This article was downloaded by: [b-on: Biblioteca do conhecimento online UL] On: 04 April 2012, At: 09:56 Publisher: Routledge Informa Ltd Registered in England and Wales Registered Number: 1072954 Registered office: Mortimer House, 37-41 Mortimer Street, London W1T 3JH, UK The International Spectator: Italian Journal of International Affairs Publication details, including instructions for authors and subscription information: http://www.tandfonline.com/loi/rspe20 Has Regionalism Peaked? The Latin American Quagmire and its Lessons a b Andrés Malamud & Gian Luca Gardini a Institute of Social Sciences of the University of Lisbon b University of Bath Available online: 04 Apr 2012 To cite this article: Andrés Malamud & Gian Luca Gardini (2012): Has Regionalism Peaked? 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The publisher shall not be liable for any loss, actions, claims, proceedings, demand, or costs or damages whatsoever or howsoever caused arising directly or indirectly in connection with or arising out of the use of this material. Has Regionalism Peaked? The Latin American Quagmire and its Lessons Andre´ s Malamud and Gian Luca Gardini Since 1960, Latin American attempts at regionalism have undergone dis- tinct phases. More notably, they have tended to diverge across space, gradually giving birth to separate blocs that seem to be tearing South, Central and North America apart. Additionally, within and across these regions several overlapping projects coexist. This article focuses on the dynamics of segmented and overlapping regionalism in order to describe what they look like, analyse how they articulate with one another, and explain why member states have pushed for such a messy outcome. This situation, linked to the evolution of the global context, might be indicat- ing that regionalism in Latin America has reached its peak, beyond which it may be difficult to achieve further progress. Two conclusions are elicited: first, economic integration is becoming a geographically diffused phenomenon rather than a regional one; second, regionalism is still a compelling foreign policy but its causes, goals and outcomes are no longer what they used to be. Keywords: regionalism, regional integration, subregionalism, Latin America When Henry Kissinger allegedly asked what number he should dial if he needed to talk to Europe, he was mocking a regional organisation that had developed a large bureaucracy but no single political authority. If anyone asked the same question today about Latin America, it would hardly be a laughing matter as it is only too evident that the region lacks not just a phone number but also a headquarters and phone attendants. Indeed, there is no regional organisation that exclusively brings Andr´es Malamud is a Research Fellow at the Institute of Social Sciences of the University of Lisbon Email: Latin American Regionalism and its Lessons 117 together all Latin American countries: the Organization of American States (OAS) includes Canada, the United States and the Caribbean; the Ibero-American Community embraces Andorra, Portugal and Spain; the Latin American Integration Association (ALADI) comprises only twelve of the twenty Latin American states; the inchoate Community of Latin American and Caribbean States (CELAC) messily brings together 20 Latin American and 13 Caribbean countries; the Union of South American Nations (UNASUR) unites ten of them together with Guyana and Surinam; and the processes of subregional integration (Mercosur, the Andean Community, the Central American Integration System) are even less encompassing as regards membership. For its part, the Bolivarian Alliance for the Americas (ALBA) unites only five Latin American countries with three Caribbean microstates. One potential exception stands out: the Rio Group, which numbers 23 members, including all of Latin America, but also a few coun- tries from the Caribbean. Yet, there is still a caveat: this organisation lacks a secretariat or permanent body, so if it did have a number it would have to be a cell phone. This article argues that, since the first experiences in the 1960s, Latin American regionalism has never been all-encompassing, but rather territorially segmented, therefore disintegrating the conceptual Latin American space at the same time as it has sought to integrate subregions. This trend has only been accentuated more recently, giving birth to new blocs that are tearing South, Central and North America apart. More confusingly, some of these subregions overlap. In the follow- ing two sections, the focus will be on the dynamics of segmented (i.e. subregional) and overlapping (i.e. multilevel) regionalism respectively. The aim is to dissect the nature and features of the blocs, analyse how they articulate with one another, and explain why member states have pushed for such a messy outcome. The third section discusses five factors that pose limits to what Latin American regionalism may achieve, thus suggesting that the development of integration has reached its peak. Excessive expectations and high rhetoric have to be tempered against struc- tural circumstances beyond the control of the region or the political will of its member states. The claim made in the article is that the presence of segmented and overlapping regionalist projects is not a manifestation of successful integration but, on the contrary, signals the exhaustion of its potential. This is not incompatible with the proliferation of cooperation initiatives. Yet regionalism understood as ‘compre- hensive economic integration’ in a macro-region is losing ground to regionalism understood as ‘a set of diverse cooperation projects’ in several subregions. Recent developments have shown traits such as the primacy of the political agenda, an increased role of the state, growing concern for social issues and asymmetries and an attempt to escape from broadly neoliberal and US-endorsed dynamics. This shift has been captured by definitions such as post-neoliberal or post-hegemonic Downloaded by [b-on: Biblioteca do conhecimento online UL] at 09:56 04 April 2012 118 A. Malamud and G.L. Gardini 1 regionalism, which seek to overcome the open or new regionalism paradigm. This study challenges these analyses by offering a different perspective: Latin American regionalism is not evolving towards yet another paradigm but is instead rolling onto itself, either spilling around without deepening or going back to standard cooperation arrangements. The final part of the article offers two concluding remarks for reflection: first, economic integration is becoming a geographically diffused and thinner phenom- enon rather than a regional and thicker one; second, regionalism is still a compel- ling foreign policy component but its goals and outcomes are no longer integration but cooperation, in line with the revitalized will of the larger states. Segmented regionalism as decentralised subregionalisms In the 1960s, the thrust towards regional integration encompassed most geogra- phical areas across the planet. Framed by the Cold War, the decolonisation process fostered a series of attempts at cooperation among neighbouring states in an era of nationalist restoration and protectionist economies. A few years later, though, most efforts had failed. Even the most successful case, the European Community (EC), entered the dark ages of so-called Eurosclerosis between the 1970s and early 1980s. In the 1990s, a revival of integration arose. It was different from the earlier wave in that the so-called ‘new regionalism’ was conceived of as open: it did not pursue import substitution but export promotion, thus not aiming at closing the region in a defensive way but at improving national competitiveness in an increasingly free- 2 trade environment. The fears of a world divided into several ‘fortresses’ receded, and the new regionalism began to be thought of as a feature of the wider globalisa- tion process. However, it developed heterogeneously. One of its features was ‘‘the very wide variation in the level of institutionalization, with many regional group- ings consciously avoiding the institutional and bureaucratic structures of traditional 3 international organizations and of the regionalist model represented by the EC’’. As an attempt to rebuild the eroded national boundaries at a higher level, regionalism can be interpreted as a protective manoeuvre by states that cannot 4 by themselves secure their own interests. Yet, the new regionalism conceived of regional organisations as building blocks rather than stumbling stones of a new world order. In Latin America, where the dream of political unity had been present since the wars of independence, the emphasis gradually changed to economic 5 integration after World War II. The decisive thrust came from the United 1 Riggirozzi and Tussie, The Rise of Post-Hegemonic Regionalism; Sanahuja, ‘‘Del ‘regionalismo abierto’ al ‘regionalismo post-liberal’’’. 2 Bhagwati, ‘‘Export-Promoting Trade Strategy’’. 3 Fawcett and Hurrell, Regionalism in World Politics. 4 Milward, ‘‘The European Rescue of the Nation-State’’. 5 This part draws on Malamud, ‘‘Latin American Regionalism and EU Studies’’. oD nw loadedb b[ y o- niB : bliotecad oc onhecimentoo nlineLU a ] tA 40 65:90 pril 2102 Latin American Regionalism and its Lessons 119 Nations Economic Commission for Latin America (ECLA). Later renamed Economic Commission for Latin America and the Caribbean (ECLAC), this agency was established in 1948 to encourage economic cooperation among its member states, and its proposals aimed at the enlargement of national markets through the constitution of a regional market. The coalition of technocrats and reformist politicians led by its first president, Rau´l Prebisch, considered that this was the only means to overcome traditional dependence on primary commodity 6 export trade. As the then prevailing model of development – that is, import- substitution industrialisation – was reaching its limit within the national markets, larger markets entailing economic diversification and technological modernisation were indispensable to advance further development. In the meantime, the creation of the EC also had an impact on pushing integration across the Atlantic, given that the resulting trade diversion in the Old Continent indirectly damaged Latin 7 American countries. ECLAC’s drive for regional integration initially came about in two waves. The first one saw the establishment of the Latin American Free Trade Association (LAFTA) and the Central American Common Market (CACM) in 1960; the second led to the creation of the Andean Pact (later Andean Community) in 1969 and the Caribbean Community (CARICOM) in 1973, partly as a reaction to the effects produced by the previous wave. A third one took place later, following the transitions to democracy in the 1980s and 1990s, and saw the creation of the Common Market of the South (Mercosur) and the relaunching of both the CACM and the Andean Community. Moreover, the North American Free Trade Agreement (NAFTA), the first regional organisation that included developed and developing countries (US, Canada and Mexico), was also born in this period. Labelled ‘open regionalism’, as they aimed to combine regional preference with extra-regional openness, the latter processes reached early success and are still in existence. Yet, none achieved its initial objectives as stated by the respective found- ing treaties – whether a free trade zone, a customs union or a common market. As of 2000, a fourth wave has been identified: post-liberal or post-hegemonic 8 regionalism, which has allegedly changed the focus from economics to logistics or politics. Physical integration, political identities and security issues are quoted as the rationale for the new integrative efforts, as in the cases of the Union of South American Nations (UNASUR), the Bolivarian Alliance for the Peoples of our 9 America (ALBA) and even Mercosur. Almost two centuries after holding two Bol´ıvar-led pan-American conferences, in 1819 and 1826, Latin American visions 6 Wionczek, ‘‘The Rise and Decline’’; Mace, ‘‘Regional Integration in Latin America’’. 7 Mattli, The Logic of Regional Integration. 8 Sanahuja, ‘‘Del ‘regionalismo abierto’ al ‘regionalismo post-liberal’’’; Riggirozzi and Tussie, The Rise of Post-Hegemonic Regionalism. 9 Carranza, Mercosur, the Global Economic Crisis; Cienfuegos Mateo and Sanahuja Perales, Una regio´n en construccio´n. Downloaded by [b-on: Biblioteca do conhecimento online UL] at 09:56 04 April 2012 120 A. Malamud and G.L. Gardini of integration seem to have gone full circle – back to a shared identity as the main driver. Identity politics, however, are likely to lead to fragmentation rather than 10 integration, which is driven instead ‘‘by the convergence of interests’’. The most recent reaction to the ideological radicalisation of Latin American regionalism has come from the Pacific Arc, as Chile, Colombia, Peru and Mexico have signed a treaty that – once again – puts the economy first, as they vow to foster free trade. As an outcome of the four consecutive waves, a patchy picture has emerged of 11 ‘‘many coexisting and competing projects with fuzzy boundaries’’. However, 12 these projects neither form ‘‘concentric circles of regionalist forums’’ nor show a minimum common denominator or a convergence of political or policy posi- 13 tions. The parallel with the European experience may be tricky but also helpful if handled with care. This is not to suggest that Europe be taken as a model, but just as a reference for comparison, as it has traditionally been for both analysts and decision-makers. Think of European integration as a combination of several circles that intersect partially: a political organisation (the European Union), a currency area (the Eurozone) and a border and migration zone (the Schengen area), all under the umbrella of the Council of Europe (see Figure 1). At the very centre, where all circles intersect, the six founding states sit together with nine countries brought together by successive waves of enlargement. Even if we added Europe’s defence alliance, that is NATO, thirteen countries would still share every circle of integra- tion. In other words, the EU has displayed – so far – an increasing degree of convergence regarding functional organisation, internal leadership, external actor- ness, and development strategy. It is true that, back in the 1960s, the then EEC had to compete with the European Free Trade Area (EFTA); however, it came out the winner due to its economic dynamism and, ultimately, its success. But even with two competing schemes, the situation in Europe remained one of convergence. Alliance with or neutrality towards the US or fear of the USSR united all the members of the EEC and EFTA. The place of West Germany and France within the EEC and the United Kingdom within EFTA did not result in incompatible international policies or in clashes bordering on political and diplomatic inaccept- ability. Furthermore, while differences existed on the degree to which integration should proceed (common market in the EU versus free trade area in EFTA), convergence towards a capitalist regional order based on free trade was never questioned on either side. A very different picture emerges in Latin America. Figure 2 shows nine of the afore mentioned regional organisations and one feature stands out: not one country participates in even half of them. In the Western hemisphere, regionalism is always 10 Malamud and Schmitter, ‘‘The Experience of European Integration’’, 147. 11 Tussie, ‘‘Latin America: Contrasting Motivations’’, 170. 12 Phillips and Prieto, ‘‘The Demise of New Regionalism’’, 120. 13 Gardini, ‘‘Proyectos de integracio´n regional sudamericana’’, 26. Downloaded by [b-on: Biblioteca do conhecimento online UL] at 09:56 04 April 2012 Latin American Regionalism and its Lessons 121 MNE SRB M UA HR MD RUS G AZ BIH AL EU Customs ARM European Union The Council Union of Europe European BG Economic Eurozone AND Area RO European CY IRL Free Trade GB TR Association FL A B D I RSM CZ E EST FIN F IS DK GR L M NL M CH N H P SK SLO Schengen LV Area LT V S PL Agreement with EU to mint euros FIGURE 1. European Union: concentric integration Source: Wikipedia, European Integration. subregional and there is no common core or political centre. The reality is that, every time a new bloc is born, it does so by excluding neighbouring countries and by intentionally differentiating itself from other (sub)regional organisations. Decentralised subregionalisms rather than concentric regionalism has been the end-product of such logic, by which subregional integration proceeds through regional or hemispheric disintegration. Overlapping regionalism and conflicting national strategies In Latin America, no sooner is a regional conflict solved than a national leader comes forward publicly announcing that ‘‘now, it is time for integration’’. Intermediate alternatives between conflict and integration, which are customary politics in other settings – such as conventional diplomatic relations or standard interstate cooperation – are either neglected or disdained. The burden of two century old dreams of Latin American unity, coupled with the shadow projected 14 by the European model, have imbued into most regional leaders the idea that anything short of integration is a political failure or, worse, a betrayal of the liberators or the peoples. The pre-eminence of this vision has had a twofold 14 Sanchez Bajo, ‘‘The European Union and Mercosur’’; Gardini, ‘‘Mercosur at 20’’; and Sanahuja, ‘‘Del ‘regionalismo abierto’ al ‘regionalismo post-liberal’’’. oD nw loadedb b[ y o- niB : bliotecad oc onhecimentoo nlineLU a ] tA 40 65:90 pril 2102 122 A. Malamud and G.L. Gardini FIGURE 2. Latin America: decentralised regionalisms From top left, reading wise: (1) the Americas, (2) Latin America, (3) ALBA, (4) North America (NAFTA), (5) Central America (SICA), (6) South America (UNASUR), (7) Mercosur, (8) Andean Community, and (9) Pacific Alliance. Source: Wikipedia, several entries. effect: while it has multiplied the number of regional organisations, it has at the same time emptied them – and the very concept of integration – of real content. This has resulted in ‘region inflation’: not a decade has passed without an addi- tional couple of blocs being created. Similar to cooperation and integration pro- 15 cesses in Africa, as discussed by Draper in this issue, another important aspect of Latin America’s inflated regionalism is non-exclusivity: every country belongs to more than one organisation and is thus potentially subject to double loyalty and norm conflict. 15 See article by Draper, in this issue, 67. Downloaded by [b-on: Biblioteca do conhecimento online UL] at 09:56 04 April 2012 Latin American Regionalism and its Lessons 123 Latin American regionalism or regionalisms result diluted at best and emptied at worst. This situation is both the cause and the product of discrepancies on three different planes. the variety and coexistence of integration schemes and their membership make it hard to reach a minimum common denominator. national strategies are hard to articulate within regional organisations that are based on the intergovernmental principle and therefore are more exposed to national swings. multiple membership creates frictions between and within regional integration projects, fuelling divisions instead of the unity that regionalism purports to pursue. First, the lack of a basic Latin American consensus on key issues is epitomised by the current situation in South America. Mercosur, ALBA and UNASUR, arguably the most relevant regional projects in the area, are the product of different political logics and visions. As a consequence, they give very different responses to three fundamental questions of Latin American regionalism: the relationship with the United States, the leadership issue, and the economic and development model to 16 pursue. The relationship with the United States varies from mildly competitive in commercial terms (Mercosur), to inconsistent or elusive (UNASUR), to ideologi- cally confrontational (ALBA). The role of leadership is not clearly defined either. Whereas ALBA reflects the allegedly socialist vision of Venezuela’s leader Hugo Cha´vez, UNASUR is a Brazilian creation designed to promote Brazil’s role regionally and globally. In turn, Brazil’s pre-eminence within Mercosur has been squeezed between the emergence of UNASUR and the bilateralisation of relations with Argentina. Finally, the models of development range from open economy and free trade (Mercosur), to rejection of free trade in favour of com- pensation and barter (ALBA), to the impossibility of adopting any model due to divergences among members (UNASUR). Second, the difficulty in reconciling national interests at the regional level is amplified by the intergovernmental logic. Because Latin American regionalisms 17 rely heavily on interpresidential dynamics rather than supranationality, they are extremely responsive to national agendas. At the same time, they lack unifying input from a strong regional bureaucracy. Despite a generalised turn toward left- leaning administrations throughout Latin America, national visions of economic and development strategies remain very different. For instance, Chile has adopted low tariffs and concluded free trade agreements with countries across the world including the United States and the EU. It is not convenient for it to join regional integration schemes such as Mercosur, where common tariffs are higher. 16 Gardini, ‘‘Proyectos de integracio´n regional sudamericana’’. 17 Malamud, ‘‘Presidential Diplomacy’’. Downloaded by [b-on: Biblioteca do conhecimento online UL] at 09:56 04 April 2012 124 A. Malamud and G.L. Gardini In contrast, in both ideological and policy terms a free trade area with the US would be unthinkable for Venezuela. Peru and Colombia have broadly followed the Chilean model, while Ecuador, Bolivia and Venezuela tend to regulate and restrict foreign trade and are largely state-dominated economies. Brazil and Argentina are in their own ways somewhere in the middle. What is clear is that no real economic integration is possible without a minimum of trade policy convergence. Third, multiple allegiances create or exacerbate tensions between and within integration projects. Simultaneous membership reveals, on the one hand, a degree of inconsistency of national choices and, on the other, an increasing gap between political declarations and diplomatic action. This may signal a parallel 18 surge in both ideology and pragmatism. Venezuela enshrined the principles of anti-capitalism and anti-free trade in the ALBA agreements; it has denounced and left the Andean Community for these reasons, but is seeking membership of Mercosur, still largely shaped by liberal economic precepts, and has joined UNASUR. The result is that Mercosur’s enlargement to Venezuela, signed in 2006, is still pending and technical negotiations on Caracas’ adaptation to the 19 acquis communautaire are ‘‘not making progress’’. For the time being, ‘‘we are 20 not close to full accession’’. Within UNASUR, countries with very different economic strategies (for example Chile and Ecuador) and political views and alliances (Colombia and Venezuela) coexist but limit the organisation’s actorness on crucial regional and multilateral issues. The relation between the adhesion to Latin American regional projects and the conclusion of free trade agreements with the US and the EU provide additional evidence of current inconsistencies, or more optimistically, extreme flexibility. Nicaragua has already ratified the US-sponsored Dominican Republic and Central American Free Trade Area (DR-CAFTA) while it has also joined ALBA. Ecuador, another ALBA member, has denounced the free trade agreement it had concluded with the US but at the same time has pursued preferential trade access to the US market through the Andean Trade Promotion and Drug Eradication Act (ATPDEA). Bolivia, also an ALBA member, has obtained an opt-out from the FTA negotiations between the Andean Community and the EU, thus further fragment- ing the cohesion of the Andean integration project. The latter was further strained by Colombia’s 2008 attacks on the territory of Ecuador during anti-guerrilla operations. Ultimately, regional positioning pertains to the domain of foreign policy and as such is highly dependent on national calculations. To Brazil, Mercosur is essentially 18 Gardini and Lambert, ‘‘Introduction’’. 19 Interview with Jose´ Manuel Quijano, former Director of the Mercosur Secretariat, Montevideo, 22 July 2010. 20 Interview with Walter Cancela, Director of Mercosur at the Uruguayan Foreign Ministry until 2010, Montevideo, 20 July 2010. Downloaded by [b-on: Biblioteca do conhecimento online UL] at 09:56 04 April 2012