| PRESERVING THE ESSENTIAL, MAKING METHODS
MORE FLEXIBLE: WTO, EU and Mercosur adaptation to new international realities.
by Félix Peña
English translation: Isabel Romero Carranza
Certain signs of stress are becoming evident in some
of the major institutionalized spaces of cooperation among nations both
at a regional level and in the different regional geographic spaces. Recently
they have become even more evident. Examples of this are the obvious difficulties
to move forward in the WTO Doha Round negotiations, the growing concern
over the future of the euro and on how to continue building the European
Union itself, and the trade disputes that have updated the debate on the
real scope of the customs union and the automotive integration within
These stress signs seem to result from a gradual enlargement of the
gap between the international reality in which these cooperation spaces
were born, including their goals and operation modalities, and the current
reality. In almost two decades the political and economic conditions surrounding
the interaction between nations at a global and regional scale have changed
In any case, the signs of fatigue are increasingly becoming more visible
in the area of methodology of working together. They are evident in relation
to the efficiency of the mechanisms and rules and in the difficulties
to obtain the desired results or, alternatively, to adopt decisions that
enable an adaptation to the new realities that are being confronted. The
risk, however, is that with time the loss of efficiency impinges on the
legitimacy of the respective space of multinational cooperation and that
it starts to be perceived by its member nations -or by some of them-as
irrelevant or detrimental to their own national interests. In such case,
the difficulties would become even greater given that they would involve
the existential dimension of working together, i.e. the main rationale
underlying the cooperation effort between the associated nations.
Overcoming such state of affairs will require a collective political
leadership of the main protagonists aimed at limiting the effects of the
efficiency crisis and preventing them from transferring from the methodological
to the existential dimension. In order to preserve the essential it will
be necessary to make the methodological more flexible.
Several of the main institutional spaces for the cooperation between
nations, both at a global and regional level, are increasingly showing
signs of stress. If the causes leading to this were to continue, the future
of complex multinational structures such as the World Trade Organization
(WTO), the European Union (EU) and Mercosur may come into question. At
the very least, it could lead to a crisis in their legitimacy and slide
them into a gradual oblivion, which would be a setback in the predominance
of reasonable guidelines for international governance.
Such signs are becoming evident in the great difficulties being faced
in the WTO Doha Round negotiations, even in the less ambitious version
which was launched after confirming that the "window of opportunity"
was already closed (refer to the report by Patrick Messerlin and Erik
van der Marel listed in the Recommended Reading Section, among others).
The signs are also becoming evident in the uncertainty regarding the political
and macro-economic conditions needed to face, and eventually overcome,
the current crisis of the euro, with its potential chain reaction on the
construction of the EU (see the articles by Simon Kuper, Kenneth Rogoff,
and Nouriel Roubini listed in the Recommended Reading Section, among others).
On another level, and with much less impact and scope, the signs are becoming
evident in the striking precariousness of the ground rules of Mercosur.
This was recently made manifest in relation to the automotive industry,
at the core of the sub-regional integration process, and which has contributed
to intensify the debate over the extent of the common economic space that
is being built in the South of Latin America.
These are stress indicators that seem to result from a gradual widening
of the gap between the international reality in which such multinational
organizations were born -or in which some of its current goals and operation
modalities were originated- and the reality that has been manifesting
in recent years.
It is a well known fact that the two last decades have deeply changed
the political and economic conditions in which nations interact, both
at a global and regional scale. A new era of international relations has
begun in which, due to the distribution of real power, the world has become
decentralized (there are many relevant players). Due to the dynamics of
interactions, it is now more intense (the changes are constant and sudden,
with a penchant for the unpredictable, the so called "black swan"
of Nassim Taleb). As a result of the high degree of connectivity between
the different national political and economic systems, it has become dense
(all sorts of trans-national networks are flourishing, including production
ones which have led to install the "made in the world" concept
-on this regard refer to http://www.wto.org).
We have entered an international scenario that will demand, from the
main protagonists, a greater flexibility to craft all types of cross-alliances
and networks that are non-exclusive and non-excluding. At first sight
it might appear as a chaotic and even toxic world, a world "in times
of cholera" paraphrasing Gabriel García Márquez. To
discover its implicit logic will be one of the main challenges, both for
those who aspire to decode reality and, especially, for those who seek
to exert political leadership at an international scale.
The gap that was previously mentioned is affecting the ability of the
three referred organizations (and of many others) to be effective in producing
the expected results. The difficulties arise in the methodological dimension
of the corresponding institutional space, which is the result of the joint
work methods and modalities used by the partner countries.
On this regard, the following are some of the questions that have surfaced
recently and that may help explain the evident stress:
- Among others in the case of the WTO, are the following: How to build,
among 153 countries with diverse interests, the consensus needed to
close the Doha Round while preserving the single undertaking modality?
How to attract the attention of the political and business leadership
of the main countries -as per their relative weigh in the world trade
flows of goods and services- to incentive the adoption of the measures
needed to conclude negotiations -particularly those with clear short-term
political costs and eventual long-term benefits- all in the midst of
election calendars that mobilize citizens who become aware of their
power and express a growing displeasure and even "indignation"
for their political leadership? How to explain the adoption of measures
for the development of other countries when the respective country is
eventually facing an agenda of hard-to-solve complex social issues of
strong political impact?
- In the case of the EU, some of the questions are: How to preserve
the euro among countries that are facing the unequal effects of a deep
financial crisis, with repercussions at multiple levels, including the
political? How to explain to the respective public opinions the costs
of resolving the problems caused by what is perceived to be the result
of the fiscal indiscipline of other countries? How to abandon partner
countries to their own fate if, on the other hand, they have become
indebted with the financial institutions of some of the most wealthy
countries of the EU?
- In the case of Mercosur: How to continue building a customs union
or a common economic space in a context of pronounced economic asymmetries
and with rules whose fulfillment often depends on the single-sided discretionary
will of each one of the partners? How to reconcile the idea of a multidimensional
strategic alliance with the perception of an unequal distribution of
In the three cases and in spite of the differences that exist between
these institutional spaces, the problems observed are so far and in essence
more methodological -how to work together- than existential -why to work
However, there is a risk that, with time, the efficiency deficits end
up impacting on the legitimacy of each one of the multinational spaces
and that they begin to be viewed by the people of the member countries
-or of some of them- as irrelevant or even as adverse to their own national
In this case, the difficulties would be even greater given that they
would be referring to the existential dimension of the agreement of working
together among nations, including its principles, aims, main functional
mechanisms, rules and instruments. What would be under question then would
be the very same "raison d'être" of the corresponding
In both aspects -those of efficiency and legitimacy- the main problem
would be that the partners either fail to envision or to agree on reasonable
alternatives that are convenient for all. This would imply an absence
of the political conditions needed to continue building an institutionalized
space for the cooperation among nations, or to devise and materialize
other possible options. In that case Plan A is not working but it would
seem that there is no Plan B either.
If this were to happen, a period of systemic crisis might begin, with
possible negative consequences on the governance goals at both the global
or regional level. What would be at stake then would be the preservation
of the conditions that contribute to political stability and peace in
the corresponding international space. History is full of examples of
what may happen when nations that are connected and interdependent fail
to agree on acceptable forms of global or regional governance.
History also shows that the situation being faced today in the international
scenario, reflected by the state of the three multinational institutional
spaces referred to on this occasion, requires of a strong political leadership
-concerted but not hegemonic- in order to be confronted, and eventually
overcome, without resorting to different modalities of violence -normally
refer as war.
Given the multiplicity of relative power centers that exists today and
the heterogeneous interests and visions of the world's future of the main
protagonists, in order to be effective such leadership will need to be
a collective one. The three spaces mentioned above are precisely the ones
that could contribute to the construction of these collective leaderships.
This is one of their main reasons for being, maybe even the essence, of
their existential dimension.
In these types of situations, the collective political leadership has
to be aimed at limiting the effects of the loss of efficiency, preventing
these effects from transferring from the methodological to the existential
Preserving what is essential, i.e. the acquired assets (for example,
the collective disciplines in terms of trade policies and the idea of
a direct relation between trade and development, in the case of the WTO,
and the idea of a common political and economic space, in the cases of
the EU and Mercosur) and adapting methodologies of working together, including
mechanisms, instruments and common rules to the new international reality,
with a strong dose of pragmatism and flexibility, would seem to be the
priority. This would imply eventually postponing more ambitious goals
in the construction of the corresponding multinational institutional space.
In the case of the WTO it would not necessarily involve sacrificing Doha
in favor of the systemic requirements. However, it would entail adapting
its modalities and pace of evolution to what is possible, taking into
account the new international realities and, at the same time, keeping
the agenda open to new measures necessary to strengthen the efficiency
of the multilateral trade system. This should be a key issue in the agenda
of the upcoming WTO Ministerial Conference that will take place next December.
In the cases of the EU and Mercosur -regional integration schemes with
obvious and marked differences in their historic roots, scope, methods
and results- what is essential is to preserve, in practice, the idea of
a space of regional governance with common instruments and goals -there
are not set formulas as to which these should be-. With time, though not
lineally or without setbacks, these will nourish the creation of ground
rules, different kinds of networks -not just productive ones- and symbols
that help citizens identify with the respective regional space and eventually
contributing to its potential irreversibility. As for the methodological
dimension, it may be adapted to the circumstances and needs that prevail
at the different stages of the construction of the corresponding institutionalized
regional space, as was propounded by Jean Monnet and the founding fathers
of European integration.
It should always be remembered that even when the idea of taking advantage
of the crisis to generate forward leaps might seem attractive -and European
integration has been enlightening on this regard- it might also lead to
leaps in the dark, or to dangerous and costly regressions that would seem
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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