MERCOSUR: Toward Latin American Integration

By Juan Diego Nusa Peñalver:


JULY 31, 2012 will be recalled in the history of Latin America and the Caribbean as a landmark, a giant step, with Venezuela’s full entry into the Common Market of the South (MERCOSUR), in the first extension of this customs association in the 21 years of its existence.

It will also be recalled as a resounding failure of the imperial policy of the United States in relation to a region which it can no longer dominate at its whim.

For Argentine political economist Atilio A. Borón, from the geopolitical point of view, Venezuela’s inclusion in MERCOSUR after a six-year wait constitutes the greatest U.S. diplomatic defeat since the disastrous Free Trade Area of the Americas (FTAA).

Beatriz Miranda, columnist in the Colombian El Espectador, defines it as a strategic accomplishment, given that the new entrant concedes the bloc a greater economic and commercial weight.  Analysts consider that in geopolitical terms, Caracas’ arrival represents the possibility of increased Brazilian insertion in the Andes and Caribbean and Venezuelan access to the South Atlantic.  Thus MERCOSUR is facilitating strategic integration, giving the group an Amazonian, Atlantic, Caribbean and Andean identity, and a strong energy component.

Doubtless, this bold step will affect U.S. interests in the region in the long term, given that it prevents Venezuela from signing a free trade treaty with this country, still set on re-conquering the Bolivarian Republic’s oil wealth.

It is no secret that with Venezuela‘s energy potential – according to the Organization of Oil Producing Countries (OPEC) it has the largest certified oil reserves in the world: 297,570 million barrels – the industrial vigor of Brazil (the sixth largest world economy), and the agricultural potential of Argentina and Uruguay, this regional bloc will acquire a strategic role.  Created March 25, 1991 by the Treaty of Asunción, it promotes the free circulation of goods and services, common external tariffs and trade policy, as well as coordinated macroeconomic policies among member states and compatible legislation.

In effect, the United States was unable to prevent MERCOSUR, now including Brazil, Argentina, Uruguay and Venezuela (Paraguay’s membership is suspended due to the parliamentary coup d’état against President Fernando Lugo), from growing in strength and promoting sovereign economic and social policies in accordance with national interests, far removed from the dictates of the discredited financial institution of Bretton Woods and the anti-democratic Washington consensus.

The U.S. maneuver to utilize the Paraguayan oligarchy, entrenched in the country’s Senate, to block Venezuela’s entry backfired.  In fact Paraguay’s suspension and Venezuela’s participation could make MERCOSUR more attractive to Bolivia, Ecuador and other nations in the region.

From the Planalto Palace, headquarters of the Brazilian government, Venezuelan President Hugo Chávez emphasized the historic importance of the unity of Latin American countries in terms of promoting their independent development, within which MERCOSUR represents a platform for the changes needed.

"We are exactly in our historic position, our North is our South, we are where we always should have been, we are where Bolívar left it to us to arrive," the Bolivarian leader affirmed during the extraordinary session of the bloc in Brasilia.

What is being reconfigured is a balance which will allow South America to address, on more equal footing, other centers of power such as the United States and the European Union, which have demanded subordination and an anti-national submission to their transnationals.

BUILDING THE PATRIA GRANDE

According to analysts, Venezuela‘s incorporation into MERCOSUR makes the bloc the world’s fifth largest economic power, extending from Patagonia to the Caribbean over an area of close to 13 million square kilometers, linking more than 270 million inhabitants (70% of the population of South America) to form an impressive and gigantic bloc with the largest oil reserves, booming industrialization and excellent potential for food production.

It will have a Gross Domestic Product (GDP) of $3.3 trillion at current prices, equivalent to 83.2% of the Southern Cone GDP, and the largest global biodiversity and fresh water reserves, a reality very much to be borne in mind in terms of world geopolitics by the select club of the G-8 and emerging giants such as China and India, two nations which have a more constructive position in international economic relations.

In the internal context, Venezuelan José Gregorio Piña emphasizes that while, initially, the country was only offering MERCOSUR oil and hard currency, "the panorama has changed, given that it can develop its productive potential through a more complete relationship with bloc members, which includes complementary trade, a innovative financial architecture, internal regional investment and the free circulation of persons and jobs, among others."

Caracas has already invited MERCOSUR enterprises to participate in housing provision for the Venezuelan people, with a target of three million family units, as well as conjoint work with the state to promote other social, industrial and agricultural development projects.  The new Venezuela wishes to leave behind the private model to which it was subjected by the United States, the only legacy of which was enormous social inequality and widespread poverty.

This effort will benefit from the bloc’s creation of a Structural Convergence Fund to reduce imbalances among its members, in a necessary spirit of solidarity with the less developed nations.  "This is an experiment to reduce the imbalances of our countries and promote equitable regional development," stated Brazilian President Dilma Rousseff during the extraordinary summit.  She also noted that 40 regional projects have been approved, with an initial start-up fund of $1.1 trillion, good news further boosted by MERCOSUR’s announced expansion of credit to promote the economy of this part of the world.

PROTECTING MERCOSUR

Given the blows the United States delivered to progressive processes in Honduras and Paraguay, a reaction to Venezuela’s inclusion in MERCOSUR is also anticipated.  The country will use any possible means to prevent a united, prosperous and strong South America capable of defying its political hegemony and global economy.

This warning was given by Argentine President Cristina Fernández de Kirchner, who urged the member countries present at the summit "to create, sooner rather than later, the instruments and institutions which will make this new pole of power indestructible and indivisible."   The Argentine leader strongly attacked attempts by imperialist nations to weaken South America.

MERCOSUR is thus moving ahead to create the Patria Grande to which Latin American and Caribbean nations rightly aspire.

August 16, 2012

Granma.cu

7 Years on from the Creation of the Bolivarian Alliance for the Peoples of Our America’s Trade Agreement for the People (ALBA-TCP)

7 Years on from the Creation of the ALBA -TCP



By Tahina Ojeda Medina - Ciudad CSS

What initially started as an alternative aimed at stopping the advance of the Free Trade Area of the Americas (FTAA) has been transformed into an alliance in favour of Latin American and Caribbean integration.  I am referring to the Bolivarian Alliance for the Peoples of Our America’s Trade Agreement for the People (ALBA-TCP).

It is important to remember the solitary beginnings of ALBA-TCP.  The main goal of the 2001 Summit of the Americas in Quebec was to create the FTAA, and like the majority of hemispheric meetings, the decision to implement a free trade area had already been taken prior to it being “democratically approved”.

The FTAA claimed to create a structure for free trade relations within the framework of the free market, without taking into account economic asymmetries, much less social ones.  This aforementioned structure is evident in the 6th point of discussion for business and investment in the summit’s “plan of action”: countries will “ensure that the negotiations for the FTAA conclude before January 2005 at the latest, so that the agreement might be put into effect as soon as possible, no later than December 2005...”

The only vote against the plan came from the Bolivarian Republic of Venezuela; although the plan was published as having been approved unanimously.

Once they had analysed the kind of injustices that the application of the FTAA would bring to Latin America and the Caribbean, Cuba and Venezuela stepped forward and agreed on a plan to put the brakes on this situation.  This is where the idea of the ALBA emerged, against the 2001 FTAA, before it was formally established in 2004 in Havana, Cuba.

The next step to stop the advance of the FTAA was taken at the Summit of the Americas in Mar del Plata, Argentina, in 2005.  The final declaration of this summit read “the necessary conditions to implement a balanced and equal free trade agreement still do not exist, (conditions which ensure) the effective access to markets free of subsidies and distortive business practices, which take into account the needs and sensitivities of all business partners, including in their levels of development and the size of their economies”.  This summit represented a definitive break with the FTAA.

Furthermore, Latin America and the Caribbean’s political map had changed since the FTAA was proposed.  Cuba and Venezuela were no longer alone.  From 2004, the following countries joined the ALBA: Bolivia (2006), Nicaragua (2008), Dominica (2008), Honduras (2008-2010), Ecuador (2009), St. Vincent and the Grenadine Islands (2009) and Antigua and Barbuda (2009).  The subcontinent turned to the left, and this turn was met with various destabilisation attempts.  An attempt to create war in 2008 in Bolivia, a state coup in Honduras in 2009, a failed state coup in Ecuador in 2012, amongst other international pressures toward the rest of the region.

Whilst the South was negotiating the various political difficulties arising from setting into motion the mechanisms designed to fight for the protection of the people, the “developed world” sunk into an unprecedented economic crisis created by the “invisible hand of the market”.  These events are not isolated from the political and theoretical debate on contemporary international relations.  When a project like the ALBA-TCP is analysed at an academic level, inevitable questions emerge, such as; is it a scheme aimed at integration?  Is it aiming to construct a regional politics or an intra-regional free-trade agreement?  Is the ALBA-TCP a formula to confront the negative effects of globalisation, or is it a strategy to enter into this process but from a stronger position?

All these questions have answers, which are still vague and somewhat open to debate, if we analyse the process of ALBA’s creation and consolidation from the perspective of theories on new “postliberal” regionalisms in Latin America and their relationship to globalisation.  It is evident that ALBA-TCP was not conceived of as a scheme for regional integration, but rather as a political alliance to put a stop to FTAA which was progressively transformed into a collaborative mechanism which helped to strengthen real cooperation between countries in the regional South.

It is too soon to predict what a final regional integration project in South America would look like, but what we can confirm is that the ALBA has allowed for the creation of new forms of exchange and communication between countries that were once isolated; a first step in exploring a political agenda for integration.  In this sense, ALBA-TCP is a formula for resistance to the project of globalisation.  It is impossible to deny that globalisation is a concrete reality, but it doesn’t mean that countries have to throw themselves into its choppy seas without a lifejacket; the consolidation of strong regions is needed in order to confront the contradictions of the world system in which we live.

The ALBA-TCP, as Maria del Carmen Almendras Camargo defined it in the celebrations for the alliance’s 7th anniversary in Madrid, February 2012, is a “regional integration bloc made up of 8 countries with a population of 71 million inhabitants and a GDP of 498 billion dollars.  It is the second largest trading bloc in the Latin American and Caribbean region after Mercosur, which has enormous human and natural resource potential.”

As ALBA begins to consolidate independently as a definite regional integration scheme, it is mutating and fusing with other integration strategies such as UNASUR and CELAC.  On its 7th anniversary there are a whole host of reasons to celebrate; it has demonstrated that it is possible to say NO to the great global powers and design an independent and sovereign politics which can pave the way to a multi-polar world.  Like the maestro Simón Rodriguez even said himself, we invent or we err.

Tahina Ojeda Medina is a researcher at the Development and Cooperation Institute at the Complutense University in Madrid ((IUDC-UCM), graduate in International Relations and a lawyer from the Central University of Venezuela, M.S in International Cooperation, Masters in Contemporary Latin American Studies and Doctorate in Political Science at the Complutense University in Madrid.

Translated by Rachael Boothroyd for Venezuelanalysis.com

Source: Ciudad CCS

May 7th 2012

What does the emergence of a unified, anti-American, Europe-oriented trade bloc mean?

Good morning Europe, Goodbye America, because when the people are starving democracy is just a word

It is clear that the new trend in Latin America is… Buenos dias Europe, Adios America, pero quando o povo esta morrendo de fome, a democracia e’ so uma palavra”.

By Rebecca Theodore


If argument persists that a state cannot be fully understood if it is isolated from its historical development, then the transition from democracy to authoritarianism for Latin American countries implies that there must be a constant rewriting of the social contract based on new social and economic relations that are continually emerging in Latin America. Paradoxically, the return of democracy from authoritarianism not only demonstrates that ‘a government is legitimate if and only if no better feasible policy exists’ but also exhibits the fact that it is possible for democracies to be authoritarian as well.

Opponents have argued that Latin American state formation is more closely aligned with European state patterns due to colonial influences from the fifteenth century and it is to Western Europe that one needs to turn in order to uncover the roots of the embryonic parallel. However, it must be remembered that the US has also been deeply ingrained in Latin American affairs since 1823, when President James Monroe created the Monroe Doctrine to keep European powers out of the New World. In light of this, America’s reputation as the great superpower of the Andes and the savior of protectionism and liberalism is now viewed in Latin America as a policy of imperialism and a sign of utter weakness.

While China’s ideological connection of communism and socialism weakens US power in Latin America, it is evident that the European trade bloc is now Latin America’s primary trade partner. Latin American trade group Mercosur is the only multinational continent in the world to be united by a common linguistic background, a common culture, and a common religion factor making South America’s path to assimilation a lot smoother into the congregation of the European States of Europe. The legal structure of the Union of South American Nations (UNASUR) not only unites South America’s two major trade blocs -- Mercosur and the Andean Community -- but has now launched a South American Defense Council, unlike a NATO alliance to mediate regional conflicts and defense from foreign intervention and excludes the US from military planning in the region.

Moreover, Latin America is far more important to Europe as an industrial base than as a simple trade partner. The giant storehouse of timber, natural gas, crude oil, minerals, precious metals, and iron in the region from the Rio Grande to Terra del Fuego are resources that Europe needs in its ascension to world supremacy. The completion of the largest steel-producing complex in Brazil by ThyssenKrupp means steel products will be actively churned out to be sold to Germany and South American countries, with Venezuela as the principal buyer. This also means that the US-backed Área de Libre Comercio de las Américas (FTAA) is dead. Estados de América Latina ha creado su propio barrio, y los Estados Unidos de América no es parte de ella. (Latin American states have created their own neighborhood and the US is not a part of it.)

It is clear that anti-Americanism is now the common premise across every political party in Latin and South America. While Evo Morales is rapidly following Chavez’s lead by nationalizing Bolivia’s oil and gas in a move that reverberates that of Zimbabwe’s Robert Mugabe’s land for grab deals, the newly elected president of Brazil, Dilma Rousseff is just a hand-chosen puppet of wildly popular President Luiz Inacio Lula da Silva’s policies. With huge oil reserves recently discovered off Brazil’s coast, and with a rare earth debate gaining momentum between China and Germany that excludes American interest, Rousseff inherits an economy that is among the world's hottest emerging markets and this means that it will need more than a party shift in the US House of Representatives to advance bilateral relationship.

Hugo Chávez on the other hand has, without doubt, polarized Venezuela’s society and intellectual debate by undermining civil liberties, threatening the continuity of democratic governance, hence his accompaniment of a repulsive episode of an ALBA alliance that provided Honduran president Manuel Zelaya and Ecuadoran Rafael Correa with a foretaste of how to rewrite the constitution and establish authoritarian rule in Honduras, leaving a Honduran legislature buried in turmoil and controversy over US intelligence officials bribing Ecuadoran police, and recruiting informants among them. Argentina, Peru, Uruguay, Mexico, Colombia, Guatemala, and Chile are all offering radical transformation and presenting different alternatives to deal with the consequences of economic reforms.

Now that the US has lost Latin America to Europe and China as primary trade partners also means that the Republicans’ tsunami win in the House of Representatives will prove that Barack Obama is not suffering the blunders of a political double standard on the economy as has been so widely anticipated. As Republicans embrace their ambitious legislative agenda they will in time notice that the U.S. economy is starving to death and reducing the deficit or the current unemployment rate of 9.6% and fighting the Great Recession is no magic but a sign of the times.

Trade with Latin America, coupled with other economic factors, has already started reading the eulogy of the US dollar, thereby exposing the grave danger of the economic reverberations that are just now beginning to shake the nucleus of the world’s financial systems. Regardless of what anyone says, this is not an Obama problem, it is a global problem -- “blame it on the economy stupid”. The only self-sustaining economic bloc is the establishment of an EU-style government and for this reason EU status must be fortified in the UN because Latin and South American states, Caribbean states and even Africa have no option other than complete reliance on the economic ties of a German-led EU, or cling to the apron strings of a Russo-China alliance in their quest for economic reforms.

Whether it means that economic reformers in the US need to employ authoritarian tactics to defend democratic processes or risk total failure or that democratic governments in Latin America are not authoritarian enough to defend positive economic reforms; it is clear that the new trend in Latin America is… Buenos dias Europe, Adios America, pero quando o povo esta morrendo de fome, a democracia e’ so uma palavra.” Good morning Europe, Goodbye America, because when the people are starving democracy is just a word.

November 15, 2010

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