was the confluence of cultural, social and political values,
especially since the consolidation of democracy in the Mercosur countries.
This was not a minor fact since the EU was incorporating Eastern European
countries at the time.
However, there was another key factor. The launch of the so-called Initiative
of the Americas implied getting the message, on the European side that
the US was planning to build a preferential trade relationship with Latin
American countries. Inserted in the context of a historical triangular
relationship between Europe, the US and Latin America, it is an important
issue when trying to understand the European interest and behavior -including
its fluctuations- in relation to the Mercosur countries. For the most
part, this factor still holds a certain degree of validity today.
This last factor seems to have had a marked impact on the erratic European
enthusiasm for promoting bi-regional negotiations, formally initiated
in 1999. It can even be hypothesized that only by inserting the bi-regional
negotiating process in the context of a triangular relation it is possible
to understand some milestones that marked the cycle of advances, setbacks
and standstills that have characterized the negotiations. A fundamental
example in this respect was when the bi-regional negotiations stalled
in 2004, almost simultaneously with the final collapse of the FTAA negotiations.
Moreover, this hypothesis is supported by the fact that some thirty years
after the simultaneous start of the process that would have led to the
FTAA, the EU and the US have concluded free trade agreements with almost
the same Latin American countries.
This would allow advancing another hypothesis that may have special validity
on the European side. Specifically, that a bi-regional agreement could
only be politically feasible for the EU if Mercosur simultaneously concluded
a preferential trade agreement with the US-as was supposed to happen with
the FTAA. In other words, from a political perspective, it would be difficult
for the EU to face a situation in which its companies and investors had
preferential treatment, especially in the markets of Argentina and Brazil,
which would place them in a more advantageous situation than those of
American origin. Such a situation would not be compatible with the strategic
value that the Atlantic Alliance has had for the European countries -especially
belonging to Western Europe-at least up to now. This should not be overlooked
when imagining the process after the signing of the eventual bi-regional
agreement, where the possible reaction of American economic interests
could play a relevant role.
How real is and has been the interest of both parties in advancing the
bi-regional negotiations for the so-called free trade agreement? It is
difficult today to answer this question with certainty. The answer should
not be based only on what the respective protagonists point out in public.
On both sides we can find elements that would support the idea of a "bluff
game" (pretending to have the predisposition to negotiate), that
would later be followed by a typical "blame game" (blaming the
other side for the eventual standstill of the negotiation process).
The causes leading to the successive standstills are well known. However,
the only thing that is difficult to explain is why the acquired experiences
have not been capitalized by either side, proposing and agreeing on changes
in the methodologies used to build the preferential bi-regional space.
On many occasions, options have been identified to make the methodologies
used more flexible, compatible with a reasonable and feasible interpretation
of multilateral regulations -Article XXIV of the GATT-and the use of the
potential offered by the framework agreement signed by both regions in
1995 and which is still valid. The focus on a free trade agreement, conceived
with an almost dogmatic interpretation of its concrete scope, has continued
After the last negotiating meetings, everything would seem to indicate
a will to move forward, but at the same time, a difficulty to imagine
alternatives in the development of the road undertaken almost thirty years
ago. Even if the agreement were finally signed in the upcoming months,
as has been announced, the process for its entry into full force could
demand a period estimated in at least three years. The precedents of other
preferential trade agreements indicate that accidents -even fatal ones-usually
occur after the signature of the corresponding text. The recent case of
the TPP is illustrative in this respect.
The fact that the option offered by the framework agreement of 1995 to
use a methodology of advancing, simultaneously, through multiple lanes
in the construction of the bi-regional association has not been utilized
is quite telling. In this regard, a report from both parties on how much
progress has been made in the application of the mentioned framework agreement
would be a very useful instrument. Such report may exist, and if that
were the case, it would be very useful if it were published online.
The importance of this bi-regional relation, accentuated in view of the
current complex and uncertain international context, transcends the economic
and commercial and delves into the political and strategic. It would merit
a deeper debate on the way to move forward. This would have to be a pluralistic,
multidimensional and multidisciplinary debate, not focused on theoretical
or academic approaches but aimed at proposing practical recommendations
for a necessary and possible action.
The precedent of the methodology used in the meetings of the Evian Group,
under the leadership of Jean-Pierre Lehmann, recently deceased, could
be very useful in this regard.
Some of our previous work on the subject of the bi-regional negotiations
between Mercosur and the EU can be found on:
- Acharya, Amitav, "Constructing Global Order. Agency and Change
in World Politics", Cambridge University Press, Cambridge 2018.
- Amstrong, Shiro, "Trump's tariffs a call to arms for global economy",
East Asia Forum, "6 March, 2018, en
- Barbosa, Ruben, "Nova
Política Comercial dos EUA", "O Estado de Sâo
Paulo", 27 de Marco de 2018, en http://brasilsoberanoelivre.blogspot.com.ar/.
- Durán Barba, Jaime; Nieto, Santiago, "La Política
en el Siglo XXI. Arte, Mito o Ciencia", Debate - Penguin Random
House, Buenos Aires 2017.
- East Asia Forum, "Why ASEAN Matters", Quarterly Vol 10,
Nro 1, January - March 2018, en http://press-files.anu.edu.au/.
- Estevadeordal, Antoni, "Latin America in the new Asia-Pacific
trade order", Brookings Report, March 22, 2018, en https://www.brookings.edu/.
- Frankl, Viktor E. "Man's Search for Meaning", Foreword by
Harold S.Kushner - Afterword by William I. Winslade, Beacon Press, Boston
- Frankl, Vkltor E., "El hombre en búsqueda de sentido",
Herder, Barcelona 2015.
- Frankl, Viktor E., "Lo que no está escrito en mis libros.
Memorias", Herder, Barcelona 2016.
- Hufbauer, Gary Clyde, "Success
ensures ASEAN's long-term importance to the United States",
en East Asia Forum, 27 March 2018, en http://www.eastasiaforum.org/.
- Hui, Wang, "China from Empire to Nation-State", Translated
by Michael Gibbs-Hill, Harvard University Press, Cambridge - London
- Johnson, Steve, "Pan-African trade bloc faces lengthy obstacle
course", "Financial Times", London, March 28, 2018.
- Lawrence, Robert Z., "Five
Reasons Why thr Focus on Trade Deficits is Misleading", Peterson
Institute for International Economics - PIIE, Policy Brief, WASHINGTON
dc, March 2018, en https://piie.com/.
- Mahbubani, Kishore; Sng, Jeffery, "The ASEAN Miracle. A Catalyst
for Peace", Ridge Books, Singapore 2017.
- Manzoni, Carlos, "Quienes
ganan y quienes pierden con un acuerdo entre el Mercosur y la Unión
Europea", diario "La Nación", 25 de marzo
2018, en https://www.lanacion.com.ar/.
- Márkaris, Petros, "Próxima Estación, Atenas",
Tusquets Editores, Buenos Aires 2018.
- Mills, Greg; Obasanjo, Olusegun; Herbst, Jeffrey; Davis, Dickie, "Making
Africa Work. A Handbook for economic success", Tafelberg. Cape
- Natanson, José, "¿Por qué? La rápida
agonía de la Argentina kirchnerista y la brutal eficacia de una
nueva derecha", Siglo Veintiuno, Buenos Aires 2018.
- Rougier, Marcelo; Odisio, Juan, "La Argentina será industrial
o no cumplirá sus destinos". Las ideas sobre el desarrollo
nacional (1914-1980), Ediciones Imago Mundi, Buenos Aires 2017.
- Van Vechten, Carl, "El Tigre en la casa. Una historia cultural
del gato", Editorial Sigilo y Hueders, Buenos Aires 2018.
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