| REFLECTIONS ON THE OCCASION OF AN ANNIVERSARY:
25 years of Mercosur and the options for its future evolution
by Félix Peña
English translation: Isabel Romero Carranza
Celebrating a quarter century of existence is a good
opportunity to reflect on the experience gained in the past and on the
options for the future. It is more than necessary because it is difficult
to deny that Mercosur faces today a serious crisis of credibility. But
it is also necessary due to the fact that Mercosur countries must face,
simultaneously and in the first half of the year, at least three fronts
of negotiation and complex decision-making.
Mercosur is not the only process of construction of
a common political and economic space between neighboring countries that
is at a crossroads. Decades after its inception, the EU is experiencing
an even more complex situation.
The different moments that Mercosur has experienced
in a quarter century of evolution prompt us to identify at least three
conditions that are necessary to move towards the agreed objectives of
a voluntary integration process between sovereign nations that aspire
to remain so. A first condition is that of political drive. This means
that political will, which can be just apparent, translates into a continuous
and intense flow of stimuli from the highest political level, at least
from some of the member countries with greater relative power. A second
condition is the technical competency. This means that the working methods
and instruments used to impact reality reflect analysis and content that
meet sound technical criteria to make sound decisions that aspire to be
viable. A third condition is the quality of management, both internally
in each member country -at government level and in the business and other
social actors- and in the common bodies that are established.
The experience gained after the first twenty-five
years of Mercosur enables us to reflect on what needs to be achieved in
the negotiations leading to integration agreements, in which the sough
objectives are set and the main mechanisms and instruments that are supposed
to help achieve them are established. Three seem to be the key points
in these negotiations. These points result from finding a balance between
requirements that may be conflicting and difficult to reconcile. These
are the requirements of the short and the long term; between the offensive
and defensive economic interests; and between the demands of flexibility
and predictability with regard to the ground rules, especially those that
affect productive investment decisions.
Mercosur celebrates 25 years. The Treaty of Asuncion was signed on March
26, 1991, with four member countries that were continuing the foundational
process initiated in 1986 with the bilateral agreements between Argentina
and Brazil. These agreements were, in turn, the culmination of a preparatory
stage which had begun after the tripartite agreement on water resources
of October 1979 between Argentina, Brazil and Paraguay.
What led to the founding moments of Mercosur was, among other factors,
a shared understanding of the requirements that resulted from the changes
that were taking place in the global scenario after the end of the Cold
War and in the inter-American region following the launch by President
Bush of the idea of a hemispheric free trade area. Thanks to the abovementioned
tripartite agreement, there were no longer reasons for concern that there
could be a confrontation in the American south, with the ensuing economic
and political costs for each of the protagonists that could have resulted
from the collision course that had previously dominated the relationship
between Argentina and Brazil. Also, the challenges and opportunities coming
from the new economic and political global and regional environment could
be perceived. The context of those years was, therefore, one that compelled
towards joint action of complex and profound political and economic dimensions
and which aspired to have a wider geographic projection. A testimony of
this was the frustrated attempt for Chile to join in as a member country
and also the text of Article 20 of the Treaty of Asuncion.
Celebrating a quarter century of existence is a good opportunity to reflect
on the experience gained and on the options that open up for the future.
This seems to be more than necessary due to the fact that it is difficult
to deny that Mercosur faces a serious crisis of credibility. Mercosur
is, in this sense, at a crossroads that could lead to different and even
opposite destinations. Among them certainly is the possibility of its
disappearance as a relevant framework for the development and the international
economic integration of its member countries or, at least, of some of
them. (See the May
2015 issue of this newsletter on http://www.felixpena.com.ar).
But it is also a necessary reflection because Mercosur countries must
deal, simultaneously and in the first half of the year, with at least
three fronts of negotiation and complex decision-making. One is precisely
on the adaptation of the methodology used for the integration of Mercosur
to the new global, regional and domestic realities of its different member
countries. This implies continuing with the momentum originated in the
recent Summit of Asuncion, thanks especially to the initiatives of Paraguay
and Uruguay. The other is related to the strategy of convergence in diversity
as a means to address economic integration in the broader context of Latin
America, especially through effective communicating vessels established
between the members of Mercosur and those of the Pacific Alliance. And
the third front is the conclusion of the bi-regional agreement that has
been negotiated in recent years between Mercosur and the EU. This front
will be linked necessarily to other preferential bi-regional trade negotiations
-in the various possible modalities consistent with an intelligent interpretation
of the scope of action allowed by the rules of GATT and the WTO- that
are undertaken in the future with other major blocks and countries, and
even the hemisphere. (On this topic, see the January
issues of this newsletter on and on www.felixpena.com.ar).
But Mercosur is not the only voluntary process of construction of a common
political and economic space between neighboring countries that is at
a crossroads. Several decades after its inception, the EU is going through
an even more complex and uncertain stage. This is reflected, among other
things, in the multiple effects of the migration flows from neighboring
environments and, most notably, in the debate on the "Brexit"
and even about a possible "Grexit". The recent European Council
meeting in Brussels (18 and 19 February 2016) revealed the complexities
of the situation posed by the eventual withdrawal of Britain, and, at
the same time, the creative imagination and relative heterodoxy needed
to address the methodological crises on how to work together for the construction
of a region where peace, political stability and social progress prevail,
that threaten to turn into existential crises (why work together). (See
The different moments observed in a quarter century of evolution of Mercosur
help us identify at least three conditions that are necessary in order
to advance the goals agreed in a voluntary integration process between
sovereign nations that aspire to remain so.
A first condition is that of political drive. This means that political
will, which can be just apparent or circumstantial, translates into a
continuous and intense flow of effective stimuli from the highest political
level, at least in some of the member countries with greater relative
power. Without such flow, it is possible that much of what is decided
at the regular meetings of the key decision-making bodies, even with the
participation of the Heads of State, remains just an expression of "media
diplomacy". Such diplomacy has abounded in the integration processes
in Latin America and translates into decisions that may have repercussions
in the press the following day, but that seldom achieve the legal standing
required to produce real effects, for example, in decisions aimed at encouraging
productive transformation and investment. They are then formal decisions
that lack the three characteristics consistent with the common quality
rules of a multinational integration process which are effectiveness,
efficiency and social legitimacy.
A second condition is the technical competence. This means that the working
methods and instruments used to operate on realities reflect analysis
and content that meet solid technical criteria, especially in the economic
and the legal, to support decisions that are viable. These criteria need
not necessarily adapt to theoretical models from other realities and historical
A third condition is management quality, internally in each member country
-in government, business and other social actors- and in the common bodies
that are established. Management quality is closely related with the degree
of coordination among those involved, at different levels, in the corresponding
decision-making processes, and with the degree of transparency that helps
facilitate the access to relevant information so that the multiple players
involved can influence, in one way or another, the content of the decisions
that are taken.
The experience gained also allows us to reflect on what needs to be accomplished
in the negotiations leading to agreements in which the sought objectives
are set and the main mechanisms and instruments for achieving them are
There are three key points in these negotiations. They are not the only
ones but they largely determine the sustainability of an integration agreement
and its main objectives over time. These three points are the result of
achieving a balance between requirements that may be contradictory and
difficult to reconcile. They are: the balance between short and long term
needs; between offensive and defensive interests, and between the demands
for flexibility and predictability, especially with regards to the ground
rules which affect productive investment decisions.
Reconciling sometimes contradictory demands such as the three mentioned
in the preceding paragraph requires that the conditions of political drive,
technical competence and management quality are not only present but also
find sustainability in the support of the citizenry to the idea of joint
work between nations that share a same regional geographic space. Such
support will be easier to gain and maintain over time if there is a meaningful
degree of transparency and public participation; if the integration process
can be correlated with credible future horizons for each of the societies
involved, and if citizens can relate their employment and welfare to the
effectiveness of the objectives and commitments made together with the
other countries participating in the process.
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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