Some lessons could be drawn from the integration experiences of regional
spaces. This presentation will consider some of those which can be observed
in the very different integration processes of the European Union (EU)
and of Mercosur in Latin America.
A first lesson is that a profound integration process among democratic
nations requires, to be sustainable in the long term, a strong identification
of the people of each country with its construction. Citizens of a democratic
nation will support the idea of working together with their neighbors
of the other participating nations if they perceive clear benefits of
the association in terms of peace, democracy, employment, economic and
social development and, especially, identity and the idea of having a
future in the global scenario.
A second lesson is that an integration process requires a continuing
adaptation to changes in national, regional and global realities. Especially
in our times of very dynamic and deep international transformations, both
at the power and economic level, an integration process should be able
to help answering the demands resulting from new realities in terms of
challenges and opportunities for each nation and its people. Today everything
risks becoming obsolete very quickly. And this could also be the case
in an integration process among democratic nations, if the political leadership
is not able demonstrate their capacity to develop a strategy for its adaptation,
both in terms of its sense and of its methodologies, and to preserve the
support of their citizens.
Participation of the people and adaptation to new realities will be two
main aspects of the following reflections. Our objective is to contribute
to a debate about the future of integration that appears to be necessary
in the Latin American region, but it seems that also is convenient in
other regions and very especially in Europe.
Both in Latin America and in Europe, the debate about the future of the
integration processes -the idea of working together in a permanent way
between nations and peoples that share a common geographic space- is closely
related with the debate about the future of democracy, as the political
system that allows people to obtain an environment of peace, liberty and
political stability as a way to achieve economic and social development,
and to navigate, at the same time, the turbulences of a transition to
a new global order that eventually could take time to be stable and effective.
It is related to the idea of global and regional governance through institutions
that permit avoiding the risks for fragmentation among nations and, particularly,
within nations. The logic of fragmentation, as the contrary of the idea
of working together, could lead to the radicalization of positions of
the main protagonists and eventually to the use of force in solving conflicts
that could emerge. Within nations, regional fragmentation could weaken
the cultural conditions that are necessary for the prevalence of democratic
values, including those related with social justice and harmony.
Having in mind the previous considerations, we are including in the final
part of this presentation some reflections about Mercosur and the future
of regional integration in Latin America.
Civil society participation in an integration process
among democratic nations
In the last decades, since democratic institutions prevail in most of
Latin America, the idea of "working together" among nations
of the region and of each of the main sub regions, has had support from
political leadership but also from citizens. Frequently this idea has
been presented through the concept, the rhetoric and the mechanisms of
different modalities of "integration", even pretending to develop
formal processes toward higher degree of it, as has been the case of several
projects oriented toward "common markets" or, at least, "free
trade areas" or "customs unions". But in real life, what
prevailed through the years has been the value attributed by governments
and politicians to the more pragmatic idea of avoiding conditions for
political fragmentation leading to conflicts and, eventually, to war.
Political will and strategic vision that reflect the concrete national
interests; external conditions that generate the perception of economic
and political challenges, even of threats; and a network of cross-interests
in the economic and social levels are some of the basic conditions that
explain the origin of the integration agreements between countries and,
eventually, between regions. And also explains their sustainability in
the long term.
These are agreements which, regardless of their modalities and of the
market integration techniques employed - for which there are no single
mandatory models - are subscribed voluntarily with the idea of building
a permanent relation among sovereign nations. They are multidimensional
in scope since at the same time they have political, economic and even
social implications due to their effect on the level of welfare and on
the expectations of the respective populations. At least this is indicated
by five decades of experiences developed not only in Europe -so far the
most successful integration process in terms of sustainability and depth,
even with its well known actual strong difficulties- but also in other
regions including South America and the Mercosur regional space.
The presence or absence of the above mentioned conditions, as well as
their respective weight, may account for the successes or failures in
the history of integration processes. However, it should also be noted
that those conditions have a dynamic character and tend to change with
time. This is the reason why the enthusiasm and energy present at the
moment of the conclusion and signature of an integration agreement are
weakened by changes in the original circumstances, as well as by the perception
- in one or all of the partners, especially in the citizenship - of the
actual or expected future results. Additionally, more personal factors
become relevant in order to explain the origin of the respective agreements.
Political leaders and negotiators with different interests, priorities
and qualities, may help to explain the founding moment of an institutionalized
strategic association between two or more nations, as well as the capacity
to overcome through changes, those other moments when inertia prevails
or when the necessary drive to continue building what was originally imagined
begins to wane.
One of the key factors that explain the success of an integration process
is the degree of participation of civil societies. In democratic countries
as is the case of Mercosur as well as of the EU, the intensity of this
participation is crucial for the perception of citizens that an integration
process is "their process".
There are at least three different angles from which to approach the
issue of civil society's participation in a concrete integration process
such as, for example, Mercosur.
The first one is its participation in the design of integration strategies
and public policies to be adopted by the partners, as well as in the creation
and enforcement of the rules destined to regulate the construction of
the integrated economic space, and the transnational competition among
firms producing goods and providing services.
The second is the participation of civil society in the development of
multinational social interaction networks, which may be a result of the
governmental strategies and public policies and rules. They manifest especially
in business and social behaviors, in associative efforts on all levels
(even in the cultural and academic) and in the trade, investments and
human flows through the frontiers.
And the third one is the emergence of Mercosur´s civil society.
That is, a common citizenship -even a common identity in an embryonic
stage- that expresses itself in demands and expectations of participation
from non-governmental actors in the political instances (created or to
be created) on a supranational level. It would be similar, on a regional
level, to the growing demands and expectations with regards to the emergence
of a civil society in the "global village", which is currently
manifesting itself through social movements that emerge along the institutional
dimension of globalization, especially with regards to its governance
and, among others, to the development of the World Trade Organization
This presentation will be limited to the first of the possible angles,
regardless of recognizing the importance and natural complementariness
of the other two angles. The broadness of the issues if the three angles
were to be boarded simultaneously forces us to privilege the one we think
most significantly impacts the possible progress of the others.
We understand that a real participation of civil society in the making
of economic integration strategies and public policies, as well as in
the creation and application of the rules, may produce significant effects
in the development of regional social networks -or at the interregional
level in the case of an eventual agreement of Mercosur with the EU -as
well as with regards to the progress towards the creation of an authentic
Mercosur civil society. It will even be difficult to imagine relatively
balanced progresses in the development of such networks -particularly
when they involve investment decisions- if they are not sustained on effective
rules that reflect the interests of each civil society.
What must we understand by civil society participation in an integration
process such as Mercosur? Basically we are relating to the fact that the
men and women of each of its member countries, in their different roles
-citizens, tax payers, consumers, workers, business people, among others-,
either directly or through their political representatives -especially
Congress- or through their NGO´s, may influence the definition of
economic integration strategies, in the making of their governments common
policies, and in the creation and application of rules that in some way
affect their values and interests.
What are the levels in which civil society's participation can be observed
in the making of strategies and rules of an economic integration process
such as Mercosur?
It is important to distinguish between the national level of each of
the member countries, and the multinational or common level. The first
level differs, and sometimes significantly, in each country. It does not
necessarily respond to common parameters. Nevertheless, in the Mercosur
case, at least in its founding moments, the respective National Sections
of the Common Market Group (CMG) were conceived as a main decision-making
mechanism at the national level. That was reflected in the Asunción
Treaty, in the Ouro Preto Protocol and even in the Brasilia Protocol.
The second level is a result of what the members decide together with
respect to how the civil society may express itself and be effectively
heard in the common bodies that compose the institutional and rule-making
mechanism of the integration process.
The participation of civil society in the process of designing and implementing
Mercosur's integration strategies, as well as public policies and norms,
is important for at least two reasons. They are the effectiveness of the
rules and its consequent degree of efficacy and credibility, and the social
legitimacy of the integration process.
In the case of Mercosur both reasons are related with the voluntary and
permanent character of the integration process. We are talking about voluntary
association among sovereign nations that do not necessarily pretend to
disappear as such. They commit themselves to work together in a permanent
way in order to integrate their economies -using their own techniques
that essentially correspond to a well done interpretation of what article
XXIV of GATT allows- establishing economic preferences -limited to goods
or eventually extensible to services and other production factors-, collective
disciplines and institutional mechanisms for the creation and enforcement
of common rules. Generally these processes acquire a multidimensional
character that exceeds the exclusive trade and economic level when they
occur among neighbor countries. Besides Mercosur the EU, the NAFTA, the
Andean Community, the Central American the Caribbean integration schemes,
among others, belong to this category. We may also include within this
category the eventual interregional association between the EU and Mercosur.
These kind of processes normally take place among nations with asymmetries
in their relative power and with different economic dimensions. That is
why it is relevant for them to be predominantly oriented by freely consented
and enforceable common rules (rule-oriented process). This neutralizes
the negative effects to the relative weaker and smaller partners if the
reciprocal relations were predominantly determined by power factors (power-oriented
process). This observation is valid both for the intra-Mercosur relations,
as well as for the interregional Mercosur-UE relations.
This is why institutions and common rules are important in order to maintain
the win-win scenario that sustains the voluntary associative link through
time. The goal of such institutions and rules is to preserve in a dynamic
way the reciprocity of interests among partners. No country participates
in these kinds of processes if they consider that it is not convenient
for them. No one stays if they understand that it is losing more belonging
than not. In other words: no country is forced to negotiate or to participate
in this kind of consensual associations among sovereign nations.
These processes as a result of their voluntary character and their vocation
of permanence could be sustainable in the long term if the advantages
of belonging are perceived by the respective citizens. It is the social
legitimacy what at the end explains the origin of the association and
that sustains it through the years. It is in this perspective that civil
society participation in the definition of strategies, public policies
and common rules acquires its full relevance. The citizens must feel identified
with belonging to a regional space created by the association of nations.
The appraisal of a certain regional identity gives vitality to the respective
The effectiveness of a legal norm in international relations is generally
considered by its capacity to penetrate into reality. This is reflected
in the fact that it is considered and respected by the different protagonists
in their behaviors and reciprocal relations. For that purpose it must
be supposed that the norm has formal validity. In other words, that it
meets the necessary requirements to be recognized as such. And the efficacy
of a norm depends, in a great manner, on its effectiveness. That means
that the pursuit results are indeed achieved. It is difficult for non-effective
rules to have efficacy. The issue of the efficacy of a rule may condition
the general process efficacy if there is a chain effect of ineffective
rules. In this case, the balance of interest behind any rule -and even
the whole set of norms adopted by the members- may be affected in its
The problem of the effectiveness and efficacy of the agreed rules, acquires
a particular relevance when an integration process such as Mercosur is
oriented to stimulate investments and productive transformation in each
of the members and in the block as whole. Such objectives require a reasonable
degree of predictability with regards to the rules that will influence
particularly the open market access for goods and, eventually, for services
and investments as well. If the rules are not effective, which means they
do not penetrate into reality, the process loses the investor's creditability
on the possibility to access a larger market than the national one. If
this is the case, the main damages would come to the relatively smaller
countries, such as Paraguay and Uruguay in the case of Mercosur. It would
affect their ability to attract productive investments on behalf of a
broader market, even if the other investment conditions were to be favorable.
This way, the expected results by their participation in the integration
process would not be obtained with the consequent efficacy and, eventually,
social legitimacy loss. In the case of Mercosur, this is yet more important
because the expectation of unrestrictive access to a broader market and
its effect on productive investments was the main argument why Argentina
and Brazil refused to grant a special treatment to Paraguay and Uruguay
at the founding moment, except the one given by article 6 of the treaty.
Furthermore, the effectiveness and efficacy of the rules impacts its
credibility and social legitimacy. Credibility should be understood as
the possibility that the social actors to whom the rules are destined
may perceive them as a relevant factor in determining decisions that influence
in their behaviors. This is the case of businesses and investors. Social
legitimacy is understood as the recognition by society and, particularly
its most affected social actors, that the rules are common to all the
members and that they should be respected because of mutual convenience.
In other words, that they are rules that guarantee that benefits will
be obtained by all the members, regardless of the relative power or economic
dimension, and that therefore allow to counterweight the eventual costs
produced by the unrestrictive opening of their markets to relatively more
The credibility and social legitimacy issue grows in political and economic
relative importance, as the number of rules affected by the lack of effectiveness
and efficacy gets bigger in relation to the overall set of rules that
regulates a voluntary economic integration process. If the spectrum is
broad, it is very likely that it is reflecting serious deficiency in the
partner's political willingness to carry out what they agreed. Citizens,
businesses and investors usually perceive this immediately, especially
if there is a collective memory of past tendencies towards a "fiction-integration".
It is even possible that it is also showing some profound disequilibrium
in the reciprocity of national interests that support the consensual association.
This could be the current case of Mercosur.
Another characteristic of this voluntary and permanent association phenomenon,
besides having common rules, is that they have institutional mechanisms
whose objectives are to formulate decisions that are materialized in common
rules, and to administrate and settle conceptual or interest conflicts
among the members. There is not a unique institutional model, nor are
there international rules that determine parameters on their modalities
and reaches. There is a very broad set of alternatives.
There are three basic functions that are expected to be fulfilled by
the institutions of a voluntary and permanent association among sovereign
nations. All three are related to the need to preserve, through time,
the reciprocity of national interests in a win-win condition, as well
as to translate it into rules that are effective, credible and legitimate.
The first function is to canalize the integration process political impulse,
particularly when it foresees an incremental development in different
stages implicitly or explicitly contemplated in the constitutive agreement,
as have been the cases of the Rome and Asunción treaties. The second
is to allow the creation and implementation of different types of decisions,
expressed in complementary norms derived from the constitutive pact. The
third function is to facilitate the administration of the conflicts that
arise among the members and to solve them when they are set as actionable
Such functions are fulfilled by common organs of the association. They
can be integrated by government representatives that act in such character.
They could be distinguished according to the level of governmental representation,
in political and technical organs. Usually they have attributions to adopt
different kind of decisions that, generally originate legally binding
rules of the game. There can also be organs integrated by technical independent
officials that are designated collectively by the member States.
In the decision-making organs, the articulation of national interests
and its expression in decisions with different types of legal effects
recognizes at least three phases. The first one is what we could call
the ascending phase. It is the phase in which each country determines
its own proposal with regard to what they want or need to obtain as a
collective decision. It is supposedly made based on a diagnostic on what
the national interests are and what are the possibilities of obtaining
consensus with the partners on it. It is a phase fulfilled in the domestic
levels of the decision making process. Each country organizes itself in
the most convenient way and according, among other factors, to their domestic
legal framework. The second phase is the negotiation and eventually adoption
of decisions at the common multinational level. If the members reach an
agreement, the decision is finally adopted -according to the established
vote system- and becomes the respective norm -including the legal effects
that should be produced and the internalization modalities, if it corresponds.
Finally the third phase can be named as descendent. It is the one in which
the decision penetrates into reality either because of its direct effect
or because it is incorporated by a national norm in the respective domestic
legal systems in order to be enforced.
The Mercosur experience could be showing that important institutional
deficiencies are located in the ascendant phase of the decision making
process. It could be the fact that the proposals that arrive at the final
decision multinational level either have not been sufficiently consulted
with other governmental instances or with the interested social sectors.
This is translated, sometimes, in unsatisfactory quality products.
It could then be the definition of each national interest that may be
representing some weaknesses -including the essential exercise of conciliating
each country's domestic requirements with the possibilities to obtain
from the members what presumably is needed-. It could explain the accumulated
number of rules that are not being enforced, or in other words, are not
being effective. Sometimes they do not even have finished the respective
legal process to obtain their formal validity. This deficiency in the
preparation of the national positions can be due to various reasons. One
of them could be the insufficient consultations to different sectors of
the public administration or to a low participation of civil society through
its representative institutions. A factor that may explain civil society's
low participation could be the difficulties to access quality and in-time
information that may help the following of what is actually been negotiated.
This lack of transparency contributes to reinforce the tendency to a decision
making mechanism that work in a kind of closed circuit in which only government
experts and eventually some civil society's representative institutions
The amount of accumulated rules that did not penetrate into reality or
that have not even completed their cycle to become formally valid, could
help to explain the perception that citizens, businesses, investors and
third countries have about a deep distance between Mercosur´s nominal
legal structure and reality. This can contribute in the diagnosis of a
process with serious efficacy and credibility problems that may result
in a growing legitimacy crisis if such situation produces serious damages
to the interests of partners, especially those with less economic dimension
and relative power.
Adaptation to changes, the inexistence of unique models and the importance
of a dynamic national strategy for integration
At least three lessons could be drawn of the EU and Mercosur recent experiences.
The first one is that to sustain voluntary integration among sovereign
nations requires permanent adaptations to changes in their domestic and
international environments. Roadmaps and working methods should be permanently
adapted to new circumstances. How to produce this adaptation preserving,
at the same time, the accumulated assets of years of working together,
is then a big challenge.
Adaptations become more necessary when citizens began to doubt about
the convenience for their own country to continue working together with
nations with whom they share a geographic space. It could lead to a point
in which they perceive the integration process as part of their problems
and not of any solution. Sometimes this is the result of not recognizing
the problems of the people of another member country as being their own
problem. If that is the situation, a frank explanation to the citizens
of the different countries of which could be the costs for them of a failure
of the integration process seems to be necessary. Particularly if the
political leadership perceives that they don't have rational alternatives
to the idea of working together with their partners.
Preserving the win-win perceptions among the people of the member countries
is then one of the main challenges faced by the construction of any voluntary
integration process. This is more difficult in a context of deep global
economic and political transformations as we are facing this years. The
impacts of those changes sometimes are very different from one member
country to another one. It could weaken then the idea of being in the
same boat. Or increase the perception of the advantages of navigating
alone to better tackle the challenges posed by new realities. This could
then jeopardize the core idea of working together among nations of the
same geographic space, especially if institutions with the capability
of expressing a common vision do not exist or eventually are not able
to undertake the necessary leadership.
The second lesson is that there is no unique model or formula to produce
that adaptation to an environment of deep changes. There are obviously
limits to the imagination about how to tackle the main problems that are
faced. They could be the result of political, economic and legal constraints.
But at the same time, with a mix of political will and technical capabilities
it is always possible to draw mechanisms that could contemplate the new
realities and the different interests of member countries. Most probably
this will imply heterodox and flexible formulas including those requiring
multiple speeds, variable geometry and "à la charte"
And the third lesson is that to succeed in the difficult task of integrating
sovereign nations through a voluntary and long term process implies, at
the same time, effective common disciplines and a clearly defined national
strategy by each of the participant countries. The dynamic interaction
of both factors seems to be crucial precisely to preserve the "win-win"
situation among the members of a common integration process. And here
is where flexibility of concepts, mechanisms and instruments become so
important. It facilitates the continuous adaptation of the process to
new realities. And this becomes more important when those new realities
have different impacts in each of the member countries due, eventually,
to asymmetries of relative power, dimension and degree of economic development
Mercosur and the EU are undergoing complex transition processes towards
a new stage in their development. In both cases it would seem premature
to venture any forecasts of the results. The outcomes are still uncertain,
but everything indicates that in each case the new stage will be different
from the previous one. If the accumulated assets are preserved and previous
experiences are capitalized the outcome is likely to be positive. Otherwise,
they could face scenarios in which it will not be possible to avoid the
word "failure" and its consequences in terms of affecting the
regional governance and stimulating fragmentation among and within member
countries. Beyond the well-known differences that distinguish both processes,
as well as their histories and regional realities, the good news is that
in the two cases there are debates within the respective societies that
reflect methodological dilemmas and, increasingly, existential ones. The
more encompassing and inclusive these debates become the better for the
social legitimacy of the results.
A common element of these debates on both sides of the Atlantic is the
growing doubts that arise on the real possibility for the subsistence
of a distinction between "us" and "them" that reflects
a common identity rooted in the respective citizenships. But, at the same
time, even those who would seem to be more frustrated with the membership
of their country to the integration process have difficulties in bringing
forward a credible option that is sustainable both at the economic and,
above all, the political level. By this we mean an option that has its
own social legitimacy within pluralist and democratic societies that does
not exceed by far the costs of attempting to correct the deficiencies
of the joint work within the current integration processes. If it were
true that the member countries -large or small- had no reasonable alternatives
to the voluntary integration with their current partners, the debate would
then be circumscribed by the methodology of the joint work within a shared
geographic space rather than by the existential reasons behind it.
Having in mind the recent experiences, in the case of Latin America three
are some possible conclusions to draw about what normally receive the
label of "regional integration": i) the idea of working together
among nations that share a geographic space, requires to be effective
some modality of collective leadership and a great accent in strengthening
the main focuses for peace and political stability within the region,
as is the case of the Argentina-Brazil strategic relation; ii) when short
or medium term considerations prevails in the leaderships of the different
nations, normally the result will be a low quality "rule-oriented
process" with weak common institutions and precarious rules, and
iii) the idea of working together respond to multiple factors that lead
to a multi-dimensional collective action; is not only related to power
or welfare or to the perception of an external challenge.
Mercosur and the future of regional integration in Latin America
Latin America integration, as well as the region and also its nations,
are going through a process of deep changes. Is not clear how the integration
process will develop in the near future or in the long term. Most probably
what has been observed in the past will continue to prevail for some years.
The main regional institutions (ALADI-UNASUR-CELAC) will continue to be
there with different degrees of relevance according to the circumstances.
At the sub-regional level Mercosur, ALBA, SICA, CARICOM and the Pacific
Alliance, will also continue to be part of the landscape even if is not
possible to predict how relevant and effective each of them will become
in the future.
Also it seems possible to forecast the following trends with impact on
the evolution of the future regional scenarios: i) plurality of active
and relevant non-regional protagonists; ii) proliferation of options for
the global economic international strategy of each nation within the region
-and not only for the biggest one's- leading them to try to become active
protagonists both at the global and inter-regional trade agreements, and
iii) emphasis on the role of the new urban middle classes, on the quality
of physical connectivity among the different nations and with respect
to other regions in the world, and on the development of global and regional
transnational production networks.
In the case of Mercosur, its transition to a new stage with still uncertain
institutional profiles and work methods increases the need to reflect
on how to enter, based on the acquired experience and capitalizing on
the accumulated assets, to a new stage of the process of integration in
which the benefits that are generated can be perceived as advantageous
by the different countries and, in particular, by its citizens. This will
not be easy. Since its creation in 1991, the experiences and assets that
have been accumulated have value in terms, for example, of relatively
guaranteed preferential access to the respective markets and a budding
productive integration. At times Mercosur was even perceived as a success.
However, many frustrations have also been accumulated. These stem from
the inherent difficulties of a joint work undertaking that requires combining
very different national interests within a context of numerous asymmetries,
especially in the relative economic dimension of the involved countries.
The suggested reflection needs to be done having in mind the context
of the profound changes that are taking place at a global scale. It also
requires placing Mercosur within the institutional architecture of the
South American region (UNASUR), the Latin American regional space (LAIA
and SELA), and the broader Latin American and Caribbean (CELAC). Articulating
any cooperation initiatives that may be developed through the mosaic of
existing institutions is today one of the explicit priorities of the countries
that form part of them. There are several possible options for the design
of a new phase. One lesson to be learned from the accumulated experience
in these and in other regions is precisely that the design must be tailor
made to fit well diagnosed realities. As once held by Jean Monnet, it
is essential to find formulas that are adapted to each historic circumstance.
It is here where the right combination of political and technical imagination
will be needed.
One option might be to conceive Mercosur as a network of bilateral and
plurilateral agreements, including sector and cross-sector agreements
of productive integration, connected together. It would require flexible
variable geometry and multi-speed mechanisms. The EU itself has some experience
in this regard. This would not entail setting aside the commitment of
building a customs union as a step towards a common economic space. It
could be done through additional protocols to the Treaty of Asuncion,
or through parallel non contradictory legal instruments. The bilateral
agreements between Argentina and Brazil are a precedent to consider. This
option would enable to include the possibility of relaxing, under certain
conditions, the conclusion of commitments made within the framework of
preferential agreements signed by one or more member countries with third
countries or groups of countries. Of course, this would mean agreeing
on collective disciplines among Mercosur members whose fulfillment could
be supervised and evaluated by a technical organ with effective competencies.
It does not have to fit the stereotype installed with the equivocal concept
of "supranational". The model of the role of the Director-General
of the WTO may be useful in this regard.
It is important to note that there are many conditions that may be necessary
for the construction of a regional space characterized by the ideas of
integration and cooperation, that is, of joint work between the nations
that form it. These conditions result, in particular, from some of the
main features of these multinational undertakings, such as the voluntary
nature of the participation of each nation. In the case of Mercosur as
it stands now, at the end of one stage and transitioning to a new not
yet precisely defined one, there seem to be three important conditions
that will be required in order to take a leap towards a stronger and more
effective construction that has the potential to capture the public interest
due to its ability to generate mutual gains for each of the participating
countries, while taking into account the diversities that characterize
them. Such conditions include the strategy for development and international
integration of each participating country, the quality of institutions
and ground rules and the productive articulation of transnational scope.
It would seem advisable that these three conditions are present in the
necessary national debate that each country interested in remaining a
member, or willing to become one, should encourage in order to clearly
define the strategies and methods of Mercosur's new stage.
The joint work between nations that share a regional geographic space,
especially when expressed through agreements and institutions with ambitious
and long term goals such as the case of Mercosur, presupposes that each
participating country knows what it needs and what it can obtain from
the association with others. This means that it has a strategy for development
and international integration designed according to its own internal characteristics
and to the goals that are most valued by its society. It is a strategy
that should not have only a regional scope. Today more than ever, the
goals at the regional level should be thought out in relation to the goals
of global scope. How such a strategy is developed and expressed depends
on each country. The fact is that the consensual construction of a multinational
region, whatever its objectives, modalities and scope, is based on the
national interests of each participating country. In this regard, it has
been rightly pointed out that countries associate at a regional level
not based on any hypothetical supranational rationality but because of
concrete national rationalities. It is the sharing of national interests
around a common strategic vision what characterizes this type of voluntary
joint work between sovereign nations that aspire to continue being so.
In the case of Mercosur in its current crossroads, it would be convenient
for each member country to ponder about their real options. If a country
were not satisfied with Mercosur and visualized other reasonable options
that would allow a better outlook for its insertion in the region and
in the world, it could then be reasonable to abandon the joint undertaking.
If, on the contrary, such country is unable to visualize a reasonable
alternative plan from a political or economic perspective, it would be
convenient for it to ponder what should be the scope of a future Mercosur
in the light of the constituent pacts and the methodological options that
could be imagined. Such considerations would be sounder if they reflect
the objectives defined in the corresponding strategy for national development.
It would seem reasonable to imagine that this plan would include an assessment
of what the country needs and of what it may obtain form its global and
A second condition is related to the quality of the institutions and
the ground rules. This includes the process of decision-making, the rules
that are approved and the mechanisms for their implementation and for
the settlement of the disputes that may arise between the member countries
in relation to the compliance of those rules. Again, it can be argued
that institutional quality begins at the respective national level, is
later expressed at the multinational level, and is finally re-expressed
at the national level where what is agreed is implemented or not.
The intensity of the participation of the civil society at the domestic
level of each member country is a key factor to ensure the institutional
quality of an integration process. It requires a culture of transparency
that is reflected, in the national and the multinational, through the
quality of Web pages loaded with useful information for the management
of the competitive intelligence by all the protagonists.
Reconciling flexibility with predictability seems to be crucial if the
next stage of Mercosur aims to include other South American countries,
which would increase the asymmetries and the diversity of interests. As
already mentioned this will require the use of variable geometry and multi-speed
methodologies. Without quality ground rules these methodologies could
accentuate tendencies towards the scattering of efforts and lead Mercosur
to new frustrations.
The third condition is related to regional productive integration. The
issue of productive integration has an important place in Mercosur's agenda.
Actually, it comes from its founding moment when the concept of sector
agreements was incorporated to the Treaty of Asuncion and Decision CMC
03/91 was approved. It is based on the experience gained during the period
of bilateral integration between Argentina and Brazil. Aside from generating
mutual gains between the participating countries, productive integration
through transnational value chains enables to develop what Jean Monnet
called de facto solidarities in his foundational layout of European integration.
They can be, in this sense, a strong factor to reduce the risks of reversibility
of the commitments made by member countries. This is so because they contribute
to link the different national productive systems and its players, generating
strong incentives to preserve and expand a process of multinational integration.
It requires, in each of the countries, domestic firms with aggressive
objectives and capacity for international projection. .
The three above mentioned conditions are closely linked with each other.
Added together they help us imagine a realistic strategy of trade negotiations
with other countries and regions. Without a national strategy, it will
be difficult for a country to benefit from the decisions that are made
to guide an integration process and to generate its ground rules. Without
ground rules that are effectively enforced, it will be difficult to gain
flexibility and encourage companies to make productive investments based
on the expanded market. Without productive investments, especially in
the context of cross-border value chains, it will be difficult to generate
the stable benefits that can be expected from an integration process,
especially those of greater social impact due to their effects on job
creation and on the identification of citizens with the idea of a shared
region. It will be harder still to establish international trade negotiations
that contribute favorably to the development and productive transformation
of each country in the region.
In any case the redesign of Mercosur will have to take into account more
recent developments at the global, interregional and also regional level.
Recent developments in these three levels have had repercussions in Latin
America and especially in the South American regional space. On the one
hand, due to the difficulty in determining the real practical extent of
the progress that would be taking place in the development of the Pacific
Alliance. On the other hand, in the debate that is being installed in
Mercosur countries on how to address the new realities of trade and international
trade negotiations, as reflected in recent reports published by business
institutions in Brazil -(two of the reports are from the Instituto de
Estudos para o Desenvolvimento Industrial (IEDI) which gathers a significant
group of leading Brazilian businesses. One of them deals with the impact
that the new mega preferential agreements under negotiation would have
on the business strategies of Brazil http://retaguarda.iedi.org.br/).
The other IEDI report refers to Brazilian participation in global value
The third report is by the Federaçâo das Indústrias
do Estado de S.Paulo (FIESP) and it introduces an external integration
agenda (http://www.fiesp.com.br/)-. From these three reports we can sense
the risk of isolation of the Brazilian economy in the new global context.
The fact that Mercosur as a joint strategic project of a group of South
American countries is not being questioned becomes much more relevant
when we note the frequency with which different analysts and protagonists
suggest that countries like Brazil should rethink their relation in regards
to other approaches considered more appropriate. In particular, the model
that is in contrast with that of Mercosur is that of the Pacific Alliance.
In doing so, it is assumed that the partnership has already produced the
results announced by its four member countries.
We can also find the approach of the requirement of flexibility in the
agreements to be negotiated. Specifically, it is proposed with regard
to the ongoing negotiations between Mercosur and the EU. It is an approach
that would be based on the assumption that not all Mercosur member countries
would be willing to move forward at the same pace in terms of tariff reductions,
at least in all sectors. Beyond how sustainable this assumption may be,
it would be convenient to ponder on the different forms that the proposals
for flexibility of the commitments could have. The idea would be to achieve
flexibility in the context of an "umbrella" agreement that contemplates
multiple speeds on the tariff reduction commitments of each Mercosur country,
but also variable geometries in the commitments made in other non-tariff
issues and in particular in the regulatory frameworks of trade and investments.
It is an alternative that could erode the preferential treatments agreed
within Mercosur and that, in practice and due to the economic dimension
of the EU, could lead to the same results that the signing of free trade
bilateral agreements between the EU and each one of the Mercosur countries.
In other words, it could be tantamount to the end of Mercosur as a relevant
economic integration process for its members. However, a section of the
IEDI report on the impact of the negotiations of mega- preferential trade
agreements (page 43) provides more interesting options that would be convenient
to explore in the debate that has actually been installed by the Brazilian
business institutions. Such options are three: the gradual implementation
of the negotiated measures; the use of temporary general, special and
sector safeguards; and the implementation of training and professional
relocation mechanisms. Including such measures in the architecture of
the respective bi-regional agreement would enable to contemplate any eventual
situations of disparity resulting from the existing asymmetries in economic
development, both within Mercosur and with regards to EU countries. Other
proposals included in the IEDI report (pages 42 and 43) deserve special
attention. They refer to preferential rules of origin, mechanisms of mutual
recognition or harmonization of non-tariff measures, protection of investments
originating in Brazil or in other Mercosur countries and a gradual liberalization
of services to aid regional economic integration, structuring value chains
and enabling market access for domestic companies.
Beyond the initial enthusiasm that now seems evident in the participating
countries and in others that aspire to have some kind of connection, even
just as observers, the question that arises then is how sustainable over
time will be the process of deep integration' channeled by the so called
'Alliance of the Pacific'.
An issue to monitor closely is that of the relationships that are built
between the Latin American preferential spaces: the Alliance of the Pacific
and Mercosur. It is a matter of economic interest but also with strong
geopolitical connotations. It should be noted that for several countries
in the Alliance of the Pacific relations at all levels with Mercosur countries,
but especially with Argentina and Brazil, are very close and transcend
Hence, the importance of raising the question of whether these two regional
preferential spaces will complement each other or if, by the contrary,
contradictory views will prevail. And this is a question that will take
time to get an answer based on solid arguments and not only ideological
or emotional ones. Among other reasons, time will be necessary in order
to have a clearer idea of what are the commitments that are eventually
manifested in the space of the Pacific Alliance and to appreciate the
true scope of the present 'metamorphosis' of Mercosur, resulting especially
from changes in its membership, the convenience of capitalizing on the
experience gained since its creation, and its recommendable adaptation
to national, regional and global realities different from those of the
time of its creation.
The Alliance of the Pacific is the equivalent of a house to be built.
The willingness to do so exists and the plans are being discussed. Mercosur
is also the equivalent of a house under construction but it already needs
to be expanded and adjusted to the new realities of its owners and the
environment in which they operate. Both constructions are developed in
the broader institutional frameworks that exist in the region. All of
them aim to ensure regional governance -in terms of peace and political
stability- and not only in the economic aspect.
How to get both processes to complement each other, generating a convergence
of development and commercial policies and achieving a growing articulation
of transnational value chains? This is perhaps the central question on
which to base the work between Mercosur and the Pacific Alliance from
now on, while maximizing the installed capacity within the scope of the
regional institutions mentioned above.
But while it seems certain that the previous design of South American
integration is undergoing a process of change, it will be difficult to
predict how long the one that is beginning to take shape will remain in
effect. The experience of recent decades suggests great caution in any
optimistic forecasts regarding its eventual longevity.
Conclusions: A necessary debate
Several factors are contributing to the redesign of South American integration.
Some are external to the region, while others are endogenous.
As for the external factors, some deserve to be pointed out, although
they are not the only ones: " The paralysis suffered for quite some
time by the multilateral trade negotiations of the Doha Round within the
scope of the World Trade Organization (WTO). Even when in Geneva the fire
is being kept alive, there is marked skepticism about the possibility
of restoring this multilateral negotiation process of global scope. There
is no evidence of a sufficient political will to relaunch such negotiations
in relevant countries due to their impact on world trade. Such is the
case in particular of the United States.
" The increasing proliferation of negotiations aimed at creating
"private clubs" in international trade that are the result of
various forms of preferential agreements, all of them with a discriminatory
scope for countries that are not members, even when they belong to the
WTO. Recent examples include the Trans-Pacific Partnership (TPP). Another
example is the Regional Comprehensive Economic Partnership (RCEP). To
this we must add, among others, the free trade agreements being negotiated
by the EU with Canada, India and now Japan, as well as the eventual delayed
association agreement with Mercosur. And, finally we must add the negotiations
between the EU and the United States for the conclusion of a Trans-Atlantic
Trade and Investment Partnership.
" The fact that the growing trend towards the development of transnational
value chains generates a greater demand for the facilitation of trade
and investments -in all the possible derivations of this concept- and
of ground rules that are favorable for the development of transnational
business strategies involving productive investments in many countries.
The perception that it might be difficult to imagine any rapid progress
on the Doha Round negotiations would encourage the development of new
forms of agreements between groups of countries, all of them aimed at
reaching objectives in terms of trade and investments that go beyond what
has been achieved -or could be achieved- in the framework of the WTO.
The problem is that this could eventually intensify the fragmentation
of the multilateral world trade system and that the subsequent erosion
may also have systemic geopolitical connotations that would not help in
securing global governance, understood as the prevalence of conditions
conductive to peace and political stability in international relations.
As for the endogenous factors to the South American region, the following
are the most relevant: " The accumulation of frustrated experiences,
richer in their expectations and even in their rhetoric that in the actual
fulfillment of the agreed commitments. Perhaps the fact that it is difficult
for citizens of a South American country - the same applies for the wider
Latin American space- to relate their level of well-being and, in particular,
their jobs with the effects derived from an integration process, be it
the CAN or Mercosur, may be the more noteworthy fact when seeking an explanation
for the low credibility that the idea of economic integration between
countries of the region awakens today. The fragility of the ground rules
related with the opening of the respective markets to reciprocal trade
-especially of the countries of largest economic dimension- may be a factor
that helps explain the weak impact that the major agreements have had
on the productive integration of the region. This results in the differences
observed in the development of transnational value chains between the
countries of Asia and those of South America.
" The greater freedom to develop joint actions between countries
of the region with the aim of ensuring at the same time reasonable governance
of the South American space -in terms of peace and political stability-
and the strengthening of the linkages of the productive systems through
cross-investments aimed at projecting to the world the existing capacity
of each country to develop competitive goods and services. It is a freedom
which is nurtured by the erosion of rigid models of economic integration
and a more informed appreciation of the real scope of one of the only
international legal constraints when selecting methods of integration,
which is derived from Article XXIV, paragraph 8, of the GATT.
" The fact that all countries in the region, regardless of their
economic size, level of development or relative power, have in today's
world many choices as to their economic -and even political- insertion
in the international system. This favors a strategy of multiple alliances
with commitments and memberships that can even be superimposed, as is
the case today with the mentioned agreements that are being negotiated
between the Asian and the Pacific countries. At the same time, it becomes
difficult to imagine a South American regional construction focused on
the hypothetical hegemonic leadership of one single country. This tips
the balance towards collective regional leadership patterns, which will
probably be of variable geometry, as will be the regional agreements that
are devised. Both the European and the present Asian experiences have
much to illustrate on the dynamics of such types of collective regional
The combination of exogenous and endogenous factors will influence the
future design of South American integration. If past lessons are correctly
capitalized and certain advantage is derived from the leeway provided
by a decentralized international system with multiple options, we can
anticipate that what will predominate in the region will be multidimensional
integration agreements (with political and economic objectives at the
same time) and with cross-memberships and commitments. In the perspective
of the dominant regional integration orthodoxy of the past six decades,
with all its variations and "closed" or "open" forms,
it is possible to anticipate the predominance of heterodox models in the
What criteria would be possible to assess the sustainability of the new
map of South American integration that is now emerging? How can citizens
and those who must make decisions for productive investment in order to
take advantage of the benefits offered by the integration agreements,
trust in the effective fulfillment of the promises? How to prevent citizens
and investors, when analyzing the announcements made on agreements often
described as "historic", from concluding that these are actually
"more of the same" (i.e., a "déjà vu")?
Those are some of the main questions to answer in what is now clearly
a necessary debate both at the regional and at the national level, in
each case with strong participation of citizens and their social and political