1. Some main challenges for global governance in a G-0 world.
With regard to the issue of global governance at least three approaches
are possible. Firstly, global governance is related with the classic tension
between order and anarchy, which in its most extreme version refers to
the alternation between peace and war in the relations among nations (Aron1962).
This is a tension that has had in the long history epicenters mainly of
a regional scope. In those epicenters the connectivity and, the physical
proximity between sovereign political units have intensified the tension
originated from the perception of opposed values and interests, which
many times have led to conflict and eventually armed confrontation among
neighbors. Since the World War II, especially due to the collapse of physical
distances resulting from technological changes in communications and transport,
chain reactions caused by regional conflicts have often enlarged their
geographical scope. So in this first approach, global governance is related
with the existence of institutions and rules that, due to their effectiveness
and legitimacy, ensure the prevalence of an international order that neutralizes
the tendencies towards the use of force among nations at the regional
or interregional level.
Various other approaches to global governance are indeed possible. One
of them refers to unequal effects resulting from the organization of production
in transnational value chains. On the one hand, the global transnational
productive networks contribute to accelerate the transmission of the impact
of economic and financial crisis between nations, even distant ones, such
as has been evident after the recent 2008 crisis. It has visible effects
still present in many countries, calling yet for certain reserve in the
diagnosis of its defeat. But on the other hand, precisely due to the connectivity
and chain effects that they generate between the different economic systems
at a trans-national scale, the proliferation of such productive networks
increases the interest of nations in avoiding a worsening of the crisis
through the policies applied to defend themselves. This is almost the
opposite of what happened during the Great Depression of 30's. The ease
of contagion generates a collective interest in answers that preserve
global order and governance in the face of any trend towards a "run
for your life" attitude. At the same time it promotes favorable reflexes
toward the idea of an effective international economic order and of global
A third approach -the one that we are going to focus on-, is related
with the capacity of the international system to articulate solutions
for relevant issues of the global economic agenda that, due to their scope,
can only be tackled effectively by some agreement among all nations. This
means that it is not possible for them to be tackled successfully only
by one nation or a limited group of nations. Those issues are the result
of the globalization of the economic activities. Among others, we can
mention those related with climate-change, the trade and currency "wars",
the global regulation of the financial markets and the creation of conditions
favorable for the development of all nations. It is precisely in view
of this reality of globalization of the world economy that systemic deficiencies
may be observed.
In fact, the shifts in world power during the last decades (Zakaria 2008),
have gradually eroded the ability of the international institutions related
as a result of WW II to generate effective responses to the most relevant
economic issues of the global agenda. It is not an easy task now to adapt
them to the new geography of world power. And those then originated in
the financial domain as informal mechanisms between the most developed
nations such as the G7, have shown their inadequacies when the 2008 crisis
and its economic implications became evident. They led to resort to the
G20 which, however, has been unable to pass the test of sustainable efficiency
and international legitimacy. Thus, at the global level, it has become
difficult to gather around a single negotiating table the sufficient critical
mass of power that is required for decisions to effectively impact reality.
In the presence of relevant issues of the global agenda that demands effective
and legitimate decisions, the fundamental question remains which nations
should be summoned and which nations understand that they should be summoned?
Not always the answer will be the same to both questions. Traditionally
it has been force more than reason what has set the rules for sustainable
order in the relations between autonomous units of power at the international
level. At least these are the teachings of the long history of mankind.
This is the reason why what is currently happening in international relations
-the idea of achieving order without war- is such a novelty, both at the
global level and in some of the regional spaces that have had a greater
tradition of violent conflicts and wars.
The scattering of world power in multiple relevant centers is complicating
the task of redesigning the institutions of a new global architecture.
The existing ones were born at a time when it was clear who held most
power, which was enough to be acknowledged as the maker of rules at world
level. As many times before, the answer emerged from war. This accounts
for agreements such as Breton Woods. It also explains why it can be an
illusion to pretend to reproduce a similar scenario now, a kind of "another
Breton Woods" demanded by some economists. The failed attempts, between
l918 and 1939, to create international institutions that made the world
governable, remind us how difficult it is to achieve viable agreements
in a multi-polar and heterogeneous context without a previous enforced
definition of which countries can effectively guarantee international
The problem is then at the level of power relations between nations.
For a time at least it will not be an easy task to add up the necessary
concentration of power in order to adapt the institutions that make global
economic governance possible. Not only has the international system become
globalize but it tends to be a kind of "multiplex world" (Acharya
2013). Several other factors also help turn it heterogeneous in terms
of values, memories, perceptions and visions. This means that it is potentially
more ungovernable. From there the growing importance of mechanisms that
enable to summon a sufficient critical mass of power to make possible
a process of creation of new international rules, the revision of the
existing international institutions (such as the UN and world financial
institutions) or to insure their proper functioning (such as the WTO).
It could be facilitated by the agreements that may be achieved in those
formal or informal ambits of regional scope, such as the EU, or trans-regional
such as BRICS. In certain way they all represent diverse modalities of
coalitions of nations that, at the same time, reflect different international
subsystems. These are coalitions of a variable geometry adapted to the
main issues of the regional, trans-regional or global agenda that lead
to its formation. They can even be coalitions with superposed memberships.
A country may be member of different coalitions at the same time, depending
on its relative relevance in different international subsystems. The joint
work of the coalitions of nations towards common goals has been frequent
in the history of international relations. Often they are of informal
groups without institutionalization. Other times they result in formal
agreements that originate international agencies. Additionally, other
of their objectives reflects the interests of a group of nations in international
trade negotiations, for example within the framework of the WTO or to
have an impact in the definition of new international institutions, or
the transformation of the existing ones. The latter could be precisely
the case of BRICS.
In historical terms, what is currently happening poses so an unprecedented
challenge. It consists of an attempt, through dialogue and negotiations
between nations with varying degrees of power and a diversity of interests,
to find an agreement on the mechanisms, rules and conditions that will
enable to achieve reasonable levels of regional and global governance.
It implies favoring the method of a gradual transformation or metamorphosis
(Morin 2010) that comes as a result of the main changes that are taking
place at the multiple levels of the political, economical, social and
cultural life of nations. It is an unprecedented challenge precisely because
the experience of the last centuries has shown that the shifts in world
power, such as the ones that can be seen today at a global scale, have
encouraged a tendency towards anarchy and not necessarily towards a sustainable
order. Therefore, the violent confrontations and innovative modalities
of wars, which have sometimes lasted some years, have determined in the
past the transition towards new periods of world order in which those
with superiority of power prevailed (Goldstein 1988).
Today each nation appears to be on its own (Bremmer 2012). This is a
blunt way of describing the criteria that seems to prevail in the new
international economic reality especially in the transition from a collapsing
world order to one that may still take a long time to emerge and to consolidate.
Quite soundly Bremmer points out right from the title of his last book
this characteristic of a world in which each nation must find its own
way of navigating it so as not to become a loser. Because, as also hinted
by the title of the book, there is no doubt that there will be winners
and losers at the end of the road. This is something that history has
taught us well enough.
According to Bremmer the main reason for such diagnostic is that in today's
world no nation would be capable, or even willing for that matter, to
exercise individually a collective leadership such as some nations did
in the past. This is the case of the US, a country that has not ceased
to be a great power, indeed the main military power, and will probably
continue to be so for a while. However, it is very likely that a heavily
indebted Washington will have, for many years to come, an agenda dominated
by local economic issues with the inevitable social consequences, many
of them with clear implications in values and political behavior as has
been evident in the recent paralysis of the US government. The same situation
applies to Germany, France, the United Kingdom and other countries of
the EU. Everything indicates that in the next years their energies will
be focused on preventing the collapse of a construction that is showing
evident signs of weakness. Additionally, it has become vulnerable to the
effects of disturbing trends towards the radicalization of the domestic
political front of some countries, which seem to be affected by an end
of their illusions. The case of Greece illustrates this point. However,
it might not be the only one and not even the most difficult to handle.
At the same time, as indicated by Bremmer, it is also possible that the
great re-emerging nations such as China and India will be focused for
a long time on consolidating their modernization processes, which sometimes
show signs of economic, social and political weakness. It is unlikely
that in the short or even medium term these nations will have any interest
in wasting energies in their trans-regional fronts if there is no pressing
need for it. Unless, as has happened before in history, their leaderships
eventually yield to the temptation of seeking external factors that help
them preserve the necessary national cohesion.
Precisely, the notion of a polycentric and interconnected world is one
of the main ideas of an in-depth report published by the EU Institute
for Security Studies (de Vasconcelos 2012). This report analyzes in particular
three main trends that are currently emerging and that would contribute
to shape the global system towards 2030. These are: the empowerment of
citizens, which contributes to the sense of belonging to a unique human
community; a greater tension in relation to the objective of sustainable
development; and the emergence of polycentrism characterized by shifts
in power from the national states to individuals and different types of
transnational networks and by growing governance gaps, in the measure
that international institutions fail to answer appropriately to global
It is possible to imagine that the effectiveness and legitimacy of the
decisions that result from an ambit such as the G20 would be enhanced
if some of the nations that form part of it could speak in the name of
their own regions. This seems not to be the case today, not even the EU
in spite of the steps taken regarding its foreign policy with the enforcement
of the Treaty of Lisbon. It even has serious difficulties to preserve
its capacity to devise collective answers to the economic and financial
problems being faced by some of its members. In the case of South America,
even if Argentina and Brazil are members of the G20, it would be difficult
to consider that they always reflect the point of view of their region
in such ambit.
2. Relevant factors that are emerging in new international realities.
We have entered then a period of transition towards a different world
that will be characterized by a continuous dialectic tensions between
the forces that drive towards convergence and, simultaneously, those that
lead to fragmentation. It is still not possible to forecast which forces
will prevail in each of the regions of the world. For a long time this
will be a world full of uncertainties. It is necessary to keep in mind
that those tensions will not exclude certain forms of violence, even innovative
ones given the technological advances enacted by very different protagonists
and not necessarily by states.
More connectivity and diversity, more difficulties to provide public
goods that guarantee regional and global governance guidelines, more prominence
of non-state actors -middle class citizens and urban consumers; social
and production transnational networks- will be some of the other factors
that will condition global economic competition in the future and, as
a consequence, the international trade of goods and services.
Moreover, it will be a competition marked by the rising of a third industrial
revolution (Marsh 2012). It will have an impact on new modalities of value
chains of transnational scope. These could result from multiple impacts
of all kinds of technological innovations in the development of novel
forms of orchestration of productive chains that will seek to satisfy
a growing demand for personalized products and services -combining resources,
technologies, creativity and highly qualified labor- coming especially
from the urban middle-class consumers.
Within the newly emerging international context the quality of the strategy
for the insertion in the global economic competition of each nation and
its firms will become increasingly important. This includes not only the
right policies, instruments and roadmaps to navigate the world of the
future, but also the density of connectivity with other nations and of
the coalitions and alliances they build. The quality of the domestic front
is a key variable if the aim is to stay on the winning side in the world
of the future.
Some other relevant factors are surfacing in the new international reality.
They could have a strong impact in the future development of global and
regional international relations. We are referring to the issue of the
empowerment of citizens and consumers and, more specifically, of the emerging
urban middle classes. From the 8 billion people that will probably inhabit
the world in 2030 about 4.9 billion will be middle class in terms of economic
income. By 2030, 74% of China's consumers will be middle class and by
2040, 90% of Indian consumers will be middle class as well. Two-thirds
of Brazilians will be considered to be middle class by 2030 (Neri 2012).
Moreover, they will be middle class consumers and citizens that will live
in cities and, in many cases, big cities of over one million inhabitants.
They will be increasingly more educated, informed and interconnected,
even at a global scale and well aware of the power that they hold. It
is logical to imagine that they will attempt to use it. With their actions
and demands they will sometimes surpass the deeds of governments. In some
cases, they could become disoriented and "outraged" at the same
time (Hessel 2011). This is why it can be considered that we are entering
a stage of international relations in which, increasingly, the states
could lose their role at least as the main actors. South America as a
region is no stranger to these trends. According to UN data by 2030 the
region will have about fifty cities with more than one million inhabitants
and several cities with more than ten million citizens and consumers with
expectations and consumption patterns characteristic of the middle class.
3. International trade negotiations and its impact in global governance.
If concluded successfully and this is not always the case, international
trade negotiations among a group of nations that, due to their economic
dimension, are relevant players in world trade, could have a strong impact
on the design of a new global economic order and, obviously in the map
of international trade. This is a reason why they need to be followed
closely by nations and firms with active participation in world markets,
even while not directly involved in a concrete negotiation. That is so
because it is a known fact that the design of the rules of the global
trade of tomorrow could have and influence in the future definition of
winners and losers, with all the political implications this entails when
nations compete for their presence in those markets that are the most
The above considerations become ever more relevant due to two concurrent
facts: on the one hand, the stagnation that today dominates multilateral
trade negotiations within the WTO and, on the other hand, the size of
the economies involved in the current negotiations of preferential mega-trade
agreements, such as the Trans-Pacific Partnership and the Transatlantic
Trade and Investment Partnership, or agreements that are being promoted
at the Asia-Pacific region, such as the Regional Comprehensive Economic
Partnership, and by the EU itself, especially with India, Canada and Japan.
Both facts evoke conflicting diagnoses. In some cases these focus on the
need to preserve the WTO multilateral trading system. In others, they
lead to propose a new organization with participation limited to a restricted
group of nations (Baldwin 2012).
On the side of the WTO, until now there are no promising prospects with
regards to the results expected from the next Bali Ministerial Conference,
either in its three priority issues (trade facilitation, agriculture and
issues related to developing and least developed countries) or in relation
of a "post-Bali agenda". This issue is related to the credibility
of the multilateral trading system and can be linked with the risks of
a rising protectionism that could result from pessimistic perceptions
about the evolution of the world economy.
On the side of the mega-trade agreements currently under negotiation,
what is important to note is the fact that expanding the number of members
(for example Japan and Korea) and the diversity of situations and interests
at stake may nevertheless accentuate the doubts regarding they could be
concluded soon. The other front where negotiation of a preferential mega-trade
agreement is expected to conclude soon is that of the EU and India. However,
difficulties persisted in some sectors that are precisely the most sensitive
in the majority of the trade agreements currently under negotiation, especially
those related with the automotive, the agriculture, intellectual property
and government procurement chapters.
Understanding the evolution of the various fronts of international trade
negotiations implies, moreover, to be able to interpret the major trends
that are affecting the definition of the new map of global power and even
of the different regions. Some authors has referred to the fact that these
negotiations of preferential mega-trade agreements highlight the fact
that power politics has come back to influence the strategies of the major
players in world trade (Laïdi 2012). Even if this was always the
case there has been a tendency to consider that economic factors were
what really mattered, sometimes nuanced in certain analysis by the influence
that the political factors could have on them. But it was only a nuance,
given that the political was not viewed by many analysts as the central
If we attempt to diagnose the uncertain evolution of the current international
scenario in the perspective of the future of global trade and the main
fronts of multilateral and preferential trade negotiations, three factors
seem relevant. The first is the diversity of actors. Today there are many
nations with capacity to have a significant impact at the international
level. Some of them -China and India- have centuries of accumulated experiences.
Understanding the multiple options they have in their international strategies
and, in particular, the cultural differences and perceptions of their
interests and values is now something of increasing importance. A second
factor is the strong dynamics of change. Being able to grasp in a timely
manner those events loaded with future implications and the major trends
the international arena is something necessary, difficult and relevant
for each nation and their businesses. The third factor is complexity.
It implies the need to understand the main differences and to resist tendencies
to simplify reality. The least advisable in order to understand the world
of today would be to pretend that what is happening, is something similar
to what were realities when GATT or even the WTO were created.
4. Three conditions required for the construction of global and regional
governance: the cases of Mercosur and of the EU-Mercosur negotiations.
Three conditions are required in order to move forward in the concerted
construction of reasonable governance, both the global and regional levels.
These would apply also if the aim is to build inter-regional spaces such
as the ones that could result from the Mercosur-EU negotiations, in the
measure that they effectively aspires to become something more than just
an attempt at improving trade and investments (Peña 2013). These
conditions are a firm political will aimed at achieving ambitious goals
at the global or regional level; a strategic idea that is feasible and
adapted to the interests of all the participating nations, and technical
creativity in the definition of the methods to be used for its attainment.
As for the political will, it is a crucial condition in the measure that
it originates at the highest political level of each of the protagonists
but, as the case of Mercosur demonstrates, it would seem not to suffice
if it were limited to just a foundational moment. On the contrary, to
be effective it should become sustainable in time as a political drive
that flows steadily into the negotiating table where the actual common
decisions are made.
Concerning the second condition, a strategic idea driving the political
thrust should be feasible. This implies that it needs to be based on concrete
interests of the different nations, on the reality of their relative power
and, most particularly, on a correct assessment of the international context
where the initiative is inserted, including its continuous adaptation
to the changes that are taking place, sometimes at a very fast pace. For
a long time, this was accomplished in European on the basis of a vision
molded by the idea inspired by Monnet and nurtured by the political will
of Schumann and Adenauer, among others. It doesn´t appear to be
the case in the more recent years.
And the third condition is a good dose of technical creativity. This
implies not to follow previous models or text-book recommendations. On
the contrary, it is about the creation of mechanisms and instruments adapted
to the objectives and to the reality of the protagonists, and to the conditions
that might result from global and regional commitments previously assumed
by them. Both in the case of the future construction of Mercosur as of
the Mercosur-EU bi-regional partnership, said creativity should additionally
take advantage of flexibilities that result from the ambiguous rules of
WTO and of GATT's article XXIV-8.
At the South America geographic space, if fulfilled and combined together,
the three abovementioned conditions would imply a most necessary qualitative
leap both in Mercosur's and UNASUR experiences, and in the future development
of a bi-regional partnership with the EU that could be extended then to
similar preferential trade agreements with other nations and regions.
If this were the case, those processes would contribute towards the construction
of global and inter-regional governance. But in both cases it seems necessary
that they could retrieve its symbolic power as a political and strategic
project. However, even more fundamental still will be that the citizens
of the member countries can see a clear link between their legitimate
expectations for democracy, employment and social progress and the commitments
assumed and in their effective implementation. This is not happening yet
today and could be the origin of the evident signs of dissatisfaction
that can be seen regarding their results and their future perspectives.
5. Is possible an optimistic view about the increasing value of South
Latin America is a region of increasing value in the perspective of relevant
players of world economic competition. It becomes more evident in the
case of re-emerging economies such as China and India. It is reflected
by trade flows and direct investments. This fact does not go unnoticed
by the US or the countries of the EU.
Such valuation is even more notorious in the case of South America. Is
possible to sustain, as Marco Aurelio Garcia did, that is becoming "the
world's most relevant region in terms of food production
we have enormous mineral reserves of the conventional type, such as iron,
and of the new generation kind, such as lithium. We also have both due
to the size of the population and the social inclusion policies being
implemented in our countries
the reality of a considerable internal
market. We are almost 400 million South Americans and have become a main
point of attraction. We have abundant water resources and biodiversity".
He completed his idea pointing out that: "additionally, we possess
characteristics that are essential to guarantee the quality of life. It
is a region with certain cultural and linguistic homogeneity, which prevents
us from being overburdened by the task of having to deal with several
languages or a diversity of cultures. Moreover, it is a peaceful region.
It is probably the only region in the world where there are no nuclear
.and if any conflict regarding border issues should arise,
they can be easily resolved through diplomatic means. Moreover
is a region of democratic governments, voted in free elections and under
international scrutiny" (Garcia 2011 - the translation is ours).
A view such as this expresses some convincing arguments that allow having
an optimistic view on the role of the region in the global economic competition
of the future. These may explain the fact that in many cases, governments,
businessmen and citizens are becoming increasingly assertive, pragmatic
Of course, the huge challenges that the countries of the region will
need to overcome in the next years should not be overlooked. It is a known
fact that in a world of constant systemic change any optimistic view could
prove risky. In the case of South America, given the image that has long
prevailed in more developed countries, especially in Europe and in the
US, it has often been safer to predict negative scenarios. Today, however,
there are some factors that lead to propose a more positive forecast with
regards to the value of the region. To begin with the shortcomings that
may still be observed, it would be relevant to refer to the inventory
of reasons that have for long fueled the skepticism on the region. The
following are some factors that could eventually justify a continued pessimistic
view regarding its future: the subsistence of poverty in large social
sectors and, in particular, of great social inequalities; the low institutional
quality reflected by a weak ability to ensure the articulation of contradicting
social interests and the predominance of the rule of law in social life;
the political instability as an endemic condition often leading to schemes
that are not sustainable for efficiently dealing with the most serious
economic and social problems; the insufficient number of firms with the
capacity to compete in international markets, which is the result of a
low level of innovation and investment in science and technology. These
factors, among others, have had prevalence in the analysis of the future
of the region, leading to pessimistic conclusions even when they are assessed
together with other factors of a more positive nature, such as the abundance
of valuable natural resources.
Before mentioning the circumstances that would lead to a more optimistic
view, we should remember that these not always surface with similar characteristics
and the same intensity in every country of the region. South America is
a vast and diversified territory. There can be no analysis of the realities
and perceptions without acknowledging the differences, at times very deep,
that exist between the countries. Therefore the factors that would account
for a more optimistic forecast of the future of the region are not necessarily
valid for every one of them. However, they are more visible today in certain
countries that have become key ones due to their size and economic relevance,
and that have thus a strong potential to generate a spillover effect of
their eventual success to the rest of the region.
Even when other cases could be mentioned, one of these countries is Brazil.
The deep changes that took place in the recent two decades are transforming
the largest country of South America in what may be a driving force of
a more positive future for the rest of the region. Certainly, this does
not imply that Brazil by itself can lead the rest of the region to different
levels of economic and political development. On the contrary, the construction
of a regional space functional to a scenario of peace, political stability
and sustainable social and economic development will require an active
cooperation between several nations, and even of those outside the region
but with strong interests in it.
Having made this point clear, it is then possible to mention at least
three reasons that would allow having a cautiously optimistic view of
the future of South America.
The first of these reasons refers to those aspects in which the learning
process of the last decades becomes more evident. Firstly, the growing
number of social and political leaders representing a wide ideological
spectrum, and of vast sectors of the public opinion in different nations
who recognize the importance of fiscal discipline and macroeconomic stability
to guarantee development goals within a democratic and open society framework.
The second one refers to the recognition of the importance of institutional
quality to move forward in the areas of productive transformation, social
cohesion and competitive insertion in world economy. Thirdly, the clear
perception that in the current international system nobody will take up
the problems of another nation -unless these affect them directly or indirectly-
and that the destiny of any country -big or small- will need to be worked
out at a national level with an active participation of all the society.
The need to reach the articulation of the different social interests and
to achieve collective disciplines as a result of strong institutions;
a home-grown strategy for economic development; and a competitive insertion
in world economy are three lessons that several countries of the region
and their public opinions are drawing from their experiences of the last
decades. These have a strong impact on social attitudes and public policies.
A second reason to be optimistic is the existence of clear signs of a
cultural change with regards to what the region may achieve in the future.
These signs are related with the great value being assigned to the definition
of long term objectives and to the development of pragmatic strategies
to achieve them. This entails having a clear idea of where a country is
headed to in terms of its development and its international insertion,
what it can effectively achieve and, most particularly, which steps would
be necessary to move forward along the chosen path. It is possibly in
this aspect where the greatest differences between the countries of the
region can be found. Deeply rooted structural issues, yet unresolved,
including those related with the active participation of all social actors
in the development of the nation, can sometimes explain these differences.
In some cases the countries are still on their way towards achieving greater
social inclusion. These can account for a certain propensity towards political
instability and even towards economic and social policies of a more radical
nature. In such cases future perspectives are more questionable and uncertain.
The third reason is related with the impact of deep changes that are
taking place in the global scenario. As a result the countries of the
region now have multiple options in terms of external markets and sources
of investment and technology. As a consequence diversification in their
international relations has expanded. They perceive that they have a significant
value for what might be their contribution to face some of the critical
problems of the global agenda. Energy, food security and climate change
are some of the issues about which the countries of the region, especially
acting together, have something to say.
Finally, if the most optimistic forecasts regarding the region were to
be confirmed in the next years, taking full advantage of this would require
moving forward in a dynamic articulation of the national interests of
its countries. This could only be feasible through collective leadership.
On this regard, the strategic alliance of Argentina with Brazil and Mercosur
itself constitute the hard-core of the construction of a South American
geographic space, in which UNASUR will be called upon to play also an