Since overcoming the hypothesis of permanent conflict between Argentina and Brazil, following the signing, in October 1979, of the tripartite agreement on shared water resources, the two countries started to explore a positive phase in their relationship. This has manifested in the bilateral economic and political dimension but also in the consultation and concertation regarding the relations with the region and in the approach to some of the main issues of their global international relations. This positive phase first led, in 1986, to the launch of PICE, then to the Bilateral Treaty of Economic Integration, signed in 1988 and later, in 1990, to the ACE 14 within the scope of LAIA. Finally it led to the creation of Mercosur in 1991, with the addition of Paraguay and Uruguay at the founding moment and later of Venezuela and Bolivia, whose incorporation processes have not been concluded yet.

After more than thirty years since the beginning of this journey, which would be difficult to describe as linear or devoid of any uncertainties and temptations, it appears that today its main institutional expression is the subject of strong criticism and controversy, at least within some of the member countries. Mercosur is at a crossroads that, at times, would seem to have an existential and not just methodological dimension. This would need to be addressed through a discussion of the options for its future and which would be the costs of backtracking. It should not be limited to the government level but it would require the active participation of all sectors of society -including of course the business sector- and multidimensional and trans disciplinary approaches.

The following are some suggestions that would help foster a debate on the future of the relations between Argentina and Brazil and, within this bilateral framework, of Mercosur: how to preserve a space of economic preferences aimed at developing the productive integration and competitive insertion of local businesses both regionally and globally? How to reconcile such preferential space with the requirements of the potential agenda of trade negotiations of the two countries and their partners with other countries and regions? And how to articulate the construction of a preferential space and a sustainable strategic relationship with the initiatives that are developing between other countries of the region such as those related with the Pacific Alliance and ALBA?

In October 1979, Argentina, Brazil and Paraguay concluded a tripartite agreement for the compatibility of hydroelectric projects on shared rivers. This tripartite agreement implied a significant change in the way that Argentina and Brazil addressed their mutual relationship and how it was perceived by the public opinion in each country. As was noted shortly thereafter by Oscar Camilión -then Argentine Ambassador in Brasilia and a great advocate, since the time of his collaboration with Arturo Frondizi, of a close strategic relationship between Argentina and Brazil, idea that he shared, among others, with Ambassador Carlos Manuel Muniz- the tripartite agreement meant overcoming the hypothesis of permanent conflict that had previously been the starting point in all argumentation regarding mutual relations, and its replacement by the logic of cooperation for the common good, not only bilateral but regional (see Revista Brasileira de Política Internacional - Brasil-Argentina, Year XXIV, 93-96, 1981, on "O Encontro de Buenos Aires: Um fato político de conteúdo académico", with contributions referring to the meeting organized by the CARI and FGV in BsAs on 1981 and, particularly, our article on the future of the relations between Argentina and Brazil, p.144 and subsq.).

In fact, since the moment they overcame the hypothesis of permanent conflict the two countries began to explore a positive phase in their relationship that, beyond ups and downs and reciprocal mood swings, has manifested in concrete facts in the bilateral economic and political fronts and also in the consultation and coordination regarding the relations with the region and in the approach to some of the main problems that both countries have faced in their global international relations.

This resulted in what can be considered the most fundamental contribution of the two countries towards the construction of a region characterized by peace and political stability, which was the dismantling, through specific agreements, of the collision course that had been developing in the nuclear field. This is one of the main public goods that resulted from the abandonment of the scenario of permanent conflict. Preserving this achievement is today one of the main priorities that nobody seems to dispute.

This positive phase resulted in the launch of the Program of Integration and Cooperation between Argentina and Brazil (PICE) in 1986, the Bilateral Treaty of Economic Integration, signed in 1988, and later the Economic Complementation Agreement, ACE 14, of 1990 within the scope of the LAIA (both still in force). Finally, it led to the creation of Mercosur in 1991, with the initial incorporation of Paraguay and Uruguay at the time of its founding and later of Venezuela and Bolivia, although the incorporation of the latter countries has not been yet fully completed. Together, all these commitments constitute the main core of a network of institutions and ground rules that support a strategic relationship with a clear South American projection. In any approach that transcends the purely commercial aspect they can be recognized as a valuable contribution to regional governance.

More than thirty years into a path that would be difficult to describe as linear or devoid of uncertainties and temptations, Mercosur, conceived as the current main institutional expression of this process -and even its symbol in the eyes of the respective citizenships and of the rest of the world- would seem to be facing strong criticism, not always sufficiently substantiated, even when considering its actual impact on reciprocal trade.

In this regard we should note that, from the point of view of many analysts and relevant actors, Mercosur would currently be at a crossroads (in the sense of confronting "an array of options where the choice is uncertain"; in relation to this see http://www.wordreference.com/), that sometimes would seem to have an existential dimension (why work together?) and not just a methodological one (how to work together?).

It is a crossroads that would need to be addressed through a frank and open discussion on the options for its future but also on the costs of backtracking. And it is a debate that should not be confined solely to the government level. On the contrary, it would require an active participation of all sectors of society -including of course the business sector- and the use of multidimensional and trans disciplinary approaches. It could not be successfully addressed if it was limited, for example, to the economic and trade dimension, such as it would seem to be the tendency of many approaches.

The background of this debate cannot be ignored. We are referring to the idea that many analysts have raised recently regarding the trend towards global turmoil, with its multiple and complex expressions such as the current confrontations in the Middle East and in the Euro-Asian space, with the epicenter in the crisis originated in Crimea and also involving Ukraine (see the last book by Henry Kissinger and the recent articles by Ian Bremmer and Javier Solanas included in the Recommended Reading Section of this Newsletter). These processes are currently in full development and their future projections are still uncertain, which strongly reminds us of what was pointed out, among others, by Dominique Mosi in his book "La Géopolitique de l´Émotion" (Flammarion, Paris 2008) and by Bertrand Badie in his latest book "Le Temp des Humiliés. Pathotologie des Relations Internationales" (Odile Jacob, Paris 2014).

Notwithstanding any other that may be considered relevant, the following are some suggested questions to include in the necessary debate. The answers to these questions should eventually drive an agenda on the future of the relations between Argentina and Brazil and, within this bilateral framework, of Mercosur, that helps to continue capitalizing on what has been achieved in thirty years of joint work:

• How to preserve the effectiveness and efficiency of a space of economic and trade preferences that also entails an incentive for shared productive development, at least in the favored sectors, as well as in the regional and global competitive insertion of businesses?
  
  
• How to stimulate the development of productive linkages that are sustainable, as well as other forms of cooperation, especially in the field of science and technological innovation?
  
  
• How to open new areas of joint action, for example in terms of energy sources and hydrocarbons, production and commercialization of food, and the use of the abundant natural resources?
  
  
• How to create conditions that encourage connectivity between the different national economic areas, especially through the development of physical infrastructure and trade facilitation agendas?
  
  
• How to facilitate an effective participation of civil society, particularly the youth, in the construction of a regional space that has an identity of its own and that provides future horizons for its citizens?
  
  
• How to reconcile a joint preferential commercial space with the requirements of the potential trade negotiation agendas that each of the two countries and their partners could eventually develop with other countries and regions?
  
  
• How to articulate the construction of a preferential economic space between the partners and a strategic relationship that endures over time with the actions that are being developed or attempted between other countries in the region, such as the Pacific Alliance and ALBA?

In this context, some of the following issues deserve particular attention. These are:

• The erosion of the economic preferences agreed in the Treaty of Asuncion of 1991 that could result from the proposals that are being developed in order to allow Mercosur countries that, due to their national interests, wish to sign other preferential trade agreements with third countries or regions.
  
  
• The requirements for modifications of existing legal instruments within the scope of Mercosur, in the event that one or more members wished to undertake bilateral negotiations with other countries or regions. In that case, would it be enough to amend Decision 32/00, as has been maintained? or would it be necessary to renegotiate the Treaty of Asuncion itself, given that the preferences there agreed involved the adoption and implementation of a common external tariff and, thus, trading as a group with other countries or regions, as has been attempted with the EU without much success and not just for reasons attributable to Mercosur or any of its member countries?
  
  
• The practical modalities that would allow threading a strategy of "convergence in diversity", recently proposed by the government of Chile, as a way to overcome trends towards divergent approaches between the integration spaces embodied in Mercosur and the Pacific Alliance.
  
  
• The participation of the countries of Mercosur and the region in the formulation of the proposals that some of the member countries could raise in the global forums in which they participate, as in the case of Argentina, Brazil and Mexico within the ambit of G20.
  
  
• The possibility of addressing joint programs of regional scope that facilitate the development of a common identity and greater mutual understanding, as could be a strictly regional version of the Erasmus program successfully developed within the sphere of the EU.

Recommended Reading:

• Baumann, Renato; Machado Oliveira, Ivan Thiago, "Os BRICS e seus vizinhos. Comercio e acordos regionais", IPEA, Brasilia 2014. Ver texto digital en: http://www.ipea.gov.br/.
  
• Bremmer, Ian, "Hacia un nuevo desorden mundial", en el diario "El País" de Madrid del viernes 26 de septiembre 2014, página 25, ver en: http://elpais.com/.
  
• Carmody, Patricio, "Política Exterior al Fin del Mundo. Argentina, Brasil y Chile en el Tiempo Democrático", Consejo Argentino para las Relaciones Internacionales -CARI-, Buenos Aires 2014.
  
• Casanova, Lourdes; Kassum, Julian, "The Political Economy of an Emerging Global Power. In Search of the Brazil Dream", International Political Economy Series, Palgrave MacMillan, London 2014.
  
• ESPRIT, "Le nouveau désordre mondial", Revue International N° 407, Paris, Août-Septembre 2014
  
• Ferrer, Aldo, "El empresario argentino", Capital Intelectual, Buenos Aires 2014.
  
• Foxley, Alejandro; Meller, Patricio (editores), "Alianza del Pacífico: en el proceso de integración latinoamericana", Corporación de Estudios para Latinoamérica (CIEPLAN) - BID, Santiago de Chile, marzo de 2014. Ver la versión digital en: http://www.cieplan.org/.
  
• Harford, Jim, "The Undercover Economist", Oxford University Press, Oxford - New York 2012.
  
• Harford, Jim, "The Undercover Economist Strikes Back. How To Run -or Ruin- an Economy", Riverhead Books, New York 2014.
  
• Kissinger, Henry, "World Order", Penguin Press, New York 2014.
  
• Levi Coral, Michel (editor), "La Unión Europea y América Latina. Relaciones entre bloques regionales e integración regional", Centro Andino de Estudios Internacionales, Universidad Andina Simón Bolivar, Corporación Editora Nacional, Quito 2014.
  
• Miranda Pineli Alves, André Gustavo de, "Os BRICS e seus vizinhos. Investimento direto estrangeiro", IPEA, Brasilia 2014. Ver texto digital completo en: http://www.ipea.gov.br/.
  
• Mandelbaum, Michael, "The Road to Global Prosperity", Simon & Schuster, New York 2014.
  
• Marques, Renato L.R., "Memorábilia", Ediçâo do autor, Rio de Janeiro 2013.
  
• Matus, Carlos, "Adios, Sr. Presidente", Colección Planificación y Políticas Públicas, Ediciones de la Universidad Nacional del Lanús, Remedios de Escalada (Lanús) 2007.
  
• OMC, "Argentina - Medidas que afectan a la importación de mercancías", Organización Mundial del Comercio (OMC), Informe del Grupo Especial, WT/DS438/R; WT/DS444/R; WT/DS445/R, Ginebra 22 de agosto de 2014, en: http://www.wto.org/.
  
• Padilla Pérez, Ramón (Editor), "Strengthening value chains as an industrial policy instrument. Methodology and experience of ECLAC in Central America", ECLAC - German Cooperation, Santiago de Chile, July 2014.
  
• Peña, Félix, "Las metodologías de la integración regional y la nueva realidad global: el caso latinoamericano", en Levi Coral, Michel (editor), "La Unión Europea y América Latina. Relaciones entre bloques regionales e integración regional", Centro Andino de Estudios Internacionales, Universidad Andina Simón Bolivar, Corporación Editora Nacional, Quito 2014, páginas 11 a 27.
  
• Priestland, David, "Merchant, Soldier, Sage", Penguin Books, New York 2014.
  
• Reid, Michael, "Brazil. The Troubled Rise of a Global Power", Yale University Press, New Haven and London 2014.
  
• Solana, Javier, "La vuelta a un mundo que nunca existió", en el diario "El País" de Madrid del martes 23 de septiembre de 2014, página 25, ver en: http://elpais.com/.
  
• UNCTAD, "Trade and Development Report - 2014", UNCTAD, Ginebra, 10 September 2014, en: http://unctad.org/.