Ecla e Integracion Regional - [PDF Document] (2024)

7/27/2019 Ecla e Integracion Regional

1/33

1 | P a g e

Authors:

Edgard Moncayo Jimnez

UNU-CRIS Working Papers

W-2010/8

THE CONTRIBUTION OF THE REGIONAL UNECONOMICCOMMISSIONS TOREGIONAL INTEGRATION PROCESSES:THE

CASE OF ECLAC

7/27/2019 Ecla e Integracion Regional

2/33

2 | P a g e

The author

Edgard Moncayo Jimnez

Director of the Research Centre of the Faculty of Administrativeand Economic Sciences,

Universidad Central (Bogot), and Associate Research Fellow,UNU-CRIS.

United Nations University - Comparative Regional IntegrationStudies

Potterierei 72, 8000 Brugge, BE-BelgiumTel.: +32 50 47 11 00 /Fax.: +32 50 47 13 09www.cris.unu.edu

7/27/2019 Ecla e Integracion Regional

3/33

3 | P a g e

Abstract

This paper deals with the role the regional UN EconomicCommissions have played in support of regional

integration processes in the past and explores their possiblerole in the future. Indeed, all regional UNCommissions have a trackrecord of support to regional cooperation and integration indifferent policy

areas, although there is some variation in terms of intensity,modalities as well as direction of this

support. The regional commission which has probably been mostprominent in this area is ECLAC. The

roles that this commission has played in the first and secondwaves of regional integration in Latin

America, and the role it is currently playing, are analysed indepth in this paper. The author concludes the

paper with a reflection on the potential role of ECLAC and otherregional commissions in the future.

Introduction1

This paper deals with the role the regional UN EconomicCommissions have played in support of regional

integration processes in the past and explores their possiblerole in the future. Indeed, all regional UN

Commissions (i.e. ECLAC, ECA, ESCWA, ESCAP and UNECE) have atrack record of support to

regional cooperation and integration in different policy areas,although there is some variation in terms of

intensity, modalities as well as direction of this support. Theregional commission which has probably

been most prominent in this area is ECLAC. The role that thiscommission has played and is playing in

this area is analysed in depth in this paper, as it is a goodstarting point for a more general reflection onthe potential roleof the regional commissions in the future.

The intention of creating a common socio-political, economic andcultural space has always been a

constant in Latin American history. In counterpoint to local-(sometimes) nationalist- tendencies, a clear

inclination towards regional integration can be observed sincethe beginning of the republican era.2

During the first half of the 19 th century, some of the mostdistinguished leaders of the emancipating

processes in Hispanic America, promoted several initiatives inorder to achieve the political and economic

union of the newly formed sovereign states. These proposals weremainly motivated by the commondefence against the potential threatof an incursion by the Holy Alliance (Austria, Russia andPrussia),

which since 1815 tried to restrain democracy in Europe and inthe New World. Furthermore, these

1The final version of this paper will be included as a chapterin: Baert, F., T. Felcio and P. De Lombaerde (eds),

The UN and the Regions. Third World Report on RegionalIntegration, Dordrecht: Springer (forthcoming).2The followingparagraphs are based on Vieira (2004).

7/27/2019 Ecla e Integracion Regional

4/33

4 | P a g e

initiatives were also aimed at the consolidation of the risingdemocracy and the economic positioning in

the emerging international division of labour.3

The most outstanding project in the Latin American integrationprotohistory was, the Amphictyonic

Congressof Panama in 1826, promoted by the Liberator SimnBolvar. A Treaty of Union League and

Perpetual Confederation, was signed at the Congress, with theaim of creating a confederation intended to

unite themselves against every attempt of foreign dominance. Theevent held in Panama attracted

delegates from current Colombia, Ecuador, Panama, Venezuela andPeru (Andean countries); Costa Rica,

Guatemala, Honduras, Nicaragua, El Salvador (Central American)and Mexico. The absence of the

southern nations, the covert opposition from the United States(US)4, the common fears from the

Bolivarian countries themselves and the participants lack ofpolitical will to ratify the treaty, turned the

Congress of Panama into one of Bolvars thwarted dreams.

The Congress of Panama can be described by the contemporaryintegration discourse as an initiative

focused on a continental union scheme to achieve the convergenceof the different integration processes

between nations during the third decade of the 19th century.Such integration processes included Great

Colombia (formed by Nueva Granada current Colombia-, Venezuelaand Ecuador), the United

Provinces of Central America(Federal Republic of CentralAmerica)(formed byGuatemala, El Salvador,

Honduras, Nicaragua and Costa Rica), and the United Provinces ofRio de la Plata (formed by current

Argentina, Bolivia, Paraguay and Uruguay).

This period of integrationist euphoria was followed by a new andlong cycle, marked not only by sharp

nationalisms, but sadly also by numerous conflicts betweenseveral nations in the region. The fragmenting

forces penetrated at a national level, causing internalfrictions and divisions who have not yet been solved.

Consequently, the territorial issue in its internal and externaldimensions has been at the centre of Latin

American history over the years.

With the exception of sporadic regrouping attempts in the secondhalf of the 19 thcentury,5only after the

Second World War would Latin America restore the lost path ofintegration.

3The Central American Jos Cecilio del Valle (1970-1834)proposed, for example, the creation of a Pan-American federationconcluding

with a general trade agreement.4 In 1823, the United States, whosince its independence had adopted a neutral position in theindependency wars in the south of the

continent, proclaimed the Monroe Doctrine, starting a new era,not yet finished, characterised by the US intervention in the restof thecontinent. The United States sent its delegates to theCongress of Panama. However due to certain circ*mstances, they didnot participateactively in its deliberations.5In 1980, theInternational Union of American Republics (called Pan-AmericanUnion since 1810), was created in Washington. This is

the beginning of the continental political and economiccooperation called Pan-Americanism.

7/27/2019 Ecla e Integracion Regional

5/33

5 | P a g e

First Wave of Latin American Regionalism

In an international context characterised, on the politicalscene by the Cold War and on the economic

scene by the beginning of a period distinguished by positiveeconomic growth and world trade that would

last for 30 years, the early regionalism in Latin America foundits concrete expression in the Latin

American Free Trade AssociationLAFTA(1960), the Central AmericanCommon Market (1960), the

Caribbean Free Trade Association-CARIFTA (1968)6and theCartagena Agreement (1969).

This first generation of integrationist schemes in the region,contemporary to the European integration

process, had a common denominator: the liberalisation of trade.In the case of the Cartagena Agreement

(Andean Group), the Central American Common Market (1960) andthe Caricom (1973), the goal was the

establishment of a common market, through the previous creationof a Customs Union. These treaties,

especially the Central American and Andean ones, pursued longterm development goals, based on large

scale industrialisation and productive complementarity amongassociate states. The achievement of these

objectives required an active role of the state.

Argentina, Brazil, Chile and Uruguay already enjoyed aconsiderable amount of exchanges and trade,

boosted by free trade and payment agreements between themselves.Thus, they played a determinant role

in the shaping of LAFTA whose membership also included Bolivia,Colombia, Ecuador, Mexico,

Paraguay, Peru and Venezuela (Wionczek 1964).

Unlike the European experience, where the political impulse wasessential ( we're [EEC] not in business,

we're in politics)7, Latin American post-war regionalismoriginated from purely economic

considerations.8Therefore, the obstacles to the process ofimport substitution, the generalised difficulties

in the balance of payments, the narrowness of internal markets(worsened with the unequal distribution of

income), and the need to enhance employment creation in order toabsorb the demographic explosion,

were among the factors that led Latin America to look foralternatives for reaching economic growth and

social development based on regional cooperation. Furthermore,the Treaty of Rome, signed in 1957, was

expected to restrict the Latin American exports to Europe.

In this regard, the role of the Economic Commission for LatinAmerica ECLAC was fundamental.

ECLAC was established in 1948, after a decision of the UnitedNations in 1947. During the 1950s,

ECLAC framed a systematic and coherent approach to LatinAmerican development.

6In 1973, CARIFTA was turned into the CaribbeanCommunity-CARICOM-.

7 Speech from Prof. Hallstein, at the time President of theCommission of the EEC, in the Joint Meeting of Harvard Universityand

Massachussets Institute of Technology, on 22 May 1961. Quoted byDell (1966: 45).8Also different from the abovementionedintegrationist projects from the first half of the XIX century.

7/27/2019 Ecla e Integracion Regional

6/33

6 | P a g e

Based on the Economic Survey of Latin America, 1948 and RaulPrebishs seminal contribution

Economic Development of Latin America and its PrincipalProblems, published in 1949 (as a prologue

of the Economic Survey...)9, and being supported by a group ofremarkable intellectuals under the

leadership of Prebish himself, ECLAC developed the well knownLatin American structuralism theory,

building a truly integrated concept of development. Thus ECLACstheoretical framework dealt with

growth, capital accumulation, structural change, technologicalprogress, income distribution and

international integration of the peripheral economies (Rodrguez2006).

The main ideas of ECLAC at the time were closely linked to theproposals developed by structuralist

authors such as Kuznets, Hirschman, Myrdal and Kaldor, andtherefore industrialisation was thought to

represent the most appropriate means to achieve higher levels ofdevelopment. These common approaches

and the influence of those authors in development policiesacross many peripheral countries (in Latin

America, Egypt, India, etc.), represented what Ranis (2004)called the Post -War consensus.10

ECLACs understanding of industrialisation found severaljustifications. Firstly, the need for an

endogenous source of growth in order to overcome the externalrestrictions caused by the deterioration on

the terms of trade. Secondly, the importance of generating theirown technological changes due to the

asymmetric concentration of innovation and benefits in theindustrialised countries. Thirdly, the need to

increase employment in order to absorb the excess of laboursupply with low productivity in the

agricultural sector.

Finally, the strengthening of the industrialised sector, fullemployment and the increase of productivity

and wages would contribute to improve the income distributionand to overcome long term structural

poverty (Fitzgerald 1998).

In the four abovementioned aspects, the participation of thestate through trade policies, productive

incentives, coordination and planning of public investment wereessential.

It should be observed that, unlike stated by the literaturecriticizing ECLAC, the Commission has never

proposed an autarchic model. On the one hand, already in theearly sixties ECLAC proposed an export

strategy for manufactures through intra Latin American trade andthrough the suppression of tariff

barriers in core countries (Bielschowsky 1998: 23).11The meansto achieve these goals were respectively,

9This work was recognised by Hirschman as the Latin-AmericanManifest (Gurrieri 1982: 14).

10In a different analytical framework, Marxist economists suchas Paul Baran (1957), proposed industrialisation as the path forfuture

economic development.11

Indeed, Latin American manufacture exports increased sharply(more than 10 per cent) between 1960 and 1973 (Halperin, T. etal.2002: 362)

7/27/2019 Ecla e Integracion Regional

7/33

7 | P a g e

Latin American integration schemes and the creation of theUnited Nations Conference on Trade and

Development (UNCTAD) in 1964, under the leadership of Prebishhimself.

In the framework of this conference, the core countriesestablished a system of unilateral tariff

preferences in favour of developing countries in 1971(Generalised System of Preferences).

This context reveals the reasons propelling ECLAC to focus onLatin American integration. The purpose

was the liberalisation of commercial exchanges between countriesin the region to overcome the

limitations of national markets through the use of economies ofscale and the expansion of the horizons of

import substitution to the regional level (Wionczek 1964: XVII).The initial contribution of ECLAC to

regional integration was the Economic Survey of Latin America,1949, as well as some studies on Latin

American trade within the region and worldwide, drafted byspecialised working groups. Moreover,

ECLAC encouraged the Central American integration processinitiated in 1951, which achieved its first

contractual formulation with the General Treaty on CentralAmerican Economic Integration, signed in

Managua in 1960.

ECLACs work in that period was compiled in the report The LatinAmerican Common Market and the

multilateral payment systems, presented by the ExecutiveSecretary in 1959. 12 According to the

document [...] the common market aims at the creation of a newmodel for Latin American trade more

suitable to meet the need for industrialisation and reduceexternal vulnerability (CEPAL 1959: 330).13

It is remarkable that the document rejects any plan orpretension of self-sufficiency in a clear, categorical

and resolute way. On the contrary, the idea of integration as aplatform to improve the international

inclusion of Latin America is stressed throughout thereport.

The need for industrialisation in these countries is undeniable.It is also indisputable that by intending

to fulfil this objective within small countries, there will be adeprivation in a much higher level than

with bigger countries of specialisation opportunities and lowercosts which can only be attained

inside a common market. This market should be organised in sucha way that it stimulates industrial

expansion of the regions less developed countries [...] thecommon market will contribute to reduce

the cost of production and boost industrial manufacture exports[] Latin American Common Market

policy, as it has been conceived, is far from being againstinternational trade, but on the contrary

supporting it

(CEPAL 1959: 330-337)14

12This report was drafted by Raul Prebish, at the time ExecutiveSecretary of ECLAC.

13Our translation.

14Our translation.

7/27/2019 Ecla e Integracion Regional

8/33

8 | P a g e

Besides, ECLACs integrationist proposals were not hostile toforeign direct investment: [...] foreign

capital will have a vital role in the next years. Therefore, itwill help to create the necessary conditions for

Latin America endogenous growth (CEPAL 1959: 345).15

Nevertheless, the report states that a

restructuring of trade policies in the core countries isrequired in order to achieve the double goal of

boosting trade with the rest of the world and trade within theregion:

[...] a readjustment of trade policy [of industrialised centres]will be necessary [...] without it, the Latin

American common market cannot by itself promote trade with thebig centres. If Latin Americas

trade flow towards the latter centres continues to be composedsolely by traditional products, still

bounded by current barriers, the quantity of imports coming fromthose big centres will be the same

with or without the common market, and only its compositionwould have changed. However, if the

readjustment of trade policy would improve the conditions forprimary exports and open new

opportunities for industrial exports, the Latin American commonmarket could apply all its potential to

increase trade

(CEPAL 1959: 37)16

Regarding operational aspects, ECLAC proposed an integrationmodel with the following characteristics:

A Common Market opens to all other Latin American countries,with a common external tariffand universal product coverage, to beachieved in stages.

Harmonisation of industrial policies and agreements ofindustrial complementation, in order toencourage the advanced phaseof import substitution.

Special treatment to relatively less developed countries and tothe traditional agriculture sector. Safeguard clauses for sensitiveproducts and compensation mechanisms to assure an equitable

distribution of benefits.

A multilateral payments agreement. State- led integration withan active role for the private sector.

The abovementioned Treaty of Montevideo (1960) reflected themajority of elements of ECLACs

proposal, though in a light version due to the fact that thesouthern countries (Argentina, Uruguay,

Brazil and Chile) had proposed a scheme with a narrower scope,in which only trade liberalisation was

pursued. According to Wionczek (1964: 71):

15Our translation.

16Our translation.

7/27/2019 Ecla e Integracion Regional

9/33

9 | P a g e

Therefore, the final formula accepted by the seven promotingcountries17showed all the characteristics of

a transaction. Some consider that its biggest virtue is to avoida political and economic rupture in Latin

America, for which the conditions for a serious long-termregional economical cooperation should be

created.18

Also in 1960, the General Treaty on Central American EconomicIntegration was signed in Managua

(Nicaragua) by Guatemala, El Salvador, Honduras and Nicaragua,19culminating a process that started in

the preceding decade with the active support from ECLAC. TheTreaty of Managua was more ambitious

than the Treaty of Montevideo since the former aimed at thecreation of a common market, a customs

union, an accelerated program of trade liberalisation, anindustrial development plan, and cooperation in

areas such as infrastructure and investment financing. In orderto pursue the latter, the Central American

Bank for Economic Integration (1960) was created. A multilateralpayments system was also established

in 1961. And in 1964, the Agreement for the Establishment of theCentral American Monetary Union

was formalised although it was never fully implemented.

The reactions from the international community to the firstgeneration of Latin American integration

processes were diverse. Whereas the US - unlike in the case ofEuropean integration had held an

ambiguous and fearful position towards Latin Americasintegration efforts and towards ECLAC itself, it

decided to endorse LAFTA and the Treaty of Managua during theConference of Punta del Este

(Uruguay) in 1961. In this meeting of the Inter-AmericanSystem,19 summoned by the initiative of

President Kennedy to multilateralise the Alliance for Progress,the US delegation proposed the inclusion

in the final text of the Charter of Punta del Este of thefollowing declaration according to which one of

the purposes of the Alliance for Progress was:

To strengthen existing agreements on economic integration, witha view to the ultimate fulfilment of

aspirations for Latin American common market that will expandand diversify trade among the Latin

American countries and thus contribute to the economic growth ofthe region.

An entire section of the Charter is devoted to the means bywhich the Alliance for Progress would

contribute to the economic integration of Latin America(Levinson and De Onis 1970: 170).20

17 The Treaty of Montevideo was originally signed by Argentina,Brazil, Chile, Mexico, Paraguay, Peru and Uruguay. Later on,

Colombia, Ecuador and Venezuela also joined.18

Our translation.19

Costa Rica joined in 1962.20

In a new meeting at Punta del Este in 1967, summoned byPresident Johnson, the Chiefs of State of the Pan American Unionagreed toform a Latin American Market, with financial support fromthe US, over a fifteen year period beginning in 1970 (Levinson andDe Onis1970: 174).

7/27/2019 Ecla e Integracion Regional

10/33

10 | P a g e

The GATT and the International Monetary Fund (IMF) adoptedtotally opposed positions. The first,

following the precedent established by the Treaty of Rome,declared LAFTA compatible with its rules on

free trade. The latter, by contrast, rejected the establishmentof payment and compensation mechanisms in

the framework of LAFTA arguing that it could lead tobilateralism and delay th e regions course to

convertibility and liberalisation of trade and payments alreadyunderway (Dell 1966: cap. IX).

According to Fernando H. Cardozo (1977), the 1960s were theGolden Age of ECLAC. There was a full

convergence between its ideas on industrialisation-drivendevelopment and the need to enlarge markets

through integration, on the one hand, and the actually adoptedpolicies by the Latin American countries.

Maria da Conceio Tavares (1998), a prominent Brazilian economistfrom the ECLAC school of

thought, rightfully synthesises ECLACs position onintegration:

In sum, regional economical integration was conceived, as shownin ECLACs original documents, as

a strategic vector intended to break out of the prevailing lackof dynamism and productivity in the

Latin American economy. It would project itself in threeinterdependent dimensions: the acceleration

of growth, the expansion and diversification of exports, and theprogress of industrialisation

(Tavares 1998: 202)21

In the first years of LAFTA, the liberalisation of commercialexchanges was very slow and it was mainly

concentrated on raw materials and foodstuff coming fromArgentina and Brazil, and on a smaller scale

from Uruguay and Paraguay (Cline 1983: 317). This led ColombiasPresident Llera s Restrepo, and

Chile's President Frei to propose to the other Andean countriesa more ambitious sub-regional agreement.

In 1969, Bolivia, Colombia, Chile, Ecuador and Peru concludedthe Cartagena Agreement (Andean

Group), also joined by Venezuela in 1973 (whereas Chile left in1976).22

The aim of the Andean Group was not the creation of aself-sufficient space detached from LAFTA. On

the contrary, it aimed at the strengthening of commercial bondsand productive complementation between

the members of the Association. Nevertheless, its integrationmodel was more advanced than the LAFTA

one.

The Andean Group aspired to become a common market withharmonised economic policies towards

third countries by means of a common external tariff and acommon regime for foreign direct investment

(FDI) and technology. Furthermore, the Andean Group saw as oneof its major objectives balanced sub-

regional growth, formalised in a regime of preferentialtreatment for the less developed countries (i.e.

Bolivia and Ecuador) in all the programs of the agreement. Amongits main mechanisms, a policy of

21Our translation.

22Colombia, Ecuador and Venezuela constituted the Great Colombiain the beginning of the XIX century.

7/27/2019 Ecla e Integracion Regional

11/33

11 | P a g e

integrated industrial development was foreseen to jointly carryout programmes in new industrial

sectors.23

In 1973, Prebish declared enthusiastically that the scheme ofthe Cartagena Agreement overcame many of

LAFTAs limitations:

I believe that the existence and the development of the AndeanGroup will help to clarify more than

one doubt or sceptical opinion regarding the Latin Americanattitude. It is positive that the Cartagena

Agreement has made use of the LAFTA experience, trying toovercome and correct the previously

mentioned flaws

(Prebisch 1973: 35)24

One of the strengths of the Andean Group underlined by Prebishwas the existence of an Executive

Secretariat which, similarly to ECLAC, had the legal andtechnical capability to act in accordance with

the collective objectives and independently from the memberstates interests (Prebisch 1973: 34-35).

Devlin and Estevadeordal (2001: 2) argue that the Andean modelof integration is a good synthesis of the

first wave of Latin American regionalism.

Since its beginning, Latin America integration faced hugeobstacles, such as those related to the

accentuated differences in levels of income and productivedevelopment between the countries involved

in the process. Unlike the European Economic Community whichdeparted from relatively hom*ogeneous

national structures combined with strong economicinterdependence (building on century-old ties), Latin

America showed a high degree of structural heterogeneity, inAnbal Pintos words. This author explains

that the economies in the region were characterised by thecoexistence of several modern poles -

composed by export activities (primary commodities) andindustrial activities, with good productivity

performance - and primitive production systems which had notexperienced structural changes since

colonial times (Pinto 1970).

Consequently, almost half of Latin American population was faraway from the dynamics of the modern

capitalist market integration was aiming for.

A second element that hindered the evolution of Latin Americanintegration was the lack of commitment

from the governmental elites of the region regarding theadoption of harmonised macroeconomic policies.

In practice, each country continued elaborating exchange rate,fiscal and monetary policies addressing

their domestic needs, disregarding the declared objectives ofintensifying cooperation within the region.

23Puyana (1984) presents a complete analysis of the first phasesand achievements of the Andean Group.

24Our translation.

7/27/2019 Ecla e Integracion Regional

12/33

12 | P a g e

In third place, there were the difficulties associated with theadopted integration models: exclusive trade

orientation and weak institutional basis in LAFTA; unrealisticobjectives in terms of joint industrialisation

and very complex institutional structures in the cases of theAndean Group and the Central American

Common Market.

Last but not least, the import substitution strategy (ISI) wasincoherently pushed forward. Some of the

most serious limitations of this strategy in Latin America were:the existence of tariff patterns that

provided exaggerated protection to consumer goods, thatdiscouraged the internal production of

machinery and other equipments; lacking interest in exportdevelopment; excessive intrusion by

multinational companies; and absence of endogenous technicalprogress. In these circ*mstances, the

modern industrial sector was unable to deploy Kaldors virtuouscycles, which had characterised

industrialisation in advanced countries, at the regional level,as had been proposed by ECLAC.

In spite of this, during the 1960s and the 1970s, Latin Americanintegration achieved some significant

successes. The intraregional trade share (measured by exports)in LAFTAs member states went from 6.7

per cent in 1961 to 14.0 per cent in 1980 (Aladi 1983),25growing even more in the Central American

Common Market.26The Andean Group developed a solid institutionalbase including an investment bank

(Corporacin Andina de Fomento).

However, the profound disturbances in the world economy whichtook place in the 1970s and 1980s led

to the failure of the first wave of Latin American regionalism.Thus, this period is often identified by

ECLAC as the lost decade for the development of the region.

Among other factors, the 1973 and 1979 oil shocks, the fiscalcrisis of the mid-1970s and the

abandonment by the US of the Bretton Woods rules on fixedparities, meant for developed countries the

end of an expansive cycle known in economic history as thegolden age.

Simultaneously with falling economic activity and productivity,oil prices were increased by OPEC in

1973. The corresponding need for international banks to recycleexceeding funds from oil producing

countries led to a massive expansion of the internationalmovements of capital. This astonishing increase

of capital transactions, together with the technologicalrevolution in central countries, established the

beginning of the current phase of globalisation.

25The biggest part of these exchanges was operating within theMultilateral Compensation and Reciprocal Credit Agreement, signedin

1969 by the central banks of all contractual parties of LAFTAand the Dominican Republic. On the concept and measurementofintraregional trade shares, see e.g. Iapadre (2006).26

In the CACM, the intra-regional trade share (measured byexports) went from 8 per cent in 1962 to 25.4 per cent in 1980(Halperin, T.et al.2002: 375).

7/27/2019 Ecla e Integracion Regional

13/33

13 | P a g e

Such processes were accompanied by an ideological shift infavour of the free market under the

leadership of President Reagan and Prime Minister Thatcher. Thisshift was further reinforced by the

implosion of the Soviet Union and the generalised collapse ofthe socialist regimes.

In conclusion, this period did not meanas previously notedan ageof change but rather a change of

age; and in this transition Latin America got the worst of it.Developed countries faced the emerging

challenges with a new range of fossil energy-savingtechnological innovations and made the transition

towards an information and knowledge based economy. On theirside, the South-East Asian region

succeeded in consolidating its industrial export modelbenefiting from a wide access to the North

American market.

Latin America, on the contrary, became trapped in the landslideof eurodollars and petrodollars that

flooded the region with unconditional loans and negativeinterest rates in the 1970s. Later, in the 1980s, a

complete change occurred and massive volumes of financialresources were withdrawn, sinking the

region for a whole decade. Besides, high debt service payments,with remarkably high interest rates, were

accompanied by a generalised worsening of the terms of trade, areduction of the demand for primary

commodities in the North and, consequently, a restricted accessto fresh capital resources.

In this period of the world economic history (1980-1990),developed countries registered an annual 2.0

per centper capitagrowth and decisively entered a new stage ofglobalisation and technological changes.

Asia achieved the highest growth in the post-war period (4.9 percent)27

, successfully entering in

productive activities with high technological content.Paradoxically, Latin America experienced on

average a tightening of -0.1 per cent of per capitaGDP andsuffered a severe regression in all political

and structural dimensions of its development process.

This situation was exacerbated by the structural adjustmentprograms adopted by Latin American

governments in order to face the crisis. These programs provideda severe reduction of public spending -

especially in the social sector - and on imports, causing a deeprecession and also a generalised

deterioration of the social indicators. As a result, between1980 and 1990 the regional GDPper capitafell

by 9 per cent and the real minimum wage dropped 31 per cent,whilst poverty and extreme poverty

increased by 5 per cent and 3 per cent respectively.28 Inaddition to those recessive adjustment policies,

the IMF and The World Bank introduced conditionality clauses inthe financing operations.

The devastation produced by the Latin American debt crisisduring the 1980s seriously damaged the main

pillars of the development model that Latin America had beenfollowing until then: industrialisation based

27ECLAC (2003: 29).

28Halperin, T. et al.(2002: 395).

7/27/2019 Ecla e Integracion Regional

14/33

14 | P a g e

on import substitution, state intervention, and economicintegration.

The dismantling of industrialisation policies, which started inthe 1970s in the Southern Cone (Argentina,

Uruguay and Chile) (Ramos 1986), became a general trend in LatinAmerica during the years of the debt

crisis. The countries of the region were convinced that theindustrialisation process was worn out and has

caused serious distortions in the structure of relative pricesin their economies. Unilateral trade

liberalisation was initiated by Bolivia, Mexico and Costa Ricaand spread to the rest of the countries of

the region in the beginning of the 1990s (French-Davis 2005:50).

It is undeniable that import substitution industrialisationshowed indeed serious limitations and was

affected by significant incoherencies, as ECLAC had timelywarned. However, in the same period Latin

America also witnessed significant progress on all itsdevelopment fronts, described by the World Bank

in its first World Development Report (1978) as a substantialimprovement of the historical record

(Brutton 1998:916). Additionally, as Shafaedin (1998) and Chang(2004) clearly state almost all currently

developed economies used intensively several forms ofprotectionism in order to achieve their economic

takeoff. This is what happened also in the recent case of SouthEast Asian industrialisation (Aoki et al.,

comp. 2000).

In addition to the trade liberalisation a reduction of thefunctions of the state was implemented, as

prescribed by the neoliberal paradigm that began to prevailduring that period in Latin America. The

concept of a developmental state, with an active role throughplanning, the protection of the internal

market, fiscal policy and direct investment in strategicsectors, was gradually replaced by a smaller state

via privatisation, fiscal orthodoxy and market deregulation.29In regard to the new economic growth

strategy, this was captured by the often repeated dictum thebest industrial policy is noindustrial policy

(Ocampo 2008: 47).

In such a context, it was to be expected that the integrationmodel aimed at boosting the import

substitution strategy at the regional level also entered into acrisis. It was a real identity crisis since the

integration process lost its way due to the lack of higherindustrialisation objectives and active state

leadership.

29Salazar (1991) presents a good extensive overview of theparadigm shift on the role of the State in Latin America duringthis period.

7/27/2019 Ecla e Integracion Regional

15/33

15 | P a g e

The Second Latin American Regionalism

The abovementioned transformations in the world economy andchanges in development policies in Latin

America, associated with a worldwide revaluation of regionalism,led to Latin Americas second

regionalism in the 1990s.

Although up until then globalisation was expected to stimulatemultilateralism, during that period there

was a movement towards regional integration agreements at aninternational level, as noted by Diana

Tussie: It could be argued that, paradoxically, globalisationhas not accelerated but has actually slowed

down the development of the multilateral trading system over thelast decade (Tussie 1998:

81).Therefore, by that time more than 90 per cent of the membersat the WTO were participating in

regional integration agreements (WTO 1995). This paradox couldbe explained, as suggested by Charles

Oman (1996), by the fact that national states wanted to takepart in economic internationalisation without

endangering their autonomy to manage their commercial flows.

The limitations of GATT multilateralism30 at that time, theconsolidation of the European Union (EU)

with the Treaty of Maastricht of 1992, the adoption of the euroand the accession of ten new member

states also played a role in the renewed importance ofregionalism and the second regionalism wave

(Bhagwati 1991). Regarding the accessions of the new EU memberstates, it has been observed that the

enlargement or extension of the existing regional agreementsgives an incentive for non-members either

to apply for membership, so that they are not left aside, orengage in new agreements (i.e. a domino

effect occurs, according to Baldwin, 1993).

In the case of Latin America this second regionalism wave wasdue, among other factors, to the new

position adopted by the US. As previously mentioned, thiscountry had been a champion of free trade and

multilateralism since the end of the Second World War, andtherefore sceptic and many times opposed

towards Latin American integration. However, the US considerablychanged its trade policy and began

showing a growing interest towards regional integrationinitiatives. Firstly, the Caribbean Initiative was

launched in 1983. Subsequently, bilateral free trade agreementswith Israel and Canada were concluded in

1985 and 1989 respectively. Moreover, the US joined APEC in1989. Finally, in 1992, the North

American Free Trade Agreement (NAFTA) was put in place withMexico and Canada (Panagariya 1998).

The culminating point of this new American attitude towardsregionalism took place in 1990, when the

30Until the mid 80s, when the new regionalism starts takingform, the Uruguay Round which resulted in the transformation of theGATT

in to the WTO had not yet been concluded.

7/27/2019 Ecla e Integracion Regional

16/33

16 | P a g e

administration of President Bush Sr. introduced the AmericasInitiative, proposing a continental scale free

trade area.31

Other relevant causes behind this renewed inclination towardsregionalism were the consolidation of

certain structural reforms that were already underway, thenecessity of attracting FDI and the interest in

undertaking functional cooperation initiatives in fields such asinfrastructure and energy.

The transformation of LAFTA into the Latin American IntegrationAssociation (LAIA) in 1980 can be

regarded as the first Latin American movement towards the newregionalism. This treaty initially

proposed as long term objective the creation of a Latin AmericanCommon Market, although in practical

terms it became an overly open and flexible scheme where almosteverything was possible: multilateral

and bilateral agreements between member countries or between thelatter and other Latin American

countries, and the inclusion of issues not just related to tradebut also to agriculture, tourism, science,

technology, or economic complementarities, amongst others. Noneof them included deadlines or specific

chronograms (Vieira 2008: 103-107).

In the following years several other agreements were signed: theGroup of Three (G-3) between

Colombia, Mexico and Venezuela (1989), the Common Market of theSouthern Cone (MERCOSUR)

between Argentina, Brazil, Uruguay and Paraguay (1991)32, thetransformation of the Andean Group into

the Andean Community (1997), and the transformation of Caricom(2002). In addition, NAFTA was

signed between Canada, Mexico and the US in 1994, representingthe first integration scheme between

the latter and a Latin American country. From that momentonwards, these North-South interregional

agreements became one of the most characteristic elements of thenew stage of Latin American

regionalism.

This collection of integration schemes showed some commoncharacteristics, which enables us to label

them as second regionalism. These common factors included: widerproduct coverage and depth of the

agreements; liberalisation of FDI; enhanced participation ofprivate sector; and, above all, search for

compatibility between a reasonable protection of the integratedmarket and the efficient insertion in the

international markets.33

In conclusion, the new agreements were pro-market,pro-trade,pro-competition

and pro-FDI.

31Garay (1997) presents a good analysis on the context, causesand (potential) consequences of the Free Trade Area of theAmericas

(FTAA).32

Chile and Bolivia became associate members as of 1996 and 1997,respectively. Since Argentina, Brazil, Uruguay and Paraguay hadbeenthe main promoters of LAFTA, MERCOSUR represents an alignment ofthese countries with the new Latin American integrationcontext.MERCOSUR had its origins in a bilateral agreement signed in 1986between Argentina and Brazil in the framework of LAIA.33For acomplete analysis of the second regionalism wave in Latin America,see De Lombaerde and Garay (2008).

7/27/2019 Ecla e Integracion Regional

17/33

17 | P a g e

A synoptic comparison between first and second (open)regionalism is represented in Table 1.

Table 1

First versus second regionalism

First Regionalism Second or Open Regionalism

Functional auxiliary instrument of ISI in order

to expand protected markets.

Functional for the strategy of insertion in the

worlds economy third way towards the global

liberalisation of markets.

Agreements between countries with similar

development levels (North-North or South-

South).

Agreements between developed and less

developed countries (North-South).

Hostility of US. Active support from the US.

Superficial integration (industrial goods,

tariffs).

Deep integration (all products, services,

investment, and competition regimes).

Restrictions to FDI. Attraction of FDI.

Economic scope. Economic, social and political scope.

Governmental initiative. Active participation from privatecompanies.

Resource allocation through planning and

political negotiation.

Market based allocation of resources.

Differentiated treatment of least developed

countries.

Equal norms, although with different

adjustment periods.

Source: Authors elaboration, based on Lawrence (1997).

In the context of abovementioned changes in the internationalenvironment and in the orientations of

development and integration policies in Latin America, ECLAC,following its historical-structuralist

7/27/2019 Ecla e Integracion Regional

18/33

18 | P a g e

method, adjusted its position according to the sequence ofhistorical events. Thus, ECLAC first proposed

expansive adjustment policies and debt renegotiation (ECLAC1984), and afterwards, a new strategy

oriented towards long term growth (ECLAC 1990).

The core of this new strategic visioninspired by the work ofFernando Fajnzylber (1983, 1988, 1990)

was a renewed proposal for industrialisation based on thecreation of an endogenous core of technical

progress,34 needed in order to achieve genuine competitivenessin the international market. The

productive transformation with social equity, which articulatedECLACs contributions, also granted an

essential role to an equitable income distribution consideringthe latter determines consumption patterns

and hence savings and investment rates which influence therelationship between capital and production

(Bielschowsky 1998).

According to the document Productive transformation with socialequity (CEPAL 1990):

[t]he productive transformation with social equity can beachieved in the context of better

international competitiveness. Such competitiveness should relymore on a deliberate and systematic

incorporation of technical progress in the productive process(with the corresponding productivity

increases) than on shrinking of real wages. Thus, greaterrecognition of the learning dimension and of

the diffusion of the available knowledge at the internationallevel is needed, a prerogative hardly ever

used by the region in the past [...]

Industrialisation constitutes the core of the productivetransformation, mainly because it supports

technical progress, and also because, due to the newcirc*mstances, policies have to beyond the

former narrow sectoral approach. Instead, industrialisationshould aim to connect itself with the

primary and services sectors in order to integrate theproductive system and contribute to the

progressive harmonisation of productivity levels. The overcomingof sectoral entrapment is one of the

keys of the productive transformation and the new stage ofindustrialisation

(CEPAL 1990: 14)

As mentioned before, ECLACs theoretical approach in the threeprevious decades was known as

structuralism; therefore, the new proposals from the 1980s and1990s were accordingly named neo -

structuralism.

After the analytical recoil experienced under the dominance ofthe monetarist approach, there should

be, in our opinion, a revitalisation of the structuralisttradition by incorporating therein a systematic

concern about the design of economic policies. Macroeconomicequilibria, coordination between the

34Some similarity should be noted between this approach andendogenous growth theories which, at that time were being developedby

North-American academia. See, Romer (1990) and Lucas (1988).

7/27/2019 Ecla e Integracion Regional

19/33

19 | P a g e

short-term and the long-term, coordination between private andpublic sectors, building-up of more

equitable production and management structures, and the adoptionof strategies and policies aiming

for an enhanced national autonomy are very important aspects.This is what could be described as

neo-structuralism. Its most defining characteristic consists ofoffering selective policies instead of

the theoretically neutral neo-liberal policies

(French-Davis 1988: 39)35

Whereas the first Latin American regionalism emerged in thetheoretical framework of ECLACs

structuralism, the second generation of regional andsub-regional integration agreements found its

conceptual support in the notion of open regionalism, derivedfrom neo-structuralism and developed

by ECLAC in the first half of the 1990s. According to ECLAC in1994:

Open regionalism is defined as the process that follows theconciliation of both phenomena [...]

interdependence as the result of special preferential agreementsand interdependence driven by trade

liberalisation in general. Open regionalism intends to reconcileexplicit integration policies with other

complementary- policies pursuing international competitiveness.What makes open regionalism

differ from the opening-up of the economy and non-discriminatoryexport promotion is a preferential

ingredient, reflected in integration agreements and reinforcedby geographic and cultural proximity

between the countries in the region.

A complementary objective of open regionalism is to become abuilding-block of favouring a more

open and transparent international economy, instead of being anobstacle that hinders it and limiting

the options of Latin America and Caribbean countries

(CEPAL 1994: 12-13)36

Consequently, the wider opening to international markets, as oneof the innovative elements in the

approach of productive transformation with social equity, wasreflected in ECLACs open regionalism

framework. Additionally, regarding Baghwatis question (1991) onwhether multilateralism and

regionalism are complementary or supplementary, ECLAC opted forthe first. Thus, according to

ECLACs new views, integration is a building block rather than astumbling block for a free and

competitive international market.

35Our translation.

36Towards the end of the 1970s, the concept of open regionalismwas originally presented by Masayoshi Ohika, at the time Japans

Prime-Minister, who proposed to engage in an open regionalcooperation in accordance with the new era of globali sation inorder toovercome the political and economic differences between theAsia-Pacific countries. This initiative was materialised in aconsultationmechanism leading to the Asia Pacific EconomicCooperation APECwhich includes open regionalism as one of its basicprinciples(Okita, 1992).

7/27/2019 Ecla e Integracion Regional

20/33

20 | P a g e

According to Pizarro (1999: 34), this change in ECLACs point ofview meant t hat Latin American

integration continues to represent a valid instrument not longerfor industrialisation based on import

substitution, but for growth based on international trade.Furthermore, the role of the state another of

ECLACs major principles ofintegrationwas consequentlyweakened.

Palacio observed on a critical tone:

The concept of open regionalism at the end of the 20th centuryrepresents a change in the paradigm of

regional integration. Regional integration no longer aims tosupport national industrial development

but, on the contrary, to create trade at the multilateral level.In this new paradigm, not only trade in

goods but also trade in service is relevant, as well as otherissues that had not been covered by the old

regionalism agenda. This new regional integration paradigm is nolonger State-centred. Instead, it

attempts to discipline State intervention through a newgovernance model ruled by markets and

international capital.

(Palacio 2006: 4)37

The idea of open regionalism also found enthusiastic receptionin international organisations such as the

World Bank and the Inter-American Development Bank (IADB).According to the World Bank:

In sum, there are both political economy and purely economicarguments that support the political

decision to move forward with unilateral trade liberalisationand regionalism. In any event, there is

little doubt that they were part and parcel of the samepolitical decision to integrate LAC economies

into the global economy, and we could even argue that oneprocess would not have happened without

the other in many LAC countries. There is, thus, a case to judgejointly the outcome of both processes

and not to attempt an artificial separation in the analysis

(World Bank 1998: 6)

The IADB (2002) sustained that:

The regional initiatives that emerged in the 1990s have beencharacterised as the new regionalism.

This is because the role of regional integration has changeddramatically with respect to the early post-

war episode. The new regionalism is an integral part of anoverall structural policy shift in Latin

America towards more open, market-based economies, operating ina democratic system.

(IADB 2002: 4)38

37Our translation.

38Our translation.

7/27/2019 Ecla e Integracion Regional

21/33

21 | P a g e

A strong dissenting opinion in the academic world was Baghwatis,who, concerned by the negative

effects of free trade agreements on trade liberalisation at amultilateral level, sustained that:

An FTA, because of the inherent discrimination that it impliesin freeing trade, is different from free

trade. Indeed, its flip side is protectionistprotectionistagainst non-members, against whom the

relative protection is increased because barriers fall in favourof members, while the ones against non-

members remain in place.

(Baghwati 1998: 13)

Based on this premise, Baghwati recommended the following:

The policy option for the United States is entirely clear. Weshould revert to exclusive focus on

multilateralism and MFN-based trade liberalisation, asking theSouth American nations to join in the

multilateral opening of markets through a variety ofinitiatives, while pursuing regionalism and its

separate objectives through non-PTA means. In short, we shouldrenounce the FTAA gracefully,

easing into an Americas Initiative that focuses, like APEC, onissues like security, democracy, human

rights, drug trafficking, customs procedures and a whole host ofissues of hemispheric interest, while

becoming a regional platform for launching multilateral tradeliberalisation initiatives

(Baghwati 1998:18)

The movement towards integration in Latin America experienced aperiod of intensification during the

1990s. Open regionalism was clearly in the convergence of twotendencies: the US stance on regionalism

induced by changes in its relative position in worldwidegeopolitics and Latin Americas stance

towards the market economy and international trade.

Amid such converging interests, the Bush Sr administrationproposed the creation of a free trade zone

spreading from the port of Anchorage [Alaska] to Tierra delFuego (Enterprise for the Americas

Initiative). With the aim to achieve this goal, the US announcedthat they were willing to enter free trade

agreements with Latin American and Caribbean countries, givingpriority to Mexico (ECLAC 1990).

The US formed in 1992 the North American Free Trade AssociationNAFTA with Canada and

Mexico and summoned, in December 1994 the Summit of the Americasin Miami. The signing of

NAFTA unfolded a new series of regional integration agreementsin the American hemisphere. Whilst in

the period from 1960 (year of LAFTAs creation) until 1992, fiveagreements of this nature had been

7/27/2019 Ecla e Integracion Regional

22/33

22 | P a g e

signed, between 1992 and 2008, more than 60 agreements wereconcluded.39Moreover, the former five

agreements were opened up to adopt the model of the secondregionalism.

The most active countries in the context of open regionalismwere Mexico and Chile. After joining

NAFTA in 1992, Mexico initiated similar schemes with Costa Rica,Colombia and Venezuela (in the

framework of the Group of the Three), and with El Salvador,Guatemala and Honduras (which formed the

Northern Triangle). Furthermore, Mexico extended its network oftrade agreements to all the

industrialised countries with whom it shared economicalrelations (except Japan)40

, through different

agreements with the European Union and with the European FreeTrade Association (EFTA).

In the same way Chile, already an associated member of MERCOSUR,signed regional trade agreements

with Mexico, Venezuela, Bolivia, Ecuador, Panama, Colombia,Peru, Costa Rica, the Central America

Common Market, Canada and the US. In addition, Chile has alsobeen especially interested in the

relations with Asian countries, its main trade partners, and hasconsequently signed several agreements

with Japan, North Korea, China and India.

In the early 1990s, the dense network of agreements betweenAmerican nationswhich gave birth to the

spaghetti bowl metaphor seemed to fit in the greater hemisphericscheme previously suggested by the

US through the Free Trade Area of the Americas (FTAA). Thenegotiations on the FTAA started in 1994

and were expected to be concluded in 2005.

However, after the promising beginning, the process leading tothe creation of the FTAA the most

ambitious external policy initiative in the Americas since the1950scame to a standstill due to several

factors such as the failure of the Doha Round in Cancun (2003).41 The US conferred to the WTO

framework the negotiations on subsidies, antidumping andagricultural aid, and therefore the failure of the

Doha Round made the negotiation of such issues in the frameworkof the FTAA unmanageable. This

deadlock, in turn, gave way to new bilateral agreements betweenLatin American countries - Chile,

Central America, Colombia, Panama and Peru - and the US,threatening the previous agreements between

themselves.

In fact, the signing of bilateral agreements by Peru (2005) andColombia (2006) 42caused the withdrawal

of Venezuela from the Andean Community, leaving this regionalbloc plunged in the most serious crisis

in its history.

39 Including the Partial Scope Agreements (PSA) negotiated atthe Latin American Integration Association LAIA and the extra-

regional agreements subscribed by the Latin American countries(Durn et al. 2007:10).40

Nevertheless, Mexico is a member of APEC.41

As well as the Doha Round in Cancun the FTAA faced a strongpopular opposition. (Lander, 2004)42The FTA between Colombia andthe US has not been approved the US Congress yet.

7/27/2019 Ecla e Integracion Regional

23/33

23 | P a g e

Thus, the results of the new regionalism could not match theinitial expectations. In an article written by

Devlin and Estevadeordal (2001), the authors optimisticallystated that:

The New Regionalism contrasts fundamentally with the old. Itsinstrumental role is geared to

supporting structural reforms to make economies more open,market based, competitive and

democratic [] the scope of liberalizing disciplines in the NewRegionalism tends toward a

comprehensive, more rapid, universal and sustained system interms of effective application. The New

Regionalism also is designed to attract foreign investment, notto restrict or control it. Moreover the

new Regionalism has more functional and cost effectiveinstitutional arrangements. Finally, the new

initiatives better support important non-economic objectivessuch as peace, democracy and effective

participation in international forums

(Estevadeordal 2001: 21).

Nowadays, a wide consensus exists regarding the fact that theneoliberal structural reforms inspired by theWashington Consensusdid not succeed in driving Latin America towards accelerated growthand

sustainable social development. Besides, the democratic systemsof the region still suffer from an

enormous deficit in terms of social equity and institutionaldevelopment (ODonnel 2008). Furthermore,

there was a disturbing appearance of authoritarianism,nationalism and power perpetuation tendencies of

different nature.

Obviously, the expected evolution towards a comprehensive, morerapid, universal and sustained system

in terms of effective application did not occur. The spaghettibowl grew exponentially and turned the

current regionalism in this hemisphere into a great amalgam ofuncoordinated FTAs signed by the US and

several Latin American countries, the debilitated firstregionalism schemes and a compact matrix of

bilateral agreements amongst almost every country.

This complex framework is completed by nearly thirty agreementswith countries outside the region and

several integration programs focused on infrastructure andenergy (Vaillant 2007).43

In spite of all these

developments, intra-regional exportsin relation to thetotaldecreased during the current decade from

an average of 17 per cent for the period 1990-1999 to 16.8 percent in 2006 (Saez 2008: 18) and the

participation of Latin America in worlds GDP and trade is stillvery limited.

During the period of open regionalism, Latin America could notbe said to play an effective role in the

international forums. On the contrary, some authors as Sez(2005) unveil the institutional weaknesses

43Vaillant qualifies these agreements, especially theNorth-South ones (with the EU and with the US) as inefficient andfutile.

7/27/2019 Ecla e Integracion Regional

24/33

24 | P a g e

affecting the process of trade policymaking in Latin America, aswell as the low influence of the region in

multilateral negotiations at the WTO.

In this confusing scenario, the real possibilities of achievinga convergence of the different integration

processes in the regions, bringing to life an effective SouthAmerican Community (2007)44

are extremely

remote. This is even more obvious with the involvement ofalternative or post -liberal integration

initiatives such as the Bolivarian Alternative for theAmericasALBAsigned in Havana (2004).45

Post-Neoliberal Regionalism: Beyond Open Regionalism

In the 1980s and 1990s, as mentioned, the decline of state-ledindustrialisation and the consequent loss of

purpose and identity of the first Latin American regionalism ledto the generalised adoption of open

regionalism, already boosted in other latitudes. Nowadays, in acorsi e ricorsi movement, so commonthroughout history, the poorresults yielded by the neo-liberal reforms and the debilitation ofopen

regionalism are shifting development and integration policiesagain away from the neoliberal postulates

and especially from the emphasis on the role of trade and FDIfor growth.

Concerning the evaluation of the policies inspired by theWashington Consensus, it seems relevant to

quote an enthusiastic and influential neo-liberal from the1990s, who now reconsiders: [...] assuming that

the list of priorities for reform is the same for every countryseems more and more unfounded... there is

increasing evidence that the empirical connection between widereform packages and growth is fragile

(Haussmann and Velasco 2007: 72-73).

Haussmann46

does not limit himself to criticizing the structuralreforms:

The obstacles to productive transformation can be an importantcause in understanding the lack of

economic growth in many countries. Therefore, it will not be ofa great help to keep favouring

horizontal policies with few dimensions. Inevitably, policieswill have again to actively promote

economical activity, a change that could cause legitimateworries over the possible repetition of the

mistakes made in the past

(Haussmann 2008: 114)

44In 2004, in order to improve the convergence of the differentregional processes the Third Presidential Summit at Cuzco (Peru)agreed

on creating a South American Community.45

Venezuela and Cuba established ALBA in 2004. Later, Nicaraguaand Bolivia joined. In this framework, the Peoples Trade TreatyTCPwas signed in Havana in 2006.46

In his role of Chief Economist at the Inter-American DevelopmentBank in the 1990s, Ricardo Haussmann was a firm advocate oftheneoliberal reforms. .

7/27/2019 Ecla e Integracion Regional

25/33

25 | P a g e

A large group of academic development experts share Haussmannsconcern about productive

transformation. These include: Jos Antonio Ocampo, Dani Rodrik,Ha-Joon Chang, Alice Amsden and

Anthony Thirlwall, who continuein a way - the neo-structuralisttradition.

The reflection of this recent version of structuralism on LatinAmerican integration are several post -

neoliberal initiatives aimed at transcending the model of openregionalism. Within this third Latin

American regionalism, two trends can be identified: one inspiredby a neo-structuralist agenda aimed at

promoting productive transformation in the region and a secondtrend focused on the conformation of

blocks of countries with ideological affinities (Motta and Rios2007).

The concrete expression of the abovementioned first trend is thecreation of the South American

Community of Nations in 2004, recently (2008) transformed in theUnion of South American Nations

UNASUR. This scheme holds a positive vision of integration andfocuses on the creation of a new

regional production platform, thus abandoning the emphasis givento mere trade liberalisation.

Furthermore, UNASUR, led by Brazil, proposes to act preferablyin political, social, environmental and

security areas. On the other hand, the movement searching topromote an alternative integration based

upon an ideological convergence of Latin American socialistregimes is being lead by President Chvez

of Venezuela, who promotes a 21stcentury Socialism and thecreation of ample South-South Alliances

in order to face the US hegemony (Sanahuja 2009).

Beyond the obvious differences in these approaches, the twoinitiatives share common elements such as

the return of the state, the concern about the social dimension(poverty, inequality and asymmetries in

levels of development), military security, energy cooperationand the recovery of a policy space, in

order to implement autonomous domestic policies.

Thus, Latin America is in-between the end of the openregionalism model and the two new proposals,

strongly differentiated in terms of leadership, scope, andpolitical and ideological orientation. Therefore, a

substantial contribution from ECLAC would be desirable, givenits role in the past as theoretical and

cognitive reference guiding the regional integration policies.In spite of its continuous intellectual

production throughout the last decade, focused for example, on abetter comprehension of the effects of

neoliberal reforms, as well as providing information in order todeal with the financial crisis and social

and productive transformation policies,47ECLAC has not expressedyet a global vision on development

synchronised with the circ*mstances of the current times. Norhas ECLAC suggested any proposal on any

47 On this subject, the document Structural Change andProductivity Growth, 20 Years Later. Old Problems, NewOpportunities,

directed by Fernando Fajnzylber, is an attempt to update ECLACswork on productive transformation of the 1980s.

7/27/2019 Ecla e Integracion Regional

26/33

26 | P a g e

integration model in order to overcome this stage of openregionalism, although it does have monitored

the development of every integration process underway.

Conclusion

Latin American integration has entered a new existential crisiswith the discredit and weakening of the

policies promoted by the Washington Consensus. Thus, openregionalism risks becoming irrelevant. After

an integration stage mainly focused on trade liberalisation fornearly two decades, the region moves again

towards integration models focusing on development objectivesbased on productive transformation and

genuine competitiveness.

The current proposalsbasically UNASUR and ALBAfail to present analternative integration model

since they appear to compete between them and to suffer fromprofound internal contradictions.Furthermore, they lackcorrespondence between the ambitious objectives - aiming at everydimension of

development and external policy - and intergovernmentaldecision-making, consensus and presidential

diplomacy. In sum, weak institutions, lacking binding legalforce and supranational capacity, are further

obstacles to move into more advanced stages of integration.

Notwithstanding these shortcomings, such initiatives still raisepolitical and academic debate on

integration and its relation with socio-economic development,paving the way to more progressive and

innovative visions. That is to say, the reason for integration,that had become impoverished by processes

based exclusively on trade liberalisation, where tariffpreference margins are anyway close to zero.

In this context, the contribution of ECLAC can be extremelyimportant in matters such as a new

generation of productive transformation policies; social rights,citizenship and social cohesion; energetic

integration; and the new configuration of the world economy. Allthese issues are included in the new

agenda on integration, on which ECLAC has already accumulated ahuge amount of analytical and

theoretical capacity.

7/27/2019 Ecla e Integracion Regional

27/33

27 | P a g e

References

ALADI (1983). Evolucin y estructura del intercambio comercial delos pases que integran la ALADI.

Doc/ALADI/Sec /Estudios(5).

Altimir, O., Iglesias E. and Machinea J.C. (2008). Hacia larevisin de los paradigmas del desarrollo en

Amrica Latina. Santiago de Chile: CEPAL and Segib.

Baldwin, R. (1993). A Domino Theory of Regionalism.NBER WorkingPaper, 4465.

BID (2002).Ms all de las fronteras. El nuevo regionalismo enAmrica Latina. Washington DC: Banco

Interamericano de Desarrollo.http://www.iadb.org/res/pub_desc.cfm?pub_id=B-2002.

Baran, P. (1957). The Political Economy of Growth.Nueva York:Monthly Review Press.

Bhagwati, J. (1991). The World Trading System at Risk.Princeton:Princeton University Press.

Bielschowsky, R. (1998). Cincuenta aos del pensamiento de laCepal. In CEPAL, Cincuenta aos de

pensamiento de la Cepal. Textos seleccionados.Tomo I. Santiagode Chile: FCE and CEPAL.

Bouzas, R. (Ed.) (1997). Regionalismo e integracin econmica.Instituciones y procesos comparados.

Buenos Aires: Grupo Editor Latinoamericano.

Brutton, H. J. (1998). A Reconsideration of Import Substitution.Journal of Economic Literature 36,

903-936.

Cardozo, F. H. (1977). La originalidad de la Cepal: La Cepal yla idea del desarrollo.Revista de la Cepal,

9. Santiago de Chile: CEPAL.

CEPAL (1959).El mercado comn latinoamericano y el rgimen depagos multilaterales en el mercado

comn latinoamericano. Santiago de Chile: Naciones Unidas.

CEPAL (1990). Amrica Latina frente a la iniciativa Bush: unexamen inicial. Santiago de Chile:

Naciones Unidas.

CEPAL (1990). Transformacin productiva con equidad. Santiago deChile: Naciones Unidas.

CEPAL (1994). El regionalismo abierto en Amrica Latina y elCaribe. La integracin econmica al

servicio de la transformacin productiva con equidad. Santiago deChile: Naciones Unidas.

7/27/2019 Ecla e Integracion Regional

28/33

28 | P a g e

CEPAL (1998). Cincuenta aos de pensamiento en la Cepal. Textosseleccionados . Santiago de Chile:

CEPAL and FCE.

CEPAL (2008).La transformacin productiva 20 aos despus. Viejosproblemas, nuevas oportunidades.

Santiago de Chile: Naciones Unidas.

Cline, W. R. (1983). El inters de Amrica Latina en la integracineconmica. In Conessa, E. R. (Ed.),

Trminos de intercambio y tarifa ptima en Amrica Latina(pp.23-33). Buenos Aires: BID and Intal.

Da Motta, P. and Rios, S. P. (2007). O regionalismo ps-liberal,na Amrica do Sol: origens, iniciativas e

dilemas. Serie Comercio Internacional, 2, Santiago de Chile:CEPAL.

Dell, S. (1966). Experiencias de la integracin econmica enAmrica Latina. Mexico D. F.: Centro de

Estudios Latinoamericanos.

De Lombaerde, P. and Garay, L. J. (2008). El nuevo regionalismoen Amrica Latina. In De Lombaerde,

P., Kochi, S. and Briceo, J. (Eds),Del regionalismolatinoamericano a la integracin interregional(pp.

3-35). Madrid: Fundacin Carolina and Siglo XXI.

Devlin, R. and Estevadeordal, A. (2001). Whats new in the NewRegionalism in the Americas? Intal

ITDSTA Working Paper, 6.

ECLAC (2003).A Decade of Ligth and Shadow. Latin America and theCaribbean in the 1990s. Santiago

de Chile: United Nations

Fajnzylber, F. (1983). La industrializacin trunca de AmricaLatina. Mexico D. F.: Editorial Nueva

Imagen.

Fajnzylber, F. (1988). Competitividad internacional: evolucin ylecciones. Revista de la Cepal, 36.

Santiago de Chile: CEPAL.

Fajnzylber, F. (1990). Industrializacin en Amrica Latina: De lacaja negra al casillero vacio.

Cuadernos de la Cepal, 60. Santiago de Chile: CEPAL.

Valpy, F. G. (1998). La Cepal y la teora de la industrializacin.Revista de la Cepalnum. extraordinary

issue. Santiago de Chile: CEPAL.

French-Davis, R. (1988). Esbozo de un planteamientoneoestructuralista. Revista de la Cepal, 34.

Santiago de Chile: CEPAL.

7/27/2019 Ecla e Integracion Regional

29/33

29 | P a g e

French-Davis, R. (2005).Macroeconoma, comercio y finanzas,2ndedn. Bogota: Cepal and Mayol.

Garay, L. J. (1997). Regionalismo e integracin en las Amrica. InBouzas, R. (Ed.), Regionalismo e

integracin econmica. Instituciones y procesos comparados. BuenosAires: Grupo Editor

Latinoamericano.

Ghalal, A. and Hoekman, B. (Eds) (1997).Regional Partnerts inGlobal Markets. Limits and Possibilities

of the Euro-Med Agreements. London and Cairo: CEPR.

Gonzales del Valle, J. (1964). Sistema de Pagos y comerciointercentroamericano. In Wionczek, M. (Ed.)

Integracin de Amrica Latina. Experiencias y Perspectivas(pp.313-328). Mexico DF: FCE.

Gurrieri, Adolfo (1982). La obra de Prebish en la Cepal. MxicoDF: FCE.

Halperin, T. et al. (2002). Historia Econmica de Amrica Latina.Desde la independencia a nuestros

das. Barcelona: Crtica.

Hausman, R. (2008). El futuro de la estrategia de crecimiento deAmrica Latina. In Altimir, O., Iglesias,

E. and Machinea, J. L. (Eds), Hacia la revisin de los paradigmasdel desarrollo en Amrica Latina.

Santiago de Chile: CEPAL and Segib.

Hausman, R. and Velasco, A. (2007). Crecimiento lento en AmricaLatina resultados comunes, causas

comunes? In Machinea, J. L. and Serra, N. (Eds) Visiones deldesarrollo en Amrica Latina (pp. 15-76).

Santiago de Chile: CEPAL and Fundacin Cidob.

Iapadre, L. (2006). Regional Integration Agreements and theGeography of World Trade. Statistical

Indicators and Empirical Evidence. In De Lombaerde, P.(Ed.),Assessment and Measurement of Regional

Integration (pp. 65-85). London: Routledge.

Lawrence, R. Z. (1997). Preferential Trading Agreements: TheTraditional and the New. In Ghalal, A and

Hoekman, B. (Eds), Regional Partners in Global Markets. Limitsand Possibilities of the Euro-Med

Agreements(pp. 13-34). London and Cairo: CEPR.

Levinson, J. and De Onis, J. (1970). The Alliance That Lost ItsWay. San Antonio: Quadrangle Press.

Lucas, R. Jr. (1988). On the Mechanics of EconomicDevelopment.Journal of Monetary Economics, 22,

3-42.

Machinea, J. L. and Serra, N. (Eds) (2007). Visiones deldesarrollo en Amrica Latina. Santiago de Chile:

CEPAL and Fundacin Cidob.

7/27/2019 Ecla e Integracion Regional

30/33

30 | P a g e

Mascarella, J. (1964). La interaccin Econmica centroamericana.In Wionczek, M. (Ed.), Integracin de

Amrica Latina. Experiencias y Perspectivas. Mexico DF: FCE.

ODonnel, G. (2008). Los desafos actuales de la democracia y eldesarrollo. In Altimir, O., Iglesias, E.

and Machinea, J. L. (Eds), Hacia la revisin de los paradigmasdel desarrollo en Amrica Latina.

Santiago de Chile: CEPAL and Segib.

Ocampo, Jos Antonio (2008). Etapas del Pensamiento sobre eldesarrollo de Amrica Latina. In: Altimir,

O., E. Iglesias and J. L Machinea (Eds), Hacia la revisin de losparadigmas del desarrollo en Amrica

Latina. Santiago de Chile: CEPAL and Segib.

Okita, S. (1992). Regionalism and the Asia-Pacific DevelopmentOutlook. Paper presented at

International Seminar on the Pacific: An Integral Part of theWorld, the Ocean of the XXI Century.

Santiago de Chile.

Oman, Charles (1996). Los desafos polticos de la globalizacin yla regionalizacin. Lima: Fundacin

Friedrich Ebert.

Palacio, P. (2006). La industrializacin nacional y el papel delEstado, en el viejo regionalismo y en el

nuevo regionalismo abierto americano: un cambio de paradigma.Observatorio de la Economa

Latinoamericana, 57.http://www.eumed.net/cursecon/Lecocat/la/.

Panagariya, A. (1998). The Regionalism Debate: An Overview,World Economy, 22(4), 455-476.

Pinto, A. (1970). Naturaleza e implicaciones de laheterogeneidad estructural de la Amrica Latina.El

Trimestre Econmico, 37(1), N.145. Mexico DF: FCE.

Pizarro, R. (1999). Comparative Analysis of Regionalism in LatinAmerica and ASIA-Pacific. Serie

Comercio Internacional, 6, Santiago de Chile: CEPAL.

Prebisch, R. (1973). La integracin econmica en Amrica Latina. InWyndlam-White, E. et al., La

integracin latinoamericana en una etapa de decisiones. BuenosAires: BID and Intal.

Puyana, A. (1984).Economic Integration among unequal partners.The case of the Andean Group. New

York: Pergamon Press.

Ramos, J. (1986). Neoconservative Economics in the Southern Coneof Latin America, 1974-1983.

Baltimore: The John Hopkins University Press.

Rodrguez, O. (2000).El estructuralismo latinoamericano. MexicoDF: Siglo XXI and CEPAL.

7/27/2019 Ecla e Integracion Regional

31/33

31 | P a g e

Romer, P. (1990). Endogenous Technological Change,Journal ofPolitical Economy, 98(2), 71-102.

Sez, S. (2005). Trade Policy Making in Latin America: A comparedAnalysis. Serie Comercio

Internacional, 55, Santiago de Chile: CEPAL.

Salazar, J. M. (1991). El papel del Estado y del mercado en eldesarrollo econmico. In Sunkel, O. (Ed.),

El desarrollo desde dentro. Un enfoque neoestructuralista parala Amrica Latina. Mexico DF: El

trimestre Econmico and FCE.

Sanahuja, J. A. (2009). Del regionalismo abierto al regionalismopost-neoliberal. Crisis y cambio en la

integracin regional en Amrica Latina.Anuario de la IntegracinRegional de Amrica Latina y el Gran

Caribe, 7, 11-54. Buenos Aires: Coordinadora Regional deInvestigaciones Econmicas y Sociales.

Sunkel, O. (Ed.) (1991). El desarrollo desde dentro. Un enfoqueneoestructuralista para la Amrica

Latina. Mexico DF: El trimestre Econmico and FCE.

Tavares, M. C. (1998). La Cepal y la integracin econmica deAmrica Latina. Revista de la Cepal,

nmero extraordinario, 213-228. Santiago de Chile: CEPAL.

Tussie, D. (1998). In the Whirlwind of Globalization andMultilateralism: The Case of Emerging

Regionalism in Latin America. In W. D. Coleman, and R. D.Geoffrey,Regionalism & Global Economic

Integration: Europe, Asia and the Americas. New York:Routledge.

Vaillant, M. (2007). Convergencias y divergencias en laintegracin sudamericana. Serie Comercio

Internacional, 83. Santiago de Chile: CEPAL.

Vieira, E. (2004). La integracin de Amrica Latina: del CongresoAnfictinico de Panam en 1926 a

una comunidad latinoamericana o sudamericana de Naciones en elao 2010. Bogota: Editorial

Pontificia Universidad Javeriana.

Vieira, E. (2008). La formacin de espacios regionales en laintegracin de Amrica Latina. Bogota:

Universidad Javeriana and Convenio Andrs Bello.

Wionczek, M. (1964). Historia del tratado de Montevideo. In M.Wionczek, (Ed.), Integracin de

Amrica Latina. Experiencias y Perspectivas(pp. 53-93). MexicoDF: FCE.

Wionczek, M. (1964).Integracin de Amrica Latina. Experiencias yPerspectivas. Mexico DF: FCE.

World Bank (1978). Word Development Report. Washington DC: TheWorld Bank.

7/27/2019 Ecla e Integracion Regional

32/33

32 | P a g e

World Bank (1998). Trade Towards Open Regionalism, AnnualConference on Development in Latin

American and the Caribbean 1997, Washington DC.

Wyndlam-White, E. et al. (1973). La integracin latinoamericanaen una etapa de decisiones. Buenos

Aires: BID and Intal.

Zapata, R. and E. Prez (2001). Pasado, presente y futuro delproceso de integracin centroamericano,

Serie Estudios y Perspectivas, 6. Mexico DF: CEPAL.

7/27/2019 Ecla e Integracion Regional

33/33