Wednesday, April 04, 2007

Don't Cry for Uruguay, Truth is She Never Left MERCOSUR!


Don't feel too sorry for Uruguay just yet.

There's an article in mercopress, maintaining that:
Uruguay and Paraguay, junior members of Mercosur have lately been at odds with Argentina and Brazil claiming the block has become a two members club, with little benefits for the smaller partners and therefore the need to establish agreements with third countries
.

Uruguay has been entertaining the US on discussions over free trade, prompting speculation in other MERCOSUR quarters that it is not as committed to the MERCOSUR project as it claims to be.

Honestly, how can anyone feel that Uruguay is not that committed when, as Xinhua, Chinese news agency maintains:

Uruguay signed a bilateral trade and investment framework agreement with the United States in January, a step analysts said put the two countries closer to a possible free-trade agreement


To boot, London's Financial times reports that:

Uruguay may downgrade its status in Mercosur, giving up its full membership, if the South American trading bloc stops the country reaching a bilateral trade deal with the United States


This type of doublespeak can only compound the apparently-conspiratorial sentiment by the rest of the MERCOSUR bloc that feels Uruguay is selling out--and to no less than the United States!

Comments like the following don't help either:


“Uruguay must find a way of making a bilateral trade deal with the US,” Uruguayan Economy Minister Danilo Astori was quoted in the newspaper on Friday as saying.

“Our small country is trapped, a prisoner of the collective wishes of the group, and this is causing us serious harm.”


Let me just quickly go back to what Andrew Hurrell says about an aspect of regional integration:


REGIONALISM…can also be seen as panacea for smaller countries when they find themselves weak in the face of strong countries. – CF Latin America (MERCOSUR); AFRICA (ECOWAS; COMESA; SADC; etc..)

i. Hegemony (existence of hegemon within a region may undermine efforts to construct inclusive regional arrangements involving all or most of the states within a region)

FOUR WAYS IN WHICH HEGEMONY MAY ACT AS POWERFUL STIMULUS TO REGIONALISM:

a. FIRST, sub-regional groupings often develop as a response to the existence of an actual or hegemonic power. Formation is a means by which to improve BOP vis-à-vis locally dominant state (CF: ASEAN > Vietnam; GCC > Iran; SADC > South Africa; MERCOSUR > USA

b. SECOND, regionalism can emerge as an attempt to restrict the free exercise of hegemonic power thru creation of REGIONAL INSTITUTIONS. (cf: specific project of regional integration in EU arose precisely as preferred means of dealing with GY (armament + ecnc rehabilitation by tying it into integrated network);

c. THIRDLY, tendency of weaker states to seek regional accommodation with local hegemon either in the hope of receiving special rewards (BANDWAGONING)

d. FOURTHLY, hegemon itself may seek to actively become involved in the creation / construction of REGIONAL INSTITUTIONS. Alternatively declining hegemony may compel hegemon towards the creation of COMMON INSTITUTIONS to pursue its interests, to share burdens; to solve probs; and to generate int’l support & legitimacy for its policies



Now, if Uruguay goes threatening to downgrade its membership in the event that its other members refuse to allow it to have a bilateral deal with the US, you have got to wonder whether this small country is into MERCOSUR for a bandwagoning spree--ready to collect whatever it can whenever it can, yet feeling reluctant to follow the leftist policies of its bigger brother Venezuela, and Brazil.

Furthermore, this type of development, to me, calls into question the major big difference between MERCOSUR and many other regional organisations that appear to be motivated merely by economic reasons. It's about the institutions!

Other than the Secretariat, a Parliamentary Commission, inter alia, what else is there that can lend some support to a a more comprehensive regional bloc--as exemplified by even the African regional economic communities of ECOWAS, which has a Parliament, and a ECOWAS Community Court

An interesting paper by Celina Pena and Ricardo Rozemberg looks at some of the institutional deficiencies around and within MERCOSUR, maintaining:


The lack of an independent technical body is, undoubtedly, one of MERCOSUR’s clearest institutional deficits. The creation of working subgroups or technical committees with national officials was not effective beyond the transition period with respect to the designing of quadripartiteinstruments. Constructing an independent technical body could turn out to be a necessary condition in order to overcome current limitations, but not enough, because its recommendations are not binding and therefore are subject to the member states’ representatives’ political decisions.In any event, a new MERCOSUR technical body might just contribute to the preparation of negotiations with third countries and regions, and to the presentation of technical proposals on issues of the internal agenda where common interests exist


All these differences apart, it's clear, in my view, that if Uruguay is feeling hemmed in, and restricted, one could easily assume that a lack of motivation by some of the smaller members on where MERCOSUR is going is one of the reasons.

Uruguay, it looks, might have to do some serious soul-searching before countries decide eto expel it!

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