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  Félix Peña

INTERNATIONAL TRADE RELATIONS NEWSLETTER
2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | 2009
THE ENDING OF THREE LONG HISTORICAL CYCLES:
A backdrop for the dilemmas faced in the construction of regional spaces?

by Félix Peña
November 2011

English translation: Isabel Romero Carranza


 

The structural changes that are being experienced at the international level may be reflecting the simultaneous ending of three lengthy historical cycles which have impacted international relations during the last centuries.

The first of these cycles started five hundred years ago when Europe began to occupy center stage in the world scenario and continued when the United States took this place during the last Century. It was quite a long cycle centered in the Western World. The other cycle was initiated by the Industrial Revolution at the end of the 18th Century and gave birth, among other things, to the divergence of economic paths between center and periphery. The third cycle began in the mid 17th Century with the Peace of Westphalia. It was during this stage that different modalities of groups of big powers with the ability to preserve a certain international order were born.

The current structural changes have become the backdrop to be considered in the analysis of the turmoil that is shaking the European regional space. They show the end of an era in which both Europe and the US have been the main focus of the world scenario. However, they also lurk behind the existential and methodological dilemmas that can be observed in other regional spaces where coexisting sovereign nations may choose the path of fragmentation or cohesion in their mutual relations. This spans the South American regional space and the larger -and often more difficult to define- Latin American and Caribbean space.

The construction of a united Europe, seen for a long time as a point of reference for other regions, has now entered a phase of uncertainties and dilemmas. Uncertainties regarding the future of its economic and social model, livelihood of a way of life and of each one of the diverse national political systems. Dilemmas regarding the possibility and the manner in which to achieve continuity in the construction of an integrated space that has shown some achievements but also visible failures.

It is still too early to venture a forecast on the future of European integration. Its past history generates the expectation that once again Europe will reinvent itself. In any case, this is not an issue that should leave Mercosur countries indifferent, especially if we consider certain facts such as, among others, the ongoing negotiation of what should be an attractive and original interregional agreement.


The current financial and economic crisis that is shaking Europe and the euro zone countries, but that may have a chain effect at a global scale, is taking place within a scenario of deep structural changes in the international system. Understanding such changes will probably be one of the conditions that will influence the policies applied by countries in order to face the most immediate effects of the crisis.
We are referring to structural changes that reflect the simultaneous ending of at least three long historical cycles which have dominated international relations during the last centuries.

One of such cycles started five hundred years ago when Europe took center stage in the world scenario, a place that would later be occupied by the United States during last Century. This was quite a lengthy cycle with a focus on the Western World (on this regard refer to the book by Fareed Zakaría, "The Post-American World. Release 2.0" included as recommended reading in the October 2011 edition of this Newsletter). Currently, the world has entered a period of decentralization in which an undetermined number of main players have attained significant prominence (on this issue see the book by Jean-Claude Guillebaud, "Le commencement d'un monde. Vers une modernité métisse", Seuil, Paris 2008). As a consequence, the world has become a place in which multiple options are opening up for the strategic international insertion of all the protagonists -and not just states-, whatever their relative economic dimension. Thus, a generalized empowerment of the contestants for world power and international markets has taken place and the consequences of this phenomenon are still difficult to anticipate.

The other cycle that is reaching an end is the one initiated by the Industrial Revolution at the end of the 18th Century, a cycle which gave birth, among other things, to the diverging economic paths between the central and the periphery countries, between North and South (on this issue see the book by Michael Spence, "The Next Convergence. The Future of Economic Growth in a Multispeed World", included as recommended reading in this Newsletter).

The third period started in the mid 17th Century with the Peace of Westphalia, when different modalities of groups or clubs of relevant nations were born, all of them with the ability and expectation of wielding a decisive influence in the preservation of a certain international order (on this topic refer to the recent book by Bertrand Badie, "Diplomatie de Connivence. Les dérives oligarchiques du systeme international", mentioned as recommended reading in the October 2011 edition of this Newsletter). The G20 meetings -as was seen once more at the recent Cannes Summit (see http://www.g20.utoronto.ca/) - show clear evidence of the difficulty of its member countries to agree on common and effective answers for the relevant issues of the global agenda. The specter of the "world power freeze" or the "oligarchic condominium" -i.e.: a group of powers acting together which are able to impose and eventually freeze the international order- proposed decades ago by some prominent diplomats now seems to be less viable.

The abovementioned structural changes constitute a backdrop to be taken into account in the analysis of the turbulences that are shaking most particularly the European regional space.

However, they are also behind the existential and methodological dilemmas that can be observed in every regional geographic space made up of coexisting sovereign nations that may opt for the path of fragmentation or cohesion in their mutual relations. This most certainly includes the South American regional space or the broader -and at times more difficult to define accurately-Latin American and Caribbean space.

The existential dilemmas refer to the reasons that cause a group of nations that share a geographical space, to institutionalize a voluntary and permanent association aimed at granting one another preferential economic treatment in order to facilitate the transnational productive articulation, to work together in their relations and negotiations with third countries, and to facilitate regional governance through the prevalence of democratic values, social cohesion and, most particularly, peace and political stability. Thus, the dilemmas concern the objectives that are sought through the association of the respective nations. It implies the acknowledgement of the need to transcend the exclusive use of the logic of bilateralism on their regional relations.

On the other hand, when the dilemmas are methodological they refer to the modalities of working between neighboring nations and, in particular, to the mechanisms, institutions and disciplines that are employed to achieve the common objectives sought by a voluntary association of lasting intent.

Due to the crisis that has been affecting particularly the euro zone the European case currently deserves special attention. This is also so because of the incidence that it might have in the construction of the South American regional space and in the relations between both regions, as evinced by the difficulties to move forward and conclude the interregional negotiation between the European Union and Mercosur.

The construction of a united Europe has entered a phase of strong uncertainties and, at the same time, of great dilemmas. Uncertainties, regarding the future of its economic and social model, livelihood of a way of life and of each one of the diverse national political systems. Dilemmas, as to how to continue building an integrated space that has shown some achievements but also visible failures.
These uncertainties and dilemmas reflect the end of a period largely as a consequence of the deep international changes mentioned before. These have an impact not only on the economy but on the political life of several of the EU member countries, or at least of those most affected by the crisis of the euro. The impacts are felt not just by debtors but by citizens as well. They feel disoriented and at times express their outrage through protests, though in general they have little to propose.

The fact is that the survival of the European Union, and not just of the euro zone, has started to come into question. The crisis is thus taking an existential dimension. This means that what might be at stake is the notion of an integrated European space. Some signs indicate an inclination towards the return of the logic of bilateralism. Even certain ghosts from the past have started to emerge. Chancellor Angela Merkel subtly brought them back when, on the eve of this November's European Summit, she pointed out to the German Parliament that the achievements of fifty years of European peace were at risk. And many Europeans still remember the situation before the inflection point meant by the Schumann Plan of 1950.

It is precisely this existential dimension what could complicate the repeated idea of surmounting the current crisis with "more Europe", that implies moving forward in the development of common policies and institutions. The difficulty of this idea lies in that, for certain apparently growing sectors of some member countries -and this would seem the case in various countries of the original founding group- by including such a diversity and number of countries, united Europe itself has become the problem precisely because within it they can visualize some of the causes of the current crisis.

There is evidence of the erosion of the European identity, manifested by expressions such as "their problem is not my problem" when some citizens of European countries refer to what is happening, for example, to the Greek, or what might happen to the Italian, Spanish or Portuguese. By thinking thus they show that they are ignorant to the fact that their own country probably lacks a reasonable "B plan" as an alternative to the idea of an integrated Europe.

It would be possible to draw three conclusions from what is happening to European integration that would be useful at the moment of promoting the construction of a South American regional governance space that involves overcoming Mercosur's visible insufficiencies. Especially so, if the future of such construction is visualized within the context of the new structural realities of the system of world power and of global economic competition.

The first of these conclusions is that the permanent reengineering of the common policies and institutions to adapt them to the new realities and circumstances is a constant demand in the construction of an integration space between sovereign nations sharing a same regional geographic space. This requires constructs that are extremely flexible and predictable at the same time and that take into account the signs that those making localization and investment decisions will try to read, especially in the area of productive chains and transnational supply chains.

The second conclusion is that such reengineering -and much more so the original design- should not follow any preconceived or text book models. The prescriptions of economic or political theory are not usually taken into account in reality. In a certain way all of them have been, and still are, "tailor-made suits" based on the assessment of concrete national realities and the perception of the leeway allowed by the external context. They respond to the needs of member countries and, above all, to what they are effectively able to accomplish.

The third conclusion is that cruising through the current world reality, especially between an integrated set of contiguous nations, is not eased by the use of any "GPS" as there are no preset roadmaps. On the contrary, it requires much instinct, economic realism, flexibility and technical skill. But, above all, it calls for an enlightened and firm political leadership in each one of the countries and, in particular, in those with the greatest capacity to influence reality and to mobilize the partners. Ultimately, it requires a great deal of luck.

It is still too soon to venture a forecast on the future of European integration. Its history of over fifty years generates the expectation that Europe will certainly know how to reinvent itself and that such reinvention will be characterized by continuity and innovation at the same time. This means that it will truly be a metamorphosis in the sense advocated by Edgar Morin in his book "Ma Gauche", FB, Paris 2010).

In any case, this issue should not leave Mercosur countries indifferent, particularly in view of the ongoing negotiations to achieve an interregional agreement that should be both attractive and original. Neither would it be convenient for this agreement to be conceived following theoretical models or rigid preconceived formulas. On the contrary, it would be advisable to visualize it as a long term process that helps take advantage of the flexibilities made possible by an accurate interpretation of article XXIV, paragraph 8, of the GATT (on this regard refer to the April 2011 edition of this Newsletter on www.felixpena.com.ar). In order to do this, it will be necessary to summon much political will and technical imagination on both sides of the Atlantic.


Recommended Reading:


  • Ahmed, Faisal, "The Global South Needs a Multilateral Approach", Business Standard, New Delhi-Mumbai, November 6, 2011, on: http://groups.google.com/.
  • ALADI-CEPAL-MERCOSUR-UNASUR, "Latinoamérica y el Grupo de los 20. Hacia la construcción de un espacio de diálogo en la Región", Montevideo, October 18, 2 011.
  • Alonso, José Antonio; Aguirre, Pablo; Santander, Guillermo, "La cooperación triangular española en América Latina: un análisis de dos experiencias de interés", Fundación Carolina (ceALCI)-ICEI, Documento de Trabajo n° 51, Madrid, October 2011.
  • Amado, Fernando, "La masonería uruguaya. El fin de la discreción", Random House Mondadori Uruguay, Montevideo 2011.
  • Angeloni, Ignazio; Pisani-Ferry, Jean, "Wanted: A Stronger and Better G20 for the Global Economy", Bruegel Policy Contribution, Issue 2011/15, Brussels, October 2011, on: http://www.bruegel.org/.
  • Auboin; Marc; Ruta, Michele, "The Relationship Between Exchange Rates and International Trade: A Review of Economic Literature", World Trade Organization, Economic Research and Statistics Division, Staff Working Paper ERSD-2011-17, October 25, 2011, on: http://www.wto.org/.
  • Bartesaghi, Ignacio, "Unión de Naciones Suramericanas (UNASUR)", Cámara de Industrias del Uruguay, Departamento de Integración y Comercio Internacional, Dirección de Investigación y Análisis, Montevideo, June 2011, on: http://www.ciu.com.uy/.
  • Dotta Ostria, Mario, "Oligarquías, Militares y Masones. La Guerra contra el Paraguay y la Consolidación de las Asimetrías Regionales", Colección Ensayos, Ediciones de la Plaza, Montevideo 2011.
  • ECLAC, "People's Republic of China and Latin America and the Caribbean. Ushering in a new era in the economic and trade relationship", ECLAC, Santiago de Chile, June 2011.
  • Ferguson, Niall, "Colossus. The Rise and Fall of the American Empire", Penguin Books, New York 2005.
  • Ferguson, Niall, "Civilization. The West and the Rest", The Penguin Press, New York 2011.
  • Fundación INAI, "Boletín del INAI", N° 110, Instituto para las Negociaciones Agrícolas Internacionales, Buenos Aires, 31 October 2011, on: http://www.inai.org.ar/.
  • Hartzenberg, Trudi, "Regional Integration in Africa", WTO, Economic Research and Statistics Division, Staff Working Paper ERSD-2011-14, Geneva, October 2011, on: http://www.wto.org/.
  • Iglesias, Fernando, "La modernidad global. Una revolución copernicana en los asuntos humanos", Sudamericana, Buenos Aires 2011.
  • Lowenthal, Abraham F., "Disaggregating Latin America: Diverse Trajectories, Emerging Clusters and their Implications", The Brookings Institution, Washington DC., Saturday November 12, 2011, on: http://www.brookings.edu/.
  • Márkaris, Petros, "Con el agua al cuello", Colección Andanzas, Tusquets Editores, Buenos Aires 2011.
  • Martin, Will; Mattoo, Aaditya (eds.), "Unfinished Business? The WTO Doha Agenda", Centre for Economic Policy Research (CEPR)-The World Bank, Washington 2011, on: http://www-wds.worldbank.org/.
  • Maxton, Graeme, "The End of Progress. How Modern Economics has Failed Us", John Wiley & Sons (Asia) Pte.Ltd, Singapore 2011.
  • OECD-WTO-UNCTAD, "Reports on G20 Trade and Investment Measures (May to Mid-October 2011" Geneva, 25 October 2011, on: http://www.oecd.org/.
  • Oporto, Mario, "De Moreno a Perón. Pensamiento argentino de la unidad latinoamericana", Planeta, Buenos Aires 2011.
  • Oropeza García, Arturo (coordinador), "BRICS. El difícil camino entre el escepticismo y el asombro", UNAM-Cámara de Diputados, México 2011.
  • Pedersen, Peter N., "The case for creating a Working Party on the Functioning of the WTO", Staff Working Paper ERSD-2011-16, Geneva, October 25, 2011, on: http://www.wto.org/.
  • Peña, Félix, "Why not an ombudsperson at the WTO? A proposal for debate", on Carolyn Deere Birkbeck (ed.), "Making Global Trade Governance Work for Development. Perspectives and Priorities from Developing Countries", Cambridge University Press, Cambridge 2011, pages 442 to 458.
  • Ramos, Jorge Abelardo, "Historia de la Nación Latinoamericana", Biblioteca del Pensamiento Nacional, Peña Lillo-Ediciones Continente, Buenos Aires 2011.
  • Revista Política Externa, "O papel atual do Brasil na América do Sul", Vol. 20 n° 2, Säo Paulo, Set/Oct/Nov 2011.
  • Roy, Joaquín; Dominguez, Roberto (compiladores), "España, la Unión Europea, y la integración latinoamericana", Jean Monnet Chair, University of Miami, Miami-Florida European Union Center of Excellence, Miami 2010.
  • Spence, Michael, "The Next Convergence. The Future of Economic Growth in a Multispeed World", Farrar, Straus and Giroux, New Yok 2011.
  • Tomz, Michael, "Reputation and International Cooperation. Sovereign Debt across Three Centuries", Princeton University Press, Princeton and Oxford 2007.


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.

http://www.felixpena.com.ar | info@felixpena.com.ar


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