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  Félix Peña

INTERNATIONAL TRADE RELATIONS NEWSLETTER
2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | 2009
THE STRATEGIC RELATIONS BETWEEN ARGENTINA AND BRAZIL:
Considerations on their relevance in the current regional and global context

by Félix Peña
May 2017

English translation: Isabel Romero Carranza


 

Being able to grasp the challenges and opportunities posed by the external environment of a country is a necessary condition for the development of an effective strategy for its insertion in the world. In this sense, the quality of the diagnoses helps assess the scope of action that a nation has in terms of its short and long term concrete interests.

This is even more valid when countries that share a regional geographic space are questioning the desirability of working together, cooperating on multiple fronts and better integrating their production systems.

Thus, the strategic purport of a relation between neighboring nations is based, to a great degree, on a shared understanding of their most relevant interests in the international environment. It is this understanding -which requires continuous updating to keep up with the rapid changes of the world's reality-that allows them to attain and eventually strengthen the necessary articulation in order to relate and negotiate with other countries, especially with those with greater relative power.

In addition to intensifying the efforts to develop effective diagnostic capabilities on the changes that will continue to operate in the international context, there are at least three fronts that will require coordinated action between Argentina and Brazil. In turn, this joint action will also need to be orchestrated with the Mercosur partners and, if possible, with other Latin American countries.

Among others, such priority areas of action will be:

  • the contributions that can originate from the region for the necessary redesign of the institutions and ground rules of the multilateral system of international trade;

  • the articulation between the countries of the region to advance their efforts of cooperation and economic integration, through the joint work between the different schemes that exist today -especially between Mercosur and the Pacific Alliance -and the progress that may be achieved by proposing new agreements in the ALADI, including the need to develop effective and sustained cooperation with Cuba, which is one of its member countries, and with other Caribbean nations; and

  • the adaptation of joint work methods in Mercosur to the new regional and global realities and in particular to those of its member countries.

The idea of the convenience of having a common understanding of the challenges, threats and opportunities that may originate in the international environment for Argentina and Brazil was at the heart of a short book that we published together with Celso Lafer in 1973. (Celso Lafer and Félix Peña, "Argentina y Brasil en el sistema de relaciones internacionales", Ediciones Nueva Visión, Buenos Aires 1973 and, in Portuguese, "Argentina e Brasil no sistema das relaçôes internacionales", Livraria Duas Cidades, Sâo Paulo 1973. For the Spanish text go to http://www.felixpena.com.ar/).

In 1972, when participating in a meeting of Carnegie Endowment for International Peace as young professionals, we found out that, shortly before, we had both written articles about our respective countries in relation to the international system and Latin America. We also discovered that there were many similarities in our approaches to the global reality in which each of the two countries was inserted.

We arrived at the conclusion that we had to undertake a shared analysis on how Argentina and Brazil should approach their strategies of international integration and, in particular, the value that the Latin American region had for both countries to better navigate the world of the future. Thus emerged the initial chapter, written together in the pre-Internet era, using postal mail to collaborate long distance and prepare the final text.

We agreed to ask Professor Helio Jaguaribe, whom we both knew and admired, to write the prologue for our collaborative work (http://www.felixpena.com.ar/). In it, Jaguaribe describes its essential contribution. He points out that "based on two previous studies in which they analyzed, from similar basic assumptions, the foreign policy of Argentina and Brazil, Peña and Lafer elaborate together a study of the international conditions in which the two countries are situated within the Latin American context". He then points out that the two central characteristics of the international system described are "the diminished relevance of bipolarity due to the nuclear balance and the growing importance of bi-segmentation, which confronts the underdeveloped nations of the south with the highly developed nations of the north, in transition from the industrial to the post-industrial society. Bipolarity persists in military and strategic terms, but the impasse provided by the nuclear balance leads to a widespread ideological neutralization of the world, where the industrial-technological confrontation takes the place of the former Cold War. What matters is the access to markets and their dominance, as well as technological innovation and the control of technology transfer".

Nearly forty-five years later, at a seminar held on April 25th., 2017, at the Fernando Henrique Cardoso Foundation in São Paulo on the subject "Brazil and Argentina: Should the two countries act together in a fragmented world"? (see http://fundacaofhc.org.br/), on the panel shared with Celso Lafer we confirmed that, despite the profound changes that have taken place in the international system, especially in recent years, it is in the interest of both countries to take advantage of the fact that they belong to the Latin American region. This will help them project themselves to a world that today offers multiple options for an international integration useful to their objectives of economic and social development, much more than when the book was written.

This implies recognizing that grasping the challenges and opportunities posed by the external environment of a country is one of the necessary conditions for the development of an effective strategy of insertion in the world. The quality of the diagnoses that are made in this regard is, precisely, what allows a nation to assess the scope of action that it may have according to its specific short and long-term interests. To the extent, of course, that these interests are properly defined and that the country in question is clear of what it wants to obtain in its relations with other countries and, above all, of what it can attain given its relative value for each one of them. This also implies achieving an articulation between the visions of the government, business, social, and academic sectors.

This is even more valid when countries that share a regional geographic space are questioning the desirability of working together, cooperating on multiple fronts of action and better integrating their respective production systems. At the same time, they aspire to preserve their character as independent nations that share, when necessary, the common exercise of their sovereignties -which is not equivalent to giving up their sovereignty and, therefore, their independence to back out. In Latin America this is precisely the case of Argentina and Brazil, among others. In Europe, since the middle of the last century, it has been the case of the relationship between Germany and France.

The strategic purport of a relationship between neighboring nations is based mainly on a shared understanding of their most relevant interests in the international environment. It is such understanding -which will require continuous updating the more dynamic the world reality becomes- that allows them to reach and eventually deepen the articulation necessary to relate and negotiate with other countries, and especially with those with greater relative power.

The dynamics and complexity of the current global scenario (with the ensuing impacts on Latin America), make it more necessary than ever to intensify the efforts to have a shared understanding, by Argentina and Brazil and by other countries in the region, of the profound trends that are being observed and, as French prospection specialists taught us, of future events.

This task will require intensive cooperation between centers specializing in international affairs. The International Relations Council of Latin America and the Caribbean (RIAL), chaired until April by Ricardo Lagos, the former President of Chile, and now chaired by Enrique García, former President of the CAF-Latin American Development Bank, could play a leading role in such cooperation.

In addition to intensifying efforts to develop effective diagnostic capabilities for the changes that will continue to operate in the international context, we can identify at least three areas of action that will require concerted action between Argentina and Brazil and that will also need articulation with Mercosur partners and the remaining Latin American countries.

Among others, these priority areas of action will be:

  • the contributions that can be made from the region with ideas and initiatives that help with the necessary redesign of the ground rules and institutions of the multilateral system of international trade-which are being questioned today, even in countries that played a key role in its creation -especially in view of the WTO Ministerial Conference, that will be held in Buenos Aires next December and the G20 Summit, that will take place in 2018;

  • the articulation between the countries of the region to advance their efforts of cooperation and economic integration, through the joint work between the different schemes that exist today -especially between Mercosur and the Pacific Alliance-and the progress that can be achieved by proposing new agreements in the scope of the ALADI, including the need to develop effective and sustained cooperation with Cuba, which is one of its member countries, and with other Caribbean countries, and

  • the adaptation of the joint work methods of Mercosur member countries to the new regional and global realities, especially those of its member countries, taking advantage of the fact that the changes that are being observed at the international level have rendered obsolete many concepts, paradigms and models that were considered to be the only ones that could be adapted to the requirements of the multilateral system of international trade institutionalized in the WTO.

In the upcoming months, Argentina and Brazil will have the chance to make concrete progress in the action plan agreed at the Presidents meeting of last February. They will also have the opportunity to propose joint initiatives to discuss with the Mercosur partners, with the countries of the Pacific Alliance and within the framework of the initiative that the LAIA has taken to advance the analysis of ideas aimed at strengthening regional cooperation and integration mechanisms. (On this topic, refer to the March edition of this Newsletter on http://www.felixpena.com.ar/
and http://www.aladi.org/).


Recommended Reading:


  • Abraham, Tomás, "La dificultad", Literatura Random House, Buenos Aires 2015.
  • Anderson, Perry, The H - Word. The Peripeteia of Hegemony", Verson, London - New York, 2017.
  • Beattle, Alan, "Arbitration on trial: the US and UK's fear of the supranational", diario "Financial Times", 3/05/2017.
  • Comisión Europea, "Libro Blanco sobre el Futuro de Europa", Comisión Europea, COM/(2017)2025, Bruselas, 1º de marzo 2017, en (sólo en inglés) https://ec.europa.eu/.
  • Comisión Europea, "Documento de Reflexión sobre el Encauzamiento a la Globalización", Comisión Europea, COM(2017)240, Bruselas, 10 de mayo de 2017, en https://ec.europa.eu/.
  • Dobbs, Richard; Manyika, James; Woetzel, Jonathan, "No Ordinary Disruption. The Four Global Forces Breaaking all the Trends", Public Affairs, New York 2015.
  • Durán Lima, José; Pellandra, Andrea, "La irrupción de China y su impacto sobre la estructura productiva y comercial en América Latina y el Caribe", CEPAL, Serie Comercio Internacional, 131, Santiago de Chile, Febrero 2017, en http://repositorio.cepal.org/.
  • Escaith, Hubert, "The evolution of production networks in the Asia Pacific", East Asia Forum, 4 April 2017, en http://www.eastasiaforum.org/.
  • FICBC, "La formación de especialistas en comercio internacional: ¿"sherpas" para guiar una pyme que procura internacionalizarse?", Informe final reunión de trabajo, 25 de octubre 2016, Fundación ICBC, en Biblioteca Virtual, https://www.biblioteca.fundacionicbc.edu.ar/.
  • González Laya, Arancha, "Integración y pymes, la clave en Latinoamérica", diario "El Cronista", BsAs. Miércoles 5 de abril 2017, en https://www.cronista.com/.
  • Harris, Jeremy, "Building Inclusive Rules of Origin in the 21st Century", RTA Exchange, IDB - ICTSD, Policy Brief, Geneva - Washington D.C. March 2017, en http://e15initiative.org/.
  • ICTSD, "Negotiating Global Rules on Agricultural Domestic Support: Options for the World Trade Organization's Buenos Aires Ministerial Conference", ICTSD, Issue Paper, Geneva, April 2017, en http://www.ictsd.org/.
  • Huang, Xiaoming, "China takes One Belt One Road down under", East Asia Forum, 7 April 2017, en http://www.eastasiaforum.org/.
  • Kennedy, David, "A World of Struggle. How Power, Law, and Expertise Shape Global Political Economy", Princeton University Press, Princeton and Oxford, 2016.
  • Luce, Edward, "The Retreat of Western Liberalism", Little, Brown, London 2017.
  • Mishra, Pankaj, "Temptations of the West. How to be Modern in India, Pakistan and Beyond", Picador, London 2007.
  • Olivier Peralta, Emanuel, "Cómo generar clientes en el exterior sin viajar", Suplemento Comercio Exterior, diario "La Nación", 27 de abril 2017, en http://www.lanacion.com.ar/.
  • Paredes, Lionel, "Los errores más comunes a la hora de exportar", Suplemento Comercio Exterior, diario "La Nación", BsAs, 4 de mayo de 2017, en http://www.lanacion.com.ar/.
  • PWC, "The World in 2050 Will the shift in global economic power continue?", PricewaterhouseCooper, London, February 2015, en https://www.pwc.com/.
  • Reuvid, Jonathan; Sherlock, Jim, "International Trade. An essential guide to the principles and practice of export", Kogan Page, London - Philadelphia - New Delhi, 2011.
  • Scheidel, Walter, "The Great Leveler. Violence and the History of Inequality from the Stone Age to the Twenty-First Century", Princeton University Press, Princeton and Oxford, 2017.
  • SEGIB, "Pensamiento Iberoamericano: Juventud, emprendimiento y educación", Secretaría General Iberoamericana, Madrid, 3ª. Época/02/2016.
  • Yara, Suos, "The way forward for the ASEAN Community", East Asia Forum, 12 May 2017, en http://www.eastasiaforum.org/

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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