In a world scenario characterized by a strong dynamic of changes, complexities
and uncertainties, the agenda of trade negotiations of Argentina -like
that of its Latin American partners-would tend to develop on three interconnected
fronts: i) the Latin American regional; ii) the interregional and trans-regional,
and iii) the global multilateral. (This newsletter takes up and aims to
expand on topics that were addressed in the December
2018 editions, available on http://www.felixpena.com.ar/).
In all three cases, the development of the respective negotiating processes-
from the conception and formal beginning to the conclusion and implementation-
would reflect the vision of the country and not just of its government
on the most convenient international insertion strategy that can effectively
be carried out.
In order to fully understand the development of trade negotiations, the
political and geopolitical factors are as or even more important than
the economic factors, such as for example those related to production,
the trade of goods and services, and technological advances. The former
have to do with power relations, either with the country or countries
participating in the negotiations as well as with third countries that
are taken into account when deciding to undertake a certain negotiation.
However, above all, they have to do with the vision of the political leadership
on the value of building an external environment that is sustainable and
favorable for the political, economic and social development of a nation.
Additionally, the impact of ground rules conditions, to a greater or
lesser degree, the leeway for action of a country in its interaction with
others. These rules are those that the country, in exercise of its sovereignty,
has voluntarily accepted for its international relations, such as the
case of the multilateral global trading system first institutionalized
in the GATT and then in the WTO, or those that have been established by
regional agreements, such as the case of LAIA and Mercosur. The principle
of non-discrimination and most-favored-nation treatment are, among others,
examples of this (see the April
2017 edition of our newsletter on http://www.felixpena.com.ar/).
The abovementioned accounts for the importance that a country assigns
to factors that may impact in a positive or negative way the development
of a trade negotiation agenda linked to its international insertion strategy,
that is, with its way of relating to countries of its close environment
and of other regions of the world. Such factors are the quality of the
diagnosis, the effectiveness of the negotiating organization, and the
preparation for "the day after the negotiation".
With regard to the quality of the diagnosis, its importance increases
in times such as the current ones in which the international environment
of a country, both regional and global, is exposed to marked volatility
and uncertainties. As Alberto van Klaveren, a prestigious academic expert
with vast practical experience, aptly points out, today's world requires
navigating in the fog (see the reference to his recent article in the
recommended reading section below). Understanding the deep forces at work
in the international context and their direction is today a key factor
for successful negotiating.
This implies not only an accurate analysis of the factors that may affect,
for example, the ability of a country to project its talent to the world,
its capacity to produce goods and services, and its appeal for productive
investments, but that such analysis is also constantly updated, to avoid
the ever present risk of obsolescence. This aspect shows if a country
has really put into practice what is known as the "Sábato
triangle". This means the articulation of the government, production
and research sectors to formulate concrete proposals on how to operate
on the realities, both in the case of technological innovation as in the
design of effective strategies for intelligent insertion in the world,
of the country as a whole or of its provinces and regions. (On the "triangle"
see Jorge Sábato and Natalio Botana, "Science
and technology in the future development of Latin America", published
in 1968, on http://purace.unicauca.edu.co/,
and the recent article by Daniel E. Alonso, on http://www.lavoz.com.ar/,
The increasing density and complexity of the trade negotiations agenda
that Argentina will have to face in the coming years will require the
articulation and mobilization of all the actors with the capacity to participate
in the collective effort to diagnose international reality, global and
regional, with a country perspective. A strategy of intelligent insertion
in the world and in the region requires a serious effort to diagnose the
external environment and its dynamics. An intelligent diagnosis should
not be limited to economic factors. A concrete aspect in which we can
imagine a national effort and which in other countries, including those
with which we compete and cooperate, is also carried out, is the drawing
up of periodic reports on the external environment and the demands that
arise for our country, its sectors and its regions. The 2017 White Paper
on the international insertion of Australia provides a recent example
in this regard (see https://www.fpwhitepaper.gov.au/).
An example is also provided by the periodic reports on the strategy of
international insertion that are often prepared by business institutions,
for example from Brazil (see the report "Agenda Internacional da
Industria 2017" from the Confederaçâo Nacional da Industria
- CNI, on http://www.sistemaindustria.org.br/).
These are, among others, examples that should be followed in Argentina
and in other countries of the region.
In the perspective outlined above, the efforts of business and academic
institutions to promote the contribution of Argentineans living abroad
to the competitive intelligence of the country and its companies, as well
as the experience of travelling, especially of the younger generations,
whether to study, visit or work in other countries, acquire a practical
importance. All this can prove a valuable source of information and analysis
to understand the strategies for international insertion of other countries.
With regard to the effectiveness of the organization for negotiating,
it is essential to bear in mind that the agenda of trade negotiations
is closely linked to the strategy of international insertion of a country.
It is not something that is limited to economic issues or foreign trade.
On the contrary, only by inserting a negotiation in a broader context
of factors that have an impact on its development, in particular the political
and even geopolitical, can the efficiency required to succeed be achieved.
This is the reason why it is of great importance that the Head of State
exercises in reality, and not only formally, the leadership of a country
in each concrete negotiation. There are many examples today in this regard.
Only by inserting a commercial negotiation in the broader context of
the country's strategy of international insertion, is it possible to achieve
results that are perceived as sustainable and convenient to the national
interests. In the experience of Argentina, there were at least three moments
in which such vision were put into practice. This happened when Presidents
Arturo Frondizi, Raúl Alfonsin and Carlos Menem launched initiatives
that led to the creation of LAFTA (1960), the bi-national integration
between Argentina and Brazil (1986), and Mercosur (1991.) respectively.
In all three cases, the political leadership was presidential and shared
with the presidents of Brazil. Also in all three cases, the conditions
observed at the beginning were later diluted by political, economic and
human factors (on the latter, see John Carlin, "El factor humano",
Seix Barral 2010).
Regarding the factor "the day after the negotiation", is the
one that requires the most political leadership and a follow-up resulting
from the articulation recommended by Jorge Sábato, between the
government, production, and research sectors. It involves developing simultaneously
with the negotiation process that of the preparation, especially of the
production sectors, to take full advantage of the results of a negotiation.
This becomes even more necessary in federal countries such as Argentina
and Brazil. (This issue was addressed in the June 2010 edition of our
"The day after a complex commercial negotiation: Reflections on the
occasion of the negotiations between Mercosur and the European Union",
on http://www.felixpena.com.ar/). What was stated there continues to be
Throughout 2018-and probably in the following years too-the trade negotiations
of Argentina and their connection with the country's strategy of international
insertion will have one of its main epicenters in the Latin American region,
in particular in the South American space. (On the perspective of the
current Argentine government, see the recent article by Chancellor Jorge
Faurie listed as recommended reading of this newsletter).
Three institutional milieus stand out. The first is that of LAIA. As
was the LAFTA in the sixties, the incorporation of Mexico to the original
idea of preferential trade in the southernmost space of South America,
conferred a very special geopolitical projection to the institution that
would later become the LAIA (1980). It implied the acknowledgement of
a Latin American space with its own identity, both at the hemispheric
level and the global multilateral level, at that time institutionalized
in the GATT. The fact that the current U.S. stance with regard to WTO
ground rules is diminishing its effectiveness to promote new multilateral
global trade commitments -the failure to overcome the stalemate of the
Doha Round makes this clear- is also reflected in the questioning of the
principle of non-discrimination as the central tenet of the system. Among
other effects, this can lead to a growing deterioration of the effectiveness
of this rule, embodied in Article XXIV of the GATT 1994, which was supposed
to restrict the tendencies to the fragmentation of the multilateral global
system through multiple preferential trade agreements or true "private
clubs" of international trade.
The LAIA tends to be re-empowered, as was expressed in 2016 by its then
General Secretary, Carlos Chacho Álvarez. It provides the institutional
framework to address, especially through the instrument of partial scope
agreements, different modalities of actions for commercial and productive
articulation, for example between Mercosur countries and the Pacific Alliance
and also with Cuba, among other member countries.
The other epicenters will be interregional and trans-regional spaces.
In the perspective of the trade negotiations agenda of Argentina and Mercosur,
the fact that the long-delayed bi-regional agreement with the European
Union could eventually be signed this year, opens the door to the creation
of an ambitious interregional preferential network of Latin American countries
-those of Mercosur and the ones that already have free trade agreements
with the EU-and the European Union. Eventually, such a network could also
result from the post-Brexit negotiations of Latin American countries with
the United Kingdom.
The preferential networks could be extended to other regions with which
Latin American countries already have or seek agreements of interregional
scope. Among others, it could be the case of the Southeast Asian region
through the connectivity established between preferential trade agreements
that have already been concluded, or that could be concluded in the near
future, between countries of the LAIA and the ASEAN, and China as well.
A preferential trade agreement between Mercosur and China, in any of the
possible and recommended modalities, would greatly enhance the eventual
interregional preferential trade network between Latin America and Southeast
In the future, these interregional preferential networks would allow
commercial negotiations with the CPTPP, especially if it finally enters
into force and if it were to include, as is sometimes pointed out, the
United States, China and the United Kingdom. (See the February 2018 edition
of this newsletter).
Finally, the global multilateral space institutionalized in the WTO is
fundamental today in the perspective of Argentina, the Mercosur countries
and the Pacific Alliance. Preserving this space, as a central axis of
the international trade system, based on its fundamental rule embodied
in the principle of non-discrimination, must be a central priority for
our country and its Latin American partners, as was opportunely expressed
last December in the Buenos Aires Declaration. (See the January 2018 edition
of this newsletter).
However, in this regard there is a significant tendency to shift the
relative importance that some of the countries with greater prominence
in global economic competition attribute to the space of the WTO. Therefore,
the future evolution of the CPTPP and its effects on the global multilateral
system should be followed closely, especially if the United States and
other big global competitors are incorporated.
Applying a good dose of realism, it would seem advisable that in future
trade negotiations our country, while reaffirming the value of a global
multilateral system guided by rules, does not discard possible scenarios
of its fragmentation. Such scenarios would be the result of a proliferation
of regional, interregional, and even trans-regional agreements of global
scope that are not framed within a multilateral and global institutional
This would reinforce the strategic idea of addressing the international
trade negotiations of our country based on Mercosur and shared action
with the Pacific Alliance and also with as many countries and regions
as possible. Although this would require a significant effort of organization,
if the simultaneity of negotiating fronts were properly managed, it would
increase the negotiating power of our countries.
All this would involve a great effort of organization, both by the government
sector (at the national and provincial levels) and by the different productive
and social sectors with interests in the corresponding negotiations. It
is an organizational effort that must also have an active participation
of the many think tanks and academic institutions that exist in the country.