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I. Introduction.
This paper refers to the current outlook, at the beginning of 2009, regarding
the completion of the bi-regional agreements that the European Community
(EU) is negotiating with Mercosur and the Andean Community of Nations
(ACN).
Both bi-regional negotiations are characterized by a state of uncertainty
in relation to their future evolution. This fact is even more accentuated
in the case of the negotiations with Mercosur.
First we shall examine the course of events until the present day, the
current state of affairs and the future outlook for each one of the negotiations.
We will also take into consideration that these negotiations are taking
place concurrently with those of the Doha Round. Even when there is no
formal relation between the bi-regional and the global multilateral negotiations,
this fact has had implications for the respective negotiation strategies,
particularly those involving the European Union and Mercosur, as a consequence
of the relative importance that the issue of agricultural and agro-industrial
products has reached in this case.
Next, the respective negotiations will be evaluated first within the
framework of the rules agreed by the Latin American Integration Association
(LAIA), taking into consideration the possible effects on the preferential
agreements that are formalized between Mercosur or the Andean Community
and any other countries or commercial blocks. Secondly, they will be analyzed
in relation to the World Trade Organization (WTO) regulations, in particular
due to the preferential effect that any commercial agreements would have
if their scope reaches farther than those agreements involving the rest
of the member countries.
As a conclusion of our analysis, we will make some considerations on
the approach and methodology for the future development of bi-regional
associations, placing the stress on those aspects that may contribute
to the achievement of the desired strategic goals pursued in their creation.
These considerations will be analyzed from the perspective of the transformations
that have taken place in the international context since the inception
of the corresponding negotiations, as well as from the broader outlook
of the transatlantic economic and political relations between the regions
involved. Additionally, they will be analyzed in view of the strategic
relation of the European Union (EU) with Latin America and the Caribbean
(LAC), especially taking into account the upcoming EU-LAC Summit to be
held in Spain in 2010.
II. The bi-regional negotiations of the EU with Mercosur and the
Andean Community: past course of events and current outlook. Relation
with the Doha Round.
Formally, the bi-regional negotiations between the EU and Mercosur began
in April 2000 [1]. As a precedent, it should be noted that a General Agreement
of Inter-regional Cooperation had been previously signed in Madrid in
1995. This agreement, which has been ratified by all the parties, is still
in effect. Visits http://www.sice.oas.org/
and http://eur-lex.europa.eu/.
The negotiations for the agreement of strategic association contemplate
in this case -as with the other agreements that the EU has formalized
or is negotiating with countries in the region- three interrelated pillars:
the political, the commercial, and that of cooperation.
Regarding the commercial pillar, as per the official information provided
by the European
Commission, , the agreement being negotiated is based on a region-by-region
approach. Its aim is to be comprehensive and ambitious at the same time
and to have a WTO-plus scope, meaning that it would move a step farther
from the existing global multilateral agreements or those that are reached
by the current Doha Round negotiations. It would take the shape of a free
trade agreement, in accordance with Article XXIV of the GATT-1994. As
stated by the official European information, no sector of the commercial
liberalization would be excluded, even when the sensitivity of both parts
involving products and sectors would be taken into consideration. The
agreement should cover goods as well as services, investment and access
to government purchases. In addition, it should guarantee an adequate
protection of intellectual property, contemplate efficient competition
policies, and include an agreement on sanitary and phyto-sanitary regulations
and a mechanism for the resolution of commercial disagreements.
The official information available on the European side points out that
sixteen negotiation rounds had taken place until 2008 [2]. However, since
October 2004, the progress has only been on a technical level. In December
2007, a declaration was subscribed at a ministerial level expressing the
political will to relaunch the negotiation (see the document in this site
http://ec.europa.eu/).
One of the reasons that have been cited in an attempt to explain the
difficulties to make any progress is the close link between the bi-regional
negotiations and the WTO's Doha Round [3]. On this issue it has been noted
that, if the future evolution of global multilateral negotiations became
clearer, it would be feasible to relaunch and eventually conclude the
bi-regional ones.
It is important to remember that there is no formal requirement establishing
a necessary relation between the bi-regional negotiation processes -neither
in the case of Mercosur nor of the ACN- and the Doha Round. This is an
issue which is related, in each specific case (particularly with agricultural
products -their access to markets and subsidies-, market access for non-agricultural
products and diverse types of services), with breakeven points that the
different parties are trying to attain on each bi.-regional negotiating
front and its relation with what can finally be articulated within the
Doha Round -the idea of a "single pocket". In the case of the
EU-Mercosur negotiation, it has even been suggested, by a group of experts
from both regions, that the negotiation process be split into two separate
stages in order to examine the need to correlate its evolution with that
of the Doha Round [4].
However, at the beginning of 2009, the future of the Doha Round negotiations
remains uncertain after the consecutive failures of July and December
of 2008. The current global crisis and its impact on protectionist tendencies
could, nevertheless, motivate a formal relaunch of the EU-Mercosur bi-regional
negotiations this year regardless of how much progress is made by the
Doha Round. The idea of unfolding them into two phases, which was mentioned
in the preceding paragraph, would apparently still hold up.
To complete the current scenario, we should keep in mind that Decision
nº32 adopted by the Common Market Council in the year 2000 (http://www.mercosur.int/),
establishes the commitment of Mercosur member countries to jointly negotiate
agreements of a commercial nature with third countries or groups of countries
outside the zone when any preferential tariffs are granted. This regulation
is in force and is applied in the negotiations between the EU and Mercosur
only in reference to preferential tariffs. This means that it is not applicable
in the case of issues that are not related to tariffs or which are not
of a preferential nature. This differentiation is important for the outline
of scenarios on the possible future evolution of the negotiations between
the EU and Mercosur or, eventually, at a bilateral level with Mercosur
member countries, a hypothesis that could not be completely ruled out.
At the same time the negotiations between the EU and the Andean Community
[5] were launched in June 2007, on the occasion of the CAN Summit held
in Tarija (Bolivia) ((http://.ec.europa.eu/)
and initiated later in September of the same year, in Bogota (http://www.comunidadandina.org/).
They were preceded by the Rome Declaration on Political Dialogue of June
30, 1996 (http://www.comunidadandina.org/)
and by a Political Dialogue and Cooperation Agreement on December 15,
2003 (http://www.comunidadandina.org/).
It should be noted that Andean countries benefit from a preferential
access to the EU for those products included in the framework of the Generalized
System of Preferences (GSP) effective since July 1st, 2005 through the
modality of the Special Incentive Arrangement for Sustainable Development
and Good Governance (GSP+), (http://ec.europa.eu/
y http://www.comunidadandina.org/).
In the same manner we should emphasize that, even when the ACN is a customs
union ((http://www.comunidadandina.org/),
Decision 598 adopted on July 11, 2004 (http://www.comunidadandina.org/)grants
freedom for ACN member countries to exceptionally negotiate trade agreements
with a third country or group of countries. Article 1 of this regulation
explicitly establishes that "the Member Countries can conduct preferentially
community or joint negotiations, and exceptionally individual negotiations
for trade agreements with third countries or group of countries".
Article 2 adds "If it is not possible to conduct community negotiations
for whatsoever reasons, the Member Countries can negotiate bilaterally
with third countries. In such event, the participating Member Countries
should: a) Preserve the Andean legal system in the relations between the
Andean Community Member Countries; b) Take into account the commercial
sensitivities of the other Andean countries in the trade liberalization
offers; c) Maintain within a transparency and solidarity framework an
adequate exchange of information and consultations during the course of
the negotiations. Later, Article 5 establishes that "Upon concluding
the negotiations, the principle of the Most Favored Nation should be applied
as provided for in the Andean legal system". Article 6 contemplates
that "The purpose of the trade negotiations authorized through this
Decision can be the establishment of free trade areas and may refer to
topics other than the liberalization in the trade of goods". Additionally,
articles 3 and 4 enact the obligation to inform of the commencement of
negotiations, to keep the Andean Community informed of their evolution
and to notify the Commission prior to the signing of the corresponding
agreement.
Two ACN member countries have concluded (or are still negotiating) bi-lateral
trade agreements within the framework of this Decision. It is the case
of Peru with the US and several countries of the APEC and the LAIA realms
(http://www.mincetur.gob.pe/)
and of Colombia, also with the US (this last agreement is not yet in full
force) (http://www.mincomercio.gov.co/).
For their part, ACN member countries concluded on November 30, 2005,
an agreement of economic complementation (ACE 58) with Mercosur member
countries which contemplates differentiated tax-reduction programs for
the signing countries (http://www.mincetur.gob.pe/).
In January of 2009, the Council of the European Union modified the negotiating
mandate for the agreement with the CAN, thus opening up the possibility
of undertaking bi-lateral trade negotiations (Council of the European
Union. Press release, meeting 2918 of the Council, Brussels, January 19,
2009, 5471 (Presse 13) on http://www.consilium.europa.eu/newsroom).
. The new negotiating stage was initiated in Bogota in February 2009.
According to the press information available at the moment of this analysis
(February 15, 2009) the current focus would be on reaching an agreement
regarding the pillars of political dialogue and the block-to-bock cooperation
modality.
A bi-lateral trade negotiation with all the countries that express their
will to negotiate a comprehensive agreement with the EU, compatible with
the WTO regulations, would be introduced within this common framework.
Finally, there would be an attempt to articulate the bi-lateral processes
and those of political dialogue and cooperation in one single Agreement
of Association between the Andean Community and the European Union.
Differentiations would be admitted in these commercial negotiations in
order to acknowledge the asymmetries in development and the particular
sensibilities of each party.
In regards to the link between these bi-regional negotiations and those
of the Doha Round, as was already mentioned regarding the case of Mercosur,
they will be reflected in the manner in which the breakeven points of
the interests of each of the parties are articulated in relation to the
different chapters of the negotiating agenda. The WTO-plus scope of what
is agreed will depend then on the moment in which the bi-regional commercial
negotiation is finalized, whether this takes place before or after the
conclusion of the present Doha Round [6].
III. Bi-regional negotiations and WTO and LAIA regulations.
An important aspect to consider is that of the respective bi-regional
negotiations in view of the commitments taken on by the parts within the
scope of the LAIA and the WTO.
In short, the question that needs to be answered is the following: what
kind of conditioning arises from the LAIA and the WTO regulations in relation
to the commercial pillar of the bi-regional negotiations between the EU
and Mercosur and the ACN respectively?
In the case of the WTO, the limitations arise from the GATT and the GATS.
In both cases they are related with the exceptions to the most favored
nation general clause that expresses the non-discrimination principles
(article I of the GATT and article II of the GATS) and which are especially
contemplated by articles XXIV of the GATT and V and V-bis from the GATS
[7].
In the measure that the format chosen to fulfill the preferential trade
relations at the bi-regional level is that of a free trade zone, it will
be essential to meet all the requirements that are stipulated for such
instrument in the abovementioned article XXIV of the GATTS, particularly
in paragraphs 5-b) and 8-b) and in article V of the GATS, especially paragraphs
1, 2, 3-b and 4.
When dealing with negotiations between two processes of economic integration,
it is relevant to consider the differences established by the GATT between
a free trade zone and a customs union. In the first case there is no common
external tariff. The negotiation with a free trade zone could be materialized
by the EU -which constitutes a customs union, with an external common
tariff and shared commercial policies- and the other block -one with no
common external tariff nor, necessarily, with common policies- through
a network of bi-lateral free-trade agreements signed individually with
each member country of the block. It could also be carried out as a general
common agreement with the free trade zone, but including bilateral lists
with each individual country that forms part of it.
In the case of an agreement between the EU and a customs union, it would
be relevant to examine how this figure has been implemented in the other
block -in Mercosur or in the ACN in our case-. GATT regulations are, in
this sense, quite flexible. These do not necessarily match the theoretical
definitions of a customs union, nor the modality materialized by the Treaty
of Rome of 1957.
In fact, the main regulation to consider on this regard, in order to
asses the scope of the corresponding customs union, is that of article
XXIV, paragraph 8-a-i and ii, which states that "a) A customs union
shall be understood to mean the substitution of a single customs territory
for two or more customs territories, so that : i) duties and other restrictive
regulations of commerce…are eliminated with respect to substantially
all the trade between the constituent territories of the union or at least
with respect to substantially all the trade in products originating in
such territories; and that, ii) substantially the same duties and other
regulations of commerce are applied by each of the members of the union
to the trade of territories not included in the union. (Italicized by
the author).
From this definition we gather that, in order to be considered a customs
union, it is not necessary that all the exchanges between the "constituent
territories" are free from tariffs or other restrictions. It could
even be the case that only the trade of products originating in the customs
union is. Neither is it required that the duties and other trade regulations
be the same. What is stated is that they have to be substantially the
same. However, there is no definition as to what should be interpreted
by "substantially".
It is then possible form the perspective of the WTO rules, that a bi-regional
free trade agreement -even one between two "customs unions"-
could include partial differences, meaning multiple-speeds and eventually
variable geometries, particularly if they can facilitate the participation
of less developed countries belonging to any one of the blocks.
Thus, the room for maneuver that may be achieved on each case will depend
more on the regulations of the block with which the EU is entering the
association -in this case, the ACN or Mercosur- and on economic considerations
-that take into account for example special situations, sector sensibilities
or differences in the level of development- than on WTO rules. This is
even more evident in the case of services, in view of the explicit acceptance
of differentiations in favor of developing countries that arise from article
V-3-a.
The previous considerations suggest an even wider room for maneuver for
EU negotiations in the case of the ACN and Mercosur than what would be
left if a theoretical definition of customs unions were to be applied
-usually corresponding to a variation of the "perfect or complete
customs union"- or if such definition were to be based on the European
Union's own model.
In the case of LAIA, it should be noted that both Mercosur and ACN countries
are member countries. It would be relevant in this case to examine the
relation between the bi-regional negotiations with the EU and the obligations
assumed by the member countries of both integration processes within the
scope of the LAIA.
It is a well known fact that the creation of the LAIA changed the outlook
with which the idea of a Latin American integration had been developing
until then. In fact the Treaty of Montevideo of 1960, which established
the Latin American Free Trade Association (LAFTA), contemplated the creation
of a free trade zone -in the sense of article XXIV of the GATT- between
its eleven member countries. In practice, it was not possible to achieve
such goal.
Hence, through the Treaty of Montevideo of 1980 (TM80), which created
the LAIA (http://www.aladi.org/),
a fundamental change of focus was introduced. In Article 1 it was established
that "…the Contracting Parties pursue the integration process
leading to promote the harmonious and balanced socio-economic development
of the region (…). The long-term objective of such process shall
be the gradual and progressive establishment of a Latin American common
market". The method to reach such objective is mentioned in Article
4 and consists of setting up "…an area of economic preferences,
comprising a regional tariff preference, regional scope agreements, and
partial scope agreements."
For the purposes of our analysis, there are two main regulations of the
TM80 that should be taken into consideration in relation to the bi-regional
negotiations. These are articles 44 and 48.
Article 44 determines that "Any advantages, favorable treatments,
franchises, immunities and privileges which member countries apply to
products originating from or bound to any other member country or non-member
country, pursuant to decisions or agreements not foreseen in the present
Treaty or the Cartagena Agreement, shall be immediately and unconditionally
extended to the other member countries."
This most-favored-nation clause implies that any preference that Mercosur
or ACN member countries grant to EU countries should be automatically
extended to the rest of LAIA countries (which currently include Cuba).
However, it should be noted that, on June 13 1994, the Protocol on the
Interpretation of Article 44 of the TM80 was signed at the First Extraordinary
Meeting of the Council of Ministers of the LAIA (http://www.aladi.org/).
This protocol foresees a procedure by which the member countries that
form part of the agreements that are mentioned in the same article -which
includes those celebrated with third countries- may request, before the
Commission of Representatives, a temporary waiver of the obligations established
by Article 44 by presenting the arguments to support it.
This Protocol was negotiated in order to contemplate the situation created
by the addition of Mexico to the North American free trade area (NAFTA).
According to the information published on LAIA's official webpage, up
until now only seven countries, out of the required minimum of eight,
have submitted the corresponding ratification instrument. These countries
are Mexico, Paraguay, Ecuador, Chile, Argentina, Venezuela and Colombia.
Therefore, the Protocol is not formally in effect yet (http://www.aladi.org/).
Two other resolutions were approved for the transition period until the
Protocol came into force. These are Resolution 43 (I-E) (http://www.aladi.org/)
and Resolution 44 (I-E) (http://www.aladi.org/).
Fourteen years have elapsed since the signing of the Protocol of Interpretation
of Article 44 without it ever having become formally effective. Eventually
some legal questions could be raised regarding the validity of the effect
of the abovementioned resolutions in relation to a legal regulation of
the TM80 that is drafted in a version of the most-favored-nation clause
of an unconditional and automatic nature.
However, the political considerations which led to the approval of the
Protocol make it hard to imagine a scenario in which a LAIA member could
call upon the full enforcement of Article 44 without the interpreted version.
The question whether an eventual summoning of said clause in its original
version could be a possibility within the legal jurisdiction of a member
country remains unanswered.
On the other hand, Article 48 establishes that "Within the territory
of other member countries, capitals originating from member countries
shall have the right to a treatment not less favorable than that granted
to capitals coming from any other non-member country, notwithstanding
the provisions set out in agreements which might be concluded on this
matter by member countries under the terms of the present Treaty."
The abovementioned Protocol of Interpretation does not include this article.
This means that any advantage that a LAIA member country might give to
a third country would be automatically and unconditionally extended to
the rest of the member countries.
IV. The validity of the bi-regional strategic idea in the new international
context.
The world in which both the transatlantic relations between the EU and
the LAC and the bi-regional negotiations -dealt with in this work- are
taking place has undergone deep changes during the last years. As from
the beginning of 2009, these transformations have become more evident
and have even accelerated as a result of the global crisis, which is currently
affecting world trade.
There is a general consensus in that we are experiencing a period of
transformation and uncertainty in the evolution of the global context
where both regional integration spaces are inserted [8]. The international
system has become more heterogeneous, complex and unpredictable, and multipolarity
has accentuated in the plane of international trade.
Some of these changes have had a greater impact on transatlantic relations,
and especially on the bi-regional negotiation processes with Mercosur
and the ACN. In the case of Mercosur, if we take into account that the
initial impulse for the negotiations can be traced back to the first decade
of the '90s and that the formalized negotiation process only began in
2000, the changes that have occurred are quite substantial.
Three of these changes are the most meaningful in relation to our analysis.
They are:
- the emergence of new protagonists in the global economic competition
with its ensuing influence over the rule-making process which affects
it, especially coming form the global multilateral ambit of the WTO.
Clearly, this is the case of China. But it is the case of Russia as
well -a country which will be joining the WTO soon and which has a key
role for the EU, particularly in the energy sector-, or of the countries
of Eastern Europe, India and other emerging economies such as the case
of South Africa and Brazil in South America [9];
- the transformations that can be observed in regional spaces -both
in the case of the current EU as well as in the case of Mercosur and
the ACN- prompted by the new economic and political realities and which
have a strong incidence in the modalities of development of the respective
integration processes. The increase in the number of member countries
in the case of the EU, and also of Mercosur [10], or the decrease in
the case of the ACN as a consequence of the withdrawal of Venezuela
and, in particular, the importance that the issue of energy has acquired,
are introducing changes in the priorities of the integration agendas,
in the architecture of the respective processes and even in the power
relations with third countries and between the participating countries,
and
- the development of the Doha Round within the scope of the WTO, initiated
in 2001, and which has had a clear incidence on the agenda of bi-regional
negotiations between the Mercosur and the EU, as a consequence especially
of the agricultural issue [11].
Two other factors also seem to have influenced the development of the
bi-regional relations and, in particular, the evolution of the negotiating
process based on the idea of a strategic association.
One of these factors is the failure of the hemispheric negotiations of
the Free Trade Area of the Americas (FTAA). Beyond official declarations,
it seems clear that the conditioned reaction to the strategy of the US
for the development of its own network of free trade agreements in the
Americas has had a significant role in the trade negotiations of Brussels.
The agreements celebrated with Mexico and Chile, with Central America
and the Dominican Republic (CAFTA-RD) and those already mentioned with
Peru and Colombia (not yet in effect), are but a few examples. At the
moment of finishing this paper, there was no indication that the idea
of a hemispheric preferential negotiation would be revisited by President
Obama at the next Summit of the Americas, to be held in April, in Puerto
España, Trinidad and Tobago. In turn, it would be feasible to expect
initiatives aimed at strengthening the strategic relations with countries
of the region, such as Brazil, and in the energy sector. However, this
would not necessarily imply preferential relations in the sense of what
is established by the regulations of the GATT-WTO system.
The other factor is the European perception on the growing difficulties
of the Mercosur and the ACN. In the case of Mercosur, the inability to
perfect the Customs Union (in particular in relation to the double imposition
of the external tariff and to the approval of the Customs Code) and the
uncertainties, even legal ones, resulting from the addition of Venezuela
as a full member, contribute to emphasize the problems of efficiency,
identity and legitimacy of this integration process [12]. The incorporation
of Venezuela has not been formally completed, given that the Affiliation
Protocol has yet to be ratified by all the original members. Likewise,
Venezuela must incorporate Mercosur's legal patrimony as well as adapt
its foreign commercial policy to the external common tariff and to the
trade liberalization program. In the case of the ACN, the differences
have become more evident since the withdrawal of Venezuela, related with
the free trade agreement negotiations between Colombia and Peru and the
US, and have accentuated in relation with the negotiating strategy with
the EU.
If we combine these two factors with the abovementioned changes in the
world context, and we consider their impact on the corresponding priorities
of each regional integration space and their reciprocal relations, we
can understand the relative decline of the negotiation incentive that
has been evinced during recent times, in particular between the EU and
Mercosur. The priorities resulting from the global crisis and its impact
on the EU may also have an effect on the development of pending negotiations.
It is still difficult to foresee if this will be a positive or a negative
one.
However, a relative validity of the main objectives that led to propose
the current bi-regional negotiations may be observed at the same time,
first in the case of Mercosur and, more recently, in the case of the ACN
-or, eventually of is member countries.
There are three original objectives that seem to have preserved their
validity.
These are:
- the strengthening of a multipolar and efficient multilateralism as
a condition for the governance of a global international system in which
we find, at the same time, tendencies towards unilateral behaviors -more
recently in terms of protectionist reflexes to the consequences of the
severe global economic crisis- and the growing presence of forces that
drive towards fragmentation and conflict -which historically have led
to war [13]-;
- the reaffirmation of the idea of consensuated integration processes
between sovereign nations that share a common regional space as a contribution
to safeguard the prevalence of peace, political stability and democracy
in the corresponding regions, as well as to achieve a more balanced
global system in which reasonable governance conditions prevail, and
- the creation of a favorable environment for the increase in trade
and investments -especially through the development of production and
distribution networks- among regional integration spaces with shared
values and interests, but which have not yet fully profited form the
potential of their reciprocal relations.
After the evolution that the international system has experienced since
September 11, 2001, including the current or potential conflicts in Iraq,
Iran, North Korea, Afghanistan and Middle East -among others- and the
outburst of the current global economic crisis, the demands for balance
and rationality at a regional and global level have increased in the two
regions that are being analyzed in this work.
Vast sectors of the leadership and of the public opinion on both sides
of the Atlantic are aware of the frailty of the current international
reality and of how easy it would be to move backwards in the progress
achieved by the respective integration processes, beyond their evident
differences and degrees of development.
The greatest challenge for Latin America today, and for other regions
of the world including Europe, is to find the means to build a regional
space which is open to the world in which the centripetal forces overrule
the centrifuge ones and which accommodates multiple diversities. This
task presents a great challenge that will require a strong strategic vision
and political leadership .
Furthermore, it will also demand a significant protagonism from the civil
society as well as a great dose of creativity in the integration methodologies
and techniques used. In addition, it will call for prudence and political
vision on the side of the major external protagonists with current or
potential interests in the LAC, mainly the US, the EU and some of its
member countries, and China, among other emerging nations.
At the same time, it is necessary to keep in mind three relevant characteristics
that prevail in the current developments of the strategic idea of integration
between Latin American countries. These are the multiplicity of ambits
for the global and regional action of the different countries; the crisis
and the attempts at renewal of the institutionalized layouts -particularly
in Mercosur and the ACN-, and the strong accent on the political and,
even at times, the ideological dimensions.
In part, these characteristics reflect the impact on the region of the
abovementioned dynamics of change that has been unleashed in the last
years in the global international system in terms of protagonists, agendas
and factors that determine the international and internal security of
countries.
These transformations have provided every country -or at least those
which are ready to take advantage of them-, including the LAC countries,
with multiple non-excluding options, especially in relation to foreign
trade, international investments and sources of technical progress. In
this light, the old classifications North-South and South-South in international
economic relations are apparently being overcome in their validity for
the diagnostic and the action of each country and of its businesses at
the global international plane.
V. Contributions to the approaches and methodologies for the future
development of the bi-regional strategic idea.
After making some introductory considerations of a conceptual nature
and discussing the differences between transatlantic relations and bi-regional
negotiations, we will present several considerations referring to the
future possible developments aimed at deepening the strategic association
between Mercosur, the ACN and the EU, respectively, analyzing them within
the broader framework of the preparation for the upcoming EU-LAC Summit
of 2010.
1. Preliminary considerations
Certain introductory considerations of a conceptual nature might facilitate
our analysis:
- To begin with, it should be noted that the voluntary construction
of a cooperation and integration space between a group of sovereign
countries, devised to have permanence in time, originates in the strategic
decisions of those associated countries.
It is a construct that implies a long-term vision as well as shared
values and interests. The motivations can be diverse and may even
change as the agreed association develops. However, there is always
a strong political imprint, that is, a link with the relations of
power. The explicit objectives are normally expressed through the
multiple dimensions of the relations of the associated countries.
One of such dimensions, often times the most evident one, is related
to economic goals, either of trade and investment or of a broader
economic and social development, productive transformation and systemic
competition.
- In the second place, it is convenient to bear in mind that two strategic
objectives appear as dominant when dealing with nations that share a
regional geographic space. This arises from the rich experience of the
European integration as well as from the more limited integrations of
the Mercosur and the ACN. The first strategic goal is the governance
of the corresponding regional space in order to preserve peace and political
stability within and among the integrated nations. The second aim is
to promote decisions for productive investment -which generate employment-
in relation with the amplified market. The sum of both objectives is
what would enable the integrated countries to have the aspiration of
strengthening their international protagonism, as well as their negotiation
power and, at the same time, the ability to compete with their goods
and services in world markets.
- Thirdly, experience shows that there is not a single model on how
a group of countries may carry out a process of integration and multinational
cooperation. There are precedents that may or may not be taken into
account. There are even best practices that may derive from the observation
of formulas and models that have been successful among other countries,
especially in situations with a certain similarity. The integration
methods that are used may also be influenced by the legal conditions
derived from international agreements subscribed by the member countries,
either at the global multilateral level -the WTO-, the regional plane
-the LAIA-, or with third countries with which there are, for example,
preferential commercial agreements. At present time, the main legal
limitation is the one determined by the GATT-WTO system -at least for
those countries which are not members-. As discussed before, it is a
restriction that lends itself to multiple results and interpretations.
Considerations such as these also apply to the association between two
regional geographic spaces. It is the case of the strategic association
that has been promoted and, in a sense, developed between the current
EU and the LAC. These are two regional spaces with multiple connections
and whose origins date back in time. They also possess different degrees
of organization and economic development.
Unlike the European one, the LAC regional geographical space is characterized
by its fragmentation, its diversity and its low degree of organization
[14]. This is evinced in the periodic bi-regional Summits. In them, Europe
presents itself as a unit and, in many issues, does so through one single
voice. LAC, in turn, has multiple expressions which reflect all kinds
of diversities. Unlike what happens with Europe today, a single institutional
ambit which corresponds to the whole regional geographic space does not
exist in the case of the LAC [15].
The LAC is a region with multiple sub-regions and different levels of
organization. Four of these sub-regions stand out: they are the Common
Market of the South (Mercosur), the Andean Community of Nations (ACN),
the Central American Integration System (SICA) and the Caribbean Community
(CARICOM). These coexist -and even associate- with some other countries
of the region that have opted to preserve a greater freedom of action
in their strategies for international insertion -especially in the commercial
plane-. Such is the case of Chile and, in a certain way, of Mexico (which
at the same time is part of the North American Free Trade Agreement (NAFTA)).
The idea of the formalization of a strategic association conceived as
the central axis of the relation between two regions began to take shape
at the beginning of the '90s with the biennial Summit system, on the one
hand, and, on the other hand, with a network of agreements of association,
some of which were finalized and are still effective and others which
are in the negotiation process.
2. Two differentiated levels: relations and bi-regional negotiations.
At times, a strong trend to place the focus on the negotiations to
conclude bi-regional strategic association agreements has been observed
in the relations between the processes of integration of the Mercosur
and the CAN with the EU. At the same time, but not necessarily in a connected
way, the cooperation programs between the EU and both regions have continued
to develop.
However, a difference should be made between the broader ambit of the
transatlantic relations between regional integration spaces -which go
beyond the government level and impact every dimension of the interactions
between regions which share the common trait of being institutionalized
multinational spaces-, and that of bi-regional negotiations to conclude
strategic association agreements -which are essentially government-related
[16].
Transatlantic relations are nurtured by all kinds of interactions -not
just economic ones- that emerge from the multiple communicating vessels
that exist between two regional spaces that have undertaken voluntary
integration processes and which have significant differences and common
traits at the same time. A thorough understanding of such interactions
is essential in order to determine realistic courses of action that lead
to the deepening of the bi-regional relation.
These are transatlantic relations that are expressed and supported, above
all, by the compact web of interests and, to a certain extent, by factual
solidarities -in the sense of Jean Monnet's founding expression- that
have developed over the years -centuries in fact- between the countries
of the regional European space and those which form part of the Mercosur
and ACN sub-regions. Migratory, investment and commercial flows have nurtured,
through time, an interdependence between the countries on both sides of
the Atlantic that has become strong and rich in nuances. This has resulted
in common interests and values which transcend the political and economic
ambits and penetrate deep into the cultural plane.
They are, thus, transatlantic relations which have a historical root.
It would be extremely difficult, not to say impossible, that they stop
developing in the future, almost independently from the will of the multiple
protagonists involved.
In turn, bi-regional negotiations are the result of the assessment made
at one point by both regional institutional spaces of the convenience
of threading a strategic association based on three pillars: the political,
that of cooperation and the commercial, through a free trade zone in the
sense defined by Article XXIV of the GATT-1994.
Indeed, this was an assessment that took into account the rich history
of the mutual relation, particularly expressed through concrete economic
interests both at the commercial as well as at the investment level. Moreover,
it took into account the perception of a global international system which
had initiated, since the Cold War, an accelerated process of transformation.
One of the factors that had an effect on the beginning of the path towards
bi-regional negotiations was, among others, the initiative taken by the
government of President George Bush, in June 1990, for the development
of a free trade space "from Alaska to Tierra del Fuego". Such
initiative later translated into the objective of negotiating a Free Trade
Area of the Americas (FTAA), which was formally approved by the countries
of the Western Hemisphere at the Miami Summit of 1994.
For what was at the time the European Community, this initiative constituted
one of the main political and economic incentives to negotiate strategic
association agreements with countries of the region. A free trade agreement
was signed first with Mexico and, years later, with Chile.
It is within such a context that the formal inception of the bi-regional
negotiations with Mercosur took place in 2000. However we can recognize
their precedents in the steps that were taken since 1991 and whose main
milestones are the visit of Mercosur's Foreign Affairs Ministers to Brussels
in April of that year -an event imbued with symbolism which happened just
days after the signing of the Treaty of Asuncion on March 26, 1991-; the
meeting of Ministers in Guimaraes (Portugal) in April 1992; the signing,
that same year, of an inter-institutional agreement and the formalization
of the general agreement of bi-regional cooperation of Madrid, in 1995.
Even before the formal negotiations were even mentioned, such actions
were intended to signal the mutual interest of advancing the transatlantic
relations between both regional integration spaces.
Negotiations should have been finalized by 1994, but this was not possible.
As was mentioned before, the process of bi-regional negotiation has gone
into a state of relative hibernation since then. It has experienced some
activity, which has generally been unnoticeable for those who are not
negotiators, and constant declarations about the political will of finalizing
them, most of them with little impact on the respective public opinions.
Concretely, these are negotiations which, since 1994, have suffered a
severe crisis in their efficiency and, as a result, in their credibility.
It would be advisable not to reduce the future agenda of the reciprocal
relations between these spaces of regional integration to the commercial
negotiations. These represent just one of the possible dimensions of such
relations but are not the only dimension and probably not even the most
important one.
3. Considerations for future action.
The following are some considerations that may provide guidance for the
roadmap for future action. These arise from the different aspects that
were previously analyzed regarding the bi-regional negotiations between
Mercosur and the ACN, respectively, and the EU:
- The creation of a strategic relation between the EU and the ACN through
a network of bi-regional agreements with different modalities and coverage,
including non-preferential ones, has become even more necessary in account
of the recent evolution of the international context and the common
interests of both regions, particularly that of strengthening an efficient
multilateral system that reflects the current distribution of world
power as a necessary condition for global governance.
- This construct requires to be viewed through a political prism, beyond
the multidimensional character of the bi-regional relations and negotiations.
The three pillars (political-cooperation-trade) must be closely linked
under a political leadership in accordance with the desired long-term
strategic goals. Without detriment of the fact that this is an essential
dimension, it does not seem advisable that the strategic bi-regional
relations be guided solely by the preferential trade negotiations.
- It would seem convenient to visualize scenarios in which the transatlantic
relations between the EU and the sub-regional geographic spaces of the
Mercosur and the ACN are intensified, even without the conclusion of
the bi-regional commercial negotiations, at least as they were originally
planned. A distinction should be made at this point between the preferential
agreements -in the sense of the WTO stipulations- and those courses
of action and commitments that lack a preferential aspect. This distinction
carries a strong potential for the future.
- The strengthening of transatlantic relations could be achieved irrespective
of the fate of the respective bi-regional commercial negotiations and
even of the Doha Round itself.
- There are relevant aspects of the respective regional agendas in which
it will be possible to develop cooperation actions that not necessarily
require the conclusion of negotiation processes such as the ones that
have been initiated in the later years. These cooperation actions should
focus on the development of a compact web of interactions between both
regions, with an active participation of the different social sectors,
including businessmen. The bi-regional social networks may generate,
in turn, incentives to move forward in the formalization and deepening
of preferential trade agreements.
-
Without discarding other forms of cooperation, we could mention,
as examples, different imaginable modalities of cooperation in relation
to the global climatic change, to the development of alternative sources
of energy, to productive integration, to joint technological development
and to migrations. On this respect, there is a precedent in the extremely
flexible approach favored in the bi-regional relation between the
EU and Asia through the Asian-Europe Meeting (ASEM) and even with
the US. These are issues that, in the case of Mercosur, fit into the
agenda that ensues from the General Agreement of Madrid of 1995. Their
character is not necessarily a preferential one in the sense of the
WTO. This is made evident by the fact that some of these issues have
been included in the agenda of the strategic association between the
EU and Brazil, agreed at the Second Brazil-EU Summit held in Rio de
Janeiro on December 22, 2008 (http://www.mre.gov.br/).
- The business sectors -that often reflect the interests of transnational
companies acting in both regional integration spaces as is the case
of the automotive industry, among others- have not always profited from
the existing cooperation potential, neither within the bi-regional transatlantic
axis nor in that of conjoint projection into other regional spaces,
such as the particular case of Asia [17].
- It would seem that businessmen from both regions acting in association
have not yet exhausted their force of influence to affect the actions
that may be undertaken at the government level, including those related
with the ongoing bi-regional negotiation processes [18].
- The inclusion of differentiated methods which contemplate multi-speed,
variable geometries and sector integration mechanisms, combined with
a reasonable degree of collective disciplines, will enable to reach
bi-regional agreements that are functional for the different realities
existing in both regions and within each one of them [19]. The ASEAN
experience and that of the very same European integration provide actual
examples of such methods [20].
- What was previously affirmed does not imply ignoring the fact that
the conclusion in reasonable terms of the current bi-regional negotiations
as they were originally proposed or, eventually, through a reformulation
of their goals, format and methods, could favor the institutionalization
and, thus, the stability of the relations among the different spaces
of regional integration.
- The bi-regional negotiations and the Doha Round have several points
in common due to their respective agendas. Formally, they are not necessarily
conditioned. If the Doha Round could not be completed in a reasonable
period of time -an issue that was raised at the G20 Washington Summit
last November- it would still be possible to articulate a balance between
the interests of the different parts which takes into account the future
evolution once the global multilateral negotiations are concluded [21].
- Both WTO and LAIA regulations offer sufficient room for the creation
of preferential bi-regional agreements that introduce elements of differentiation
and flexibility in their commitments. ACN regulations enable to reconcile
general frameworks for bi-regional association with different modalities
of flexibility in the preferential commercial agreements. In their present
state, Mercosur regulations do not allow this. However, there are no
restrictions which necessarily derive from the Treaty of Asuncion. The
existing restriction refer solely to the preferential tariff arrangements.
- The triangular integration projects which benefit the less developed
countries of the LAC, may constitute one of the key elements of a joint
bi-regional strategy of solidary development that contemplates the existing
economic asymmetries of the region. The EU has a vast experience in
this subject that could be applied in its relations with the LAC countries.
- The preparatory stage of the next EU-LAC Summit, to be held in Spain
in 2010, provides a valuable opportunity to assess the evolution of
the bi-regional negotiations of the EU with Mercosur and with the CAN.
An intense participation of the social and political sectors in the
debate process of this preparatory stage might help capitalize from
the accumulated experience, even from the least positive aspects, in
order to contribute to the outline of a feasible roadmap that allows
to move forward in the creation of a dense network of bi-regional agreements
and actions, taking into account the strategic objectives that were
originally delineated, as well as its adaptation to the new regional
and global realties. In this preparatory stage, the regional Parliaments
acting collaboratively could have an active role in the promotion of
the necessary debates.
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