LATIN AMERICA: Regional Integration Takes Top Priority

By Estrella Gutiérrez Reprint | | Print |

Estrella Gutierrez

CARACAS, Feb 23 1995 (IPS) - For Latin America, regional integration must take priority over progress towards the continent-wide American free trade area (AFTA) discussed in the Miami summit, high-level officials of the Latin American Economic System (SELA) told IPS.

According to Allan Wagner, director of development issues in SELA, which has 27 Latin American and Caribbean members, “the region has its own interests and among them is relations with the United States, but our agenda stretches farther than Miami.”

From Dec. 9-11, 34 American heads of state and government met in Miami to promote a new era in hemispheric relations, in a summit whose most outstanding achievement was the decision to negotiate AFTA by the year 2005.

Meanwhile, formal negotiations got underway on Wednesday for a South American free trade area (SAFTA) to be launched by the year 2005 by the Southern Cone Common Market (MERCOSUR) and the Andean Group, two blocs that began to function as unified customs systems this year.

Wagner and the director of SELA finances, Manuela Rangel, spoke to IPS about the organisations’ reading of the turbulent post- Miami period.

Rangel stressed two events illustrative of the importance accorded regional integration.

A week after the Miami summit, the presidents of Argentina, Brazil, Paraguay and Uruguay – the four members of the MERCOSUR – formally agreed that their own integration must take precedence, and that they will push for the projected AFTA to be compatible with that goal.

Meanwhile, in the German city of Essen, European Union heads of state and government agreed in a summit – also held in mid- December – that negotiations for a free trade zone with MERCOSUR will be wrapped up this year, and similar talks with Chile and Mexico undertaken with the same goal.

“Paradoxically, one of the results of the Miami summit has been to fully awaken the Europeans” with respect to the need to defend their markets and interests in Latin America, with the AFTA time-table that was set acting as “an additional incentive” for the EU, according to Rangel.

The EU is following a new aggressive policy regarding Latin America, which if maintained will bring faster and more concrete results than can occur within the hemisphere, she added.

Wagner stated that a free trade accord with Washington remains attractive for Latin American countries, but as part of a process in which strengthening regional or sub-regional integration is given top priority.

At any rate, the question remains of how free U.S. President Bill Clinton’s administration will be to negotiate expanded free trade accords, with the Democratic party holding a minority in congress, and resistance to that type of initiative steadily growing.

SELA sees Clinton as having pushed harder than any U.S. president since John Kennedy to follow a policy of an open and cooperative relationship with Latin America, such as seen in the recent case of financial assistance to Mexico.

But in a report on Latin America’s relations with Washington and in statements by its officials, SELA has pointed out that Clinton’s intentions contrast with negative signs from congress.

For some U.S. legislators, the end of the Cold War has meant a diminishing of U.S. responsibility for supporting the political and economic stability of its allies, while Republican control of congress has led to a more isolationist position in Washington.

If to this is added lawmakers’ resistance to NAFTA – North American Free Trade Agreement, in effect between Canada, Mexico, and the United States since 1994 – and Republican interests in blocking initiatives that would make Clinton shine, the road to further free trade accords looks far from obstacle-free.

Whether or not AFTA has a future will be seen by how much free rein congress allows Clinton in negotiating Chile’s entry into NAFTA, announced in the Miami summit.

But for Rangel and Wagner, what is most important is that improved access to U.S. markets “is not the only objective of Latin American policies regarding insertion into the international scene.”

“Latin American countries are not putting all their eggs in the same basket, and in general give higher priority to regional or sub-regional integration,” stimulated by the desire to present a strong, united front in the face of the proposed hemispheric opening.

Rangel stressed that even negative episodes such as the war between Ecuador and Peru illustrate the strong pull of integration, as negotiations for creating SAFTA (South American free trade area) were postponed only for a few days, despite the fact that both countries participated in the discussion as members of the Andean Group.

Another sign was that members of the Peruvian and Ecuadorian business communities met in the midst of the war on a bridge in the disputed border area to urge peace and the preservation of integration and trade.

According to Rangel, there is a tendency to forget that integration is not easy “in any part of the world, as seen in the case of the EU,” and that Latin America “has taken gigantic steps in recent years.”