This panel provides an opportunity for a technical dialogue, and in this particular case, not just on the future of the OAS, which is the cornerstone of the inter-American system, but also., and perhaps more importantly, on the importance of inter-American relations for the agenda of: priority issues for each of our countries in the nineties.

Accordingly, the question to ask is of what use is the inter-American system- in the foreign affairs of each of our countries, particularly in their international economic relations.

This inter-American dimension, - of course, cuts across the relations of each of our' countries with the biggest power and. the biggest market in the regional system—the United States. It can only be fully understood to the degree that each bilateral relationship appears, to be conditioned by situations and relationships that occur with other Latin American countries that can affect how each country, especially the United States, perceives or idealizes the role it should have in the inter-American economy, and in its own global or regional foreign economic policy. In this perspective speaking of the importance of inter-American affairs primarily means asking what role the region as a whole can have in the economic relations of each member with the United States, and how the United States perceives and conceptualizes its relations with the region.

In the past, bilateral relations, with the United States have been affected by disagreements about how we should respond to specific situations arising out of specific problems, in the region. The classic example of this, of course, is the divergence of views arising from the varying perceptions of the "Cuban problem," which even seriously affected the viability of our incipient democracies in the 60s. The foreign debt problem has also been perceived as a source of frustration.

I therefore believe that open dialogue today through this panel should focus on the importance of the inter-American dimension in our international economic affairs and our democratization and economic transformation in the 90s.
I would like to discuss threes specific questions.

1. How can current international changes affect the future of inter-American economic relations?
   
   
2. How can our present processes of democratization and economic change affect our perception about what we expect from inter-American economic relations?, and
   
   
3. How can the efforts of Latin American economic integration affect the ability of our countries to operate as an organized economic region in the inter-American framework and not just as a network of not always coherent bilateral relations?

On the first question, I want to emphasize two aspects here. First is uncertainty as the main feature of an international reality that is highly fluid and dynamic. Very few people were able to predict what happened in Eastern Europe in. 1989. It is even more difficult to predict the future evolution of the events unleashed by this "revolution of the East." This compels us to be prudent in making any predictions about the future.  Uncertainty prevails in the international scene.

The second question concerns three different features that emerge with some clarity in the present international situation, and will probably predominate even in the international affairs of the coming years. These are: a) a relative decline of ideology in the power relations of the great powers; b) the emergence of trade as the main axis of contemporary international affairs, and the expanded concept of trade to cover a wide range of economic transactions among countries (this trend is very clearly seen in the negotiations on the agenda of the present Uruguay Round; and c) the growing politicization of international economic relations, which are increasingly managed by government action to support their economic enterprises in competing in world markets or to protect them from foreign competition. In that sense, we see the emergence of an international economic system in which the large national and multinational economic units—the "megamarkets" compete with each other using every means available, including managed trade.

I believe we are going through a transition from an international system dominated by what we might call the "mega-ideologies," reflected to some extent in military blocks, to a system concentrating on the idea of "mega-markets." The logic of the competition among mega-markets will have a strong impact on the future behavior of countries, and I have the impression that it will result in a greater emphasis on the concept of "partner-competitor" rather than "enemy-ally." Our policies are going to be more directed toward the partner-competitor, and economic and social protagonists, as pointed out by Elliott Abrams in his remarks. Relations are going to be more societal than governmental. Thus there emerges the concept of the "trading state," as described by Professor Rosecrance in his recent book, as opposed to the "territorial state." However, it is now clear that we still see constant tension in the international relations of the "mega-markets" and the more traditional markets dominated by nationalist, territorial, ethnic, and religious factors.

It also seems clear that the concept of marginality is ..going to be redefined as a result ,of what Stanley Hoffman called the "main line of tension" in international affairs, and from that perspective the main factor was the relative military-strategic value of each country. To be marginal in the future will means not knowing how to take advantage of the opportunities provided by the competition among the mega-markets. The relative .marginality of one country will not: depend so much on its strategic value in the East-West confrontation, but on the ability of each country, to find windows of opportunity in the .competition among the mega-markets. Accordingly, the world of the 90s will be inhospitable for the loners, for those who do not know how, or are not able to weave a network of strategic alliances with .other countries—a network of partners-so they can compete to preserve or expand their -share of the world markets. And the network of alliances will not only be among countries, it will also permeate society and the world of the economic operators.

The second topic concerns what is happening in Latin America. The region appears to be dominated by the shift toward stable democracies and the economic transformation toward modern and competitive economic systems. In that regard, what is striking is the emergence of a new political culture in the region. I believe that we should think about this fact, because it is loaded with implications about our future integration in the international system and sin the world of mega-markets.

In that regard, I perceive that .Latin America is much more inclined toward the values of competition, in both the economic and apolitical .areas as a result of its democratization. And it is much more inclined to value .the idea of negotiation at all levels and at all times. Competing and negotiating appear to be values that are deep-rooted in our political culture-negotiating to compete better. This has a great deal to do with the value attached to sports in our societies, especially by our young people. Preparing for competition is part of the daily life of any young person who engages in sports.

Also there are deep-rooted policies designed to create favorable environments for the external competiveness of our countries.

That is how the idea has become assimilated in our societies that we should look out for ourselves, prepare ourselves, and get organized to compete better in world markets. The world of the 90s does not seem ready to tolerate either loners or the inefficient.

The task of preparing ourselves to compete, of mobilizing our social energies to compete as countries, is made difficult by problems carried over from the 70s. We happily financed our adjustments with foreign loans until we had to compete for funding with competitors much more able to attract international lending, including our .own financial resources. .And at the same time, we have to consolidate democratic systems and transform our economies.

To some extent our region is an exception to the help given by the Western World in the post-war period for consolidating other nascent democracies, such as in Western Europe in the 50s, Mediterranean Europe in the 70s, and now Eastern Europe in the 90s. The common denominator in these cases was the deliberate action of the Western World to create around these democratization efforts a "friendly international economic environment" to support the social discipline required for economic transformation in a democratic environment. But where are the efforts of the Western World to create this friendly or favorable international economic environment for the region's efforts to achieve democratization and economic transformation?

The third topic is economic integration of the Latin American countries. Despite all efforts, there is still a gap between the political will to integrate and the economic realities. And since Latin America has not been able to achieve this in the desired fashion, such efforts generate a severe economic imbalance in the inter-American system.

However, there is now a positive factor, a new proposed strategy for regional integration, which should promote its positive valuation in the inter-American system; In fact, regional integration is now proposed by the governors and economic operators as part of the strategy for economic transformation and preparation for global competition. Integration is losing its defensive coloring, and is accentuating the positive connotations of a serious effort to organize for competition in the world markets and create a regional environment favorable for the external competitiveness of the Latin American countries.

This reappraisal of strategy, which is clearly seen in the definitions of the Group of Eight, CARICOM, and the Andean Group, should encourage future constructive support by the inter-American system for Latin American efforts, thus helping to create a favorable international and regional economic environment for the processes of democratization and economic transformation, such as European integration supported by the western countries. This has occurred for the nascent democracies of Western Europe first for that in Mediterranean Europe second and now it appears to be happening in Eastern Europe also. I believe that active support for Latin American economic integration, conceived as a way to organize and prepare to compete as countries in the world of the mega-markets, can become the cornerstone of the revaluation of the inter-American dimension of our international economic relations, because it finds in that support effective underpinning for the efforts to achieve internal social discipline that involve addressing the processes of democratization and economic transformation of our countries.