| LATIN AMERICA IN AN UNCERTAIN AND TURBULENT
Is an effective and sustainable regional economic cooperation possible?
by Félix Peña
English translation: Isabel Romero Carranza
The growing tensions between international order and
disorder and, in particular, the recent developments in the global scenario,
are accentuating the need to reflect on the strategies for international
insertion of Latin American countries, or at least of those who want their
strategies to be effective.
Thus, it would seem advisable to consider the following three aspects:
- the positioning of the countries of the region in the redesign
of an international system, including its institutions and ground rules,
which today show signs of being overwhelmed by the new realities;
- the analysis of practical modalities to help each country of the
region develop national strategies for their international insertion,
including cooperative relations with the largest possible number of
countries in the world, and especially with those that can have a relevant
influence in world trade and transnational investment; and
- the promotion of different modalities of economic cooperation,
both in the Latin American space and in the many sub regional spaces,
including South America and, among others, a Mercosur with renewed scope
Latin America has accumulated more than six decades of experiences
of integration and regional cooperation, some of broad scope and others
concentrated in groups of countries. The results have been diverse: sometimes
these results have been frustrating, other times they have involved steps
towards a greater convergence, despite the existing differences.
A question that must now be asked is: what do past experiences -whether
successful failed -show us about some of the conditions that help build
sustainable processes of cooperation and economic integration between
nations sharing a regional space?
At least three conditions seem to be the most advisable for the present
moment: political leadership at the highest level, generating "de
facto solidarities", and accentuating the physical connectivity and
that of the respective production systems and markets.
At the beginning of 2017, the factors that trigger the alarms in the
evolution of the international system, including the potential impacts
on global trade and on transnational flows of capital and technology,
The growing tensions between international order and disarray and, in
particular, the recent developments in the global scenario (including
those resulting from the Brexit process in the EU and the new government
in the US), are accentuating the need to reflect on strategies for the
international insertion of Latin American countries, or at least of those
that strive to have a strategy that is effective and functional to their
Among others, the main factors to consider would be the following:
- the first refers to the positioning of the countries of the region
in the redesign of the international system, including its institutions
and ground rules, which today show evident signs of being overwhelmed
- the second involves the analysis of practical modalities that allow
each country in the region -if interested- to develop national strategies
for international insertion, including cooperative relations with the
largest number of countries in the world and especially with those that
have the potential to impact world trade and transnational investment;
- The third aspect is linked to the objective of generating favorable
conditions for a more intense regional economic cooperation in the different
spaces formed by Latin American countries, including South America and,
among others, a Mercosur with renewed scope and methodologies.
The first aspect -that of global governance- can have multiple unfoldings.
The main one, of course, relates to policymaking, institutions and ground
rules that can help preserve peace and stability in the relations between
nations. The others relate to international economic, financial and commercial
It should be noted that today there is a growing loss of effectiveness
in the order that emerged at the end of the Second World War. There are
multiple spaces where international disorder predominates. Moreover, the
redistribution of world power, which has become more pronounced in recent
years, makes it more difficult to agree on ground rules and institutions
to replace those that have prevailed until now. As the concrete results
of the G20 Summits seem to demonstrate, today it is not easy to replicate
the experience of the Bretton Woods Conference of 1944. At that time,
it was clearer who the rule-makers at global level were.
The same holds true for international trade relations. The institutionalized
multilateral system, first in the GATT and then in the WTO, has been losing
its effectiveness, especially to adapt to changes in global realities.
Hence, the upcoming WTO Ministerial Conference, to be held in Buenos Aires
next December, provides a window of opportunity, at least to initiate
the process of redesigning the multilateral institutions and rules of
global trade. (In this regard, see the January
2017 issue of this newsletter on http://www.felixpena.com.ar/).
The fact that President Trump has withdrawn the US from the Trans-Pacific
Partnership (TPP) and that the Trans-Atlantic Trade and Investment Partnership
(TATIP) seems unlikely now, perhaps makes it even more necessary to reflect
on how to strengthen the multilateral trading system of the WTO. Achieving
points of balance between the global multilateral space and the multiple
preferential trading spaces, be they regional or interregional, could
then be one of the priority objectives of the upcoming ministerial meeting
of Buenos Aires.
This could imply that the redesign of the multilateral trading system
would result in an adjustment of the rules currently in force, particularly
in relation to the future scope of preferential agreements between groups
of countries and, in particular, when developing countries participate
in them. Since the earliest days of the GATT, more flexible mechanisms
and rules to facilitate economic integration -for example, through sectoral
agreements that do not conform to the more rigid interpretations of what
is prescribed by Article XXIV of the GATT- were demanded by Latin American
countries that had a strong participation in the multilateral negotiations
of that time. Except perhaps when the Enabling Clause was approved in
the Tokyo Round (1979), the Latin American approaches have not had much
echo in the industrialized countries, especially in the USA.
The second aspect -the national strategies for the international insertion
of each country of the region, including the relations with the most relevant
countries of the global trading system- will require from now on a great
organizational effort at the domestic level of each country in order to
coordinate the interests of all social sectors. This is due, precisely,
to the uncertainties that will continue to dominate, perhaps for a long
time, in international relations that are increasingly dynamic and complex.
(On the effects of the new international realities on the foreign strategies
of Latin American countries see, among others, the recent opinions of
leading experts such as Dante Sica from Argentina, Rubens Barbosa from
Brazil, Osvaldo Rosales from Chile, and Ignacio Bartesaghi from Uruguay.
Their respective articles are listed as recommended reading of this newsletter).
It is at the domestic level that a country, in principle and if it wishes
to do so, can decide and put into practice what is most convenient and
achievable in terms of its foreign relations. Nothing can substitute for
the national decision and effort to reach a prominent role at the international
In turn, it is at the regional level that each country can develop joint
actions with other countries from its immediate environment in order to
strengthen its own national efforts for an assertive and intelligent insertion
in the global space. This is where the regional institutions with the
capacity to support the development strategies of the Latin American countries,
such as the ALADI, the ECLAC and the Latin American Development Bank (CAF-Latin-American
Development Bank), acquire practical importance.
The third aspect -the promotion of different modalities of economic cooperation,
both in the regional space and in the many sub regional spaces, especially
in South America and Mercosur- is probably the one that will require the
most attention from Latin American countries in the coming years. In particular,
from those countries who are interested in improving their conditions
to navigate in a confusing, disorienting and, at times, inhospitable world.
This aspect includes actions leading to an effective renewal of Mercosur,
both in its scope and in its methodologies. (In this regard, see the August
2016 issues of this newsletter on http://www.felixpena.com.ar).
It should be remembered that Latin America accumulates more than six
decades of experiences of integration and regional cooperation, sometimes
of broad scope and others concentrated in groups of countries, such as
the Mercosur, the Andean Group and now the Alliance of the Pacific, the
Central American and the Caribbean countries. The results have been diverse,
sometimes frustrating and other times they have involved steps towards
a greater convergence, despite all the differences.
A question that must now be asked is: what do previous experiences -whether
successful or failed- indicate about the conditions for building sustainable
processes of cooperation and economic integration between nations sharing
a regional space?
At least three conditions seem to be the most advisable for the present
moment, that is, a moment characterized by obvious demands for updating,
renovation and strengthening of the regional cooperation and integration
The first and indispensable condition is a strong and sustained political
impulse. This condition implies a necessary involvement at the highest
political level of each of the participating countries. It should not
be a sporadic participation, typical of mediatic policy and diplomacy.
On the contrary, it has to be a sustained capacity for presidential leadership
of the actions aimed at materializing the will to achieve an effective
economic cooperation -which for obvious reasons implies the political
cooperation as well- between the countries participating in the corresponding
process, whether bilateral, sub regional or regional.
In order to be effective and efficient, such condition requires that
the energy and political impulse at the highest level be translated into
continuous construction processes carried out by competent and full-time
staff belonging to the countries involved and inserted in the respective
high-level government areas. The actions that make possible, in a sustainable
way, the strategies at the highest political level must arise from these
processes. An experience to bear in mind in this respect was the role
of the Common Market Group in translating into concrete actions the momentum
generated by Presidents Alfonsin and Sarney at the beginning of the process
of binational integration between Argentina and Brazil and which was later
reflected in the foundation of Mercosur.
A second condition is to generate "de facto solidarities" -in
the sense proposed by Jean Monnet at the founding moments of European
integration - through concerted actions aimed at generating cooperative
production and social networks of bilateral, sub regional or regional
scope, with a strong social participation and that contribute to the productive
integration between the involved countries. (In this regard, see Jean
Monnet's book "Memoirs", Doubleday & Company, Inc, New York,
1978, in https://ia800208.us.archive.org/).
Finally, the third condition is to operate in three complementary levels
to achieve greater connectivity of the involved geographic spaces and
economic and social systems. Such levels are that of physical connectivity
(infrastructure, transport and logistics); the connectivity of production,
through multiple modalities of networks (for example among SMEs aimed
at generating specialized or niche production chains); and that of the
connectivity with consumers, that is, at the transnational level between
those who produce goods or services and those who are potential consumers
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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