MERCOSUR AS A REGION OF PEACE AND JOINT DEVELOPMENT
The need for pragmatic leadership, social goodwill, and "de facto
by Félix Peña
English translation: Isabel Romero Carranza
On March 26, 2021, the Summit of Mercosur countries
could not be held in person, so it took place remotely. This is not the
ideal modality to develop dialogues at the highest level, aimed at articulating
positions on the adaptation of Mercosur to the new global and regional
realities, or to the realities of each of the member countries. Such dialogues
are more effective when they take place face-to-face.
On the positive side, a new opportunity has opened up for an effective
conversation among the four partners. We are referring to the meeting
of Ministers of Foreign Affairs scheduled for April 22nd, which will be
preceded by a session of the Common Market Group, which is the appropriate
forum to prepare for a ministerial meeting that, due to its agenda, might
In the perspective of the current debate among Mercosur partners,
at least as it has been conveyed to public opinion in the four countries,
two main issues would take priority at the April 22 meeting, without excluding
others that could also be considered relevant, such as Mercosur's position
on the possible evolution of the coronavirus pandemic and, above all,
of the "post-pandemic" world.
The first issue refers to the level of effective protection that may
result from the common external tariff, acknowledged as one of the fundamental
instruments of Mercosur in Article 1 of the Treaty of Asuncion, with its
ensuing impact on the interpretation of Article 2, which is key to fully
understand the scope of the pact that originated Mercosur.
The second issue refers to the notion of making Mercosur more flexible.
This is a proposal that generally, at least in its most extreme version,
refers to the idea that individual member countries may conclude free
trade agreements with third countries.
In addition to the two issues mentioned above, there are other relevant
matters on Mercosur's agenda that will require, sooner rather than later,
an approach at the highest political level. One of these refers to the
joint proposal made by the industrialists of the four countries to develop
policies that help shift from primary economies to the manufacture of
value-added products. Thus the issue of trade negotiations to be developed
by Mercosur is considered in this perspective.
Mercosur has been in existence for 30 years. From the time it was created,
the idea was to reach an agreement among the four founding countries (Argentina,
Brazil, Paraguay and Uruguay) to build a region of peace and economic
and social development. This implies an alliance of the democracies and
the promotion of a competitive and assertive insertion in the world. It
is a foundational pact with no deadline for conclusion: its indefinite
duration was established in Article 19 of the Treaty of Asuncion. However,
if a country chooses to withdraw, it may do so by denouncing the Treaty
(Articles 21 and 22).
The idea of independent countries voluntarily agreeing to work together,
sharing the exercise of their respective sovereignties, requires vision
and political leadership, initially, at the time of its inception and
thereafter in order to take the necessary steps for its continued evolution,
including the adaptation to the new realities. The history of the European
Union proves this point. This vision and political leadership must reflect
the values and experiences of each national society. Eventually, a "jeitinho
diplomacy" may become convenient when interpreting some of its legal
commitments, such as the Common External Tariff and the so-called free
trade agreements negotiated by the different members with third countries.
Additionally, it also calls for social goodwill and the capacity to
generate "de facto solidarities". Goodwill in the sense of a
social resolve on the side of the majority of the sectors of a society,
whether this is due to conviction or for lack of other reasonable options.
"De facto solidarities", in the sense proposed at the time by
Jean Monnet (one of the founding fathers of the European integration process),
referring to the generation of factors that make it costly to try to untie
the links resulting from the reality of undertaking joint work between
a group of countries.
Collaborative work among a group of nations that make up a region within
the global international system also requires an updated diagnosis of
its potential advantages and disadvantages. It must be assumed that these
were assessed by the United Kingdom when it made the decision to begin
the path towards its withdrawal from the European Union (the "Brexit").
This is what must be done constantly by each member country when evaluating
the advantages and disadvantages of belonging to a certain "club"
of nations of the same "neighborhood" or "region",
with the characteristics, for example, of the European Union, but also
of Mercosur itself.
At this time of commemoration of Mercosur's 30th anniversary, an article
by José Octavio Bordón, the current President of the CARI,
makes a contribution to this type of diagnostic by stating that "the
current situation of Mercosur and, especially its future, may not be analyzed
or projected without a comprehensive and updated vision. Neither can it
be done without remembering its origins, its context and its meaning"
(this article was published in the Opinion Section of Clarín newspaper,
on Monday, March 29, 2021 under the title "Getting Mercosur out of
stagnation and mistrust").
Bordón continues by stating "it is imperative to get Mercosur
out of stagnation and mistrust". He adds that "neither today's
world nor our countries are the same as they were three decades ago. It
is imperative to renew ourselves in order to seek an updated convergence,
deepen our strategic agreements, increase trade among our countries, articulate
productive chains among ourselves and with other regions, in order to
participate actively and with the greatest possible added value in the
new, complex and demanding global trade".
On March 26, 2021, the face-to-face Summit of Mercosur countries could
not take place. Instead, it was held virtually. This is not the same thing
if what is needed is to develop dialogues at the highest level to facilitate
the articulation of positions on the adaptation of Mercosur to the new
global and regional realities and to the realities of each of its member
countries. These dialogues are much more effective if they are conducted
The good news is that a new opportunity has opened up for an effective
discussion among the governments of the four partner countries. We are
referring to the meeting of Ministers of Foreign Affairs, scheduled for
April 22, which will be preceded by a meeting of the Common Market Group,
which is supposed to be the appropriate setting to adequately prepare
for a ministerial meeting that may prove to be complex due to its agenda.
In the light of the current debate among Mercosur partners, at least
two issues will require priority at the next Meeting of the Foreign Ministers,
regardless of others that may also be considered relevant, such as Mercosur's
position in the face of possible developments of the coronavirus pandemic
and, above all, of the "post-pandemic" world.
The first issue refers to the level of effective protection that may
derive from the application of the common external tariff, which is recognized
as one of the fundamental instruments of Mercosur in Article 1 of the
Treaty of Asuncion, with its subsequent impact on the interpretation of
Article 2, which is a key to really understand the scope of the pact that
gave rise to Mercosur. This is an example of the need to address the relevant
Mercosur aspects from an economic, political and legal standpoint, both
by those who have to make decisions on the effective protection that may
derive from the level of the common external tariff, but also by those
who have to analyze, interpret or apply them. Not including these three
dimensions means running the risk of either not understanding what has
been decided or of not grasping their true impact on reality. In addition,
their inclusion is a necessary condition for the effectiveness of the
so-called "jeitinho diplomacy ".
The second issue relates to the notion of making Mercosur more flexible.
This is a proposal that generally, and in a more extreme version, refers
to the idea that individual members may conclude free trade agreements
with third countries. Such an idea has been put forward on several opportunities,
especially by Uruguay, and even includes bilateral agreements with, for
example, the USA or China. The interpretation that this is not possible
within the current legal framework of the Treaty of Asuncion has led to
the expression "Mercosur ties us down".
At times it has been interpreted that said restriction is the result
of Decision 32 of the Mercosur Council, adopted in 2000. This has led
to a proposed amendment. However, a simple reading of the Treaty makes
such interpretation legally insufficient. Therefore, it is reasonable
to understand that when there is any talk of "making Mercosur more
flexible", in its most extreme version of allowing the signing of
bilateral free trade agreements between members and third countries -and
not by Mercosur as a whole-, what is perhaps being proposed is in fact
a modification of the Treaty in order to make it possible. This is an
example of a decision that can not be approached only from the perspective
of one of the three dimensions mentioned above.
For all these reasons, what Jorge Neme, Secretary of International Economic
Relations of the Ministry of Foreign Affairs, said in a long interview
with a Uruguayan radio station on March 29 makes sense. He asked the Uruguayan
government to present, in writing, a proposal to make Mercosur more flexible
and, at the same time, to explain how to implement a negotiation outside
the bloc and what impacts it would have (the full text of the interview
can be accessed on the website of radio station "Mundo 1170 am"
Depending on its actual scope, the second issue would probably require
some amendment to the founding pact in order to be deemed feasible. If
this were the case, it would make the proposal brought forward by Rubens
Barbosa more relevant and opportune, in the sense that the time has come
to convene the Diplomatic Conference provided for in article 47 of the
Ouro Preto Protocol, with the aim of reviewing the institutional structure
of Mercosur concerning the competence of its governance bodies. (See the
article by Rubens Barbosa in the magazine Interesse Nacional included
below as recommended reading).
In addition to the two issues mentioned above, there are other relevant
items on Mercosur's agenda that will, sooner rather than later, need to
be addressed at the highest political level. One of these refers to the
joint proposal made by the industrialists of the four countries, which
involves the development of policies that help transition from a primary
economy to the manufacture of value-added products. Their approach views
the issue of the trade negotiations to be developed by Mercosur in this
The proposal was made on the occasion of the 30th anniversary of the
Treaty of Asuncion by the Presidents of the industrial business organizations
of the four Mercosur countries, within the framework of the Chamber of
Industrialists of Mercosur. (See the declaration of the industrialists
in their virtual meeting of March 25, 2021, on "The future of Mercosur
requires growth, competitiveness and integration", on http://www.ciu.com.uy/.
See also the article by Paula Urien published in the Foreign Trade supplement
of La Nación newspaper of April 1, 2021).
- Barbosa, Rubens, "Mercosur, 30 años", diario "El
País", Montevideo, 13 de marzo 2021.
- Barbosa, Rubens, "Após 30 anos, Mercosul Requer Freio
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2021, ps 41-44.
- Bartesaghi, Ignacio (coordinador); Iglesias, Enrique; Masi, Fernando;
Peña, Félix; Polónia Rios, Sandra, "Reflexiones
sobre los 30 años del Mercosur", Universidad Católica
del Uruguay - Fundación Konrad Adenauer, Uruguay, Montevideo
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que necesita renovarse", Nota de tapa, Suplemento Comercio Exterior.
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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