Stephanie Polezzeli

FOKUS | 2/2017

The South American Integration Trail: The Southern Integration and the Model

The European Union (EU) is a result of the Caribbean. Intra-regional exports amounts action of the Parliament is limited since devastating 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- build­ings 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. diffe­rent spheres of Andean sub-regional ample, and , 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 , with the Caribbe- in tries‘ foreign policy on matters of sub-re­ an Community (CARICOM), with by highlighting the different integration gional interest. The and with . Moreover, Colombia, models and by providing a comparison to Commission, composed of a plenipoten- and have a 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 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 , Colombia, Ecuador, and coordinates the integration process. when Argentina, , , 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, , Paraguay, and Ve- trade agreement negotiations with the and citizens. The 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 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 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 .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

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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, , 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. 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 . 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 . 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. The Council of Foreign Affairs of the citizens of the States Parties. One development. Ministers is responsible for implementing of its main tasks is to issue statements, decisions made by the Council of Heads recommendations or reports on the devel­ The countries that currently comprise the of State. The Council of Delegates, beside opment of the integration process. The ALBA-TCP are Venezuela, Cuba, Bolivia, adopting and implementing decisions, Parliament has no enforcement powers Nicaragua, Commonwealth of Dominica, facilitates citizen participation in the and is conclusions are meant to advise the Antigua and Barbuda, Ecuador, Saint Vin- integration process. The fourth body is the others decision-making bodies. cent and the Grenadines and Santa Lucia. General Secretariat.

The bloc relies on an inter-governmental The Alliance lacks solid structures and The legislative measures emanating from structure, instead of a supranational one, is fundamentally based on meetings the organs of UNASUR are binding on

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the Member States once they have been and enforce the deci­sions of the Summits Differences between the Southern way incorporated into each Member State‘s and the meetings. This body is assisted by and the European model domestic law. This bloc does not have any The troika. The Meeting of National Coordi- supranational institution.15 nators coordinates dialogue at the national One of the main differences between level facilitating regional integration and integrational processes in South America The Union also includes a Defence Council, monitors cooperation on projects within and the EU is the purpose behind the created in 2008, in charge of implementing the organization. The specialized Meetings creation of those organizations. Europe policies in military cooperation, humanita- help to promote unity within the bloc.18 was aiming to secure peace and stability rian actions and peace operations.16 in a profoundly damaged area. However, Considered by many, including former Pre- during the twentieth and current century, The was created in 2007 sident of Nicaragua Daniel Ortega, as Latin Latin America has been a region largely in order to finance the social and econo- America’s attempt to put an end to the free of wars which do not fear aggression mic development of the region, as an alter- United States interference in the region, from its neighbors.22 native to the IMF and , and was CELAC is also seen as a mere mechanism put into operation in 2016. for regular consultation between govern- Despite the fact that economic, social and ments.19 political reasons were also behind the In 2008, UNASUR members proposed the European Union and economic and social creation of a South American parliament. The motives underneath the South America‘s The building in still under construction blocs, the later lacks political will and and works are expected to be finished in The “Pacific Alliance” (Spanish acronym: determination to go deeper into the in- July 2017. AdP) is an initiative of regional integra- tegration. Nevertheless, these are not the tion created in 2011 and comprised of only obstacles that South America has to The Community of Latin America and Chile, Colombia, Mexico and Peru. It aims overcome in order to achieve an effective Caribbean States to move progressively towards the free alliance. movement of goods, services, resources The “Community of Latin America and and people.20 The richness of its natural resources Caribbean States” (Spanish acronym: CE- along with its relatively weak financial LAC) was founded in 2010 and comprises The four countries gather a population of system have fostered a stronger relation all Member States of the Organization of 216 million people and had an average with international markets. The fact that American States except the United States GPD per capita of $ 9,910 in 2015. the whole region exports raw materials and Canada, representing roughly 600 to developed countries and engages in million people. The aim of the organization The additional protocol to the Framework agricultural production also hinders local is to strengthen political, economic, social Agreement entered into force in 2016 libe- coordination. Naturally, a limited trade and cultural integration and foster political ralizing 92% of the internal trade.21 flow among those states entails a fragile dialogue.17 spirit of cooperation. With emphasis on the Asia-Pacific region, The official bodies of the organization this bloc is the eighth largest economic Moreover, South American countries have are the Summit of Heads of State and power and export force worldwide. In low levels of education, savings and scarci- Government, the Meeting of Ministers of Latin America and the Caribbean, the bloc ty of jobs opportunities. In addition, there Foreign Affairs, the Pro-Tempore Presi- represent the 38% of the total GDP, 50% is a permanent mistrust in their own politi- dency, the Meeting of National Coordi- of the total trade and attracts 45% of the cal institutions, as they tend to be corrupt. nators the Specialized Meetings, and the Foreign Direct Investment. The lack of institutionalized commercial Troika. The Summit of Heads of State and structures and insufficient economic inter- Government is responsible for guiding The Pacific Alliance‘s Council of Ministers, dependence have hampered collaboration the relations with Non-member States composed by the Minister of Foreign among the region. countries and other organizations, as well Affairs and Foreign Trade, adopts decisi- as, promoting citizens‘ participation in the ons in order to achieve the objectives of Furthermore, the diversity of political- community. The Meeting of Ministers of the organisation. The High-Level Group, ideological orientation of the countries, Foreign Affairs is in charge of monitoring constituted by the Vice Minister of Foreign some lean towards free market policies the process of unity and integration of Affairs and Foreign Trade is in charge of while others favour government inter- the region and adopts resolutions and the supervision of the work of the techni- vention, obstructs the harmonization of statements to enforce the decisions of the cal groups, such as Trade and Integration, regional policies. It should be noted that Summit of Heads of State and Govern- Cooperation, and People Movement. The the consolidation as a trading bloc is an ment. The Pro Tempore Presidency‘s main decisions emanating from these summits essential step towards next stages of responsibilities are to organize meetings do not create binding legal commitments. integration.

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The strong tendency of the Executive especially concerning Turkey, the Balkans, Stephanie Polezelli is an AIES intern. branch to concentrate power and take on the Eurozone debt, the refugee crisis, Bre- the legislative role in economic mat- xit, rising populist-nationalism and Russia, ters prioritises short-term policies that it is the most ambitious accomplishment privilege the demands of their electorates regarding integration ever achieved. at the expense of far-reaching goals. This hyper-presidential system is an obstacle Many factors such as, different historical to a deeper involvement that would entail and cultural background, geographical sharing of sovereignty. Due to this low distances and scarce infrastructure, unde- economic and institutional development veloped financial system, social inequality, and the lack of political commitment, the similarity in export composition, low insti- region lacks long-term domestic policies tutionalized structures, limited economic which would allow them to take advanta- interdependence, uplifting of the presi- ges of associating with each other.23 dential figure and powers, insufficient ju- ridical respect for norms and an apparent The European Union integration path was allergy for long-term domestic policies, accompanied by a complex industriali- would suggest that extrapolate a model sation process, allowed by the financial that has encountered different experien- development and assistance of its major ces and challenges since its creation is a economies. The structural nature of the hard to achieve, if not unattainable, goal. continent was also an important incentive in the unification process. Market proxi- Conclusion mity, natural communication channels and the lack of significant geographical Until now, South American countries have barriers facilitated physical interconnec- not been able to accomplish this task even tion of the economies, which enhances with a strong European financial support interdependence. Infrastructure as a mean and political commitment. of transportation for goods, services, peo- ple and information consolidate regional The region should find their own way to bonds.24 South America, on the contrary, achieve a closer cooperation. To this end, is a vast territory divided by important its resources should be concentrated on natural features which, due to the lack of a fighting corruption and criminality to broad interconnected network, generates restore its institution‘s credibility. sub-regions, such as, the south of Brazil and Argentina; Uruguay and Paraguay; and A strong and solid institutional structure Peru, Colombia and Ecuador. It should be committed to long-term state policies is noted that almost 70% of the region con- the foundation of any project involving tains hydrographic basins with naturally different Nations and, indeed, administra- navigable rivers. Investment in infrastruc- tions. Political will to build a “community”, ture would enhance transportation and, to concede and oversee the integration therefore, integration.25 process is also a fundamental basis to succeed in creating a regional bloc. Moreo- Should South American countries attempt ver, true commitment of each and every to follow the European Union model? government, and support of the civil socie- ty, to invest and transfer money to other The European endeavour to establish a Member States in view of the greater goal, Constitution failed and the Union is an eagerness to achieve consensus, certainty incomplete with 19 out of and strong leadership to drive countries 28 EU member countries adopting the towards integration are necessary princip- common currency. les underlying an authentic unification.

Despite the fact that the European Union Finally, the region should seek to reach a encountered many difficulties along its fairer income distribution amongst their integration, deepening and widening, populations to boost economic develop- process and still faces further challenges, ment.

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Notes

1) See Comunidad Andina. http://www.comunidadandina.org/ Seccion.aspx?id=189&tipo=QU&title=somos-comunidad-andina (accessed June 14, 2017) 2) See CEPAL. http://www19.iadb.org/intal/intalcdi/ PE/2008/01306.pdf (accessed June 12, 2017) 3) See Cartagena Agreement. https://idatd.cepal.org/Norma- tivas/CAN/Ingles/Cartagena_Agreement.pdf (accessed June 14, 2017) 4) See SELA. http://www.sela.org/media/1876349/di_6_-_evolu- cion_can.pdf (accessed June 9, 2017) 5) See EUMED. http://www.eumed.net/rev/caribe/2017/01/can. html (accessed June 7, 2017) 6) See MERCOSUR. http://www.mercosur.int/ innovaportal/v/3862/2/innova.front/en-pocas-palabras (ac- cessed June 14, 2017) 7) See Americas Society, Council of the Americas. http://www. as-coa.org/articles/explainer-what-mercosur-0 (accessed June 2, 2017) 8) See BID, Mercosur Report No. 20. https://publications. iadb.org/bitstream/handle/11319/7280/Informe_ MERCOSUR_N_20_2014_2015_Segundo_Semestre_2014_Pri- mer_Semestre_2015.pdf (accessed May 15, 2017) 9) See The Treaty of Asuncion. https://idatd.cepal.org/Normati- vas/MERCOSUR/Ingles/Treaty_of_Asuncion.pdf (accessed May 24, 2017) 10) See CEPAL. http://www19.iadb.org/intal/intalcdi/ PE/2008/01306.pdf (accessed June 12, 2017) 11) See ALBA-TCP. http://alba-tcp.org/en/contenido/history- -tcp (accessed May 15, 2017) 12) See América del Sur en un mundo multipolar: ¿es la Unasur la alternativa?. http://nuso.org/media/articles/down- loads/3588_1.pdf (accessed June 14, 2017) 13) See CEPAL. http://www.cepal.org/pses33/noticias/ paginas/1/39171/2009-598-UNASUR-PRESS.pdf (accessed June 14, 2017) 14) See Americas Society, Council of the Americas. http://www. as-coa.org/articles/explainer-what-unasur (accessed June 2, 2017) 15) See Union of South American Nations Constitutive Treaty. http://studentorgs.law.smu.edu/getattachment/International- Law-Review-Association/Resources/LBRA-Archive/15-2/SMB213. pdf.aspx (accessed June 5, 2017) 16) See Americas Society, Council of the Americas. http://www. as-coa.org/articles/explainer-what-unasur (accessed June 12, 2017) 17) See CELAC. http://www.sela.org/celac/quienes-somos/que- es-la-celac/ (accessed June 7, 2017) 18) See NTI. http://www.nti.org/learn/treaties-and-regimes/com- munity-latin-american-and-caribbean-states-celac/ (accessed June 12, 2017) 19) See Info Noticias 7. http://www.info7.mx/internacional/ %60la-celac-es-la-muerte-de-la-doctrina-monroe%60-daniel- ortega/576149 (accessed June 13, 2017) 20) See The Pacific Alliance. https://alianzapacifico.net/en/que- es-la-alianza/#la-alianza-del-pacifico-y-sus-objetivos (accessed © Austria Institut für Europa- June 14, 2017) 21) See Protocolo Adicional al Acuerdo Marco de la Alianza und Sicherheitspolitik, 2017 del Pacífico. https://alianzapacifico.net/wp-content/up- loads/2016/06/protocoloAP.pdf (accessed June 14, 2017) Alle Rechte vorbehalten. Nachdruck oder ver­ 22) See Conflictos Territoriales y Democracias en America gleich­bare Verwendungen von Arbeiten des Latina. http://www.flacsoandes.edu.ec/libros/digital/46393.pdf Austria Instituts für Europa- und Sicherheitspolitik (accessed June 8, 2017) (AIES) sind auch in Auszügen nur mit vorheriger 23) See EUMED. http://www.eumed.net/rev/caribe/2017/01/can. Genehmigung gestattet. Die im AIES-Fokus html (accessed May 11, 2017) veröffentlichten Beiträge geben ausschließlich die 24) See IIRSA. http://www.iirsa.org/admin_iirsa_web/Uploads/ Meinung der jeweiligen Autorinnen und Autoren Documents/cap_doc_compilado_curso08y09_eng.pdf (ac- wieder. cessed June 2, 2017) 25) See CAF. https://www.caf.com/en/currently/news/2016/07/ Dr. Langweg 3, 2410 Hainburg/Donau rivers-could-transform-transportation-and-communications-in- Tel. +43 (1) 3583080 south-america/ (accessed June 14, 2017) E-Mail: [email protected] Website: www.aies.at

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