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The future poses challenges for an intelligent international trade strategy
for developing countries, including those in our geographical region,
on at least three levels. These are challenges that will require an improvement
in the efficiency of the quality of diagnosis of the profound changes
that are taking place in different countries, and not just of the current
situation.
One of these levels is that of the multilateral world trade system. The
existing institutions and rules, which some consider to be obsolete, will
require a redesign effort that will not be easy to achieve. The second
is the inter-regional level. In the stage that has begun to develop in
trade relations between nations, assertive insertion in the growing network
of inter-regional agreements will be key to projecting to the world what
a country can offer to other markets. Finally, the third is the Latin
American regional level. After sixty years of various initiatives aimed
at economic integration, physical connectivity and productive linkages
between countries of the region, there is a growing awareness of the need
for different approaches and working methods than those employed to date.
As we have pointed out on other occasions, Mercosur itself is in need
of updating, which may require significant methodological changes, while
preserving the fundamental reasons that led the founding countries to
decide to work together to achieve their economic and social development
goals in a context of peace and political stability in the "neighborhood".
Its relations with the countries of the Pacific Alliance, which in some
cases are intense and in all cases very necessary, as well as with the
other countries of the region, will require taking full advantage of the
institutional framework of ALADI, which is not always used, in order to
increase trade and economic relations among its member countries, or at
least among those most interested.
In any case, there is now a tendency to design, through governmental
negotiations, new institutional frameworks to promote international trade
and productive integration, as well as to redesign existing ones in order
to adapt them to the continuous changes in economic and political realities.
Many of these frameworks are bilateral, involving countries belonging
to different regions in the international system. Some are regional in
scope and have been developed with different modalities and intensities
in recent decades. Such is the case of Mercosur, the Pacific Alliance,
ASEAN and the EU. In general, they have a clear political scope stemming
from the fact that the countries that constitute them share a geographic
space. Others have an inter-regional scope and involve countries or blocs
of countries, even if only a few are connected to each other. And there
always remains the task of redesigning the global framework institutionalized
in the WTO.
Designing and negotiating new modalities of agreements and adapting those
that come from another era will not be easy. It is a task in which the
logic of power, the logic of economics and even the logic of legality
interact in a way that is sometimes difficult to grasp. Understanding
such interplay is key to understanding and operating on concrete realities.
This is not an easy task, moreover, because categories and concepts from
other historical moments are often used. As we pointed out above, these
have been overtaken, at least in some cases, by the profound changes observed
in recent years, both in the distribution of world power and, in particular,
in the modalities of international trade in goods and services-largely
as a consequence of the disruptive effects of technological change and
the phenomenon of consumer empowerment of the new urban middle class in
many developing countries-and in transnational investment.
In the case of the countries of the Latin American region, the main fronts
of international trade negotiations offer complementary options. Reflecting
on these options and their relative costs is one of the priorities of
any strategic thought exercise on international integration of any given
country. In what Professor Amitav Acharya has called a "multiplex"
world, a good understanding of the options and their relative costs is
essential when developing a strategy for the country's international trade
integration, including negotiations with other countries or economic blocs.
A first front of action required is the necessary adaptation of each
regional agreement, as in the case of Mercosur, to the new world realities
and to those of its own member countries, in some cases in a full and
complex evolution. It is not a matter of relapsing into the refounding
syndrome, which has occurred with some frequency almost always coinciding
with changes of government in some of the larger economic partners. It
may be more practical, effective and therefore advisable to practice the
art of metamorphosis. That is, to make gradual changes that allow us to
capitalize on the experience gained-and the results obtained-and to introduce
the changes deemed necessary.
This is all the more advisable when a process of integration between
countries faces not only an existential crisis, but also a methodological
crisis in the development of the common work of the participating nations.
And this seems to be the case with Mercosur today. No member country has
raised the idea of withdrawing from the political, economic and legal
pact that binds it to its partners, at least not openly. This is tantamount
to admitting that none of the partners has a definite Plan B.
A conceivable alternative plan, such as transforming Mercosur into a
free trade area -in the sense of Article XXIV of the GATT-WTO-by abolishing
the Common External Tariff (CET), could have some high political and also
economic costs, especially in the trade of manufactured goods. It would
imply a modification of the Treaty of Asunción. It would be up
to each country to decide whether or not it would be convenient for them
to face these costs. It should be borne in mind that the elimination of
the CET, or its open violation, could have a potential negative impact
on the commitment made to ensure free trade between the partners, as a
consequence of the provisions of Article 2 of the Treaty of Asunción
(reciprocity of rights and obligations).
A second front of action is that of convergence in diversity in the Latin
American regional space. This was the strategy proposed at the time by
the government of President Michelle Bachelet and discussed at a meeting
with the participation of the Ministers of Foreign Affairs and Foreign
Trade of the countries of Mercosur and the Pacific Alliance, held at the
Palacio de la Moneda in Santiago, Chile, on November 24, 2014. It was
clear then that what was proposed was not an integration agreement between
the two schemes, but the need to develop roadmaps that would lead to the
establishment of multiple communicating vessels between the processes
of productive transformation and international insertion of countries
belonging to both blocs and not necessarily all of them. It was also acknowledged
that the 1980 Treaty of Montevideo, which created LAIA, provides an institutional
framework and instruments that are more than appropriate and even underutilized
(such as, among others, the different types of partial scope agreements)
to implement the strategy proposed and shared by the countries of the
region.
A third front is that of global negotiations and negotiations with large
regional spaces. The protracted negotiations between the EU and Mercosur
illustrate the difficulties they sometimes entail. It is possible to foresee
that the countries that currently make up the Mercosur customs union-which
are the founding partners-will also advance initiatives aimed at expanding
the negotiating agenda with other large economic areas, such as China,
Japan and India in Asia, and the United States and Canada in North America.
On the three fronts mentioned above, Mercosur countries and their Latin
American partners could promote new approaches to the characteristics
of the trade agreements they negotiate. Perhaps they should be called
"strategic trade and investment promotion agreements". They
could not be limited to the level of tariffs, but should cover issues
that affect productive investment decisions and technological cooperation
oriented to transnational trade. The impact of such agreements on trade
and transnational investment involving companies from countries in the
region could be threefold: to promote the effect of creating stable jobs;
to ensure the fluidity and predictability of trade transactions, investment
and technological cooperation; and to maintain a sufficient degree of
flexibility in trade policies to deal with complex economic conditions
and pronounced uncertainties, for example by using different types of
escape clauses with impartial custodians.
All of this will undoubtedly mean a liberation from concepts and paradigms
that come from a world that, as we have said, is rapidly being overtaken
by new realities.
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