CONCRETE ROADMAPS AND POLITICAL DRIVE AT THE HIGHEST LEVEL: Necessary conditions to build effective spaces of regional integration?
Categoría: Noticias

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Félix Peña (*)

Abstract:
The idea of carrying out an initiative aimed at updating, expanding and deepening the commitments made by the Latin American countries in the field of economic integration and cooperation, especially within the framework of the LAIA (ALADI), has become more relevant in view of the major challenges and the great opportunities presented by the new international realities, especially after the Brexit and the election of Donald Trump as President of the USA.
 
Based on the experience accumulated in the region regarding regional integration commitments, it is possible to suggest some recommended approaches to address priority issues for the preparation of the foundations of a comprehensive Latin American trade and economic agreement.
 
It is essential to define a strategic direction to help set clear objectives for the short, medium and long-term, in order to move forward in a credible and sustainable manner in the development of a comprehensive Latin American trade and economic agreement. The cooperation of the countries of the region, which are members of the WTO, in the redesign and improvement of the institutions and rules of the multilateral trading system must be part of the regional cooperation and integration strategy.
 
The multiplicity of objectives of the initiative promoted by the ALADI and the dynamics of the changes observed at global and regional scale will require setting a hierarchy of goals and courses of action for their achievement, as well as their continuous adaptation to the new realities that will continue to emerge at both levels.
 
A strategy aimed at deepening the agreements between countries in the region will require: (a) roadmaps that indicate concrete steps towards the set goals and, in each case, the deadlines involved; (b) a strong political drive expressed at the highest level of each country involved; (c) participation of the business and social sectorsin the negotiations; and d) great transparency in the negotiations, aimed at achieving the social legitimacy of the actions undertaken. These requirements can be considered as necessary conditions for the construction of effective spaces of regional integration.
 
The full integration of Cuba into a comprehensive Latin American trade and economic agreement must also be a priority. This would help give the ALADI initiative a political and strategic meaning that is currently relevant for the region.
 

 

On April 21, at the Latin America Integration Association (LAIA – ALADI) headquarters in Montevideo, a meeting took place with the aim of beginning to address the bases of a comprehensive Latin American commercial and economic agreement. It was attended by authorities and experts from various countries of the region. Representatives from the ALADI, the ECLAC, the SIECA and the IDB -INTAL participated as well. These institutions are responsible for carrying out the initiative proposed by Carlos Chacho Alvarez, Secretary General of the ALADI. The meeting was open by Rodolfo Nim Novoa, Chancellor of Uruguay. (For information on the meeting go to http://www.aladi.org/nsfaladi/Prensa.nsf/vbusquedaComunicadoswebR/2C21222EEB06ADD40325810D0053F3FF. For the background, refer to the March 2017 newsletter on http://www.felixpena.com.ar/index.php?contenido=negotiations&neagno=report/2017-03-timely-initiative-originated-in-the-laia).

The idea of promoting an initiative aimed at updating, expanding and furthering the commitments made by the Latin American countries in the area of economic integration and cooperation, especially in the framework of the ALADI, has become more relevant in view of the challenges and opportunities posed by the new international realities. The facts brought to light after the Brexit and the election of Donald Trump as President of the USA have contributed to make these realities more evident, in particular their potential effects on the international trading system. (On this topic, see the September, October and November 2016 issues of this newsletter  on  http://www.felixpena.com.ar/index.php?contenido=negotiations&neagno=report/2016-09-adapt-system-international-trade-new-global-realities; http://www.felixpena.com.ar/index.php?contenido=negotiations&neagno=report/2016-10-complex-agenda-of-global-trade-gobernance; http://www.felixpena.com.ar/index.php?contenido=negotiations&neagno=report/2016-11-necessity-of-renewing-approaches-at-the-global-and-regional-levels, and the February 2017 issue on http://www.felixpena.com.ar/index.php?contenido=negotiations&neagno=report/2017-02-latin-america-in-an-uncertain-and-turbulent-world).

Based on the experience accumulated in the region, in terms of economic integration and cooperation commitments and in order to contribute to the necessary debate that should take place in the countries of the region and in their institutions, it is possible to suggest some recommended approaches to address priority issues for laying the foundations of a comprehensive Latin American trade and economic agreement.

In this regard, it would be essential to define a strategic direction to help clearly define the short, medium and long-term goals in order to move forward in a credible and sustainable manner in the development of the mentioned agreement. These objectives should be linked to those that have mobilized the ALADI member countries since its creation in 1980, which involve creating a regional environment of cooperation and integration that is functional to the objectives of economic and social development of each country individually and of the region as a whole, based on principles defined in the Treaty of Montevideo. They should also be viewed in the broader perspective of the profound changes that are taking place in the world trading system, and their impacts on the new challenges and opportunities present for each Latin American country and for the entire region.

The concerted action of the countries of the region that are members of the WTO, for the redesign and improvement of the institutions and rules of the multilateral system of international trade, must be part of the regional cooperation and integration strategy. The upcoming WTO Ministerial Conference in Buenos Aires, provides an opportunity to show the region’s aspiration to act in a coordinated manner.

The multiplicity of objectives to be achieved within the scope of this ALADI initiative and the dynamics of global and regional changes, will require a hierarchy of goals and courses of action and a continuous revision, in order to ensure the adaptation to the new realities that are emerging at both levels.

The flexibility that will be required in the instruments, will have to be made compatible with the predictability necessary to generate productive investments based on national markets inserted in the regional space. One priority would be to agree on different types of safeguards and escape valves, to help preserve the predictability required for productive investments and to provide the needed flexibility in the commitments assumed, with temporary scope and, eventually, with control by impartial technical bodies.

At the same time, connecting the economic and productive systems of the countries of the region in a sustained manner will require increasing their physical connectivity and the transport and logistics networks between the countries committed to generating greater compatibility and convergence of such systems.

Another priority will be to generate incentives for the convergence of agreements already in place and concluded within the framework of ALADI. This would have to be a convergence towards more advanced objectives and instruments.

Trade facilitation, based on the use of new information technologies, as well as the necessary climate of trust between all the players in cross-border trade; customs cooperation; electronic commerce; mechanisms of cumulation of origin, in particular in relation with agreements concluded with other countries or regions; commercial defense; intellectual property; government procurement; trade of services and technical cooperation are some of the other priority issues to be addressed by deepening existing or future agreements.

It would also be appropriate to give priority to different types of actions aimed at reducing or eliminating the restrictive effect on trade between interested countries, resulting from pronounced disparities in their respective technical and health standards.

Another priority would be for the countries involved that are in condition to move forward to take action for the promotion of transnational productive chains and corridors, especially those that help intensify the internationalization or regionalization of SMEs.

It would not seem necessary for all the ALADI countries or the Latin American region as a whole, to be always involved in those actions aimed at deepening regional integration. On the contrary, the strategy to follow must be of variable geometry and multiple speeds. The countries really interested in moving towards the objectives pursued in each case must participate. However, they must be open to the future participation of those countries that initially do not consider they can participate or that think it is disadvantageous for them to do so. One function of the ALADI Secretariat would be to ensure that convergence is as broad as possible.

A strategy aimed at deepening the agreements between the countries of the region, will require: a) roadmaps that indicate concrete steps to be taken towards the goals set and, in each case, the deadlines involved; (b) a strong political drive expressed at the highest level of each participating country; (c) participation in the negotiations of the respective business and social sectors; and (d) great transparency in the negotiations, aimed at achieving the social legitimacy of the actions undertaken. These requirements can be considered as necessary conditions for the construction of effective regional integration spaces.

The courses of action that are undertaken in order to promote the insertion of the economies of the region in the international environment will require a great regional competitive intelligence effort. Here, the coordination of ALADI with the various regional agencies, especially the ECLAC, the CAF, the INTAL-IDB, and SELA among others, could be essential.

The full integration of Cuba into a comprehensive Latin American trade and economic agreement must be a priority. This will allow the ALADI initiative to have a political and strategic meaning of current relevance for the region. To this end, actions aimed at increasing the exchange of goods, services and technologies as well as investments between the ALADI member countries that participate in the agreement and Cuba should be promoted, and it would also be necessary to develop multiple forms of economic and technological cooperation, including those actions aimed at promoting the integration of local companies in production chains of regional scope.

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(*)Director of the Institute for International Trade of the ICBC Foundation; Director of the Master 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.

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