André Luiz Reis da Silva has a PhD in Political Science and a Post-Doc from the School of Oriental and African Studies – University of London. He is a Professor of the Graduate Program in Political Science and Coordinator of the Graduate Program in International Strategic Studies of the Federal University of Rio Grande do Sul (UFRGS).
In an interview to Panorama, André Luiz Reis da Silva talks about successes and challenges of MERCOSUR, analyzing the strategic position of the State of Rio Grande do Sul. The researcher also evaluates Venezuela’s entry into the bloc and the negotiations between Mercosur and the European Union. The interviewee of this issue also opines about Brazil’s foreign policy and how this matter was addressed in the Brazilian presidential elections in 2014.
Panorama: After 25 years, what are the main achievements of Mercosur’s integration process and what are the biggest challenges to be faced?
Mercosur is one of the major national projects of Brazil, in progress since the 1980s. Since its establishment, even amid difficulties, some still persistent (i.e. the issue of the asymmetries and differences in the bloc’s framing), Mercosur has achieved many successes, such as the creation of a peace and cooperation zone in the Southern Cone, the expansion of intra-area trade and the strengthening of a South American conception. Mercosur, which will be celebrating its 25th anniversary in 2016, has been through several stages and difficulties and has made many achievements. The main references are the Brazil-Argentina rapprochement in the 1980s, which culminated with the inclusion of Paraguay and Uruguay in the project; then, there was the very launching of Mercosur in 1991. Although in a neoliberal context (in which Mercosur was perceived as a fast track towards trade liberalization), it served as a counterpoint to the U.S. proposal of integration of the Americas (Free Trade Area of the Americas). Its major crisis took place in 1999, when the Argentines decreed “the end of Mercosur”. However, it was relaunched under a new perspective, to base a bold project of integration in South America. In recent years, besides the associate States (Chile, Bolivia, Peru, Colombia and Ecuador), Mercosur has been advancing with the membership of Venezuela, the creation of the Structural Convergence Fund for Mercosur (FOCEM) (an effort to reduce the structural inequalities) and a parliament (which still must be developed).
In short, for Brazil’s foreign policy, Mercosur has managed to articulate a regional area and thereby has succeeded in fostering the interests of other economic blocs and countries, thus becoming a respected interlocutor both in multilateral forums and in bilateral agreements. In addition to growth prospects, such a position has opened up possibilities for cooperation among several blocs and countries and the establishment of strategic partnerships. Thus, Mercosur has contributed for Brazil’s foreign policy, an important foothold in trade negotiations and a focal point for other countries in South America.So, in despite of an apparent loss of relevance, I reckon that Mercosur remains a strategic space for Brazilian diplomacy and cannot be “abandoned” as some wish, even in Brazil, before any minor setback. Some say Mercosur hinders Brazil. It’s a real fallacy. Mercosur leverages Brazil, especially the Brazilian industries.
Currently, given the growth of Brazil’s global interests, Mercosur and also Unasur have lost centrality and incentives. The agenda with the emerging countries (especially the BRICS) and the discussion of an economic and financial global order have gained more interest in Brazil’s international agenda. The big challenge for Brazil nowadays is to combine the regional and the global agendas, recalibrating interests and priorities, once a global agenda is not possible without a strong regional presence.
Panorama: Alongside the commercial aspects of Mercosur, which other areas of integration could be classified as strategic for the future of the bloc and how do you evaluate Venezuela’s admission to the bloc?
We still have a long way to go. Commercially speaking, Mercosur is usually classified as an “imperfect customs union”, because there are several products with circulation restrictions, quotas and exception lists. We also need to advance to the construction of common regulatory frameworks in various fields, such as social security and labor rights. A bloc that wants to go as far as Mercosur cannot be restricted to trade issues: it needs to move forward in all areas, including military cooperation and energy and infrastructure integration.
In relation to Venezuela, Brazil has a commercial surplus, and our economy is complementary to theirs. Venezuela’s admission to Mercosur is very positive to Brazil and the other members, because (1) it increases our access to the Venezuelan market; (2) it promotes the Brazilian model of regional integration; (3) Venezuela’s economy is complementary to ours; (4) it strengthens Mercosur’s capabilities in the negotiations with other blocs and powers; (5) it reassures the Brazilian project to have regional integration in South America, a project that Venezuela agrees with; (6) it strengthens democracy in South America, because every Mercosur country must comply with the democratic clause.
Panorama: What are the biggest obstacles for the member states to reach a free trade agreement with the European Union and what would be the consequences for Mercosur?
Negotiations between Mercosur and the European Union have been going on for the past two decades. Usually, these negotiations balk at the European refusal to grant further liberalization of its agricultural market (much because of France’s interests and the EU’s Common Agricultural Policy). The European Union does not offer a good return for the opening of Mercosur. Therefore, the logic goes as follows: having no agreement is better than having a bad one. This is the deadlock. No illusions.
When it comes to its regional surroundings, Brazil’s foreign policy focuses mainly on Mercosur and the South American integration, which creates space for Brazil to exercise its regional leadership and to have a more assertive stance in global forums. Thus, it is not in Brazil’s best interest to walk a lonely path, disengaging itself from its neighbors to reach bilateral agreements outside the continent. This strategy may seem enticing, but it could result in the loss of important markets for Brazilian industrial products and in the further opening of the region to extra-regional competitors.
Panorama: As for Brazil’s foreign policy, how does Mercosur polarize the political debate in the country?
Although we have witnessed fierce presidential elections, with an intense debate that mobilized society, with contrasting projects and solutions for Brazil, the subject of foreign policy was poorly addressed in the 2014 presidential campaign. But it is important to stress that the challenges of the foreign policy are decisive for the success of a development strategy, given the increasingly dense and complex links of Brazil with other countries, in an international scene marked by relevant transformations. On the other hand, a country with the dimensions and capacities of Brazil cannot omit its contribution, both in global and in regional issues.
Perhaps the question that most came up during the 2014 election campaign was whether Brazil should disengage from Mercosur in order to seek trade agreements on a bilateral basis. It was a dangerous path proposed by the neoliberal opposition, because Brazil has more to lose than its neighbors in that strategy. Mercosur works as a market reserve for the Brazilian industrialized goods in the region. A careless liberalization may mean the destruction of part of the Brazilian industry.
Some also argued, in a reckless fashion, that Brazil should join the “Pacific Alliance”, which is perceived as a perfect liberal model. This is a nearly ideological fallacy, which ignores the risks embedded in that kind of strategy. Nowadays, the Trans-Pacific and the Transatlantic agreements, the growing trade engagement of China, the U.S. free trade agreements, all these topics are challenges which must be discussed within Mercosur.
Panorama: Given the strategic location of Rio Grande do Sul as a meeting point between Brazil, Argentina and Uruguay, how to make the state become a vector of regional integration?
The geographic location and the historical and cultural ties Rio Grande do Sul has with Argentina, Uruguay and Paraguay give a strategic sense to the region. In the early days of Mercosur, the Government of Rio Grande do Sul and the companies feared competition from Uruguay and Argentina. Over time, they realized that Rio Grande do Sul was on the way between Buenos Aires and São Paulo, that is, the path of integration passes through Rio Grande do Sul. Not seizing this opportunity would be a big historical mistake. Rio Grande do Sul has a lot to take in terms of border integration, road and energy interconnection, expansion of tourism and the linkage of regional networks of production.
