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TRANSCRIPT
The role of external actors upon regional integration: the US, the EU and
Mercosur.1
Andrea Ribeiro Hoffmann & Regina Kfuri
1-Introduction
This paper analyzes the role of major external actors upon processes of regional
integration. It focuses on the role played by the United States (US) and the European
Union (EU) upon the creation and development of Mercosur.
Theories of regional integration tend to undermine the influence of exogenous factors,
both structural and unit level, such as external actors.2 Classical integration approaches
such as federalism, neofuncionalism and intergovernmentalism, and more recent
approaches such as liberal-intergovernmentalism and multilevel governance, try to
explain regional integration mainly with endogenous factors (Kelstrup 1998 , Diez &
Wiener 2004). This might happen because these approaches explicitly, or not, were/are
mostly concerned with the creation and development of the EU, often considered a
unique case (Caporaso et al 1997). Attempts to analyze other processes of integration
with theoretical frameworks, and to develop comparative studies in regional integration,
such as by neofunctionalism in the 60s, were never very successful (Nye 1968,
Lindberg 1970). Andres Malamud showed how inappropriate these approaches are to
study Mercosur for instance (Malamud 2004 and 2005). Philippe Schmitter even argues
that in order to revive comparative studies in regional integration, new theoretical
approaches must be developed (Schmitter 2007). It follows that theories of regional
integration do not seem to be adequate to be used to study the role of major external
actors upon a “non-EU” process of integration such as Mercosur.
Apart from approaches of regional integration, scholars of International Political
Economy (IPE) got interested in explaining the so-called 2nd wave of regionalism in the
1990s (Breslin et al 2002, Hettne, et al 1999, Hurrell & Fawcett 1995, Mansfield & 1 Prepared to be presented at ECPR 2007, WORK IN PROGRESS, PLEASO DO NOT QUOTE 2 Although the European Union is not a Nation State, it is considered to be an actor in international politics for the purpose of this article. About the international actorness of the EU see for instance Bretherton & Vogler 1999 and Ginsberg 1999.
1
Milner 1997, Vaeyrynen 2003). As Stephan Schirm (Schirm 2002) states, these
approaches are good at explaining why so many processes of regional integration started
or were strengthened in particular moments in time (i.e. in the 60s and in the 90s), but
they are not able to explain differences between processes of integration regarding, for
instance, their institutional design, efficacy or legitimacy. Although each IPE
perspective emphasize a particular variable or causal process, their common ground is
to consider economic globalization as the main driving force behind processes of
regional integration, or, “the regionalization of the world economy”. One unresolved
question of IPE approaches is the relationship between globalization and political
agency, specially that of Nation-States (Rosamond, 2000:180). Most of these
approaches would tend to undermine the potential differences between the role of the
US and the EU upon Mercosur, because both actors are seen as being in the same side
of globalization, they are the backbone of the liberal advanced capitalist world, host of
most multinational companies. One recent exception might be the approach developed
by Walter Mattli (Mattli 1999), which seems to present an adequate analytical
framework to explain the role played by the US and the EU upon the development of
Mercosur.
As most IPE scholars, Mattli attributes the impetus for integration to market actors,
however, as highlighted by Rosamond, the “added value of his contribution lies in his
thoughts about the external effects of regional integration. Actors excluded from the
initial delineation of the region are likely to lose market access and, therefore, to
undertake compensatory action. This has two historical variants. The first is to seek to
join the integration scheme, an option. The second is to set up a rival regional
organization” (Rosamond, op.cit. 184). Following Mattli, the development of Mercosur
would need to take into consideration not only the relevant market actors at the micro
level, but also, the fact that it was created after the EU, and NAFTA. In other words,
the EU would have had the effect of stimulating Mercosur to develop as a rival bloc,
while the US (through its engagement in NAFTA) could have had the same effect, or,
alternatively, the effect of stimulating Argentina, Brazil, Paraguay and Uruguay to join
it. As it will be seen below, the strategy advanced by the US to create the FTAA was
exactly from the gradual expansion of NAFTA, through bilateral agreements with the
newcomers. Such as the EU, NAFTA could have gone through a process of
enlargement. The reasons why NAFTA did not evolve into a FTAA, or if it will in the
2
future are explained by Mattli with the role played by the hegemon power (Mattli, 1999:
50-7). In the case of the Americas, one important question would be the definition of
whether there is only one hegemon in the whole hemisphere, or whether Brazil can be
considered to be an hegemon in South America.
The existence and role of global and regional hegemon powers is also addressed by
Realist approaches of International Relations. These approaches do not attribute much
importance to processes of regional integration, since they are seen as temporary
phenomena (Mearsheimer 1990). Their “branches” intergovernamentalism and its
variations are more concerned with endogenous factors, or with the EU, as mentioned
above. Structural realist approaches, however, cannot be dismissed: they offer an
explanation based on the balance of power and global/regional hegemons to the creation
and development of processes of regional integration. Such as in the case of IPE
approaches, they are not good at explaining particularities, but they claim to foresee
broad trends of integration and disintegration among Nation-States in the long term. As
Mattli´s, realist approaches might be useful to understand the role played by the US and
the EU upon the development of Mercosur.
It is beyond the scope of this paper to present a hard test of alternative hypotheses
derived from the relevant approaches mentioned above. The paper does not analyze the
variation of the dependent variable, i.e. the level of integration of Mercosur, for the
period, it, therefore, can not even affirm if there is a correlation between the chosen
independent variables and the successes or failures of the process of integration. It only
presents a preliminary empirical research which could be used to test such hypothesis.
The empirical research consists of a comparative analysis about the efforts done by the
US and the EU to try to influence the processes of integration in Latin America, in
particular, of Mercosur. In order to do this, the paper, first, provides a historical account
of policies in favor and against regional integration in Latin America3 in the external
relations of the US and the EU, and finally, highlights the common trends and the
differences in the approaches of the US and the EU towards regional integration in Latin
America, in general, and Mercosur in particular.
3 By Latin American integration this paper means processes of regional integration within Latin America, be it a sub-regional process, such as Mercosul, or regional process encompassing the whole region such as the ones advanced by the project of the Free Trade Area of the Americas.
3
2-Latin-American integration in the US foreign policy
The end of the Cold War allowed the US to change the emphasis of its foreign policy
towards Latin America from security to economic and normative issues, such as
democracy (Purcell 1997). The 1990s witnessed the so-called “second wave of
regionalism”, with the strengthening of the process of integration in Europe with the
conclusion of the Treaty of Maastricht and the creation of the European Union in 1992,
and the revival and creation of new blocks around the globe (Herz & Ribeiro Hoffmann
2004).
In the Americas, US President George Bush announced the Enterprise for the Americas
Initiative in 1990, whose main pilar was supposed to be a free trade area in the whole
region. In 1994, the project to create the Free Trade Area of the Americas (FTAA) was
approved by 34 Presidents present to the Cupula de Miami.4 In the same year, the US
became part for the first time in history of a process of regional integration: the North
Free Trade Agreement (NAFTA).
Feinberg (Feinberg 2003) highlights that the FTAA project represented a change in US
foreign trade policy. From the end of the Second War until the 1990s, it had promoted
free trade in universal and non-discriminatory basis, in the context of the GATT. For
decades, the US had been hostile to regional arrangements, seen as discriminatory and
less efficient than the multilateral negotiations, and until the 80s, it had only two free
trade areas, with Canada and with Israel, both considered special cases.
Payne argues that new regionalism offered the US a device through which to negotiate
the tensions generated by global liberalization, as well the opportunity to construct a
new framework for inter-American relations (cited in Grugel 2004: 606). Grugel adds
that the result of this policy change was the reconfiguration of the hemisphere relations,
4 The Summit of the Americas Process hold its Second Meeting in Santiago (1998), Third in Quebec (2001), Fourth in Mar del Plata (2005), and a Special Meeting took place in Monterrey in 2004. For more see http://www.summit-americas.org. About the FTAA process see http://www.sice.oas.org/ftaa_e.asp and http://www.ftaa-alca.org/
4
“as the US sought to position itself as the hub of increasing privatized and open
economies” (op.cit).
For many actors from civil society, and scholars such as Pinto & Guimaraes (Pinto e
Guimarães 2005) the Initiative of the Americas signifies the revival of the Monroe
Doctrine of 1823, which declared Latin America as a zone of influence of the US. As
the FTAA project advanced, and agreements started to be concluded, a movement
against it became gradually perceptive. 5
According to the Declaration of Miami, the FTAA should be built upon the already
existing regional agreements. This strategy was reinforced in the following ministerial
meetings in Denver and Cartagena, but as Moniz Bandeira states, the US preferred to
develop the FTAA from an expansion of NAFTA, by the incorporation of each new
state in bilateral negotiations. Chile was supposed to be the first country in this process
(Bandeira, 2004). In 1991, 26 Framework Agreements between the US and Latin
American Countries were signed (ref)
As Bandeira, Feinberg emphasizes that the option to regionalism, however, turned
gradually into an option to bilateralism: “the rush to regionalism soon was joined by a
gradual slippage into bilateralism. At the Miami Summit, the three NAFTA amigos
announced their intention to negotiate the admission of Chile, as a first step toward
expanding NAFTA into the hemisphere-wide FTAA negotiations, that morphed into
bilateral talks” (op.cit: 1021).
The Brazilian government (Collor administration) took, in the beginning, a favorable
position, but defended that the negotiations should be conducted in bloc, and not
bilaterally, as a means to counterbalance US negotiation power. In this context,
Argentina, Brazil, Paraguay and Uruguay signed a Framework Agreement with the US
in 19... in the format 4+1. Albuquerque states that according to officials who followed
closely the negotiations of the “4+1 Agreement”, Brazil had to do greater concessions in
order to reach a consensus with its partners, but considered it to be a success since it
managed to negotiate it in bloc. The result was that the US in practice, and quite
5 One of the main NGO´s network against it was the Continental Platform for Latin America (http://www.cidse.org/)
5
unexpectedly, recognized an entity that was not even existent yet, Mercosur
(Albuquerque 1996:11)
It was in this context that one of the priorities of the Brazilian foreign policy became
the strengthening of Mercosur. In 1996, Chile and Bolivia concluded free trade
agreements with the bloc, and also became “associated countries”.6 The incorporation
of Chile was very important since it was considered to be the most stable and
development economy in the region. In early 1990s it showed interest to become part of
NAFTA, but the US Congress failed to approve a fast track to President Clinton
negotiate the agreement.
The strategies defended by the US and Brazil to create the FTAA (expanding NAFTA
through bilateral agreements vs building blocks) became more and more politicized.
The US and Mercosur began to negotiate agreements with other members of the Andean
Community: Venezuela, Colombia, Peru e Equator. Brazilian interest was to build a
concentric circle around Mercosur, encompassing other members of ALADI in South
America to create a South American Free Trade Area (ALCSA). This strategy was
promoted by Brazilian Foreign Minister Celso Amorim during the Itamar Franco
administration (1992-1995). According to Amorin, the ALCSA idea had a double
meaning since it indicated that Mercosur would not be an end in itself, that it was a step
towards a greater process of integration, but also, that the emphasis to Brazil was the
South America, and not Latin America. (Moniz Bandeira, 2004, p. 114). 7
According to Bernal-Meza (Bernal-Meza 1998), the US began to be concerned with
Mercosur already in the early 90s. Some reasons were the perception that it was loosing
its relative position in the region to the EU, and the that Brazil was aspiring greater
influence in the region and in the world politics in general. Bandeira argues that this led
the Clinton administration to antagonize FTAA and Mercosur (Bandeira, 2004, p.116).
He quotes a statement of the US Secretary of State, Madeleine Albright, in a speech to
the Committee of External Relations of the Senate, when she referred to Mercosur as
“prejudicial to the US interests”. The statement was removed from the official version
6 About the status of associate countries see Herz & Ribeiro Hoffmann 2004:?? 7 For the foreign policy of Fernando Henrique Cardoso and Luis Inacio da Silva administrations towards integration see for instance Vigevani & Cepaluni (2007) and Lima (2003).
6
of the statement announced by the speaker of the Department of State, but it as linked to
the press (Moniz Bandeira, 2004, p. 132) “The perception in Washington was that
Mercosur presented a menace to the creation of the FTAA. (Moniz Bandeira, 2004,
p.134, free translation by authors).
The events of September 2001 led to a new change in the US foreign policy, and the
deviation of attention from Latin America. The FTAA process, that was already facing
opposition from the civil society and suffering from the lack of agreement between the
US and Brazil, was put into a hold. Since then, the Americas became a “patchwork of
bilateral agreements” (Grugel 2004: 606)
In 2002, Bush managed to get a fast track from the Congress, renamed as Trade
Promotion Authority (TPA). Since then the US has intensified its efforts to conclude
bilateral agreements with Latin American countries. After 15 years, in 2003, a
agreement with Chile was signed.8 In the same year negotiations were concluded
with Central American countries, creating the US-Dominican Republic-Central
American Free Trade Area (US-DR-CAFTA). The agreements were already ratified by
most parts, except Dominican Republic and Costa Rica, where they have been resisted
by the opposition and social movements. 9
Negotiations were also concluded with Peru, Colombia and Panama, but the agreements
are not yet in force. Peru ratified it, but not Colombia and Panama. The US Congress
did not approve any of them, and the topic became highly political. The Democrats,
who have a majority in the House of Representatives since the mid-term elections of
November 2006 have an overall more protectionist attitude, some oppose free-trade
agreements in general, others say they can support them if they include tough labor and
environmental provisions (Mercopress Jan 29, 2007). The majority chief in the Senate,
Democrat Harry Reid said recently that the FTA with Peru had greater chances of being
ratified, although he admitted not favoring the signing of this kind of agreement
(Mercopress Feb 9, 2007).The US Secretary of State Condoleezza Rice is making an
effort to convince the Congress, and stated recently that “FTAs are an essential 8 About the negotiations and the contents of the agreement see http://www.bilaterals.org/rubrique.php3?id_rubrique=20 9 About the debates regarding the ratification in Costa Rica see http://www.bilaterals.org/article.php3?id_article=7225
7
instrument of President George Bush´s foreign policy and during his time in office
Congress has ratified agreements with twelve countries” (Mercopress Feb 9, 2007). She
also affirmed that Bush administration considers free trade a powerful instrument to
promote development, to help reduce poverty and ensure democratic governance (ibid).
In this regard, the White House confirmed already that it will request Congress to renew
the TPA that expires in July 2007 (Mercopress Jan 29, 2007). The situation in Colombia
is even more polemic. A very critical statement against the Agreement from Joseph
Stigliz on the 5th of February gave strength to the opposition argument that the
agreement is not fair nor free, since agriculture is not contemplated.10
Many specialists, such as Caro (Caro 2006), argue that after concluding agreements
with two countries from the Andean Community, the US seeks now to conclude
agreements with Uruguay and Paraguay. In January 2007 the US concluded a
Framework Agreement with Uruguay that does not established a free trade area, but can
be considered a first step in that direction. The rapprochement with the US is taking
plane in a moment of dissatisfaction of Uruguay with Mercosur. Together with
Paraguay, it has been criticizing the block for being slow in promoting policies to
diminish the internal asymmetries. In the ceremony of conclusion of the Agreement,
U.S. Trade Representative Ambassador John Veroneau, reaffirmed US intention to
establish bilateral agreements with Latin-American countries: “United States is very
proud of our strength the economic ties in South America, as many of you may know, we
have free trade agreements with Chile, from where I just came, with Central American
countries and the Dominican Republic, and we have three recently completed free trade
agreements with Peru, Colombia and Panama that we look forward to the U.S.
Congress passing in the near future.”11
Recently, the former US Trade Representative, Robert Zoellick, published an article at
the Wall Street Journal proposing the creation of a Association of American Free Trade
Agreements (AAFTA) as an alternative project to the defunct FTAA. Regarding the
project, he stated that:
10 http://www.bilaterals.org/article.php3?id_article=7069 11 Available at http://uruguay.usembassy.gov/usaweb/2007/07-131EN.shtml
8
“The AAFTA could shape the future of the Western Hemisphere, while
offering a new foreign and economic policy design that combines trade,
open societies, development and democracy. In concert with successful
immigration reform, the AAFTA would signal to the Americas that,
despite the trials of war and Asia's rising economic influence, U.S. global
strategy must have a hemispheric foundation.
Successful and sustainable international strategies must be constructed
across administrations. Ronald Reagan called for free trade throughout the
Americas, opened U.S. markets to our Caribbean neighbors, and
completed an FTA with Canada. George H.W. Bush completed
negotiations for a North American FTA, offered trade preferences to the
Andean countries, negotiated peace in Central America, and freed
Panama. Bill Clinton secured the passage of NAFTA, launched work on a
Free Trade Area of the Americas, and backed Plan Colombia.
George W. Bush enacted FTAs with Chile, the five states of Central
America and the Dominican Republic. He also completed FTAs with
Colombia, Peru and Panama. If Congress passes these agreements, the
U.S. will finally have an unbroken line of free trade partners stretching
from Alaska to the tip of South America. Not counting the U.S., this free
trade assembly would comprise two-thirds of both the population and
GDP of the Americas.
The AAFTA would draw together these 13 partners to build on the gains
of free trade. It could also include the island states of the Caribbean Basin
Trade Partnership Act. Starting with a small secretariat, perhaps in Miami,
the AAFTA should advance hemispheric economic integration; link
development and democracy with trade and aid; improve working and
environmental conditions; and continue to pursue the goal of free trade
throughout the hemisphere. It might even foster cooperation in the WTO's
global trade negotiations.” (Zoelick 2007)
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Mostly important, he refers directly to the ever clearer division in South America: “The
U.S. cannot afford to lose interest in its own neighborhood. The pied pipers of populism
in Latin America are taking advantage of the genuine frustrations, especially in
indigenous communities, of people who have not been able to climb the ladder of
opportunity. We should not let these populists dictate the debate.” (Zoellick 2007).
One of the persons to which he is referring to is obviously President Hugo Chavez of
Venezuela. Chavez proposed a project together with Fidel Castro to counteract the
FTAA in December 2004 called Bolivarian Alternative for the Americas (Alternativa
Bolivariana para las Americas - ALBA).12 Bolivia joined it in April 2006, briefly after
the election of President Evo Morales. The same day, the three countries signed an
Peoples Trade Treaty (Tratado de Comercio entre los Pueblos).13 Nicaragua joined in
January 2007, and Dominica, Saint Vincent and Antigua in February.
Another project of regional integration which is being institutionalized in the region is
the South American Community of Nations (Comunidade Sul-Americana de Nações –
CASA). Its founding treaty was concluded in December 2004 in the city of Cusco, Peru,
by the Presidents of twelve South American countries (all, except the French Guiana).
The first CASA Presidential Meeting took place in Brasilia, Brazil, in September 2005,
and the Second in Cochabamba, Bolivia, in December 2006. 14 The process constitutes
of a commercial convergence between Mercosur and the Andean Community (CAN),
Chile, Surinam and Guyana, and one of its main axes is the support to the Initiative for
South American Infrastructure Integration (Integración de la Infraestructura Regional
Suramenricana – IIRSA), launched in August 2000 during the First Meeting of South
American Presidents. For the period of 2005-2010, 31 projects were approved, and most
are being implemented. 15
12 For the full text of the agreement and more information about ALBA see http://www.alternativabolivariana.org/ 13 About the difference between the Peoples Trade Treaty and a Free Trade Treaty see http://www.bilaterals.org/article.php3?id_article=4617 14 For more information see http://www.comunidadsudamericana.com/ 15 For more details see http://www.iirsa.org/
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TABLE 1: Free Trade Agreements among the US and Latin American countries
Country Date of signature Entry into force
Mexico+ December 1992 January 1994
Chile June 2003 January 2004
Dominican Republic* August 2004 No yet
El Salvador* May 2004 December 2004
Honduras* May 2004 March 2005
Guatemala* May 2004 March 2005
Nicaragua* May 2004 October 2005
Costa Rica* May 2004 Not yet
Peru December 2005 Not yet
Colombia February 2006 Not yet
Panama December 2006 Not yet16
Uruguay
Source: Adapted from data at SICE (http://www.sice.oas.org/Trade/usa_e.ASP) and
Bilaterals.org (http://www.bilaterals.org)
+together with the US and Canada, Mexico belong to the North America Free Trade
Area (NAFTA)
* together with the US these countries belong to the US-Dominican Republic-Central
American Free Trade Area (US.DR-CAFTA)
16 About the debates regarding the ratification in Panama seehttp://www.bilaterals.org/rubrique.php3?id_rubrique=139
11
3-Latin-American integration in the European Union foreign policy17
3.1-The EU foreign policy towards Latin America
EU tendency to support processes of regional integration elsewhere, and relations with
other collective actors has been receiving attention in the literature (Grugel 2004; ref).
Some scholars are developing frameworks to study the characteristics and consequences
of birregional relations, or “inter-regionalism” (Schmitter & Malamud 2007).
This tendency became noticeable from the mid-to-end of the 80s, until then, EU official
policy towards Latin America consisted mainly of bilateral commercial treaties, the so-
called “First Generation Agreements” 18 , such as the ones concluded with Argentina in
1971, Uruguay and Brazil in 1973, and Mexico in 1975. However, one example of
support given by the EU to collective actors in Latin America still in the 70s was the
Inter-Parliamentary Dialogue between the European Parliament and the Latin American
Parliament (Parlatino). The Dialogue was very active and was replaced by the Euro-
Latin American Parliamentary Assembly (EUROLAT) in 2006. 19
In the mid-to-end 80s, the EU began to develop a new strategy to act in the international
politics. The interesting to note is that the approach was regional, i.e. interests and
policies were not defined for each country individually, but for regions or sub-regions
when existent. In the case of Latin America, the first relevant document was
Communication from the Commission to the Council named ‘Orientations for a
strengthening of the relations between the Communities and Latin America’ (COM (84)
105). This document set out proposals to promote closer cooperation in specific areas
and access of Latin American countries to the European Investment Bank (EIB). Also in
1984, the Institute for European-Latin American Relations (IRELA) was created to
promote interregional relations with support of the European Commission and the
17 This session relies heavily on the publication Ribeiro Hoffmann (2002), although it modifies the emphasis and updates empirical information. The term foreign policy means here policies relating to Latin America of all kinds, both regarding the 1st and 2nd pillar. The term UE is used also for EC and EEC for simplification. 18 What characterize First Generation Agreements are their conventional bilateral and technical structure and their reference to possible reciprocal cooperation. In practical terms, however, these treaties only extended the Most Favoured Nation (MFN) status to its signatories. See Lamothe, 1996, p.650; Calderón, 1996, p.682. 19 See http://www.europarl.europa.eu/intcoop/eurolat/default_en.htm
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European and Latin American Parliaments.20 In this context, the second round of
agreements concluded with Latin America already included some with other blocs, such
as the Andean Pact (1983), and the Central American Common Market (1986). 21
In 1986, the Commission sent a communication to the Council on the state of affairs in
Latin America and proposals for the development of a new policy, based on the
recognition of the heterogeneity of the region, and in support of the sub-regional
integration processes (COM (86) 720). The Council responded supportively and during
the Hague Summit, in June, declared its interest in strengthening the bi-regional
relations, emphasizing the new dimension of Latin America in the Community given by
the accession of Portugal and Spain.
After joining the EU, Spain assumed a very active role in promoting Latin America,
even if the concept of Spain as a ‘bridge’ between Latin America and Europe, fostered
by then Foreign Minister Fernando Morán, and based on the concept of ‘Hispanidad’ -
stressing common cultural values-, had to be replaced by the more modest role of
‘catalyst for change and supporter’ of Latin American interests. Spain managed to get
key Latin America-related positions into the European institutions, such as the
Commissioner for Latin American affairs Abel Matutes, in 1989, and the Commissioner
for development cooperation Manuel Marin, in 1993.22 Portugal has also had a long
term special relationship with Latin America but its links have been more restricted to
Brazil. Within the EU, Portugal joined to a large extent the Spanish effort to promote
closer relations with Latin America, but with lesser “enthusiasm”. As in the context of
the Iberoamerican Summit (see below), Portugal showed some reluctance in joining 20 IRELA was closed down in 2002 due to allegations of financial misconduct. 21 The Andean Pact was created in 1969 between Venezuela, Colombia, Equator, Peru and Bolivia, and the Central American Common Market was originally created in 1960 between Guatemala, El Salvador, Honduras, Nicaragua and Costa Rica and revitalised after the Central American crisis, when Panama became a member as well. 22 The increased interest of Spain to develop closer relations with Latin America began under the regime of General Franco. The consensus on the priority accorded to Latin America among Spanish political parties is reflected in the Constitution of 1978, in which Art.56.1 of Title II states that “As a Chief of State and the symbol of its unity and permanence, the King shall moderate the regular functioning of its institutions and assume the highest representation of the Spanish State in international relations, particularly with the nations of its historical community…” with “historical community “ referring both to Europe and Latin America. These priorities are reflected in the structure of the Spanish Foreign Ministry, which created, in 1985, the Secretariat of State for International Cooperation and for Iberoamerica, alongside with its other two divisions, the Secretariat of State for the EC, and the General Secretariat of Foreign Policy. For more about relations between Spain and Latin America see for instance, Schumacher, 1995; Berrocal, 1981; Guzman, 1981; García, 1996, pp.707-711; Baklanoff, 1996, p.110; Atkins, 1995, pp.89-90; Durán 1997; Cavalcanti 1994, 1996.
13
what it saw as primarily a Spanish initiative, which might be a legacy of its historical
fear of remaining in the shadow of its bigger neighbour.23
In 1987, another bi-regional dialogue was created, the Rio Group Dialogue, established
as a development of the success of the Dialogue of San Jose, but with the main
difference that is was not created to solve a crisis situation, but rather to establish a
permanent forum for political dialogue. The Rio Group Dialogue was institutionalised
in 1990 by the Declaration of Rome, and turned out to be the main forum for meetings
between the EU and Latin America at the ministerial level, where security but also
economic issues are often discussed.24
In 1993, the European Investment Bank was authorised to finance projects in Latin
America and in 1995, the Madrid European Council adopted the document ‘European
Union and Latin America: the present situation and prospects for a closer partnership
1996-2000’ (COM (95) 495), proposed by the Commission, in which the EU advanced
a new strategy for its relations with Latin America, based on a differentiated approach
in correspondence to the necessities of each country or sub-region.
In the 90s, a new round of agreements (Third Generation) was signed with individual
countries: with Argentina and Bolivia in 1990, Venezuela and Uruguay in 1991, Chile
in 1990, 1996 & 2002, Mexico 1991 & 1997, Paraguay and Brazil in 1992; and sub
regions, with the Andean Community and Central American Common Market in 1993,
and Mercosur in 1995. Negotiations with Mercosur for a new (association) agreement
started in 1999. The main new aspects of these agreements were that they were broader 23 A major multilateral cooperative initiative including Portugal and Brazil is the Community of the Portuguese Speaking Language Countries (CPLP), created in 1996. The idea came up in 1989 during the First Meeting of the Heads of State and Government of the Portuguese Speaking Countries in Sao Luis, Brazil, when the Portuguese Language International Institute, based in Cidade da Praia, Cabo Verde, was also established. The Community, on the contrary of what its name suggests, does not focus only on linguistic matters; its objectives include political-diplomatic coordination and economic cooperation. It has a legal personality, an institutional framework and a budget financed by the member-states and private contributions to support the implementation of its objectives. Some of its achievements include cooperation with Timor-Leste, the mediation in the conflict in Guine-Bissau in 1998; the forgiveness of the external debt of Mozambique vis-à-vis Brazil in 2000, and the development of projects against AIDS, and transfer of technology. About the CPLP see Saraiva, 2001, and for a general historical background of the relations between Brazil and Portugal see Magalhaes, 1999 and Cervo & Magalhaes, 2000. 24 The Rio Group was created in 1986 by Brazil, Argentina, Paraguay, Uruguay, Colombia, Mexico, Peru and Venezuela as an intergovernmental group to promote peace, democracy and integration of Latin America. Bolivia, Chile, Equator and Panama jointed it afterwards. For more see for instance Saraiva, 1996, ch.6. For the final declaration of the meetings until 1996 see IRELA, 1996, and EU DG External Relations homepage.
14
in scope and included political conditionality regarding democracy, the environment
and human rights by means of the so-called democracy clause, and they could be
renegotiated with total flexibility, as set out in the so-called ‘evolutive clauses’.25
Third Generation Agreements must be seen in the context of the creation of a vast
network of institutionalised relations in the EU since the beginning of the 1990s. The
EU has signed agreements with most countries in the world under the name of
cooperation, association, partnership, ‘European’ agreements, etc. The particularities of
the agreements with Latin American countries are best understood when contrasted with
the ones signed with other countries or regions. Although they are all very similar in
structure, and contain the democratic and the evolutive clauses, while the agreements
with the ACP, CEE, former Soviet and Mediterranean countries contained from the
beginning specific legal commitments regarding topics such as trade in goods,
competition, etc., the agreements with Latin American countries were originally
“empty”. 26 Some of these agreements, such as the one with the Andean Community,
remained without substantial commitments, but others, such as those with Mercosur,
Chile and Mexico were “filled” later, either by the conclusion of a new agreement, such
as the one with Chile of 2002 and the one under negotiation since 1999 with Mercosur,
or straight in the same agreement such as the case of Mexico, with the incorporation of
Decision 2/2000, promoting the liberalisation of trade in goods, and Decision 2/2001,
promoting liberalisation of trade in services and FDI.
25 The agreements with Mexico of 1997 (after the incorporation of Decisions 2/2000 and 2/2001), Chile of 2002, and the Association Agreement with Mercosur under negotiation since 1999 are sometimes referred as a 4th generation, since they include FTAs, unlike the other agreements. See Lamothe, 1996, p.651; Calderón, 1996, p.682; García, 1996, pp.725-732 CEPAL, 1999, p.8; COM (95) 216 final; Devlin et al, 2002. 26 For this distinction and more details see Torrent, 1998, p.213-228. According to this author, the logic behind the conclusion of empty agreements is their political meaning. One political reason pointed out as for the conclusion of these agreements is that they were seen as a strategy by the EU to reinforce its presence in the world and consolidate the international legal personality of the Community as distinct from its Member-States vis-à-vis 3rd Parties. Another reason is that these agreements attended to the interests of the Commission to expand its competences and to the Council’s to justify its work, since most agreements - full or empty - created bilateral institutional arrangements such as joint Committees, Commissions and Sub-Commissions which meet periodically to manage the relations. In addition, this close management is also useful for the EU in that it is used as a basis for the establishment of unilateral policies of development cooperation. Although they are legally independent from the agreements, the fact that they are managed together contributes to the (mis)perception of 3rd Parties that the cooperation programmes owe their existence to the agreements and were therefore negotiated, instead of unilaterally decided and implemented.
15
Table 1: EU Bilateral (and Bi-regional) Agreements
Type Partner
and date of
conclusion
Legal
commitmen
ts
Trade Treatmen
t of
foreign
firms
Capital
movements
Financi
al
protocol
Cooperati
on
Andean
Community
1993
No no no no
Cooperati
on
CACM
1993
No no no no
Cooperati
on
Argentina
1990
No no no no
Cooperati
on
Uruguay
1991
No no no no
Cooperati
on
Brazil
1992
No no no no
Cooperati
on
Paraguay
1992
No no no no
Cooperati
on
Mercosur
1995
no no no no
Associatio
n
Mercosur
under
negotiation
since 1999
FTA goods
and services
Probably
yes
Probably
yes
Probabl
y no
Cooperati
on
Chile 1991,
1996
no
no no no
Associatio
n
Chile 2002 FTA goods
& services
yes yes no
16
Cooperati
on
Mexico
1991
No no no no
Associatio
n
Mexico
1997
FTA goods
& services
yes yes no
‘
European’
CEEs FTA
asymmetric
al calendar
National
treatment
yes Non
quantifie
d,
mention
s
PHARE
Partnershi
p & Coop
(PCAs)
Russia 1994
Ukraine199
4, Belarus
1995
MFN National
treatment
yes Non
quantifie
d,
mention
s TACIS
Euro-Med
Associatio
n
Tunisia
1995, Egypt
2001,
Lebanon
2002, etc
FTA
asymmetric
al calendar
confirm
GATS
obligation
s
FDI Non
quantifie
d does
not
mention
MEDA
Lome-
Cotonou
ACP Non-
reciprocal
preferences
(WTO
waiver)
Non
discrimina
tion
no Quantifi
ed from
EDF
funds
Source: Based on Torrent, 1998, Ch.8 and updated by author.
Apart from the development of the relations with specific countries and sub-regions in
Latin America, in the end of the 90s the EU developed an approach to Latin America as
a whole. In 1999 the Commission prepared a document entitled ‘Prospects of a new
association - European Union/Latin America in the 21st century’ (COM (99) 105),
which provided an overview of bi-regional relations, and proposed the main objectives
17
of the EU for the ‘First Summit of European Union-Latin American-Caribbean Heads
of State and Government (EU-LAC Summit) to be held in Rio de Janeiro in June that
year.
During the First EU-LAC Summit, the 48 participant states signed the Declaration of
Rio containing 69 points about the general principles which should guide the bi-regional
relationship in the political, economic and cultural spheres. The Declaration also created
a bi-regional group, which should meet regularly, and contained a Plan of Priorities to
Action establishing 48 priorities for the implementation of cooperation programmes.
Negotiations for the conclusion of a trade liberalisation agreement with Mercosur, and
one with Chile were launched. A Second Summit of European Union-Latin American-
Caribbean Heads of State and Government took place in Madrid in 2002, a Third in
Guadalajara in 2004, and a Fourth in Vienna, in 2006.27 In the documents approved and
declarations the EU always emphasise the importance of the sub-regional integration
processes.
3.1- The EU foreign policy towards Mercosur
The EU foreign policy towards Mercosur evolved initially in the framework of its
policy towards Latin America, but has progressively received a different treatment. On
one hand, it is considered an emergent market together with Chile and Mexico, and on
the other hand, it is seen as the most successful project of regional integration, with a
special appeal to the European Union, who sees it as a receptive region to implement its
“integration model”. 28
The first treaty the EU signed with Mercosur was the Inter-Institutional Cooperation
Agreement between the European Communities and Mercosur of 29th May, 1992. This
agreement was intended principally as a vehicle for technical assistance, personnel
training, and institutional support for the integration process (Art.2), seen as the best
strategy to promote social and economic development and political stability in the
27 About the Rio Summit see for instance IRELA, 1999a and 1999b; Maior, 1999; Stuart, 1999; and about the Madrid Summit Gratius, 2002. 28 About the idea of exporting the EU model see for instance Torrent, 2002, pp.208-213.
18
region.29 The agreement created a Joint Consultative Committee with members from the
European Commission and Mercosur’s Common Market Group to develop and
intensify the inter-institutional dialogue and promote and assure the cooperation
initiatives of the agreement (Art.7). A number of cooperative programmes were
implemented such as the support to Mercosur’s Administrative Secretariat and technical
cooperation regarding customs norms, and animal and vegetable health.
In October 1994, the European Commission prepared a detailed document entitled ‘For
a Strengthening of the EU Policy towards Mercosur’ (COM (94) 428), in which it
elaborated a long and a short-term strategy to guide its foreign policy towards
Mercosur. In its conclusions, the Commission declared that despite the achievements
enabled by the Inter-Institutional Agreement, this treaty was an insufficient instrument
to promote the necessary strengthening of the EU's relations with Mercosur, and
proposed the elaboration of an interregional cooperation framework agreement, which
would, in a first stage, prepare the basis for bi-regional commercial liberalization and
continue to support the integration process, and, in a second stage, create a free-trade
area. The two stages would be institutionalised by two independent agreements,
although the second would be negotiated under the principles stated in the first. The
European Council approved the Commission's strategy during the Summit in Essen, in
December 1994, and, shortly later signed, together with the Commission and the
Mercosur member-states, a Solemn Joint Declaration formalising the intention to begin
negotiations. In April 1995, the Council requested the COREPER to analyse the
Commission's document, and in October the Economic and Social Committee sent a
reply adding some proposals and emphasizing the promotion of the participation of
sectors of civil society in the process of negotiation of the agreement (ESC Opinion
1176). The European Parliament also supported the Commission's proposal and added
some suggestions as well, such as including a political dialogue between members of
the Joint Parliamentary Commission of the Mercosur and the European Parliament in
the institutional dispositions of the agreement (Resolution of 16-5-1995).
The Interregional Cooperation Agreement between the European Community and its
Member States and Mercosur and its Member States was signed on the 15th of
29 Grabendorf, 1999, p.103.
19
December of 1995, and entered into force in July 1999. It is a typical empty Third
generation agreement: very broad, containing 9 titles and 36 articles, which cover
political, economic and cultural aspects of the bi-regional relations, but with no
substantial commitments. On the positive side the agreement established a forum for
regular meetings at the ministerial level with the establishment of a Cooperation
Council to supervise the developments of the negotiations towards the second stage of
the agreement. The Cooperation Council is composed of members from the European
Commission and from the Common Market Council and the Common Market Group of
Mercosur (Art.25), and assisted by a Joint Commission of Cooperation (Art.27) and a
Commercial Sub-Commission (Art.29).30
During the 1st EU-LAC Summit in Rio de Janeiro, in June 1999, both sides decided to
open negotiations to liberalise bilateral trade. The negotiations went through an initial
phase of exchange of information and interests, and in 2001, the tariff offers began. The
Chapters on Political Dialogue and Economic Cooperation were concluded, but an
impasse was reached regarding agricultural products, government procurement,
intellectual property and services. Both parts agreed to conclude the negotiations about
these items at the WTO multilateral negotiations first, but when these were interrupted
in 2006, bi-regional talks restarted.
4-Comparing US and EU role in the development of Mercosur
After the historical account of policies in favor and against regional integration in Latin
America and Mercosur in the external relations of the US and the EU, this section tries
to identify common trends, and differences in the approaches of the US and the EU
towards regional integration in Latin America, in general, and Mercosur in particular.
The main conclusions are, first, that the EU has continuously supported regional
integration in Latin American in general and in the Southern Cone in particular. It
favors a particular from of integration: economic and political integration with the
support of strong institutions, ideally supranational, and including a conditionality to
normative aspects such as democracy and human rights , but has not tried to impose its
30 For detailed analysis of the agreemetns see for instance Kinoshita, 2001, and Torrent, 1998, p.224-227.
20
own “model” at any cost, it has often respected the particularities of each process of
integration. The reasons for that position were not deeply explored in the article, but the
literature analyzed suggests that the EU seeks to dialogue with other processes of
regional integration and other collective actors both for normative and practical reasons.
For practical reasons because both parties share the same advantages and disadvantages
of being a collective actor, and for normative reasons because it has promoted
multilateralism in the world politics as a means to achieve stability and peace in the
international realm.
The US , in its turn, has supported regional integration in Latin America, but only one
particular type, and one particular project: the FTAA, which should develop from an
expansion from NAFTA through the conclusion of bilateral agreements with other Latin
American countries. Substantively, integration has been limited to economic issues,
mainly trade. Institutionalization was not desired.
Looking at Mercosur, the two different approaches become very clear: the bloc has
received support from the EU from the beginning: international recognition, 1992 and
1995 agreements, financial support to regional programs and institutions such as the
Secretaria and the Parliament, support in internal crises (tariff offer in 2001). The US in
its turn has never supported Mercosur as an institution nor concluded a agreement with
it, alighted the 4+1 Framework Agreement has a positive effect to the block. In addition,
the negotiations strategy to FTAA was disfavourable to Mercosur. Recent efforts to
conclude bilateral agreements with Uruguay and Paraguay are damaging the process,
and if it succeed, it might cause a major step back if not real
fragmentation/disintegration.
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