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  Félix Peña

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ECLAC's contribution to a necessary debate with multiple stakeholders.

by Félix Peña
September 2009

English translation: Isabel Romero Carranza


The current circumstances demand that certain courses of action be given priority among Latin American countries. Two of these are the creation of a climate of mutual trust 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. Both courses of action are interrelated and nurture each other.

The need to develop a platform of mutual trust among South American countries was an issue of noted relevance at the recent UNASUR Summit, held in Bariloche. It reflected the persistence of a collective will whose goal is to achieve the predominance of peace and political stability in the region, without which it would be difficult, for example, to make any progress towards productive integration based on the compliance of common rules.

Even when mutual trust is a necessary condition for regional governance, there is a general consensus in that it is not sufficient to achieve the predominance of peace, democracy and political stability in the South American regional space. A closely knit web of shared interests is required as well. As a consequence, the encouragement of a renewed regional cooperation becomes a second necessary course of action. This constitutes the central issue of the recent ECLAC report on the international insertion of Latin America and the Caribbean.

The drive towards regional cooperation involves building on what has already been achieved. More than ambitious goals, which are difficult to achieve under the current circumstances, reality imposes the need to acknowledge diversity and difference, to capitalize on the assets and experiences of fifty years of regional integration, and to place the stress on certain key issues such as those mentioned by the ECLAC report.

A thorough debate with the participation of the multiple stakeholders and, in particular, of businessmen might help translate the ECLAC recommendations into concrete actions.

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 Union.

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 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 interests.

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 problems.

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 Section).

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 equity.

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 magazine, at and at this site).

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.

Recommended Readings of Recent Publication:

  • Baumann, Renato, "El Comercio entre los países BRICS", CEPAL, Brasil Office LC/BRS/T.210, August 2009.
  • Brewer, Thomas L., "The Trade and Climate Change Joint Agenda", Center for European Policy Studies, CEPS Working Document Nº 295/June 2008, at
  • Briceño Ruiz, José; Mendoza, Carolina (editores), "Cambio y Permanencia en la Agenda de Integración de América del Sur", Fondo Editorial - Universidad Centroccidental Lisandro Alvarado, Barquisimeto, Venezuela 2009.
  • Brinkley, Douglas; Hackett, Clifford, "Jean Monnet: The Path to European Unity", Introduction by George Ball, St.Martin's Press, New York 1991.
  • CEPAL, "Panorama de la inserción internacional de América Latina y el Caribe. Crisis y espacios de cooperación regional. 2008-2009", United Nations Document, Comisión Económica para América Latina y el Caribe, Santiago de Chile 2009,
  • Danese, Sérgio, "A escola da liderança. Ensaios sobre a política externa e a inserçâo internacional do Brasil", Editora Record, Rio de Janeiro-Sâo Paulo 2009.
  • Holder, Jane; Lee, Maria, "Environmental Protection, Law and Policy", Second Edition - Text and Materials, Cambridge University Press, New York 2007.
  • IBRAC, "Legislaçâo Comércio Internacional", Revista do Instituto Brasileiro de Estudos de Concorrência, Consumo e Comércio Internacional - IBRAC, Volume 15 number 2 - Sâo Paulo 2008.
  • Pandiani, Alvaro, "Columnas de humo. Un peregrinaje a la esperanza", Nelson Group, Nashville, Tennessee, 2009.
  • Nueva Sociedad, ¿Volver al futuro? Estado y mercado en América Latina", Revista Nueva Sociedad, nº 221, May-June 2009,
  • Nueva Sociedad, "Drogas en América. Después de la guerra perdida ¿qué?, Revista Nueva Sociedad, nº 222, July-August 2009,
  • Samaniego, Joseluis (coordinador), "Cambio climático y desarrollo en América Latina y el Caribe: una reseña", Project Document, CEPAL-GTZ, Santiago de Chile, February 2009 (
  • Scout, Joanne, "The WTO Agreement on Sanitary and Phytosanitary Measures. A Commentary", Oxford University Press, Oxford-New York 2009.
  • Stevens, Paul, "Transit Troubles: Pipelines as a Source of Conflict", A Chatham House Report, Chatham House, Royal Institute of International Affairs, London 2009, at

Félix Peña Director of the Institute of International Trade at the ICBC Foundation. Director of the Masters Degree in International Trade Relations at Tres de Febrero National University (UNTREF). Member of the Executive Committee of the Argentine Council for International Relations (CARI). Member of the Evian Group Brains Trust. More information. |

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