| REGIONAL SPACES AND THE TRANSITION TO A NEW
Their role in the construction of renewed global economic governance.
by Félix Peña
English translation: Isabel Romero Carranza
The current international period seems to be the end
of a very long historical cycle with longstanding roots and that evolved
in stages, from the one initiated by the Peace of Westphalia, followed
by the Concert of Europe, later the two world wars and finally the Cold
War and Post-Cold War. These stages reflect changes in power relations
between nations and translate into different ways of ensuring, for a period
of time, certain global governance with its own guidelines, rules and
A common element in the evolution of these stages has been the difficulties
of the main protagonists - countries, governments, economic actors and
citizens- to grasp the scope of the respective transitions and to perceive
the full extent of the deep forces behind the most visible events.
The abovementioned is also seen clearly in three levels where the
actions aimed at building new guidelines, institutions and rules to facilitate
international economic governance interact today. They are the multilateral
global, the interregional and the regional level. When several countries
in a region have associated to achieve common goals that transcend the
strictly economic, sharing the analysis of the deep trends that are shaping
a particular historical moment through these three levels becomes of great
This is currently the case of Mercosur. Among other priority issues
that would need to be addressed, if the shared idea were to overcome the
current state of relative anomie, the partners cannot continue much longer
without defining an effective strategy for concerted action at the global
multilateral, interregional and regional level.
Such a strategy should include, among other priorities, concerted
actions in the WTO front, in the negotiations of interregional agreements
- even in relation to those where Mercosur countries do not participate-
and in the immediate region in which Mercosur is inserted, be it South
America or Latin American as a whole. It is obvious that any advances
in the agendas related to these three external fronts will depend largely
on the progress made in the agenda of what we have called the metamorphosis
Rebuilding the global order is a recurring task, at least when considering
long periods of history. Tectonic shifts in global power make it necessary.
Adam Tozze in his recent book "The Deluge" (refer to the Recommended
Reading Section of this newsletter), examines a particular historical
moment of transition in world order, due to its harshness and its aftermath,
which spans the years 1916 - 1931. His analysis has a striking validity
today, taking into account that since 1989 and especially after the series
of events that occurred between 2001 and 2008, we can consider to have
entered another period of transition to a new international order whose
characteristics and duration are still difficult to pinpoint.
The current period, however, seems to be the end of a long historical
cycle with longstanding roots and that evolved in stages, from that initiated
by the Peace of Westphalia and continuing with those of the Concert of
Europe, the two world wars, the Cold War and the Post-Cold War.
Each of these stages has reflected changes in the power relations between
nations and has translated into different ways of ensuring, for a period
of time, certain global governance with its own guidelines, rules and
institutions. The inflection points have been characterized more by the
predominance of sheer force than of reason.
A common element in the evolution of these stages have been the difficulties
of the main protagonists -countries, governments, economic actors and
citizens- to capture the full scope of the respective transitions and
perceive the full extent of the deep forces at play behind the most visible
The abovementioned can be seen clearly in three levels where the actions
aimed at building new guidelines, institutions and rules for international
economic governance interact today. These levels are the global multilateral
(in this regard see the February
2015 issue of this newsletter), the inter-regional -expressed by the
institutionalization of economic and trade links between relevant regions
of the world- and the regional, comprising the different and sometimes
overlapping geographical regions that can be identified in the international
scenario. The latter appears today as the most relevant.
The facts that anticipate the future and that are evident in all three
levels call for special attention in the necessary and constant exercise
of competitive intelligence that is required today of countries and companies
trying to successfully navigate this transition to a new world order and
a new international economic governance. Historical experience shows these
are moments that always produce winners and losers, usually through very
gradual processes, that is, as if in "slow motion". In the period
between the First World War and the end of the Second World War, several
of the most important protagonists were unable to anticipate the impact
that the transition would have on their place in the world. They did not
visualize themselves as losers.
The quality of the organization that a country has to follow and understand
the deep trends that often shape these facts is today a key factor for
an international integration strategy that seeks to be effective (see
the considerations made in the January
2015 issue of this newsletter).
But when several countries in the same region have joined forces to achieve
common goals that transcend the strictly economic, sharing the analysis
of the underlying trends that are operating in a particular historical
moment in all the three levels mentioned above becomes of utmost importance.
This is currently the case of Mercosur.
In this regard, we should take into account one of the most recent diagnoses
on the situation of Mercosur, made by Chancellor Rodolfo Nin Novoa upon
taking office in the new government of Uruguay. Among other things he
stated (translation is ours): "we are aware that, in recent decades,
the contexts that frame the discussions of the strategies for the international
integration of national states have varied dramatically. The unstoppable
progress of globalization is associated with a visible rebalancing of
global power in the Asia-Pacific region, and China in particular has become
the major driving factor. While developed countries face often unprecedented
challenges, the new emerging countries are starting to affirm their presence,
beyond their vicissitudes, in the new "order", or international
disorder. With multilateral scenarios questioned, integration processes
challenged and a new framework for renewed discussion of the rules and
guidelines of international trade and finance, global governance casts
uncertainties that are as radical as they are demanding".
He added that "in this context we believe the integration processes
in Latin America have not reached their expected development and demand
undelayed sincerity in order to live up to the challenges of the current
international context. The terms of the real controversy point to how
to process the international insertion of a small country such as Uruguay,
given the constraints and opportunities presented by the new contexts.
We have always been integrationists. From that same conviction we want
a sincere Mercosur. We want it to abandon empty rhetoric, to bet on concrete
actions and not on speeches that are later unfulfilled. We want a Mercosur
that sets viable objectives and agreements, that, if necessary, adjusts
its objectives to the current possibilities and that has an active external
agenda that breaks from isolation".
He concluded this part of his presentation by noting: "Everything
with the region, nothing against the region. But from the demand of sincerity
that the current regional and international context compels. For a country
such as Uruguay to confront the near future, it is necessary to promote
the facilitation of genuine regional agreements with encompassing projections.
The world is moving in that direction and we cannot be left out of major
Our countries can combine the attention for their national
interests with real concerted regional strategies for integrated development.
Together we can better vie for a more competitive and less vulnerable
international insertion in such and unpredictable and demanding world.
But if we do not want or cannot go all together, let it be done by those
of us who want to do it." (See the full text of Chancellor Nin Novoa's
speech from March 3, 2015 on http://www.mrree.gub.uy/).
Among other priority issues on the agenda of Mercosur, which will need
to be addressed if the shared idea is to overcome the current state of
relative anomie, the partners cannot continue much longer without defining
an effective strategy for concerted action at the global multilateral,
interregional and their own regional level.
Such a strategy should include, among other priorities, concerted actions
in the WTO front, in the negotiations of interregional agreements -even
in relation to those where Mercosur countries do not participate- and
in the immediate region in which Mercosur is inserted, be it South America
or Latin American as a whole.
On the front of the WTO, the expectation of resuming and eventually
concluding the Doha Round has been reestablished (on this subject, see
the issues raised by Director General, Roberto de Azevedo, in his words
to the General Council, on February 20, 2015, on https://www.wto.org/).
This is an expectation that may be fueled by the fact that it has not
been possible to confirm the most optimistic forecasts with regards to
the progress that might be achieved this year in two of the most important
interregional trade negotiations, in particular those of the Trans-Atlantic
Trade and Investment Partnership (TTIP), but somehow also those of the
Trans-Pacific Partnership (TPP). Even when Mercosur countries do not participate
in such negotiations, those of the TPP require special attention due to
the fact that they involve countries of the region with significant trade
and investment flows, especially with Brazil and Argentina.
In relation to this, we should also bear in mind that some relevant countries
in the international food trade, such as Australia, continue to advance
their strategy of concluding preferential trade agreements. The most recent
was concluded with China, (see http://www.austrade.gov.au/),
a country that, at one time, proposed the idea of undertaking a feasibility
study for a free
trade agreement with Mercosur. It seems that until the present day
Mercosur countries have not responded. Can this be considered as one of
the pending issues on its agenda for international trade negotiations?
Is it not time to give an intelligent answer to this proposal? If well
analyzed, the ASEAN-China agreements can offer a valuable precedent in
this regard (see http://fta.mofcom.gov.cn/).
Finally, in the Latin American regional front -as well as in the South
American one- the question raised at the time by the government of Chile
in the sense of addressing a strategy of "convergence in diversity",
will require operational definitions in the short term in order to translate
it into concrete actions, especially within the more comprehensive and
flexible scope of the LAIA (see the December
2014 issue of this newsletter).
It is obvious that any advances in the agendas of these three external
fronts will depend largely on the progress that can be made in the agenda
of what we have called the metamorphosis of Mercosur (see, among other
recent publications by the author on www.felixpena.com.ar-, the September
2014 issue of this newsletter).
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cruciales en la historia argentina, Abril 2002 - Mayo 2003", Sudamericana,
Buenos Aires 2011.
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