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Reconciling the diverse within a context of strong international change
is a challenge that Latin American countries face at the moment of building
a regional space for cooperation and integration, especially while trying
to develop competitive insertion in world markets. This is even truer
if the corresponding political, social and business leaders aspire to
ensure conditions for a reasonable degree of governance (peace and political
stability, productive development and social cohesion) both at the global
level and regionally.
The diversity factor affects international trade relations at multiple
levels. Certainly, the economic dimension and the degree of development
of a country play an important role. But the cultural, ideological, religious,
ethnic and technological differences, among others, also have a significant
impact. Understanding and even appreciating them is an essential condition
to navigate a world of crossbred modernity, such as it was characterized
by Jean-Claude Guillebaud in his book "Le commencement d'un monde.
Vers une modernité métisse" (Seuil, Paris 2008).
As soon as the factor of the dynamics of change is included in the analysis
and in the action, the task of accepting diversity as an inevitable part
of international reality becomes more complex and even thrilling. The
speed that has characterized the shifts in relative power among nations
during the last two decades, the density of the physical connectivity
between the various national and regional spaces and the incorporation
of new players to the global economic competition (emerging countries
and a growing urban population of middle-class income) are accentuating
the difficulties that are often present when assessing the new international
environment in the perspective of trade and transnational investments.
Such difficulties may be greater in the case of those countries that have
long been -and considered themselves- the decisive actors in international
relations, something like the center of the world. And much more so for
those who intend to interpret current realities using concepts, paradigms,
theoretical frameworks or ideological approaches from the past. The rate
of obsolescence in these aspects is often notorious.
How to reconcile or at least balance the different interests, values
and visions between countries that share a regional geographic space?
This is one of the challenges that the countries of our region will have
to face looking into the future if they seek to maximize the opportunities
that are opening up in the international scenario, especially due to their
endowment of natural resources, their cultural diversity paired with strong
creativity and the experience gained in their economic and social development,
including the heritage of successes, frustrations and outright failures.
Hence, the approach proposed by Heraldo Muñoz, the Chancellor
of the new Chilean government, becomes particularly relevant (see our
Newsletter of last March on http://www.felixpena.com.ar/).
Moreover, former President Ricardo Lagos recently highlighted in Brazil
the importance that the region speaks with one voice and adopts common
views on the main issues of the global agenda. He referred in particular
to the need of not considering the relations between countries from the
Pacific and the Atlantic as antagonistic (see http://www.lanacion.cl/).
The approach of "convergence in diversity" is present in the
Treaty of Montevideo of 1980 which created LAIA. Specifically, stated
in Article 3 are five principles that guide this institutional framework
of regional scope, now formed by thirteen countries which show a picture
of multiple diversities.
It is worthwhile remembering these principles today given that the countries
of Mercosur and of the Pacific Alliance are not only members of LAIA but
that their tariff preferences are inserted into its legal framework. These
principles are the following:
a) Pluralism, sustained by the will of member countries to integrate
themselves, over and above the diversity which might exist in political
and economic matters in the region;
b) Convergence, meaning progressive multilateralization of partial scope
agreements by means of periodical negotiations between member countries,
with a view to establish the Latin American common market;
c) Flexibility, characterized by the capacity to allow the conclusion
of partial scope agreements, ruled in a form consistent with the progressive
attainment of their convergence and the strengthening of integration
ties;
d) Differential treatments, as determined in each case, both in regional
and partial scope mechanisms, on the basis of three categories of countries,
which will be set up taking into account their economic-structural characteristics.
Such treatments shall be applied in a determined scale to intermediate
developed countries, and in a more favorable manner to countries at
a relatively less advanced stage of economic development; and
e) Multiple, to make possible various forms of agreements between member
countries, following the objectives and duties of the integration process,
using all instruments capable of activating and expanding markets at
regional level.
It would seem timely to conduct analyses at the government, business
and academic level leading to formulate concrete proposals on how to achieve
an effective convergence of the different agreements and integration mechanisms
in force in the region. The objective would be precisely to seek the greatest
convergence while respecting the limits that could arise as a consequence
of multiple diversities. The convergence between Mercosur and the Pacific
Alliance should be a priority given the economic and political relevance
of the participating countries.
In this regard, it would be possible to privilege flexible interpretations
of existing commitments in Mercosur, for example, with respect to the
common external tariff. Mercosur and GATT rules provide sufficient margin
to achieve a reasonable degree of flexibility, even within the conceptual
framework of a customs union.
Some of the most relevant issues for a "convergence in diversity"
agenda that would require creative and feasible ideas from an economic,
legal and political standpoint could be the following:
a) production linkages through joint ventures involving SMEs from different
countries that have, as an incentive for investment, access to financing
and, especially, collective guarantees for the unrestricted access to
the markets of the countries participating in the mechanism that is
agreed;
b) cumulative rules of origin to allow a joint exploitation by companies
from different countries of the trade preferences that are negotiated
regionally an even inter-regionally;
c) quality physical connectivity and effective trade facilitation measures
and,
d) effective programs of cooperation with relatively less developed
countries aimed at stimulating productive investment through the guarantee
of unrestricted access to the markets of the countries with the highest
degree of development in the region.
Speaking with one voice and developing a common view of the major issues
of the global agenda -such as the challenges posed by climate change
or the need to prevent the negotiations of inter-regional mega agreements
from eroding the effectiveness of the multilateral trading system institutionalized
in the WTO- not necessarily imply uniformity. What would be needed is
to find a balance between the different visions, which is precisely
what can be achieved through collective political leaderships and regional
institutions such as LAIA, UNASUR and CELAC, especially if they have
the intellectual and technical support of agencies such as ECLAC, SELA
and CAF.
It would also require a solid effort by each country of the region to
define and update their international trade insertion strategies. Countries
that know what they want and what they can achieve, especially if done
through a strong social participation, are better equipped to reach points
of balance between their respective interests when engaging in a dialogue
or negotiation with other countries of the region.
At least three contextual factors should be taken into account when assessing
the potential for external trade insertion of a country. These factors
have great relevance and are continuously evolving. The first of them
is the greater density of the physical and cultural connectivity between
those competing for the markets of other countries. The second is the
significant increase of the urban middle class in the developing world,
with its effects on the demand for goods and services -massive and differentiated
at the same time- and on the expectations and level of requirements of
the consumers. The third factor is that, partly as a consequence of the
above two but also of the continuous technological changes, the transformations
in the way that goods and services are produced and distributed have become
evident: "Made in the world", is the expression used by the
WTO when referring to the phenomenon of transnational value chains and
their major role in international trade.
To these factors we must add the revaluation of regional and interregional
spaces in the development of world trade, partly as a result of their
influence in the design of production linkages through their impact on
the location of investments. But also due to the fact that they are, at
the same time, a consequence and a cause of the current proliferation
of preferential trade agreements, in particular the mega-regional and
inter-regional agreements such as TTP and TTIP.
The above explains the three axes around which countries, whatever their
size or degree of development, base their strategies for international
trade insertion and their bilateral or multilateral relations with other
countries within their own region or at global scale. Each one of them
poses requirements that an effective and efficient commercial diplomacy
would ensure to be complementary and mutually reinforcing.
The first axis is the multi-space scope. It involves recognizing that
today, and much more so in the future, the trade diplomacy of a country
is aimed at taking advantage of all the opportunities that are opening
up in a world that some experts call "multiplex". As is the
case with any country, there is a wide array of options regarding who
to buy from and sell to, or regarding the possible origin and destination
of investments and technologies that are of interest. Maximizing and keeping
these options open are priority objectives of an effective commercial
diplomacy projected into the future. They are certainly goals to keep
in mind when suggesting mechanisms to facilitate the development of integration
agreements and the convergence of those already existing in a region.
The second axis is that of regional and interregional spaces. It involves
focusing the attention of the commercial diplomacy of a country, although
not exclusively, in its closest geographic environment, especially if
in addition to physical proximity there are preferential trade agreements
or, even more, if the countries are developing a process of deep integration.
The interregional agreements that currently are negotiated -despite having
an uncertain future-, heighten the importance of regarding any other country
as part of a wider economic space and, therefore more interesting, from
the point of view of prospects for business development involving the
exchange of goods and services and productive investments.
Finally, the third axis is that of the current or potential leading companies
in trade and bilateral investments. They are the main target of an ambitious
commercial diplomacy i.e.: one which is projected to impact future bilateral
relations between two countries or group of countries belonging to the
same or to a different regional space. The density of the participation
of companies in trade and transnational investments is, at the same time,
a requisite and a result of the effectiveness of the actions and agreements
that the countries carry forward in the areas of cooperation and regional
integration. This holds particularly true in relation to productive linkages.
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