CENTRAL AMERICA BENEFITS FROM SHAKE-UPS TO THE SOUTH

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MANAGUA-SAN SALVADOR, Jun 1 2006 (IPS) - A few months ago no one was betting on the progress of Central American integration, much less the region\’s hopes for a free-trade agreement with the EU, writes Joaquin Roy, Jean Monnet Professor and Director of the Centre for the European Union at the University of Miami. However, Roy writes in this article, the one-two punch administered by Venezuela\’s surprising decision to enter MERCOSUR and pull out of the Andean Community, and by the bout of nationalisation in Bolivia, set off alarms in Europe. The Andean Community, with which Brussels hoped to work out a moderate agreement, is now definitively out of commission, while the viability of MERCOSUR is in doubt. Consequently, Brussels is now setting its sights on Central America, willing, it would seem, to temporarily overlook its shortcomings. In this new opportunity for integration opened by the possibility of a Central American Free-Trade Agreement (CAFTA), or mini-FTAAs with the US, those problems presented by crucial elements that still lack a common free-trade zone must be resolved. While 94 percent of products are already covered, 53 percent of that remaining six percent are agricultural products. Despite the fact that there are agreements for the exchange of services and transport, there are also major asymmetries and not all countries apply them.

A few months ago no one was betting on the progress of Central American integration, much less the region’s hopes for a free-trade agreement with the European Union. Since the mid-80s the sub-region had been a priority for the EU because of the urgency of pacification and reconstruction after the bloody conflicts that devastated the area in the last throes of the Cold War. But it seems it has lost favour with Brussels and drifted towards the possibility of a rapprochement with the US.

The derailing of the Mar de Plata meeting last November which spelled disaster for the Free-Trade Area of the Americas (FTAA) — originally an expansion of NAFTA (North American Free-Trade Agreement) intended to compete with the EU — after — accelerated Washington’s plans to create a free-trade zone through bilateral accords, particularly with the countries closest to its borders.

However, the one-two punch administered by Venezuela’s surprising decision to enter MERCOSUR and pull out of the Andean Community, and by the bout of nationalisation in Bolivia, set off alarms in Europe. The Andean Community, with which Brussels hoped to work out a moderate agreement, is now definitively out of commission, while the viability of MERCOSUR is in doubt, at least with regard to its former ambitions, with Paraguay and Uruguay now rebellious, critical of the hegemony of Argentina and Brazil. Consequently, Brussels is now setting its sights on Central America, willing, it would seem, to temporarily overlook its shortcomings.

At the end of the recent European-Latin American summit in Vienna, a decision was taken to continue negotiations on an agreement in the hope that the Central American countries would meet the year-end deadline for the constitution of a free-trade zone — a deadline Brussels would not budge on. This provisional decision, however, does nothing to improve the generally poor prospects for Central American integration which have made this agreement impossible for a decade.

Among the apparently chronic issues pending are considerable legal disorder, a dependence on presidential decisions taken at the summits, the absence of a leader country, and a lack of respect for fulfilment of the accords. Meanwhile, in contrast to what might appear at first glance proof of the inoperability of the system, there is a large number of institutions and organisations, but they appear to operate simply as NGOs financed with foreign aid. This detail further dramatises the impossibility of transplanting certain signs of the identity of the EU, which is the model everyone has in mind: there is no trace of the existence of structural funds, and no concept of supranationality.

Central America, after a initial period of unity, disintegrated into national projects that were favoured by political and economic elites at a time when foreign intervention (especially by the US) had the effect of spurring the development of national identity. The result was the reinvention of what might be called ”ethnitised” nations in a region where it was necessary to build itself with an open civic nationalism, incorporating all the immigrants needed to fill a land that did not have (with the exception of the north Maya) a significant indigenous population.

However, in the end, in this new opportunity for integration opened by the possibility of a Central American Free-Trade Agreement (CAFTA), or mini-FTAAs with the US, those problems presented by crucial elements that still lack a common free-trade zone must be resolved. While 94 percent of products are already covered, 53 percent of that remaining six percent are agricultural products. Despite the fact that there are agreements for the exchange of services and transport, there are also major asymmetries and not all countries apply them.

Meanwhile, there is the peculiar behaviour of Panama, which is reticent to consider itself a part of the isthmus, and of Costa Rica, which until almost the very last hour opted to stay out. Paradoxically, it is the country that would account for 60 percent of the region’s exports to Europe. However, despite everything, Europe seems to have rediscovered Central America, at least as a comfort. (END/COPYRIGHT IPS)