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    | CHALLENGES FACED IN INTEGRATION PROCESSESA view from the perspective of Latin American countries.
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    | by Félix PeñaFebruary 2022
 
 English translation: Isabel Romero Carranza
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    |    | In other opportunities we have addressed the issue 
        of the different modalities of joint work between nations in the sphere 
        of international trade, especially if they are developed in the context 
        of integration and cooperation processes within the institutional framework 
        of the WTO.
       This is a question that has acquired greater relevance in light of 
        the often serious challenges that we are observing today at the global 
        level and in the different geographic regions in which international competition 
        is developing through the processes of economic integration. These are 
        challenges that sometimes exceed the economic aspect and often penetrate 
        deeply in the political and strategic spheres by bringing into play the 
        power relations between nations and even within nations themselves. They 
        remind us of other historical moments in which conflicts between countries 
        belonging to contiguous geographic regions led to war. In recent decades, some of the experiences of joint and institutionalized 
        work between contiguous nations originated, precisely, as a way of overcoming 
        existing collision courses between relevant players in the same region. 
        This was certainly the case of the process that finally led to the creation 
        of the European Union and, to a certain degree, also the case of the origins 
        of Mercosur. Three methodological issues seem to be the most relevant so that, 
        depending on how they are addressed, the current trend towards the possible 
        irrelevance of Mercosur can be reversed. These are: the methods for opening 
        the respective markets and their impact on international trade negotiations; 
        the institutional methodologies applied for the adoption of joint decisions 
        that translate into legal commitments; and the ones used to ensure that 
        an integration process is effectively guided by common rules. But to render a debate on Mercosur more engaging, it would be necessary 
        to insert it into a broader debate on the development of effective and 
        efficient methods for regional cooperation, which would make it possible 
        to harness all the institutional potential developed in the Latin American 
        region and in its sub-regions (South America, Central America and the 
        Caribbean. |  
   
    |  At present, economic integration processes face complex challenges. 
        This is undoubtedly the case of Mercosur. At the same time, innovative 
        methodologies are emerging in the joint work between nations of the same 
        geographic region. In Asia-Pacific, for example, this is the case with 
        the Regional Comprehensive Economic Partnership (RCEP), to which we have 
        referred in our January newsletter.  On previous occasions, we have addressed the issue of the different modalities 
        of joint work between nations, especially if they are developed through 
        integration and cooperation processes within the institutional scope of 
        the WTO and, therefore, of its rules (see our May 2021 newsletter). This is an issue that has acquired greater relevance in light of the 
        challenges observed today in the different geographic regions in which 
        international competition is developing through the processes of economic 
        integration and cooperation. These are challenges that often exceed the 
        economic dimension and, at times, even penetrate deeply into the political 
        and strategic spheres by bringing into play the power relations between 
        nations and even within nations themselves.  These challenges are reminiscent mostly of other historical times, when 
        conflicts between countries belonging to contiguous geographic regions 
        led to war. This was the case of the developments that took place during 
        the twenty years between the end of World War I and the beginning of World 
        War II (1918-1939).  It is a historical precedent that requires much attention today because 
        it can teach us something about the characteristics of the present time. 
        It is noteworthy because of the effects produced by changes in the distribution 
        of world power, especially in the degree of concentration of relative 
        power among the main nations, and because of the impacts produced by technological 
        changes. It is worth bearing in mind that, in recent decades, some of the experiences 
        of joint and institutionalized work between contiguous nations originated, 
        precisely, as a way of overcoming ongoing collision courses between relevant 
        players in the same region.  In this regard, the most notable case is the beginning of the process 
        that led to the creation of the present European Union through the introduction 
        of the Schumann Plan. The Frenchman Jean Monnet, who inspired and played 
        a key role in the whole process, was clear about the potential risks of 
        an international and European situation that could, once again, affect 
        relations between Germany and France, in the context of the already evident 
        clash course that had started to develop between the United States and 
        the Soviet Union. Monnet did not have academic studies but, as a businessman and for family 
        reasons, was knowledgeable of the international realities (for his biography, 
        thoughts and contributions, see his "Memoirs" written at the 
        end of his intense life, at the age of ninety. For more on Monnet, refer 
        to our October 2019 newsletter and the bibliography recommended in it). 
        Jean Monnet-together with Robert Schumann and Konrad Adenauer, among others-played 
        a decisive role in the conception of approaches that continue to have 
        great validity in today's international realities such as "de facto 
        solidarities", "pooling of resources", "working together", 
        and "common institutions and rules".  These are approaches that were also involved, although with huge differences, 
        in the process that led to the reversal of the collision course between 
        Argentina and Brazil, and which, under the political leadership of Presidents 
        Raúl Alfonsín and José Sarney, among others, led 
        to the initiation of the integration process that was later -and still 
        is -expressed in the process called Mercosur.  In practice, these are approaches that are often more relevant to understanding 
        how to address integration processes between nations than those that can 
        be derived only from concepts and categories coming, for example, from 
        economic theory. In South America, processes such as those being developed in Mercosur 
        and the Pacific Alliance are also easier for their citizens to understand 
        -with the previously mentioned approaches and, in particular, with the 
        "working together" approach.  On the contrary, in the language of international negotiations, the concepts 
        of "free trade zone" and "customs union" have a technical 
        connotation that makes them more precise for the formal commitments that 
        are adopted, but not necessarily when it comes to making citizens understand 
        their real scope.  It is precisely Mercosur that is currently undergoing conceptual debates 
        that may not be easy for the general public to understand. These debates 
        require a good command of the theoretical aspects of what is supposed 
        to be an economic integration process that is effective, efficient and 
        credible for each participating country and, above all, for its own citizens. In this regard, three methodological issues seem to be the most relevant 
        so that, depending on how they are addressed, the current trend towards 
        Mercosur's irrelevance may be reversed (on these trend see, among others, 
        the publication by Marcela Cristini and Guillermo Bermudez, mentioned 
        below as recommended reading). Such methodological issues are: those employed for opening up the respective 
        markets and their impact on international trade negotiations; the institutional 
        ones applied for the adoption of joint decisions that translate into legal 
        commitments; and those used to ensure that the integration process is 
        effectively guided by common rules. But, above all, in order to make the necessary debate on the future of 
        Mercosur more accessible, it would be necessary to insert it into a broader 
        debate on the development of methodologies that would help harness all 
        the institutional potential that has been developed in the Latin American 
        region and in its different sub-regions, such as South America, Central 
        America and the Caribbean. It will also require, as we have pointed out on other occasions, tapping 
        the full potential of LAIA, including its instrument of partial scope 
        agreements. In addition, it will require taking full advantage of the recent Asia-Pacific 
        experience in the process that led to the conclusion of the RCEP negotiations 
        (on the RCEP, see the December 2019 and January 2022 editions of our newsletter, 
        including their bibliographical and documentary references).  The issue of the regime of origin in the RCEP and its link with production 
        chains of regional and global scope will require particular attention. 
        We will return to this relevant issue at a later date. |  
   
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    | Félix Peña Director 
        of the Institute of International Trade at the ICBC Foundation. Director 
        of the Masters Degree in International Trade Relations at Tres de Febrero 
        National University (UNTREF). Member of the Executive Committee of the 
        Argentine Council for International Relations (CARI). Member of the Evian 
        Group Brains Trust. More 
        information. |  
 
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