The Southern Integration and the European Union Model
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Stephanie Polezzeli FOKUS | 2/2017 The South American Integration Trail: The Southern Integration and the European Union Model The European Union (EU) is a result of the Caribbean. Intra-regional exports amounts action of the Parliament is limited since devastating Second World War in which to a total of $10 billion1 and has increa- its recommendations are not binding. The Europe suffered extensive damage to sed from representing a 4.1% of the total repeated breaches undermine the credibi- build ings and infrastructure, and an over- exports in 1990 to 10.2% in 2006.2 lity and capacity to function properly as a whelming blow to the economy. In order supranational organisation. to secure peace and re-introduce some The community is also composed of the order in Europe, along with human rights organs and institutions of the Andean Inte- In any integration process, political will is and democratic values, the reconstruction gration System. The Andean Presidential a fundamental cornerstone. The Andean of the European economies was conside- Council is the highest-level body of the Community countries frequently reach red as a fundamental cornerstone. After Andean Integration System and is made trade agreements with non-member coun- the war, Europe enjoyed a long period of up of the Heads of State of the Member tries prioritising national interests at the uninterrupted integration together with Countries. It issues guidelines on the expense of the sub regional bloc. For ex- an intensive economic growth. diffe rent spheres of Andean sub-regional ample, Colombia and Venezuela, when the integration. The Andean Council of Foreign latter one was still a member, signed trade This focus will shed light on forms of Ministers formulates the Member Coun- agreements with Mexico, with the Caribbe- regional integration in South America tries‘ foreign policy on matters of sub-re- an Community (CARICOM), with Argentina by highlighting the different integration gional interest. The Andean Community and with Chile. Moreover, Colombia, Peru models and by providing a comparison to Commission, composed of a plenipoten- and Ecuador have a trade agreement with the European model. tiary representative from each Member the European Union.5 Country‘s government, is in charge of the The Andean Community of Nations formulation, execution, and evaluation of Mercosur the Andean sub-regional integration poli- The „Andean Community of Nations“ cy in the area of trade and investment. The The „Southern Common Market“ (Spanish (Spanish acronym: CAN) was created in General Secretariat is the executive body acronym: MERCOSUR) was created in 1991 1969 when Bolivia, Colombia, Ecuador, and coordinates the integration process. when Argentina, Brazil, Paraguay, and Uru- Peru and Chile signed the Cartagena The Court of Justice is the judicial authori- guay signed the Treaty of Asunción. Agreement and is the oldest integration ty of the Andean Community and reviews process in the region. Venezuela joined the the legality of the acts of all the Bodies and In 2012, Venezuela became a full member market in 1973 but left the CAN in 2006, Institutions and settle the existing disputes and Bolivia signed the Protocol of Accessi- after Colombia and Peru announced free between countries, citizens or countries on. Argentina, Uruguay, Paraguay, and Ve- trade agreement negotiations with the and citizens. The Andean Parliament is the nezuela have already ratified the adhesion United States of America and searched a System‘s deliberating body, it represents of Bolivia, which is waiting for the support place in the MERCOSUR. That shift was a the peoples of the CAN and promotes the of the Brazilian National Congress. change consistent with the foreign policy Andean Sub-regional integration process.3 of President Hugo Chávez that priorities The bloc is the world‘s fifth largest econo- sub-regional integration and south-south The supranational nature of several of its my and encompasses 295 million inha- dialogue. Chile left the Community in 1976 bodies and Institutions, as well as the fact bitants living in a total area of 15 million due to economic policy differences, speci- that any individual can refer to the General square kilometers.6 It has a combined GDP fically regarding tariff policies. The CAN‘s Secretariat and / or the Andean Court of of nearly $3.5 trillion.7 main achievement has been the creation Justice without previously exhausting all of a Free Trade Zone that was completed in domestic judicial instances differentiate Total trade increased from $100 - $125 bil- January, 2006. this integration process from others in lion in 2000 to $325 - $400 billion in 2014.8 Latin America.4 These intra-regional figures are relatively The community comprises 103 million in- low when compared to European trade. habitants and a total of 3.7 million square Although conclusions of the decision- kilometers. The community has 20% of making bodies and the Court of Justice The MERCOSUR comprises one of the the world‘s total biodiversity, 10% of the are binding, Member States do not tend largest freshwater aquifers in the world, planet‘s freshwater resources and 35% of to abide them due to the lack of enforce- the Acuifero Guarani, and the largest rain- all the forests of Latin America and the able sanctions. Furthermore, the scope of forest, the Amazon jungle. Furthermore, it 1 South American Integration FOKUS | 2/2017 contains Petrobras, PDVSA and numerous which implies, on the one hand, that there between Heads of Government, without energy resources, both renewable and is no entity capable of imposing a higher being able to articulate a clear instituti- non-renewable. degree of discipline resulting in a low de- onal architecture. In addition, despite its gree of implementation of the common aspirations, the bloc relies mainly on the The Treaty of Asunción provides the free rules. The decisions emanated from its participation of Central American and movement of goods, services and factors organs are not binding until approved by Caribbean countries, and Bolivia.12 of production between countries through the corresponding legislative powers. On the elimination of customs duties and the other, due to the lack of supranational The Union of South American Nations non-tariff restrictions, the establishment of rules, the market enjoys a relative flexibility a common external tariff and the adoption in the negotiating process. The “Union of South American Nations” of a common trade policy in relation to (Spanish acronym: UNASUR) was created third States.9 Its Common External Tariff covers appro- in April 2007 as a legacy of the Community ximately 85% of intra-regional trade and of South American Nations (Spanish acro- According to Article No. 1 of the Ouro is equal to national tariffs for 35% of total nym: CSN). The CSN aimed to integrate the Prêto Protocol, the decision-making bodies trade by MERCOSUR countries.10 MERCOSUR and the Andean Community are the Council of the Common Market, countries. UNASUR comprises 12 South the Common Market Group and the MER- The Bolivarian Alliance for the Peoples of American countries: Argentina, Bolivia, COSUR Trade Commission. The Council, Our America - Peoples‘ Trade Treaty Brazil, Chile, Colombia, Ecuador, Guyana, comprised by the Ministers for Foreign Peru, Surinam, Uruguay, Venezuela and Pa- Affairs and the Ministers of Economy of the The creation of the “Bolivarian Alliance raguay. Panama and Mexico are Observer States Parties, is the highest organ and is for the Peoples of Our America” (Spanish States. The Constitutive Treaty, signed in responsible for the political leadership and acronym: ALBA) was proposed in 2001 as a 2008, entered into force in 2011. decision-making process. The executive platform for economic, social, political and organ is the Common Market Group, cultural integration of the peoples of Latin According to the above-mentioned Treaty, which is composed by representatives of America and the Caribbean by the former the objective of the Union is to build „an the Ministry of Foreign Affairs, the Ministry Venezuelan President Hugo Chávez and integration and union among its peop- of Economy and Central Banks. It has the the former Cuban President Fidel Castro, les in the cultural, social, economic and power to propose measures for applying after Mr. Chávez objected to the proposal political fields“ the trade liberalization programme and of the Free Trade Area of the Americas. coordinate macroeconomic policies. The It has a population of approximately 400 MERCOSUR Trade Commission assists the In 2004, Fidel Castro and Hugo Chávez million inhabitants, equal to nearly 65% Common Market Group and is respon- signed the protocols for its foundation. of Latin America population and a surface sible for ensuring the implementation of In 2006, Bolivia joined the Alliance and area of 17 million square kilometers. The common commercial policy instruments the proposal of the Bolivian President Evo GDP of UNASUR accounts for 5.6% of agreed by the States Parties for the func- Morales of a Peoples‘ Trade Treaty (Spanish world GDP. 13 tioning of the customs union. acronym: TCP) was incorporated. A TCP is an “exchange instrument based upon soli- The regional bloc represents the world‘s Furthermore, the protocol states that the darity and complementarity between the fourth largest economy after the United institutional structure is comprised of the countries, intended to benefit the peoples States, China, and Japan.14 Joint Parliamentary Commission, the Eco- as opposed to the Free Trade Agreements, nomic and Social Consultative Forum and that are geared to increasing the power UNASUR comprises four bodies. The the MERCOSUR secretariat. The MERCOSUR and the domination of the transnational Council of Heads of State and Government Parliament was constituted in 2006, as enterprises”.11 Trade and investment are is the highest organ and establish policy a substitute for the Joint Parliamentary not considered an end in itself but inst- guidelines towards the South American Commission, and represents the interests ruments to reach a just and sustainable integration.