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Two simultaneous processes are taking place at a global scale. Both have
current and potential effects on the global exchange of goods and services
as well as on international trade negotiations, especially within the
current WTO Doha Round.
One of the current processes taking place is that of the economic and
financial crisis with its well-known consequences, among others, in the
level of production and consumption and of international trade of goods
and services. The drop in economic activity has an impact on the level
of employment and on the mental state of people, thus transferring the
effects of the crisis into the social and political planes. Depending
on the intensity of such effects an international crisis may give rise
to systemic problems that affect the political stability of the most vulnerable
countries. This, in turn, might generate a chain reaction in other countries,
particularly those belonging to the same region.
This is a process with evident immediate effects that requires short-term
answers -especially at the national level but also at the level of regional
and global coordination between countries- precisely due to its possible
social and political consequences.
The other process that is currently taking place is that of the shift
of relative power among nations. Its origins are deeply rooted in history.
Its pace has accelerated in the last twenty years. It is reflected by
the emergence of new players -countries, companies, consumers, workers-
with a bearing on global economic competition and on international trade
negotiations. However, its full effects will probably only become evident
in the long run, sometimes even through hardly noticeable shifts, almost
as in slow motion.
Even when these processes are interconnected, they would seem to require
assessments and approaches with differentiated aspects, which nevertheless
would be convenient to coordinate. This idea is expressed by the current
assertion that it is essential for countries to have, at the same time,
an agenda to face the crisis and an agenda for "the day after".
The latter would apply when the mot immediate effects of the current situation
have been overcome and the deep transformations that are shaping the international
system become fully evident.
Several social, political and economic qualities would be necessary for
a country to attempt to face both processes simultaneously. This would
mean to navigate with relative success the waters of the current global
financial and economic crisis and, at the same time, to position itself
as an active player in the world trade of the future as well as in the
arena of international trade negotiations, both within the WTO and in
the multiple regional, inter-regional and bi-lateral spaces.
Three different conditions may be highlighted as being essential in the
strategy of a country, such as for example Argentina, that wishes to capitalize
on the effects of both processes with the aim of promoting a favorable
insertion in the global economic competition of the future.
These conditions are institutional quality, offensive strategies developed
by those companies looking for an active participation in international
markets and coordination of efforts together with other countries at the
corresponding regional scale.
Institutional quality entails the development of capabilities to articulate
the different social interests in a stable manner in order to translate
the agreed objectives into effective behaviors and realities. It is an
essential condition for the development of pubic-private synergies. These
are necessary to define national interests in relation to the most relevant
matters of the international trade agenda, translate them into strategies
and roadmaps, and reflect them in behaviors of government and non-government
sectors -especially businesses- in the multiple external scenarios where
the country is involved.
In global economic competition and in international trade, such institutional
quality is nurtured by the efficiency of the organization technologies
used at the government level. This enable the adoption and application
of strategies, decisions and public policies with a strong potential to
permeate reality and to become sustainable in time, including the necessary
flexibility for the continuous adaptation to the change dynamics of the
present world.
However, institutional quality is also nurtured by the organizational
quality of the business sector and its articulation with other social
sectors. This involves companies with offensive strategic interests in
relation to the home market as well as to the multiple international markets,
especially those which are a priority in view of the competitive advantages
that a country may develop. To survey such interests becomes then an essential
factor for the planning and implementation of the strategy for the international
trade insertion of a country. The report published in Brazil in 2007 by
the National Confederation of Industry (CNI) is a clear example of this
(see www.cni.org.br). This practice also requires continuous adaptations
to the ongoing changes and excludes the possibility of a fixed-target
mindset.
The second condition is, precisely, that companies develop offensive
strategies as a result of their desire to participate in international
markets. This involves updated assessments of the opportunities presented
by different international markets for a country's capability of producing
goods and providing services. This assessment needs to be reviewed on
a permanent basis, given that the effects of the current global crisis
and the structural changes that are taking place in world scenarios may
alter in a most dynamic way the opportunities that exist for companies
with presence in the country, turning their relative competitive advantages
either for or against them.
Additionally, such desire requires having a positive outlook on the opportunities
that a country and its companies may have in world markets. In sporting
terms it would mean to act with a winning mindset. This is a cultural
factor that is present in those developing countries which, during the
last years, have given rise to a growing number of internationalized firms.
Chile and several Chilean companies are an interesting example of this
precisely due to the fact that this country does not constitute one of
the larger scale emerging economies.
Finally, the third condition is the coordination of efforts and the development
of joint actions among those countries that share the same regional space
-but also among those which share relative conditions and similar interests
such as, for example, the food-producing countries-.
At the South American regional level, this implies the promotion of a
continuous process for the development of quality physical connectivity
works (comprising issues such as the financing of infrastructure projects
-including the inter-oceanic axis- and the facilitation of trade). This
continuous process would favor an increasingly growing weave of shared
interests that would be nurtured by the reciprocal trade flows and transnational
productive networks (this would include issues related to the implementation
at a regional level of aid for trade programs, especially in favor of
those less developed economies). In the investment required for this purpose,
a country may find converging elements between the agenda of measures
destined to overcome the effects of the global crisis and that of the
necessary productive transformation required for navigating successfully
into the world of the future.
This would also imply a greater coordination between South American countries,
both in the corresponding assessment of the two international processes
mentioned above as well as in the strategies for the approach of global
trade negotiations, especially within the sphere of the WTO and with the
main players of world trade. The relations with the U.S., the countries
of the European Union and emerging economies -particularly with China-
are, in this sense, a priority.
This also applies for those negotiations related to the adaptation of
international multilateral organizations to the new international reality,
especially within the sphere of the so called Group of 20 (the next Summit
to be held in Pittsburg, U.S., will be an opportunity for participating
Latin American countries to effectively present the points of view of
the region as a whole -or at the very least of the corresponding sub-region-
which will have been previously discussed in regional forums).
On this plane of regional coordination, three fronts of action become
more relevant for Argentina, at least for the next months. The first one
is the Seventh WTO Ministerial Conference to be held in Geneva from next
November 30 to December 2nd (see http://www.wto.org/).
The second front is the re-launching and eventual conclusion of the Doha
Round (see the declaration by WTO Director General, Pascal Lamy, in Paris
on 25 June 2009: http://www.wto.org/.
This month, during the meeting in L'Aquila, Italy, G8 countries together
with G5 countries -Brazil, China, India, Mexico and South Africa- committed
themselves to finalizing the Doha Round before the end of 2010. A mini-ministerial
meeting will take place in New Delhi next September). The third front
is the strengthening of the existing institutional spaces of the region,
especially LAIA, UNASUR (its constituent agreement is not yet in effect)
and Mercosur. Regarding the latter, no new developments related to the
pending implementation of the customs union could be expected at least
in the short term; the Parliaments of Brazil and Paraguay have still to
sanction the Caracas protocol; and, above all, the negotiation for the
adaptation of Venezuela to the customs union has not been concluded yet.
On this last respect, the main issues that will need to be resolved are
Venezuela's requests in relation to what are considered sensitive-products
and which therefore should have longer periods for their final adaptation
to the customs union.
Aside from the necessary action of government leadership there exists,
at the level of regional coordination, an ample margin for initiatives
originating in the respective business sectors, at least in the South
American space. Such initiatives should attempt, for example, to make
a diagnostic assessment of the profitable use of institutions, experiences
and commitments accumulated throughout the years -especially in terms
of preferential access to markets and of the payment and financing mechanisms
for trade, productive investments and physical infrastructure- and also
include constructive proposals on how to evolve towards future joint goals
which combine realism and ambition.
An initiative of this kind could originate, at least initially, in the
business institutions of those South American countries which are more
closely connected through commercial and productive networks (Mercosur
countries and Chile). Additionally, there is a higher density of cross-investment
among these countries, both in the agro-industrial and manufacturing sectors
as well as in the services sector. A growing number of multi-latin firms
run operations in these countries, particularly if we consider the hundreds
of companies of varying sizes which have a sustained and simultaneous
commercial and productive presence in several of these markets. Together
with the respective business institutions of each country, these are the
companies that should express more interest in advancing measures to promote
the full use of the existing preferential agreements and move forwards
towards more ambitious goals.
Such as it happened in the past, at the time of the foundation of the
process of regional commercial integration - when LAIA was founded, 50
years ago (on this regard, please refer to the May Newsletter) - organizations
such as the Economic Commission for Latin America and the Caribbean (ECLAC)
could provide the necessary technical assistance to an initiative coming
from the business sector such as the one that has been proposed. Their
most recent precedent on this regard is their last December report on
"International crisis and opportunities for regional cooperation"
(see the reference to this work under the recommended readings section).
One of the sections of this report, entitled "Losing the competitive
race may be more dangerous than the current global crisis", follows
the line of thought which was expounded previously regarding the need
for correlation between the crisis agenda and the "the day after"
agenda. The Andean Development Corporation, with its vast experience,
as well as that of its President, may also contribute significantly to
a business sector initiative such as the one proposed.
The experiences of other regions illustrate the effects that business
initiatives can produce. One of them is the Trans-Atlantic Business Dialogue
(http://www.tabd.com)
between the business sectors of the United States and the European Union.
However it is primarily in Southeast Asia where we can find the most inspiring
experiences of the role of businessmen and business institutions in the
advancement of regional cooperation. Some examples are the ASEAN Business
Advisory Council (http://www.asean-bac.org)
and the Confederation of Asia-Pacific Chambers of Commerce and Industry
(CACCI) (http://www.cacci.tw).
Such experiences have contributed to give credit to the "bottom-up"
methodology for the construction of a regional space where the networks
of business institutions, especially those of productive chains of transnational
scope, have played a fundamental role.
Most recently, the Economic and Social Commission for Asia and The Pacific
(ESCAP) has published an encouraging report whose title illustrates its
eminently practical approach: "Navigating Out of the Crisis: "A
Trade-led Recovery. A practical guide for trade policy makers in Asia
and the Pacific" Bangkok 2009 (on http://www.unescap.org).
It is a report that provides down-to-earth advice on the measures that
are required in the short-term to face the effects of the current global
crisis (especially through the increase of regional trade) and on those
measures that are needed to guarantee long-term competitiveness in the
new international scenario. An example of this are its two final sections
entitled "Promoting Asia-Pacific Businesses for Long Term Competitiveness"
and "Looking Beyond the Crisis: Positioning the Asia-Pacific Region
for the Future" respectively. The information and recommendations
contained in this work would be valid for application in our region.
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