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Is Interregional Integration an Alternative to the FTAA?
Dr. Oneida Alvarez

The projects, on the one hand, hemispheric (the FTTA) and of Latin American and the Caribbean interregional integration at present constitute an unit of analysis, given that it id difficult to refer to one without considering the other.
Some specialists highlight their reciprocal relationship while others present them as two mutually exclusive polls.
Without aiming to give conclusive answers a priori in this respect, the present paper proposes to continue the reflection about the integration process in Latin America and the Caribbean, submit to debate a perspective on the FTTAA- interregional integration dialectic, and point out as well some requirements the latter must bring together to raise the influence of our countries in the present context of international negotiations, and contribute to the area's progress.

THE DEBATE ABOUT THE REALITY AND THE UTOPIA OF INTEGRATION IN LATIN AMERICA AND THE CARIBBEAN

This theme includes the treatment of a well known and polemical problem that, in spite of its age, continues to provoke interest, passionate arguments in its defense, and caustic critical evaluations due to its limited results.
Integration, conceived as a gradual process of rapprochment and interconnection between different countries, responds to an objective tendency that at present has the economic sphere as a nucleus of its objectives, although it goes beyond to the socio-cultural spaces and requires political will for its advance.
For many specialists, the integration processes are one of the manifestations of globalization and therefore can contribute to consolidate the functioning of the capitalist economic apparatus in the contemporary conditions of strong accumulation of transnational capital. It is also feasible to interpret the formation of regional markets as a fragmentation of the global one. In the case of the under developed countries, these could constitute a path for confronting the threats of the globalization process and taking advantage of their opportunities in better conditions.
At the global level, he integration that manifests itself in the various spheres is quite unequal with respects to the degrees of participation of countries and regions. There are less exclusions in the trade interconnections than in the financial sphere, because very few are the nations that do not participate in some of the Multilateral Accords in effect, or in the principal world markets (even though there is a growing marginalization of the least developed nations from the international interchange of good and services); but many are the countries affected by the severe restrictions of the financial markets, especially, of the most dynamic forms of those flows.
In the production and services spheres, the global linkages have made possible the integration of the least developed countries, particularly that have rapidly assimilated the indications of the prevailing global surroundings. In these spheres regional patterns are found that are not just of global character. These forms of integration through linkages that associate productive and service activities are pushed and controlled by the transnational corporations, which constitute an important agent of the globalization process.
Depending on the objectives defined, the processes' principal actors, the nature of their institutions, the negotiating mechanisms that are adopted and their scope, the integration processes can contribute more or less to their participants' progress. There lies the importance of identifying and characterizing those key factors, because not all integration processes are equal, nor can a single definition satisfy the multiplicity of forma that usually present themselves.
The regionalization process in the Americas is one of the elements to which all the actors connected to our region's international relations give greatest importance, not only on the plane of discourse and scientific debate, but also in the search for viable alternatives. But this is a complex problem and we can not speak of a single process, but instead of its different dimensions, including sub-regional, regional and hemispheric integration.(1)
The hemispheric dimension has acquire particular relevance at this time because the nature and intensity of Latin America and the Caribbean integration, as well as the specific features of their international insertion, will depend to a large extent on the course of the negotiations between the United States, Canada, Latin America and the Caribbean (LAC) in coming years. The recent approval of the Trade Promotion Authority (TPA) seems to clear up one of the uncertainties for the U.S side for continuation of the negotiating process, by given the Executive the prerogatives for it, although with serious conditions tending to avoid harm to the interests of U.S producers in sensitive sectors.
The Free Trade Area of the Americas (FTAA), still in the negotiating phase, constitutes a great challenge for the countries of Latin America and the Caribbean, and like every conflict, it is feasible to situate it as opportunity and not just a threat, since it can constitute a powerful incentive for the region's unity in relation to the urgent transformation required.
The United States not only has important geo-strategic expectations in LAC that it would help to consolidate through the FTAA, but is also pursuing the objective of achieving common rules and economic policies in the region's countries coinciding with its interests, with respect to the regime for competition, governmental purchases, treatment of foreing investments, and intellectual property, among other things.(2)
But, until now, the FTTAA continues to be a great unknown for LAC, because its aspirations, tied to improving its access to the U.S market, and guarantees unilateral measures will not be applied, among other things, do not seem feasible for all members of the region in the short term. It should not be forgotten either, that the different LAC sub-regions have distinct interests with respect to the United States, and thus place the FTAA in a different order of priority in the context of their foreign relations, although those negotiations are transcendent for every group of countries.
The influence the internal situation of the Latin American and Caribbean countries has about the discussions on the conditions for the potential accords cannot be underestimated, especially their precarious levels of growth and the long term unsustainability of their economic dynamism; the region instability and, likewise, the limitations of which the productive and service structure suffer in order to promote the required export boom(3). The aforementioned elements become more complex due to the high vulnerability of the Latin American external sector and the critical social situation.
In addition, the slant the marked differences between the levels of economic development of the United States and the majority of the Latin American and Caribbean countries imposes on these negotiations, must be mentioned, together with the relationships of subordination that have prevailed between them historically in political and economic relations.
In the face of this scenario, the alternative arises of LAC confronting the negotiations as a single cohesive pole, and the first question that appears is wether the Latin American region can be integrated.
Beyond the fragmentation that characterizes the integration process in our region at present- due to the proliferation of projects and sub-projects, not exempt from contradictions- there are multiple factors that influence the possibility and necessity of LAC agreement and union in order to improve its insertion into the world economy, and reduce its external vulnerability in the midst of the complexities that characterize tha international scene.
Constituting sources of strength for this unity are the common historical roots and language, geographical proximity, the antecedents of integration projects from the last century, the similarity of the problems to be confronted, and more than fifty years of joint pursuit of viable paths for development of the region, led by the Economic Commission for Latin America(CEPAL),progressive political leaders and other integrationist forces that keep active about these aspirations, among which the Continental Social Alliance stands out.
Finally, it must be highlighted that for the countries of LAC, the challenges of globalization are difficult to face in isolation, and thus they can be in integrated in order to conceive and defend a positive common negotiating agenda around which the forces interested in the region's progress would come together in the face of third parties and in multilateral organizations and institutions. In spite of the heterogeneity, there is a great and insufficiently utilized potential for coordination and cooperation that bodies with accumulated prestige and experience in this direction, like CEAPL, and the Latin American Economic System (SELA), can contribute to strengthening.
In the decade of the 90's some positive signs were observed in the Latin American integration processes because the internal and external conditions were favourable and the principal obstacles previously presented seemed to have been resolved, so that if the network of signed pacts were realized, a regional Free Trade Area could have come into being, driven by the ALADI. This may not mean much to some, but if the antecedents are taken into consideration, one would confirm that this had never before been achieved, in spite of the efforts initiated from the Latin American Free Association (ALALC) constituted in the decade of the 60's.
The sub- regional process have advanced to the point of becoming Custom Unions, albeit imperfections. Among them, the MERCOSUR exhibited additional achievements that turned it into the area's paradigm project, the CAN gave signs of revitalization, the MCCA proposed to dynamize itself after the serious natural catastrophes that affected its territories, and the CARICOM reported greater advances starting from its July, 2001 meeting.
But the negotiations some countries find themselves immersed in at the same time, require definitions of priorities between the sub-regional, regional, hemispheric and other extra-regional ones like the Accords with the European Union, as well as the analysis of the compatibility between them and with the next Multilateral Round of the WTO.
Although intra-regional trade has expanded, coming to represent around the fifth part of the total exports in the majority of the sub-regions, before the crisis of 1997 the principal trade clients of our nations were found outside the region, the financial links between Latin American countries are weak and the productive ties among them are much less developed than among Asian ones, for example.
These elements provoke more than a few debates about open Latin American regionalism and the convenience of continuing processes of unilateral favouring a greater interrelationship with the United States, the European Union and Asia, or first deepening the processes within the region until more homogeneous groups are achieved, and thereby increase negotiating power with the external counterparts. In the background of these polemics are the alternatives concerning the most effective ways to achieve a dynamic and competitive insertion of LAC on the international scenario, and the necessary complementary production, financing and technology to reach it.
In addition to the aforementioned unknowns, it must be considered that the future advance of some sub-regional processes in LAC toward the pattern of common markets requires the gradual liberalization of the movements of citizens, and this is a very sensitive theme in our region due to social disparities in the labour, social security, wage and migratory regimes. Etc. This becomes sharper because of the high levels of unemployment, underemployment and poverty. But if they do not achieve more ambitious states, the identity of this sub-regional groups could become diluted within the Hemispheric Free Trade Area. It is paradoxical that the Framework Accords discussed with the European Union, and the FTAA project. Contemplate more ambitious objectives than those reached in some of our regional and sub-regional groupings until today.
In spite of LAC's potentials and the efforts of the last decade in favour of its integration, the region does not appear as a cohesive actor with identifiable stature, nor does it project abroad in a homogeneous manner, due among other reasons, to the existence of strong disintegrating pressures, and that our countries have dissimilar interests individually and as groups.
A strategy that would guide the actions and priorities in the different scenarios of integration-after evaluating all the alternatives-, does not exist, nor do the institutions necessary for upcoming stages, having the capacity to counterbalance the asymmetries between countries or resolve conflicts among them, nor have the policies and tools to avoid disloyal competition been harmonized. Because of the elements explained above, one can state that Latin American integration is fragmented, inconclusive and immersed in a complex, contradictory and uncertain context.
Nevertheless, in the present international conditions, characterized by continuous techno-scientific changes, growing internationalism, and transformations in the paradigms of reproduction and competitiveness, it is difficult to conceive the solutions to the complex challenges of development in the Latin American and Caribbean countries, without a dynamic external insertion, and therefore, the possibilities are less for those who attempt that path starting from isolated national strategies.
Thus, the integration processes appear as decisive complement for making the insertion viable, at the same time as they strengthen the internal and external factors stimulating economic growth. They constitute an important condition, although insufficient for development understood as the possibility to achieve economic advance, that is, to gradually move the productive structure toward activities of greater technological and organizational complexity.
In LAC it is becoming necessary to articulate the internal growth and modernization policies with the objectives and tools of the external policies. Without doubt, the multinationals co-ordinations bring with them restrictions to the traditional concept of national sovereignty I n so far as the levels of decision making in some policies, but many of them are imposed by the prevailing international conditions without participating formally in any integration process. From another perspective, these still offer many margins for manoeuvres to the states and other national economic agents, which can take advantage of the opportunities a new and broader field of action offers them, in function of their response capacities.
To sum up, the LAC integration processes provide multiple options for attacking the thorniest external obstacles to development, by strengthening alliances in order to explore new proposals, undertake more effective negotiation processes with the region's principal interlocutors and obtain better results from the international transactions.
In addition, belonging to the integration processes increases external credibility and confidence, and makes viable the armonization of the internal policies with the multilateral accords concerning trade, financing, the environment, health, education, population and other things. All the elements previously expounded have influence in the evaluation carried out by risk assessment agencies that on occasion also put pressure on national economies.
Finally, but not for that, of less importance, economic progress in the present conditions is linked to the global productive networks. Without integration into these linkages in the spheres of production and services, it is very difficult to travel on the road of development since that is decisive influenced by the degree of specialization that is reached, the place occupied on the chain of creation or realization of value, and the possibility of getting access to technological and organizational skill, starting from connection to the leading enterprises of these networks.
Of course, it cannot be inferred that LAC integration processes would by themselves resolve the challenges of development, when within the countries it is not always clear which model we are aspiring to achieve. Without presenting the solution to the problems of inequality, poverty, emancipation and the solidarity ethic, the region's socio-economic progress is inconceivable.
This topic is closely related, with proper ranking, to the themes of investigation-development, innovation, access to new discoveries, educational requirements, the cultural levels of the population, the continual requalification of the human resources, and other things that would guarantee clean competitiveness. These are aspects in which Latin America does not present sufficient advances and in which the processes of integration would have to concentrate their attention, which, until now has not gone much beyond the sphere of trade.

SCENARIOS FOR CONFRONTING THE FTAA FROM THE LATIN AMERICAN REGION

Even as the diagnosis concerning the threats the FTAA represents could stimulate a high degree of consensus among analysts of Latin America and the Caribbean, agreement comes apart at the moment alternatives in the face of this dilemma are discussed. Some positions in this respect can be noted schematically:
· The FTAA is a dangerous project for the region, there is no better alternative. The FTAA is so dangerous that it should be opposed, even without having another proposal. Just resistance to the project constitutes a better alternative because it contributes to its failure.
· In the negotiation process, it is feasible to confront the objectives of the United States with the FTAA which are contrary to the interests of our countries.
· The FTAA could be counteracted in more advantageous conditions if the structuring of a strong and coherent process of intra-regional integration is achieved, based on an alternative model to the neo-liberal one.
Starting from the premise already argued, which notes the need for the region- with or without the FTAA project- to face negotiations with its more powerful neighbours to the north, or with other more developed actors, in the hemispheric framework or in other bilateral or multilateral scenarios, it is important to submit to debate some reflections about the regional and sub-regional integration process in Latin America and the Caribbean in present in present conditions, as to the new circumstances of some countries, and the accumulation of new tensions between members of the sub- continent.
The strategic design of the integration processes in our region have to be based on strengthening the strong points that can already be identified, and elaborating realistic planes to reduce the principal limitations that characterize hem. At the same time, it will have to be aware of all the opportunities the international opening offers, with the objective of studying the best ways to make use of them, and thus be in better conditions to face the treats that challenges it . (5)

WHAT KIND OF INTEGRATION SHOULD LATIN AMERICA PURSUE?

Rthe answer to this question depend on the interests one desire to give priority and as such, here some prerequisites enter the debate, which, in the author's judgment, must bring together the integration processes in Latin America in order for them to promote the region's progress to a greater extent:
*Respect the principles of sovereignty and independence of the region, and its self-determination, even when its international insertion and external relations deepen, endeavouring to achieve the most equilibrium in this to avoid geographical concentration of trade and even monetary relations, given that the bipolarity the Euro introduces in this sense would facilitate reduction of the historical dependence with respect to the dollar.
*Convert the reduction of poverty, the regional inequalities and the distributive inequity that characterizes Latin America, into a priority objective. Promote the reduction of the gap that increasingly separates our countries from the developed ones. Adopt regional mechanisms that would guarantee differential treatment for the most backward zones. These principles are essential in order to achieve regional cohesion and the support of the broad sectors of the population.
*Guarantee the active participation of all the progressive social forces in the design and control of the integrationist policies; for that, they must be compatible with national expectations for the development and social justice.
*Constitute processes that do not try to imitate the course of a higher level of economic development. The needs and interests of nations with strong export dynamism, which set prices in the world markets, or whose national monetary units circulate as freely convertible currencies, are not the same as the requirements of countries of little development.
*Contribute to dynamize and broaden the regional markets, since the area's economic growth just does not depend on extra-regional demand. Likewise, favour specialization in lines of production and services that impel the integration of the Latin American countries into the global chains and promote progress within them toward activities that generate greater value added. Push regional insertion in the world economy in ever more competitive conditions.
*Sponsor the attraction, under favourable conditions, of external financing capable of raising productive investment, complementing the scarce levels of domestic savings.
*Pressure the developed countries to fulfil the commitments established in this respect, and confront the speculative flows with adequate regional policies.
*Support rational action by national states and international bodies to avoid or correct the asymmetries market mechanisms could lead to without due regulation. Defend the leadership of the states and regional institutions in the management and control of the processes of economic development. Establish mechanisms to impel the alliance between the public and private sectors, and likewise, to prevent and combat corruption.
*Join forces to impose mechanisms to control the behaviour of the transnational corporations, prevent the indiscriminate looting of non-renewable resources, project biodiversity, conserve ownership of our nations' strategic sources of wealth and confront the imposition of economic policies contrary to their interests, in the style of the IMF's "adjustment recommendations (letter of intent?)".
*Favour an intense interchange of information between the member countries, sectoral co-ordinations, macroeconomic regulators, external policy associations, and a degree of mobility of human resources in those activities that contribute to raise the level of qualifications or the life of the population.
*Push forward the joint formation of human resources and innovative projects, as well as techno-scientific collaboration in order that our region could make use, under better conditions, of the opportunities for access to new technologies, knowledge and forms of organizations and management. Consider the formation and improvement of human capital as the essential alternative for driving endogenous development.
*Collaborate in the formation of strategies and policies conducive to the fulfilment of the accords of the environmental summits, as well as other sensitive themes of a social character tied to demographic growth, childhood, combat of the narcotics traffic, and hemispheric security, among others.
*Promote improvement of the health and education system, as well as the preservation of the cultural identities of our peoples.
*Study the ways to attack the "dollarization" process in the region, stimulate financial integration and create the basis for progressing toward a future monetary union that would contribute to the region's greater economic independence.
*Coordinate the process to prepare the region for the negotiations facing third countries, other integration plans and in multilateral forums. In the way of examples, one could cite the inter-exchange of experiences prior to meetings, events or international negotiations; technical cooperation on trade and financial-monetary policies, join struggle for the restructuring of the prevailing international order, and especially, for a new financial architecture, the reduction of the external debt burden, the fight against the protectionism of the developed countries and their demand for an indiscriminate opening of our markets; the alliances to defend the prices of the principal exports of Latin America and the Caribbean , etc.
To sum up, the integration of LAC must promote the creation of a broad regional market, with sub-regional projects that can achieve more ambitious objectives, but with a strong dedication to regional collaboration and coordination that would favour dynamic and competitive participation of our area in the world economy.

FINAL CONSIDERATIONS

*The FTAA does not constitute the only or the most important priority for the external economic policy of the United States, but it indeed has special importance on the geo-strategic plane because it facilitates control of its closest surroundings, on the basis of its interests concerning the themes of immigration, drug traffic, terrorism, environment, and others of an economic or political character, or concerning stability and security.
*For many Latin American countries, their own internal challenges and the necessity to face the demands of their citizens in critical socio-economic conditions, come before the FTAA negotiations in order of priority. It is necessary to pay attention to the course of the conflicts in Argentina, Uruguay, Colombia, Venezuela, Ecuador and other countries, which although different in nature, could mean unpredictable outcomes.
*If the restrictions to access to the U.S. market foreseeable to date are maintained
for certain sensitive products like agricultural ones, textiles, steel and others, the final positions of some governments are still unknowns, as in the case of Brazil. The result of the coming presidential elections could change the course of the position sustained until now.
* The possibility cannot be ruled out that this project could come to loose its hemispheric character during its discussion and transform into a more geographically restricted accord, or one with different speeds, all of which does not reduce the danger of its consequences.
*The negotiations around the FTAA have advanced according to the established schedule, but the disagreements are significant. In the basic document there are many brackets that reveal the discrepancies of objectives concerning the various themes.

Thus, one can foresee a scenario in which the complete conclusions of the process are not achieved in the established timeframe, or do not meet the initial expectations of the United States or some of its interlocutors.
*In spite of everything said, the possibility that the FTAA could continue advancing remains valid, and it is necessary to prepare for that as well. The areas of consensus among the different agents of the Latin American countries should be identified in order to outline a lucid strategy concerning this process, which would make possible joint positions on the essential aspects.
*There are mechanisms for reciprocal support between the countries of our region; new networks can be constructed, and existing ones strengthened for advice and exchange of information around the negotiations, since many public agents, from civil society and international institutions possess the resources for it and could assist those least favoured in this respect.
*The FTAA can be confronted form the position of opposition to the project and its total rejection, but it is also feasible within the negotiation process, defending the interests of the Latin American and Caribbean countries without making concessions in this sense. The recent approval of the Trade Promotion Authority (TPA) is one more indication that there are many American motives for a successful conclusion of the accord, and their interests in the region are very strong, which concedes to the latter advantages in the capacity to defend its positions.
*Raising the negotiating potential of our region is, therefore, a strategic objective for confronting the FTAA in present conditions when the majority of the governments have accepted to sit at the negotiating table. The identification of the respective consensus is vital for a concerted confrontation of the American appetites.
*The most desirable scenario for confronting the FTAA is to counteract it with an alternative of authentic regional integration, on none-liberal foundations, which would not only strengthen the area's negotiating capacity before any interlocutor in international forums or bodies, but also promote the economic progress of our countries and their more competitive insertion into the world market.
*It is indispensable to continue the investigations and debates about this alternative process of integration. The reflections around that requirements that design of convergence should meet do not satisfy a mere academic interest; rather, they express a vital, pragmatic necessity.

Notes
1. In this work, the MERCOSUR, CAN, MCCA, CARICOM and NAFTA are classified as sub-regional processes. Of regional dimension, the ALADI and the South American Free Trade Area project are included, and the term of hemispheric integration is reserved for the FTAA.
2. For a broader treatment of this aspect, see in Cuba Socialista, No. 22, the articles by Osvaldo Martínez, José A. Quintero, Lourdes Regueiro and Oneida Alvarez.
3. It is calculated that it should reach an average rate of 18% annually, far above the 8% reached between 1990-1999. Source: Panorama de la Inserción Internacional de América Latina y el Caribe. Chapter III, P. 86
4. In 2001, a new recession took place in the MERCOSUR, up to 17.5%, contrasting with the positive evolution of the CAN and the MCCA, which stood out its high proportion of inter- zonal exchange, close to 27& in total.
5. For a synthesis of the Strengths, Limitations, Opportunities and Threats of the Integration Processes of LAC, see Procesos de Integración en América Latina y el Caribe, BY Oneida Alvarez, CIEI, 2002