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The nearly fifty years that have elapsed since the birth of the formal
processes of Latin American integration provide an opportunity to reflect
upon its future. The new international context that is manifesting with
the current global crisis incites to approach this task.
At least two different stages in the development of regional integration
can be distinguished during the last five decades. All facts indicate
that a new stage is beginning now. Its scope and characteristics have
yet to manifest to its full extent.
As a strategic concept, the precedents of regional integration date back
to the 19th Century. However, the first stage of concrete achievements
began to manifest with the negotiation and signature of the Treaty of
Montevideo in 1960 -a result of the initiatives and negotiations of the
preceding two years-, which created the Latin American Free Trade Association
(LAFTA), (the recent book by Edgar J. Dosman on Raúl Prebisch included
under Recommended Readings discusses the context under which the LAFTA
was created). The addition of Mexico, not foreseen in the original layout
which was South American in scope, extended this initiative of commercial
integration to the Latin American space. Simultaneously, Central American
countries were resuming their own process of sub-regional integration
which had strong historical roots.
A second stage of regional integration began with the transformation
of LAFTA into the Latin American Integration Association (LAIA) through
the Treaty that was also signed in Montevideo in 1980. It was the result
of the confirmation that a free trade zone between numerous countries
-at the time less connected and more distant than today- with considerable
asymmetries in size and level of development was nonviable. In a way,
the creation of the Andean Group with the signature of the Cartagena Agreement
in 1969 was the first manifestation of this fact. In this sense, what
happened with LAIA constitutes a precedent of what was later confirmed
by the failure of the initiative for an American free trade zone of hemispheric
proportions (FTAA), which was still more extensive.
However, the transformation of LAFTA into LAIA had a deeper meaning which
was to accept that the existing differences required partial approaches,
of multi-speed and variable geometry. This meant the recognition of the
reality of different sub-regions and sectors whose interdependence and
interests were not necessarily shared by all countries. The original approach
of LAIA, according to which the regional instruments were the rule and
the sub-regional and sector ones the exception, was reversed. On the contrary,
what was partial -a group of countries or given sectors- became the main
rule and the regional dimension became, at the same time, the framework
and the final objective, though not a well defined one in its contents
or deadlines.
This stage opened the way to deep transformations in the regional integration
strategy which matured in the following years. Furthermore, in contrast
with the preceding stage, a greater responsiveness to the differentiated
demands presented to the Latin American countries by the new international
reality could be evinced since the 80's and particularly the 90's. The
consequences of this were differentiated answers in the area of external
commercial policies and negotiation strategies.
During this new stage that reaches into the present day, among other
relevant facts, the Andean Group became the Andean Community of Nations
(CAN); the bilateral process of integration between Argentina and Brazil
was initiated, with a special emphasis on particular sectors such as,
for example, the automotive one; Mercosur was created; Mexico was added
to the free trade area of North America; and the process of bilateral
preferential trade agreements began to materialize with countries in the
rest of the world, starting with the US and the European Union. In addition,
an interesting precedent that reconciles the integration of a regional
geographic space and third parties through preferential trade agreements
was born. Such precedent was the result of the free trade agreement between
Central American countries, the Dominican Republic and the US (CAFTA-RD).
The changes that were simultaneously taking place in the global context
had a strong impact on the beginning and evolution of the first two stages
of Latin American regional integration. In the last two decades, the post-cold
war reality translated into a multi-polar economic competition, and the
US changed its global commercial strategy driven by its own network of
preferential agreements. This, together with the enlargement of what would
become the European Union; the growing prominence of emerging economies
and re-emerging ones, such as China; the conclusion of the Uruguay Round
and the creation of the World Trade Organization (WTO) and the development
of production networks and transnational supply chains were, among others,
some of the factors that deeply altered the external environment in which
the Latin American and, particularly, the South American integration developed.
In addition to these, there are deep economic and political transformations
-also of a differentiated reach- that have taken place in the region and
in each one of the countries. The South American scene in particular displays
a denser interconnection between its productive systems, including the
energy field. Several countries have undergone a remarkable evolution
in their experiences both in the economic aspect as well as in the political
plane. The relevant role that Brazil has taken on is a significant fact
that marks the difference between what the region was before the 90's
and what it is today.
Are we at the beginning of a new stage of regional integration in Latin
America? There are some elements that allow us to affirm so. This new
stage would be driven by several factors. The first is the emergence of
a large number of options for the insertion of each Latin American country
in world markets as a result of the growing number of relevant protagonists
in every region and of the reduction of all kinds of distances. The second
element is the fact that such options may be capitalized simultaneously.
The third factor is that in the majority of the available options it is
feasible to develop win-win strategies in terms of the trade of goods
and services, of productive investments and of the incorporation of technical
progresses.
However, the main factor that drives towards new integration modalities
in the Latin American regional space, as well as in its multiple sub-regional
spaces, may be the growing discontent of some countries with the results
obtained from the processes currently under way. This is evident in the
case of the CAN as well as in the case of the Mercosur.
Such dissatisfaction may bring about at least two possible scenarios
which may prove disadvantageous and unsuitable to meet the challenges
that are faced at a global scale. The first scenario is that of a kind
of "integration inertia". It would imply to continue along the
lines of what has been done until now, that is, with no major innovations.
The risk of this scenario is that the integration process may become irrelevant
for certain countries. In such case, the end result could be the predominance
of the mere appearance of an increasingly obsolete integration system
with a low bearing on reality. The second scenario is that of a "foundation
syndrome". This would imply to cast aside what has been accumulated
until now in terms of joint regional strategy and preferential economic
relations -in the case of the Mercosur and the CAN it is much- and attempt
to start all over again.
There is, however, a third possible scenario. It would probably be the
most convenient and, in any case, it would be feasible. This would be
to capitalize on the cumulative experiences and results, adapting the
strategies, goals and methods of integration to the new realities of each
country, of the region and its sub-regions and of the world. Such adaptations
seem all the more necessary in the sub-regional agreements, such as the
Mercosur and the CAN, than in broader frames such as LAIA -whose role
in regional trade is still current- and UNASUR -which, however, has yet
to prove its effectiveness.
What do the cumulative experiences of the last fifty years suggest? Several
meaningful lessons stand out. The first of them refers to the importance
of reconciling political leadership with technical reliability. This implies
the direct involvement at the highest political level with the layout
and follow-up of the corresponding strategy and, at the same time, an
adequate technical formulation in regards to the objectives and working
methods. The second lesson refers to the need to consistently adapt the
goals and instruments to the changing realities while preserving, at the
same time, a certain degree of predictability in the rules, and the need
for collective regulations that can be complied with. The third lesson
is related to the importance that each country has its own national strategy
in relation to the corresponding integration process. The way towards
the regional begins with a proper definition of the national interests
of each country. This fact is corroborated by the actual experience of
the past years. Those countries which have a clearer idea of their interests
are probably those which have profited the most from integration agreements.
In addition, this constitutes a safeguard against a sort of "integrationist
romanticism" by which hypothetical supranational rationalities constitute
the driving force of any given regional process.
Which are the accumulated assets that need to be preserved? The first
one refers to the assessment of an integration process as an essential
factor for governance in terms of the predominance of peace and political
stability of a determined regional or sub-regional geographic space. Secondly,
is the stock of already agreed economic preferences which today have a
bearing on trade and investments flows. Finally, the third asset is the
value of certain "brands" for the international image and identity
of a group of countries, as is the case with the Mercosur "brand
name".
What are the adaptations in the strategies, objectives and methods of
an integration process that may result from the new international scenario
and, in particular, from its most probable future evolution? The first
of these is the deepening of flexible methodologies that combine variable
geometry, multi-speed and sector approach. These will not always adjust
to models of other regions or to what is indicated by textbooks. However,
they may be consistent with the regulations established by the GATT-WTO
legal system. The second adaptation refers to the institutions and the
rules of game. In order to orchestrate well defined national interests
among countries of different sizes and levels of development it would
seem essential to enhance the ability to formulate common visions and
interests that may be represented by organs with a certain degree of independence,
at least on the technical level, from the respective governments. These
would not necessarily have to follow the model of supranational institutions,
such as those originated in the European experience, nor would they need
to be too complex or costly. In this regard, the functions of the WTO
Director-General may represent a precedent that is better suited for the
national sensibilities of some Latin American countries. Finally, the
third adaptation is related to the importance of having, in each country,
a minimum group of businesses with aggressive interests in relation to
the respective regional or sub-regional markets, which implies a capability
to draw internationalization business strategies even at a global scale.
This is a necessary requirement in order to move forward in a relatively
balanced way towards the attainment of the much valued goal of productive
integration.
Perhaps the advice given by one of the characters in a novel on contemporary
India by Rohinton Mistry (listed under Recommended Readings) to his young
occasional travel companion can be applied to the Latin American integration
and its different institutions: "the secret of survival is the acceptance
of change and adaptation..."
It is still difficult to visualize if the adaptation scenario will take
place. However, the course of these fifty years, with its progresses and
frustrations, anticipates that regional integration will continue to be
valued by the respective countries and by their public opinions. At least,
there seems to be a consensus in that the costs of non-integration might
be too high. This fact anticipates a forecast of winding progress, with
improvements and setbacks, unorthodox but persistent, towards a greater
degree of integration on every aspect -not just the economic- between
the countries of the region and of its different sub-regions. In this
sense, it is possible to imagine a greater resemblance to what has been
the Asian model in the latter years and, eventually, to what could become
in the future the European model.
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