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Mercosur: Limits of Regional Integration Mercosur: Limits of Regional Integration Ricardo Caichiolo* Abstract versality is seen as the source of the solidification and enforcement of these values. However, the concept of This study is focused on the evaluation of successes and fail- universality has also been linked to the idea of regional- ures of the Common Market of the South (Mercosur). This ism, both regarded as being complementary concepts analysis of Mercosur’s integration seeks to identify the geared towards the improvement of international organ- reasons why the bloc has stagnated in an incomplete cus- isations as well as to society itself. toms union condition, although it was originally created to Another significant development that is seen from the achieve a common market status. To understand the evolu- international community is the emergence and attention tion of Mercosur, the study offers some thoughts about the of supranational organisations as well as the importance role of the European Union (EU) as a model for regional they hold towards their respective organisations or state. integration. Although an EU-style integration has served as Although there are times wherein national dependencies a model, it does not necessarily set the standards by which matter, the role of supranational organisations, in cer- integration can be measured as we analyse other integration tain cases, may go beyond that of the state itself. This efforts. However, the case of Mercosur is emblematic: dur- can be seen from the influence and level of authoritative ing its initial years, Mercosur specifically received EU techni- power as well as the autonomy that they enjoy, from cal assistance to promote integration according to EU-style intra- and interregional organisations. Besides, within integration. Its main original goal was to become a common the context of regionalism, member nations or involved market, but so far, almost thirty years after its creation, it parties are geared towards developing intergovernmen- remains an imperfect customs union. tal organisations that can operate and manage the The article demonstrates the extent to which almost thirty regional cooperation, treaties, agreements and the num- years of integration in South America could be considered a ber of accords being entered into by involved parties. failure, which would be one more in a list of previous The existence of these intra- and interregional organisa- 246 attempts of integration in Latin America, since the 1960s. tions is vital since it is within their activities or goals Whether it is a failure or not, it is impossible to envisage EU- that the fulfilment of key objectives, the development style economic and political integration in South America in and the success of regional integration, lies. the foreseeable future. So far, member states, including Bra- Before the actual establishment of Mercosur in the zil, which could supposedly become the engine of economic 1990s, there had been several attempts at achieving both and political integration in South America, have remained regional and economic integration among the Latin sceptical about the possibility of integrating further political- American nations. The first were the Latin American ly and economically. As member states suffer political and Free Trade Association (LAFTA), in 1960, the Latin economic turmoil, they have concentrated on domestic American Common Market (LACM), in 1965, and the recovery before being able to dedicate sufficient time and Latin American Integration Association (LAIA), in energy to being at the forefront of integration. 1980. All of these were categorised as failures for various substantial reasons and for failing to achieve consensus. Keywords: Mercosur, European Union, regionalism, integra- However, in 1991, the Treaty of Asunción (TA) finally tion, international organisation paved the way for the establishment of Mercosur, which then represented the Southern Cone Common Market. The initial members of the subregional common market 1 Introduction were Argentina, Brazil, Paraguay and Uruguay. Their cooperation has been marked as historic because these Rapid changes have intervened during the last few deca- countries had been involved in regional wars during the des in the structure and development of international 20th century. More than twenty years later, in July organisations. Old ideas of ensuring human freedom, 2012, Venezuela became a full member state; however, dignity and welfare are still the core foundations of on 1 December 2016, it was suspended from Mercosur international organisations and of improving the rela- as it failed to respect human rights and to meet a four- tionship of one country with another. The idea of uni- year deadline to fully adapt to the trade bloc regulations required for membership. Bolivia is moving closer to becoming the newest full member, according to the * Ricardo Caichiolo, PhD (Université catholique de Louvain, Belgium) is Adhesion Protocol signed on 15 July 2015, which can be legal and legislative adviser to the Brazilian Senate and professor and coordinator of the post graduate programs on Public Policy, Govern- ment Relations and Law at Ibmec (Instituto Brasileiro de Mercado de Capitais, Brazil). ELR 2019 | No. 3 - doi: 10.5553/ELR.000144 considered as a new step towards the enlargement of member countries should expand their imports to the Mercosur.1 Ecuador is expected to be next in line. same extent that their exports increase. It remains to be seen whether such an enlargement can Although LAFTA, in its initial years, stimulated trade help promote regional integration. So far, member among member countries, these principles had been states, especially Brazil, have clearly preferred enlarge- overlooked. At the end of the 1960s, LAFTA became ment vis-à-vis the deepening of integration. This article obsolete since member countries had not complied with will next present some historical and institutional several principles, including those previously men- aspects concerning the creation of Mercosur and how tioned. Items eligible on the common lists for preferen- the EU served as a model for integration. tial treatment had never been fully liberalised; access to markets had been unequally distributed; institutions to monitor and enforce reciprocity had not been created; 2 Mercosur’s History of most of the bilateral agreements were restricted to the Big Three (Argentina, Brazil and Mexico). The other Integration two groups that were led by Chile, Colombia and Vene- zuela (the middle group), and Bolivia, Ecuador and Par- Less than a decade after the first efforts towards integra- aguay (the least-developed economies), had started to tion in Europe began, during the 1950s, Latin American complain about the agreement because the benefits of 4 countries decided to follow a similar path, being stimu- integration mostly favoured the Big Three. Disap- lated by insightful information coming from the Eco- pointment with such a scenario had expedited the for- nomic Commission for Latin America and the Carib- mation of the foundation of the Andean Group within 5 bean (ECLAC). The creation of the Latin American LAFTA in 1969. Free Trade Association (LAFTA),2 through the signing In addition, the role of ECLAC, which had initially gui- of the Treaty of Montevideo I in 1960, marked a crucial ded the process of integration, had consisted of prevent- moment in the history of integration in Latin America. ing any possibility of success. Guidelines from ECLAC Twenty years later, in 1980, with the signing of the to the Third World had consisted of the adoption of Treaty of Montevideo II, the Latin American Associa- strategies of import substitution industrialisation (ISI) 6 tion for Integration (LAIA) was established to replace and protectionist policies. The intention had been to LAFTA. The Treaty of Montevideo I that created create and strengthen an internal market that would lead LAFTA was originally signed by Argentina, Brazil, to development and self-sufficiency. However, several courses of action had been undertaken at the time, Chile, Mexico, Paraguay, Peru and Uruguay. Colombia 247 and Ecuador joined the group in 1961, Venezuela in which were felt to be essential in order to achieve this 1966 and Bolivia in 1967. goal. Instead, they created a negative impact in the inte- The ultimate and ambitious goal had been, according to gration process. These undertakings included nationali- the Treaty, to move towards the ‘establishment of a Lat- sation, subsidisation of industries, augmented taxation in-American common market,3 in a gradual and pro- and highly protectionist trade policies. gressive way’. Argentina, Brazil and Mexico had adopted the strategy As a first step, the Treaty established a free trade zone, of ISI, a policy that was obviously dissimilar to the pro- setting a deadline of twelve years within which to imple- cess of integration that LAFTA proposed. Referring to ment a programme for trade liberalisation, envisaging the Brazilian perception of the integration process at the the dismantling of tariff barriers. Article 3 of the Treaty time, Vaz affirmed that: also defined some directives in its implementation, such the Brazilian resistance to the creation of a common as pluralism, convergence and reciprocity. Referring to market was demonstrated since the late 1950s and it pluralism, the Treaty underlined that the will of mem- remained throughout the trajectory of LAFTA … it ber countries should sustain the need to integrate over reflected … the option for autonomy
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