Marcus Gonzales

11/11/05

PSCI 4783

Prospects for Integration in the Americas

Overview: (NAFTA, Mercosur, Caribbean & Central America, FTAA)

1. NAFTA (1994)

a. Links Canada, Mexico, and the US into a free trade region.

b. Immediately eliminated tariffs on half of all US goods shipped to Mexico and gradually phases out other tariffs over 15 years.

c. Positives

i. Increased trade, investment, travel/immigration and intra-regional exports.

ii. Increased dependency on each member’s economies.

iii. More diversified and international economies

iv. North American Development Bank (NADBank)

1. Channels funds in border area to improve the environment.

d. Negatives

i. Lack of compliance/political will. (US agriculture)

ii. Development gap has widened.

iii. Inadequate infrastructure (increase traffic)

iv. No address to immigration and undocumented workers in US. (increase)

v. Intergovernmentalism.(?)

vi. Lack of sovereignty transfer

e. Agendas

i. Aid in infrastructure and college education

ii. Aid to be concentrated in poorer countries

1. NADBank?

iii. Institutional System to aid integration

iv. Redefine supranational goals

f. Challenges

i. Canada taking more of a leading role in N. American institutions.

ii. Mexico demonstrating how it would contribute and us a N. American investment fund to lift economy.

2. MERCOSUR (1991)

a. Exists for “the development of a common market, as it is defined in the Treaty, and build upon the reciprocity of rights and duties among partners.

b. Positives

i. Increased economic conditions

ii. Increased political health (democracy)

iii. Overcoming of crises (Tequila, Brazilian Real devaluation, Argentine econ)

c. Negatives

i. “The contagion effect.”

ii. Lack of commitment of political leadership.

iii. Lack of progress in economic conditions

iv. Perception of public opinion, investors and third countries right now.

d. Agendas

i. Deepening: “creating an infra-structure of communication, transport and energy to enhance links among South America countries, and attracting the non-Mercosur members to join-in a common integration and regional development process.”

ii. Widening: “establishing as much as possible free trade agreement and common strategies with countries and blocs of countries all over the globe.”

e. Challenges

i. Institutional structure

ii. Dispute-resolution mechanism

iii. Regional hegemony of Brazil

iv. SN vs. IG

v. Lack of commitment

vi. Econ crises

vii. Poor Image

3. CARIBBEAN

a. Caribbean Community (CARICOM): for economic integration though a common market, functional cooperation, and foreign policy cooperation.

b. Positives

i. More economic power regionally in the global economy.

ii. Solve non-traditional security threats: illicit drug trade, HIV/AIDS.

c. Negatives

i. Lacks political, legal, and institutional mechanisms to make deeper integration possible.

ii. Decision making needs to involve a representative parliament.

iii. Lack of sovereignty transfer.

iv. Authoritarian politicians not representative of the general people. Have own interest and not development goals like integration.

v. Lack of support

vi. Internal integration needed before external.

d. Agendas

i. “Move in the direction of power sharing based on shared democratic governance to compliment the evolving power sharing at the regional level.”

e. Challenges

i. Tension between need to create greater integration within the framework of a community of sovereign states. Lacking the political, legal, and institutional mechanisms to make deeper integration possible.

4. CENTRAL AMERICA

a. Central American Common Market (CACM) and System of Central American Integration. (SICA)

b. ‘Official integration’: neo-liberal regionalism focused on trade, foreign investment, and external integration.

c. Positives

i. Increased convergence of economies of region

ii. Preferential access to external markets, attract FDI, new technologies and reconstruction aid.

iii. Increase comparative advantage of the region.

iv. More bargaining power.

d. Negatives

i. Lacks social dimension some states want.

ii. Varying degrees of development and democracy within states.

iii. No sovereignty transfer

iv. External integration undermines regional integration with bilateral/multilateral trade agreements.

e. Agendas

i. CAFTA?

f. Challenges

i. ‘Reactive regionalism’: because these are small peripheral states cannot regionalize strategically, lack structural power and reciprocity.

5. FTAA

a. First summit of the Americas takes place in Miami, the focus of the meeting was the creation of the FTAA.

b. Positives

i. Promotes neo-liberal ideas.

ii. Promotes the idea of democracy.

iii. Further promotes regional hegemony.

c. Negatives

i. No blue print or “common-held design”

ii. Other regional groups as better alternatives to negotiate better terms of trade.

iii. No entity or institution which to build FTAA. LA countries are nationalistic and don’t like the idea of a supranational institution.

iv. No way to integrate public and private sectors.

v. Lack of US commitment in FTAA process

d. Agendas

i. Create hemispheric regionalism in the region

ii. Promote key security and democratic agendas.

e. Challenges

i. Relationship between sub-regionalism and hemispheric-regionalism.

ii. Diversity in LA states and hemispheric-regionalism. (Population, econ structures, incomes, GDP)

iii. Northern and Southern block domination.

iv. Bilateralism vs. hemispheric integration.

v. Lack of institutions across the hemisphere.

6. COMMONALITIES: PROSPECTS FOR INTEGRATION IN THE AMERICAS.

a. Positives

i. Economy

1. Each of these regional groups had economic benefits or is supposed to have greater economic benefits though integration. For smaller states integration seems to enable them to have more of an impact in the global economy.

ii. Security

1. For both North and South America, integration looks like a good way in insure many types (economic, non-traditional, political, ideological) of security in the region.

b. Negatives

i. Intergovernmentalism vs. Supranationalism

1. All integration schemes in North and South America are intergovernmental.

ii. Lack or unwillingness of sovereignty transfer.

1. No one has shown they will give it up.

iii. Lack of commitment

1. Even the integration schemes that have formed in North and South America (NAFTA, MERCOSUR) have problems getting members to commit to policy.

iv. Lack of institutions.

1. Every integration scheme in North and South America has a lack of institutions.

v. Society left out.

1. Domestic factors play a role in integration. In the case of the Americas, the domestic peoples are left out of all of these integration schemes.

c. Agendas

i. To create a regional integration scheme that includes every country in North, South, Central America, and the Caribbean that share common economic goals such as free trade.

1. sub-regional or hemispheric

ii. To eventually have common political, security, and ideological values as well.

iii. Have open communication between all of the countries in the Americas to insure security throughout the region.

d. Challenges

i. Creating supranational institutions that will represent the people from many different diverse countries.

1. Transfer sovereignty.

ii. Creating support from the societies in member state countries.

iii. Getting very different governments to commit to policies and act by the rules of the hemispheric institution.

1. Create big enough incentives for dominate northern and southern bloc countries to join. (Brazil, United States)

2. Gain overall support from Latin American countries. (Hugo Chavez)

7. QUESTIONS

a. Could any one of these integration schemes be the best type of integration for the Americas or could all of the integration schemes come together and form something like an FTAA?

b. In this presentation I usually marked intergovernmentalism as a negative. Is this a negative thing for integration or is it a positive because it allows for better implementation of policies with all the diverse and governmentally different members?

c. Would it be more beneficial for the United States to not get involved in a giant integration scheme and just continue to work with each of the Latin American states on a bilateral basis?