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The new government of President Lula da Silva opens the possibility
of strengthening the strategic idea of Mercosur and updating the working
methods to be used in its development. Likewise, conditions are favorable
for the goal of reaching an association agreement between Mercosur and
the European Union within a reasonable timeframe, under conditions that
will allow it to be effective and efficient. Moreover, the recent analysis
of Josep Borrell, member of the European Commission, on the reasons that
drive the agreement between Mercosur and the EU, highlights the convenience
for both parties to move forward in its completion (see the article from
November 30, 2022 "Why Europe and Latin America Need Each Other"
on https://www.project.syndicate.org).
In this opportunity we will present some ideas on how to increase Mercosur's
effectiveness as an institutional framework for joint work among its member
countries and for the development of inter-regional agreements, including
that with the EU. They are based on our contributions in the chapter (in
Spanish) "Comentarios y sugerencias para la construcción de
un Mercosur más eficaz y creíble", from the book (in
Spanish) "30 años del Mercosur. Trayectorias, Flexibilización
e Interregionalismo", coordinated by Gerardo Caetano and Diego Hernández
Nilson, Department of Political Science, Faculty of Political Science.
Universidad de la República, Montevideo 2022. The book is the result
of the symposium organized in Montevideo on September 7, 8 and 9, 2021,
by the University of the Republic (UDELAR) of Uruguay, the German Institute
for Global and Regional Studies (GIGA) from Hamburg, the Carolina Foundation
of Spain and the EU-LAC Foundation, headquartered in Hamburg. The entire
book can be found on https://eulacfoundation.org/.
One of the comments is related to the importance that should be attributed
to the issue of preparing for the day after the entry into force of the
bi-regional agreement. That is, the actions and policies that Mercosur
countries would have to develop so that their companies are in a position
to effectively benefit from the results of the negotiations. This is an
issue where there is much to be learned from the EU experience in the
preparation of its companies to take full advantage of the actual results
of negotiations, through technical cooperation programs that help train
SMEs so that they can be in a better position to benefit from the agreements
that are concluded. It therefore makes sense to consider that being well
prepared for "the day after" is as important, if not more, than
being prepared to negotiate effectively. This is clearly an area in which
the EU can contribute much of its experience to the Mercosur countries.
In principle, it can be argued that the idea of building Mercosur as an
institutionalized space for joint work among its member countries would
seem to require methodological innovations that take into account the
experiences accumulated since its creation in 1991, both in terms of its
aims and, above all, of the methods planned for joint work. The idea is
not to do so with a dogmatic or theoretical perspective but to evaluate
them in the light of the experience gained and the changes that have taken
place in global and regional realities, and imagine solutions to the problems
detected, in order to reach understandings under conditions of effectiveness
and predictability to continue building the space for joint work.
In order to understand the debate on the methods of joint work and on
the future of Mercosur, it seems advisable to go back to its early days.
It is in their roots where we can find explanations of the course followed
later by the international trade negotiations in which our country participates,
both at the regional and global level, and particularly in the negotiations
with the EU.
It is clear that the founding strategic idea was to form a customs union
and a common market, in order to open up to the world and negotiate together
with the US and the EU, and within the framework of ALADI. Additionally,
Mercosur countries were placed in a position where they could take advantage
of their potential trade relations with the Asian region, in view of the
new international reality that involved the active insertion of China
in global economic competition.
This approach was present from the very origin of the idea of transforming
the bilateral integration process of the 1980s between Argentina and Brazil
into one that was to include, among other South American countries, Chile,
Paraguay and Uruguay. The fundamental strategic idea was clear: to deepen
integration in order to create a regional environment that would be reliable
and favorable for valuable internal processes -politically, for democracy;
economically, for productive transformation; socially, for equity- and
for the requirements of competitive insertion in the world and the attraction
of investments that would allow the partners to be an active part of the
internationalization of the world production of goods and services.
Mercosur then appeared as the backbone of the idea of a solid strategic
alliance --open to the world- between the two main South American economies,
which was later joined by Uruguay and Paraguay. Creating a common platform
to compete and negotiate in the world was the purpose of the project launched
in June 1990 in Buenos Aires, which was based on the progress achieved
in the bilateral project between Argentina and Brazil (PICAB) initiated
in 1986. The founding idea was, and still is, to constitute a "hard
core" that would facilitate, through economic integration, the political
stabilization and economic and social development of the entire South
American space.
From the outset, two strategic ideas became interlinked. One was the
creation of an integration area in the South of the Americas, open to
the rest of the South American countries, and inserted in the Latin American
context through ALADI, which included Mexico. The other was the joint
insertion of Mercosur countries in the broader hemispheric free trade
negotiations, an initiative launched at the beginning of 1990 by President
Bush of the United States. This connection became even more evident at
the Brasilia Ministerial Meeting (July 30 and August 1, 1990), in which,
in addition to Brazil and Argentina, Uruguay and Chile participated. In
it, the basic guidelines of the strategy to be followed were agreed: at
the regional level, to form a customs union as a step towards a common
market; at the hemispheric level, to negotiate together the still uncertain
development of the American proposal. Paraguay, which had just started
the path toward the institutionalization of its democracy, later joined
the group. Chile, on the other hand, expressed its reasons for not participating,
a position that was understood by the other countries.
These elements are added to the political definition of the original
strategic idea --at least in its economic and commercial component- and
are part and parcel of the founding negotiating package. They are, firstly,
unrestricted access to the respective markets for all goods and, in a
further instance, for services and other factors of production; secondly,
a common external tariff that is functional to the opening of the respective
markets to world trade; and thirdly, joint negotiations, including those
with other LAIA partners and with the remaining countries of the international
system, starting, at the time of its founding, with the USA and the EU.
These aspects reflect a core assumption of the original idea: macroeconomic
coordination among the partners. Therefore, in the founding approach,
Mercosur and hemispheric integration -together with the trade association
with Europe-were conceived as two sides of the same coin.
At the same time, it is also clear from the founding moment that the
associative pact was based on the idea that all members would be guaranteed
access to a market of over two hundred million consumers, not only for
goods but also for services, without precariousness or unilateral restrictions
of any kind and without artificial distortions to relative competitiveness.
This implied the development of collective macroeconomic, sectorial and
external trade disciplines.
We understand that going back to the origins is advisable, since in many
of the positions adopted today by significant protagonists -in favor or
against the different options that may be proposed for the future-, there
seems to be a tendency to underestimate the precedents that explain the
commitments undertaken, or to confuse the sequence of events and their
concatenation. At times, there even seems to be a propensity towards "zero
reality", which would imply that these are processes devoid of history
and that they are seemingly resetting themselves with the arrival of new
government officials -whether they be policy-makers or negotiators-. Such
discontinuity in the previously defined road map -not necessarily in response
to the new realities- could affect the international credibility of Mercosur
countries, drastically reducing the effectiveness of the common project
in the stiff global competition for productive investments, and in its
quality as a valid counterpart to address complex international trade
negotiations. This may come at a high economic cost -although unnoticeable
in the short term- by discouraging productive investments and industrial
localization decisions.
Slightly over thirty years later, it seems to be a fact today that Mercosur
is eager to be modernized, adapting its objectives and working methods
to the current times and, above all, to those that can logically be imagined
for the future. In fact, it is currently going through a delicate period
in which its credibility is affected and even its survival is being challenged.
The problems it faces are, to a large extent, the effects of changes that
have taken place since its creation in 1991, both in the global and regional
realities. They are also the result of economic and political difficulties
that often affect the priorities of its member countries. However, they
may also be the result of the working methods used in the joint actions
of the members and, in particular, for the adoption of formal decisions
that require consensus.
There are three options to face the problems confronting Mercosur today.
Although feasible, their direct or indirect consequences could be very
different:
- A first option would be to recognize a certain degree of methodological
obsolescence in Mercosur. If eventually a member country considered
it advisable, it could gain independence through the denunciation of
the Treaty of Asuncion, as provided for in articles 21 and 22 of chapter
V;
- The second option would be to undertake the process of making the
necessary modifications to its main ground rules, including those of
its founding treaties, and, in particular, to articles 1, 2 and 5 of
the Treaty of Asuncion, among others. It is an option with uncertain
deadlines and results, which could eventually have high and varying
political costs in each country, especially because it would require
the approval of the respective parliaments and it is common knowledge
that this is not always possible in the political reality of a country;
and
- The third option would be for member countries to agree on policies
aimed at taking full advantage of the current constitutive rules, without
the need to resort to their potential modifications and without prejudice
to the fact that it might even be advisable to promote new constitutive
rules at a later date.
Within the framework of this third option, we have pointed out on other
occasions that substantial improvements in the objectives and functioning
of Mercosur could be attempted on at least three aspects. These improvements
would not necessarily require reforms to the Treaty of Asunción
or the Ouro Preto Protocol.
The first would be that of the coordination of national interests, which
is necessary for the adoption by consensus of joint decisions of the Mercosur
members that actually penetrate into reality and can be really effective.
Concretely, what is proposed would be an initiative aimed at strengthening
the functions of what is now known as the Administrative Secretariat,
especially in relation to the process of technical preparation and the
adoption of joint decisions that require the consensus of all the partners.
The aim would thus be to strengthen its capacity to facilitate, with its
contributions and initiatives, the complex task of coordinating the interests
and priorities of each of the partners in the adoption of Council decisions
requiring consensus.
This would not involve opening a debate on possible supranational powers
of the Mercosur Secretariat, meaning functions that would imply that those
who perform them would be considered to be above the national States.
However, it would require granting the Secretariat the necessary technical
and organizational capacity to facilitate the complex task of coordinating
the various positions of the member countries, particularly involving
decisions that must be adopted by consensus. Helping to build such consensus
would then be a fundamental role of a strengthened Mercosur Secretariat.
This would also imply developing an active role of the Secretariat in
setting up multinational networks of academic institutions and technical
analysis, with the participation of specialists from member countries
and from international organizations operating in the region, such as
ECLAC, INTAL-IDB and, eventually, CAF. This is one of the fields in which
ideas can be drawn from the varied and rich European experience, including
the most recent with the countries of Eastern Europe and with countries
in Asia and Africa within the framework of association agreements.
In principle, the Mercosur Secretariat already has an organizational
format that would allow it to fulfill such a function. Strengthening its
role in providing the experience, information and intelligence required
to coordinate the diversity of interests and visions of its member countries,
and thus achieve the necessary consensus for the adoption of its decisions,
is a valuable aspect that may contribute to enhance Mercosur's role in
the productive development and international insertion strategy of its
member countries.
In this opportunity we will only enunciate the two remaining aspects.
Firstly is that of the sector agreements provided for in the Treaty of
Asuncion. This should be addressed together with the instrument of partial
scope agreements, provided for in the 1980 Treaty of Montevideo that created
LAIA, linking it with another relevant aspect of Mercosur's integration
strategy, which is that of the joint action with the countries of the
Pacific Alliance and with other countries of Latin America. The other
aspect is the full incorporation into Mercosur's working agenda of issues
that have gained greater relevance in recent times and, in particular,
those related to climate change.
The three above mentioned aspects should be addressed simultaneously and
through a strategy of trade negotiations with a range of developed and
developing countries. This strategy should include, from the outset, the
negotiation of so-called preferential trade agreements with the world's
major markets (especially the US and China) and the previously mentioned
completion of the pending agreement with the EU.
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