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  Félix Peña

INTERNATIONAL TRADE RELATIONS NEWSLETTER
2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | 2009
THE RECYCLYING OF A STRATEGIC IDEA?
The tasks arising from the last Mercosur Summit in Asuncion.

by Félix Peña
January 2016

English translation: Isabel Romero Carranza


 

It is a fact that, along its journey, the image and attractiveness of Mercosur have deteriorated greatly. This is the reason why by the end of 2015, when the last Mercosur Summit was about to take place in Asuncion, it was difficult to make an optimistic forecast about its future.

The results of the Summit of Asuncion reflect a political will to recycle Mercosur. To recycle it in the sense of giving new impulse and providing new approaches to the construction of the space of integration, in line with past experience and the profound changes that have taken place in relation to the context of the founding moment, twenty-five years ago.

We can highlight three of the several aspects where there is a political will to recycle the common regional project.

The first has to do with the legal quality of the commitments that have been taken on or that are assumed in the future. Legal quality appreciated for its political and economic value, whether due to the effect that the compliance with what is agreed has to guarantee the interests of all member countries, irrespective of their size and their relative power, or due to the capacity to generate a scenario of predictability that encourages productive investment.

The second aspect relates to working on the consolidation of three necessary conditions for the construction of a space for joint work between nations sharing a regional space. We are referring to the physical connectivity and the connectivity of national production systems; the compatibility between development strategies and the economic policies applied, and the convergence of strategies and policies towards common goals.

And the third aspect refers to Mercosur's trade relations with third countries. Among others, in the first half of this year the three main external fronts will be with the EU, the countries of the Pacific Alliance and China.

Argentine President Mauricio Macri participated for the first time in the Summit of Asuncion. Four issues were central to his presentation: the value of Mercosur as a strategic project; the necessary combination of flexibility and predictability in its development; the importance of moving forward in the relations with the EU and with the countries of the Pacific Alliance, and the respect for human rights in Mercosur countries, such as provided by the Asuncion Protocol of 2005.


March 26 marks the 25th anniversary of the signing of the Asuncion Treaty which created the Mercosur. It meant a step forward in the evolution of the integration process of the region, such as was at the time the Declaration of Foz de Iguazu, whose 30 years were commemorated on last November 30, and which preceded the founding agreements of integration between Argentina and Brazil, including the Treaty of Integration, Cooperation and Development, still in force (see the full text on http://infoleg.mecon.gov.ar/).

They are landmarks that prompt reflection on the road already traveled and on the road that lies ahead in the near future. They remind us that the construction of an integration space between sovereign nations -which do not necessarily aspire to stop being so as a result of the joint work - develops through a series of steps that are not always systematic and linear and that are usually erratic and fragile. Interestingly, Europeans have also become more aware that what is important when building an integration and cooperation space -as opposed to spaces of fragmentation and confrontation among neighboring nations - is to preserve the political vision by translating it into a strategic long-term vision, while adapting the course and the concrete steps to the realities and to collective learning. (In this regard, see the book by Luuk van Midderlaar, "The Passage to Europe" Yale University Press, 2013). This is precisely the contribution that may result from political leaderships that are, at the same time, convincing and firm in their objectives and flexible in their instrumentation.

In fact, along its journey, the image and attractiveness of Mercosur have deteriorated greatly. From the euphoria and triumphalism of the time of its founding it went to the current disenchantment (see the January 2014 issue of this newsletter on http://www.felixpena.com.ar/). Pepe Mujica, President of Uruguay, described the situation bluntly: "Mercosur is lame and in misery". It is possible that he may have exaggerated to provoke reactions. But the truth is that, even when there were reactions, they failed to translate into effective and efficient initiatives aimed at actually giving a new boost to the construction of the Mercosur space. Often, the initiatives announced had a tendency to "play for the crowd" and therefore seemed to be more aimed at making newspaper headlines the day after the Summits than at having an impact on reality.

That is why by the end of 2015, on the eve of the last Summit in Asuncion, it was difficult to make an optimistic forecast about the future evolution of Mercosur. A turning point, however, had begun with the meeting of the presidents of Uruguay and Paraguay on June 25 (for the joint statement of the presidents, go to http://medios.presidencia.gub.uy/). On that occasion, the joint statement of the two leaders made an explicit reference to the willingness to work together in order to undertake, along with the other Mercosur partners, an action plan for achieving the objectives of Mercosur and perfecting the free trade zone. The aim was to address some of the main entanglements that have weakened the construction of a regional space of integration. This was the focus of the action of Paraguay's effective Pro-tempore presidency during the second half of 2015. Hence, the main results obtained involve addressing these obstacles, though if not always indicating how to solve them, at least expressing the will to work towards that purpose.

The results of the recent Summit of Asunción reflect a political will to recycle Mercosur. To recycle it in the sense of giving new impetus to the construction of the space of integration, in line with past experience and the profound changes that have taken place in relation to the context of the founding moment, twenty-five years ago.

Some events that were almost simultaneous with the Summit of Asuncion help illustrate, along with many others, the deep contextual changes that have taken place since the creation of Mercosur.

One of these events was the WTO Ministerial Conference in Nairobi. Its results are indicating if not the formal end of the Doha Round at least its temporary demise. This fact can raise strong doubts about the vitality of the multilateral trading system institutionalized in the WTO, at least in terms of the objectives and principles that originated it twenty years ago. (On the results of the Ministerial Conference of Nairobi, Kenya, see https://www.wto.org/ and http://www.ictsd.org/).

The other event was the Paris Conference on climate change, which had better results than those that had been anticipated before its realization (on the results of this Conference see the article published in the newspaper El Pais, Madrid, http://internacional.elpais.com/, including a link to the text of the final declaration http://ep00.epimg.net/).

From what was agreed at the Summit of Asuncion, we can highlight three of the several aspects where there is a political will to recycle the common regional project. These are some of the issues on which the Mercosur agenda will most likely focus during the first half of this year in which Uruguay will hold the Pro-Tempore Presidency.

The first one has to do with the convenience of strengthening the legal quality of the commitments that have been taken on, or those that are assumed in the future. Legal quality appreciated for its political and economic value, whether due to the political effect that compliance with the agreements has to guarantee the interests of all member countries -irrespective of their size and their relative power-, or due to the economic effect of generating a scenario of predictability that encourages productive investment.

At least two types of the pronouncements and decisions of the recent Asuncion Summit reflect the intention of reverting the deterioration in the image of Mercosur that has occurred as a consequence of the fact that commitments have been complied with only "insofar as possible". The first of these refers to the inventory of restrictions on reciprocal trade arising from measures and practices of the member countries against commitments formally undertaken. Even when a decision of the Mercosur Council has been published in this regard, the same has not happened with the inventory of restrictive measures elaborated by the Pro-Tempore Presidency of Paraguay. (See the text of Decision CMC 23 on http://www.mercosur.int/). The second refers to the commitments made in Mercosur regarding the exercise of democracy and the respect for human rights (the corresponding texts are on the website of the Mercosur, http://www.mercosur.int/ and with regard to human rights on http://www.mercosur.int/).

The second aspect relates to working on the consolidation of the conditions necessary to build, over time, a space of joint work between sovereign nations that share a regional geographic area. These are the physical connectivity and the connectivity of the national production systems; the compatibility between development strategies and economic policies, and the convergence of strategies and policies towards common objectives. (In this regard refer to the August 2015 issue of this newsletter on http://www.felixpena.com.ar/). One of the most appreciated examples of the value of these conditions is that of the production chains developed in numerous sectors and, in particular, in those sectors with greater potential to project to the world the ability of Mercosur countries to produce goods and provide services.

And the third aspect refers to the development of economic relations and trade negotiations between Mercosur and other countries and regions. Of the semester that ended with the Summit of Asuncion, the priority given to the negotiations with the EU stands out. The statement on the external relations of Mercosur, approved in Asuncion, refers to such negotiations in very clear terms: "The Presidents of the Members States (…) remembered the importance of the conclusion of a bi-regional Association Agreement between Mercosur and the European Union. They stressed that Mercosur is ready to move forward and expressed the expectation that the European side shows its readiness to make the exchange of offers for market access, which would signal the beginning of a new and final phase of the negotiations."(the translation is ours) (For the full text, go to http://www.mercosur.int/).

Notwithstanding others, the three main external negotiation fronts of Mercosur will be:

  • with the EU, mentioned above, and whose progress now depends of Brussels;

  • the development of a strategy of convergence in diversity to link more closely the spaces of Mercosur and of the Pacific Alliance within the framework of the relations between Latin American countries and, in particular, taking into account the convenience of helping to consolidate the newly established relation between Cuba and the US (see the November 2015 issue of this newsletter on http://www.felixpena.com.ar/);

  • the need to develop a preferential framework for the economic relations between Mercosur and China, taking into account the proposal made at the time by the former Prime Minister of the government of the People's Republic of China, Wen Jiabao, for undertaking a feasibility study on a free trade agreement (see the March 2015 issue of this newsletter on http://www.felixpena.com.ar/).

The newly elected Argentine President, Mauricio Macri, participated for the first time in the Summit of Asuncion. In his speech, he advanced ideas about his vision of Mercosur and about its priorities (see the text of his speech on http://www.casarosada.gob.ar/). There were four key issues in his presentation: the value of Mercosur as a strategic project; the necessary combination of flexibility and predictability in its development; the importance of advancing the negotiations and relations with the EU and also with the countries of the Pacific Alliance, and the respect for human rights in Mercosur countries, as provided in the Protocol of Asuncion of June 2005. (For the full text of the Protocol, go to http://www.infoleg.gov.ar/).


Recommended Reading:


  • Armstrong, Karem, "Los orígenes del fundamentalismo en el judaísmo, el cristianismo y el islam", Fábula, Tusquets Editores, Barcelona 2009.
  • Barrera Tyszka, Alberto, "Patria o Muerte", Colección Andanzas, Tusquets Editores, Buenos Aires 2015.
  • Bartesaghi, Ignacio, "Una nueva Cumbre del Mercosur. ¿Hacia un nuevo contexto regional?, Universidad Católica del Uruguay, Montevideo, Diciembre 2015, en http://www.ucu.edu.uy/.
  • Bauman, Zygmunt, "La riqueza de unos pocos nos beneficia a todos", Paidós, Buenos Aires 2014.
  • Bauman, Zygmunt; Bordoni, Carlo, "State of Crisis", Polity Press, Cambridge - Malden, 2014.
  • Bourguignon, Francois, "The Globalization of Inequality", Princeton University Press, Princeton and Oxford, 2015.
  • Caetano, Gerardo, "¿Hacia un nuevo paradigma integracionista en el MERCOSUR? Contextos y desafíos de la encrucijada actual", Relaciones Internacionales, Grupo de Estudios Internacionales (GERI), UAM, Número 30, Madrid, Octubre 2015 - Enero 2016, en http://www.relacionesinternacionales.info/.
  • IERAL, "Una Argentina Competitiva, Productiva y Federal", IERAL - Fundación Mediterránea, Córdoba, Septiembre 2010, en http://www.ieral.org/.
  • INAI, "IIa. Conferencia Internacional sobre Proyecciones Agro-industriales", Fundación INAI, Instituto para las Negociaciones Agrícolas Internacionales, Buenos Aires, 3 de diciembre de 2015, en http://www.inai.org.ar/.
  • INAI, "Boletín del INAI", Fundación INAI, Instituto para las Negociaciones Agrícolas Internacionales, Boletín N° 150, Buenos Aires, 28 de diciembre de 2015, en http://www.inai.org.ar/.
  • Lafer, Celso, "Um olhar sobre o mundo actual", O Estado de S.Paulo, 20/12/2015.
  • Lindholm, Charles; Zúquete, José Pedro, "The Strugle for the World. Liberation Movements of 21st Century", Stanford University Press, Stanford 2010.
  • Magris, Claudio, "El Danubio", Anagrama, Colección Compactos, Barcelona 1997.
  • Morando, Mario (editor), "Integrando Argentina al Mundo", Fundación Banco Ciudad, Olmo Ediciones, Buenos Aires 2015.
  • Manes, Facundo, "Envejecer, un desafío y una oportunidad", La Nación, Buenos Aires 6 de enero de 2016, en http://www.lanacion.com.ar/.
  • Mann, Michael, "The Sources of Social Power. Globalizations, 1945-2011", Cambridge University Press, New York 2013.
  • Murray, Edmundo, "Becoming Irlandés. Private Narratives of the Irish Emigration to Argentina (1844-1912), L.O.L.A., Buenos Aires 2006.
  • Nowotny, Helga, "The Cunning of Uncertainty", Polity Press, Cambridge - Malden 2016.
  • Rozemberg, Ricardo, "Definir una política comercial seria", Clarin, Opinión, Buenos Aires, 21 de diciembre de 2015, en http://www.clarin.com/.
  • Taboada, Gabriel G., "¿Cómo debería insertarse Argentina en la economía global", Derecho y Red, Derecho Internacional Económico, Buenos Aires, noviembre 2015, en http://www.derechoyred.com.ar/.
  • Turkle, Sherry, "Alone Together. Why we expect more from technology and less from each other", Basic Books, New York 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 information.

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


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