The development of a climate of mutual trust amongst the countries of
the South American geographic space and the encouragement of a renewed
regional cooperation, especially one that serves as an incentive for the
proliferation of transnational business networks and productive integration,
seem to be two priority courses of action demanded by the current circumstances
of South America. Both are interrelated and nurture each other, creating
thus a virtuous circle between mutual trust and the density of the web
of shared interests.
The abovementioned circumstances are the result of the effects of the
global financial and economic crisis on the region. But particularly,
they are a consequence of the deep transformations that are taking place
in the distribution of world power, with their impacts on global economic
competition and on international trade negotiations. These transformations
will probably take some time to mature but there is no indication that
this will happen in a linear manner.
On this respect, it should be noted that, throughout history, deep transformations
have been usually associated with wars, as pointed out by Ronald Findlay
and Kevin H.O'Rourke in their fascinating book "Power and Plenty.
Trade, War, and the World Economy in the Second Millennium", Princeton
University Press, Princeton and Oxford 2007.
Additionally, these are structural transformations that are gradually
generating a broad spectrum of opportunities for each of the countries
of the region, irrespective of their economic dimension or relative power
-both in terms of foreign trade as well as in terms of the flows of productive
investments and technical knowledge-. However, at the same time, they
can give rise to different outlooks on how to take advantage of them,
and even in relation to the understanding of their real scope and impact.
Within this context, the development of a climate of mutual trust among
the South American countries becomes a priority course of action for the
region. The main question that remains to be answered is the following:
Is it possible to build a regional geographic space where the logic of
integration prevails without the existence of a minimum ground of mutual
trust between the neighboring countries? Based on historic experience,
Jean Monnet, who inspired the European integration, suggested that this
is not possible. This is why he proposed a plan of action aimed at creating
factual solidarities, particularly between France and Germany, to sustain
a climate of trust that would later lead to the development of the European
This question is currently valid for our region, especially if we consider
that fifty years have elapsed since South American countries -plus Mexico,
an originally unforeseen guest- initiated their integration processes
with the creation of the Latin America Free Trade Association (LAFTA).
The road has been a winding one since then. Rhetoric has sometimes prevailed
over concrete results. The desired goal of an integrated region functional
to the development objectives of its countries still remains unfulfilled.
Those who have to make productive investment decisions in relation to
the expanded markets have every reason to doubt the rules that affect
reciprocal trade relations. (On this issue, refer to the April 2009 edition
of this Newsletter).
The need to develop a platform of mutual trust between South American
countries was precisely a topic of great relevance at the recent UNASUR
Summit held in Bariloche, on August 28, 2009 (for the text of the joint
declaration of the Bariloche Summit, go to http://www.comunidadandina.org/unasur/28-8-09bariloche.htm).
The Chiefs of State of the South American countries manifested, at the
highest political level, -and in direct thanks to the correct decision
of broadcasting the session live on TV such as had happened at the Rio
Group Summit in the Dominican Republic- the known diversities of the region
as well as the differences in perspectives and outlooks. To a great extent,
these reflect conceptual disagreements and not only related to national
The specific issue at the center of the agenda of this extraordinary
Summit was the utilization of military bases in Colombian territory by
the US as a result of a bilateral agreement between the two countries.
However, this debate exposed the unfolding of the multiple consequences
that derive from the regional outreach of the security agendas of various
countries. This unfolding reflects a significant degree of mutual distrust
regarding views and intentions. From there that the practical conclusions
of the Summit were, on the one hand, to try to preserve a space for the
multilateral dialogue on issues of common interest -in this case those
related to national and regional security- and, on the other hand, to
initiate the path towards the establishment of efficient mechanisms for
the verification of facts that could precisely generate mutual disbelief.
In any case, the Bariloche Summit mirrored reality and that constitutes
one of its major achievements. It exposed some of the various fractures
that exist in South America. However, at the same time, it conveyed the
feeling that the stakeholders recognize the limits imposed by a densely
growing web of different types of shared interests. What was agreed upon
may be considered unassertive. However, it was what was possible, and
if well developed, it could become a step in the right direction.
In other respects, the Summit evinced the persisting collective will
to make peace and political stability the prevailing forces of the region,
without which it would be difficult to move forward towards a productive
integration based on the compliance of rules. From there, the good sense
of a presidential diplomacy oriented towards building gradually a more
appropriate climate for the reasonable coexistence of the existing diversities.
The role of Argentina should be highlighted on this occasion. Yet, in
fact, the Summit gave a chance to appreciate -as was the case before with
the Santo Domingo and Moneda Summits- the importance of a presidential
diplomacy that reflects the disposition and ability for collective leadership
of at least a hard core of countries which favor, above all, the political
stability of the region.
The essence of Bariloche was the public acknowledgement, at the highest
level, of the need to build mutual trust between the countries of the
region. This will be no easy task given that the existing differences
are currently very steep and, in some cases, deeply rooted. However, an
important step has been taken by recognizing that problems need to be
approached through dialogue and with the participation of all the countries
of the region. Following the precedent of the Moneda Summit, a clear signal
has been sent regarding the determination of the region to face its own
An optimistic view demands a positive interpretation of the results of
a Summit which, if translated into concrete facts, may confer the processes
of integration -whatever the modality- a more solid political foundation
-that of mutual trust- for its future development.
However, even when mutual trust is a necessary condition for regional
governance, there seems to be a general consensus in that it is not sufficient
to guarantee the prevalence of peace, democracy and stability within the
South American geographic space.
This is the reason why the encouragement of a renewed regional integration
would be a necessary second course of action. This makes sense politically
as well as economically. If approached with a practical purport, it can
result in a higher density of the web of multiple shared interests that
sustain, in turn, the climate of mutual trust. Such web has among its
main stakeholders those companies which internationalize their operations
at a transnational level -especially articulating productive chains- and
which contribute to the physical connectivity of the corresponding markets.
It is also nurtured by networks in different fields such as energy, innovation
and technological development, education and social solidarity.
Precisely, the Economic Commission for Latin America and the Caribbean
(ECLAC) has dedicated a substantial part of its recent report to the issue
of renewed regional cooperation "Latin America and the Caribbean
in the World Economy 2008 - 2009. Crisis and opportunities for regional
cooperation". (See the reference bellow under the Recommended Readings
The report emphasizes the idea that the impulse for a renewed regional
cooperation involves building on what has already been achieved and making
good use of what is available in terms of agreements and regional mechanisms.
More than ambitious goals, which are difficult to achieve given the current
circumstances, reality imposes the need to acknowledge diversity and difference,
even conceptual disagreements -using for such purpose a wide variety of
variable geometry and multi- speed approaches-; to capitalize on the experiences
and assets of a history of fifty years of regional integration -including
Mercosur- and to place the stress on some central points such as those
mentioned by the ECLAC report.
The main idea of the report is that the new international context demands
a greater cooperation between the countries of the region, not only due
to the need of limiting the effects of the crisis, but also due to the
urgency for improving its insertion in world economy. In such sense, it
constitutes a reiteration of a concept previously expressed by the ECLAC
in that the consequences of losing the global competitiveness race would
be far more serious than the effects of the current global crisis, because,
as hard as these may be, they would be temporary, whereas any lags in
the areas of competitiveness, innovation and productivity would constitute
a permanent obstacle in the progress towards a strategy for growth with
In its recommendations, the report assumes that the new regional context
demands a greater regional cooperation; that integration can and should
be renewed, but through realistic commitments; and that, at present time,
regional cooperation becomes even more important than commercial liberalization.
This last issue can be explained by the fact that the costs of physical
connectivity currently tend to overcome -sometimes in a very significant
measure- those costs originated by the customs tariffs that have an impact
on South American trade.
The actual proposals refer to the preservation and encouragement of infrastructure
investment; a program for the promotion of intra-regional trade; the increase
of regional cooperation in innovation and competitiveness; addressing
asymmetries more thoroughly; strengthening the social aspect of integration;
using the link with Asia-Pacific to deepen regional integration; and facing
environmental challenges and climatic change in a joint manner. As pointed
out by the report all are decisive elements for the competitiveness, innovation
and productivity of the region in the short, medium and long term.
The ECLAC report provides a technical background for what should become
a thorough debate on the future of regional cooperation. Such a debate,
with the participation of the multiple stakeholders and particularly businessmen,
could help translate the ECLAC recommendations into actions. (On this
issue, please refer to what was discussed in the July 2009 edition of
this Newsletter and in our article "Para el día después",
published on the August 2009 edition of AméricaEconomía
http://www.americaeconomia.com/revista/ and at
On the other hand, the fulfillment of the recommended courses of action
will involve the different existing regional and sub-regional institutional
ambits. It is precisely its variable geometry which enables us to consider
the existing diversities and differences, not only within South America
but within the larger Latin American and Caribbean space.