(By Miguel Lora / Translation by Jason Tockman).- In the phase of capitalism we are now living through, large and small nations compete under unequal conditions in a fictitious free market controlled by new and influential actors—powerful transnational companies. In imperialism, the nation-states, especially those less developed, still do not have self-determination and their independence depends upon participation in blocs with a common foreign policy, chains of production, physical infrastructure and shared sovereignty. The Bolivarian Alternative for the Americas (ALBA in Spanish) and the People’s Trade Agreement (PTA, or TCP in Spanish) are the most recent of such experiments.

Almost 200 years ago, Simón “the Liberator” Bolívar warned that the states of South America would not be able to contend with the expansion of the Empire to the north if they did not establish an alliance. In the second half of the 19th Century, José Martí called for the construction of truly cooperative relations among Latin Americans, based on respect and justice, in order to make the region independent from the United States. In the 1920s, Víctor Haya de la Torre, the founder of Peru’s Alianza Popular Revolucionaria Americana, warned that one of the gravest imperialist plans was to maintain a divided Latin America.

In the 1960s, the discussion again centered on Latin American independence and autonomy in relation to the United States. The ex-President of the Inter-American Development Bank (IDB), Felipe Herrera, called for an integration that would create a continental nationalism in Latin America, a great nation cut to pieces by external factors and the victim of centrifugal forces that opposed regional union. Rafael Caldera, former Venezuelan president, emphasized that there exists no more dignified foreign policy interest than the formation of a bloc with a common conscience so that the countries of Latin America would act as a single unit for the defense of their common interests.

In the middle of the past century, the region began to reclaim integration as a path for development. In 1961, this took the form of the Central American Common Market; in 1969, the Andean countries established the basis for the Andean Community of Nations (CAN); and in 1991, the Common Market of the Southern Cone (MERCOSUR) was born. These attempts at political integration were more ambitious than the commercial alliances that proliferated in the 1990s.

Along with the arrival of neoliberalism came new ideas and methods of linking the nation with the external in a framework of globalization that confused trade with integration and buried the dreams of Latin Americanists. One of these ideas was the “open regionalism” put forward by the Economic Commission for Latin America and the Caribbean (ECLAC, or CEPAL in Spanish) in the mid-1990s. Latin American Center for Social Ecology (CLAES) researcher Eduardo Gudynas describes open regionalism as a vague and confused category that complicated the debate and perhaps has been ECLAC’s greatest conceptual disaster of that era.

ECLAC has since led a functionally neoliberal existence, proposing to shape commercial blocs totally oriented toward the world economy, insisting they insert themselves into a global framework and not achieve autonomy on the international stage. Open regionalism validated the commercial treaties inspired by the agreements of the World Trade Organization (WTO) and the Washington Consensus (dismantling of the state, free markets without regulation, and complete liberalization of the economy) as instruments of integration.

The example of ECLAC’s open regionalism was the North American Free Trade Agreement (NAFTA, between the U.S., Canada and Mexico), and the extreme example was the Free Trade Area of the Americas (FTAA).[1]

Later, the commercial integration of the Washington-style Free Trade Agreements (FTAs or TLCs in Spanish) not only failed to facilitate regional unity, but rather destroyed it. The CAN and MERCOSUR accords failed precisely because they corrupted regional integration with the logic of free trade competition that favors the largest over to the smallest countries. At its base, the debacles of the CAN and MERCOSUR provided evidence of the profound crisis of a paradigm which claimed that the centerpiece of integration was liberalized trade, observed Pablo Solón, Bolivian social movement leader and trade specialist.

Trade is integration?

Neoliberal reforms severely limit processes of integration and disperse their objectives. They cut off the political aspirations of the old treaties and accentuate rigidly commercial objectives. If before treaties sought to link countries to reach liberation and autonomy, now the objective is to increase trade.

José Manuel Quijano, economist and member of the MERCOSUR Sectoral Commission, identifies various differences between the free trade agreements and the processes of political integration that also include a trade component. To begin with, the trade accords are static and cannot be renegotiated, while the political integration agreements are dynamic and can be modified through protocols and partial agreements.

Free Trade Agreements impose free competition rules in an essentially asymmetrical market. A political accord promotes an alternate course for trade that permits diversification and the development of productive connections among partners.

Trade agreements employ a commercial lens, while integration accords handle matters in a political sphere and with support from institutions above the national level.

The FTAs create subordinated states that are integrated into the global productive chain as specialists in the exportation of primary products. Integration agreements combat such a role, looking instead to create coordinated chains of production.

Free Trade Agreements are not mechanisms of integration, nor do they grant autonomy to the state, because they look for precisely the opposite: total autonomy for the market and a subsidiary role for the state.

When the globalization discourse of the 1990s matured and changed the capitalist paradigm of the state, the FTAs suffered a radical change, encompassing new areas that had not been previously seen as trade issues. The old trade agreements—such as the 1820 accord between France and England—referred to borders, tariffs and customs rules. Today’s accords include new issues, including services, intellectual property, government purchasing and special international rules to protect foreign investment.

These “invasive” trade agreements began to influence all spheres and rules of society. A commercial logic advanced a market society in which the laws of supply and demand reached the state itself, explained Claudio Lara, Chilean Economist and professor at the Latin American Council of Social Science (CLASCO in Spanish).

We must change our way of thinking

The most significant problem for MERCOSUR is that the economies it brings together are not linked, and they compete amongst themselves. The case of soy is illustrative. Obstacles to trade are frequently imposed upon Uruguay by Brazil and Argentina, without a care whether they are closing bike routes or importing rice from Vietnam. In the cost-benefit logic, it does not matter if these actions harm their little brother. The MERCOSUR is reduced to a political forum in which the two largest partners consolidate preferential treatment, leaving the smaller nations at the margins.

On the other hand, the CAN advanced significantly as an institution and now maintains a solid structure: financial councils and procedures, a Latin American Reserve Fund, an Andean Parliament, its own court, and a regional judicial arrangement. But the influence of ECLAC’s export-led growth during the 1990s pushed the bloc to the cliff’s edge.

Peruvian economist and ECLAC advisor Ariela Ruiz Caro stated that the change in focus in economic policies modified the strategy for integration. In any form, integration depends upon the market, on the International Monetary Fund (IMF) and the World Bank, institutions in which there is no place for politics or projects of a regional character. Andean norms modify this new design/dogma and the liberalization and deregulation of markets, converting them into central elements in the process of Andean integration.

Neoliberalism not only disarticulated the interlinked regional chains of production, but also the political bloc that had been formed. The countries ended up competing among themselves, as much in exports as in the incentives they offered to attract foreign capital.

Ruiz sees in the CAN a puppet that has lost its capacity to make proposals. The Community is informed of trade negotiations with other regions, but is not able to object to Free Trade Agreements. Civil society does not have the opportunity for input, but business owners do. The CAN is falling apart because it lost sight of its initial objectives for which it was created, that is to say the promotion of balanced and harmonious development of the Andean peoples by means of cooperation, not on the basis of competition.

If the region is failing to achieve independence due to Free Trade Agreements, and if the regional effort perishes—contaminated by the neoliberal philosophy that always benefits the most developed nations—what scheme will suit underdeveloped and dependent countries, linked to external markets through the sale of basic goods? The Bolivarian Alternative for the Americas (ALBA) and the People’s Trade Agreement (PTA) are the embryos of a new formula for integration set in a distinct paradigm.

The ALBA under construction

In light of the collapse of neoliberal policies and projects that deepened dependency, newly elected Bolivian President Evo Morales believes that only a true integration between Latin American countries, based upon principles of cooperation, complementation and solidarity will permit the preservation of sovereignty and successfully confront the trend towards hegemonic unilateralism.

Morales and his colleagues Hugo Chávez of Venezuela and Fidel Castro of Cuba agreed on April 29, 2006 to construct the Bolivarian Alternative for the Americas and put into action the People’s Trade Agreement, plans for integration that will further the exchange of goods and services.

The strategic plan for complementary development of chains of production—with conservation/ rationing of resources—includes the construction of bi-national public, cooperative and mixed companies; the creation of subsidiaries of publicly owned banks and reciprocal credit agreements; the extension of taxes on all state investment and mixed companies, including on private capital during the period of investment recovery; facilities for airlines; and a special fund of up to $130 million to finance infrastructure and other projects that generate domestic capacity.

The governments of Venezuela and Cuba recognize Bolivia’s special needs after centuries of exploitation and plundering; therefore, the larger countries concede privileges to the smallest one. Venezuela is opening its state purchasing to Bolivian suppliers, while Bolivia does not; Venezuela lowers its tariffs to zero, while not demanding the same of Bolivia. Venezuela makes available its infrastructure and land and water transport equipment and guarantees the purchase of a range of vegetable oil products, as well as other agricultural and industrial goods harmed by Free Trade Agreements. It is a treaty that truly offers special and different treatment for the smallest economy in the bloc.

The integration of the ALBA includes social cooperation programs without financial objectives. For example, Cuba is creating a Cuban-Bolivian institution that guarantees eye care in six centers with the capacity to tend to 100,000 people annually. It is donating 20 mobile hospitals with a range of services: surgery, intensive therapy, urgent attention for cardiovascular problems, laboratories and other medical resources, as well as increasing to 5000 the number of scholarships provided for medical students through the beginning of 2007.

The countries are exchanging with each other—as opposed to trading—knowledge in areas of science, technology, sports, communication, experience in energy conservation, and culture. The exportation of Cuban goods and services can be used to pay in kind.

The ALBA and the PTA are embryos of an alternative integration. Although there remains a lack of common policies defined at this early stage of coordination (such as a common external tariff or free movement of workers between countries), these agreements replace neoliberalism’s category of “consumer” with political citizens that make decisions according to the common good and not a cost-benefit logic.

Basis for a new integration scheme

The recovery of national autonomy as the preliminary step in the reconquest of sovereignty will come to pass through effective regional coordination (political, chains of production, macroeconomic) that strengthen the negotiating capacity on the international plane. Gudynas names this proposal “autonomous regionalism,” in contrast with ECLAC’s “open regionalism.”

Autonomous regionalism implies a reorientation of trade and production toward regional needs, looking for complementary and cooperative chains of production and the construction of common policies, at least in agriculture and energy.

If one wants to connect the region economically, it is necessary to think of another type of productive relations whose principle objective is to attack the primacy of exportation. It is obvious that this type of integration is not possible if the larger countries impose conditions on the smaller ones, and if the logic of relations goes no further than the economy. Integration attempts to revive politics and above all to agree to norms at a level higher than the nation-state.

This new scheme also defines “de-materialization” of the economy, which means modifying the conditions of material ownership and consumption. “Private individualism” was a consequence of the economic emphasis of the reforms of the 1980s, and today one perceives a strong individualism and a weakened collective agenda. Quality of life is associated with material consumption and well-being depends on the possession of the latest technological advances. The structure of food supplies and customs also has changed with the use of microwaves and automatic washing machines. Society in general rejects the reforms of the 1980s, but their aspirations related to quality of life are the legacy of the reforms.[2]

The substantial variation in people’s aspirations has implications for regional integration. For example, if a government promotes regional integration by increasing taxes on Asian technologies, it runs the risk of being repudiated by the masses.

The great majority of Latin American populations have a low level of consumption due to the high level of poverty, while only a small elite consumes the highest quality and quantity of natural resources. For this reason, the reordering of resource use is perhaps necessary to set a limit on the opulence and assign a true social and environmental cost of consumption (cost of solid waste disposal, of packaging, etc.). Some import sectors would be harmed, although there are many possibilities to intervene in the area of consumption that are not taken advantage of, such as the rates of sumptuous consumption.

It is necessary to establish a limit on the use of natural resources—on water and forests/rainforests. All countries have a level of sustainable consumption that must be maintained, according to need. If one looks to cover all necessities, sooner or later, one will exceed this level. In this case, food sovereignty depends on regional interrelation, because it is not environmentally sustainable to look for domestic self-sufficiency in the food supply. One has to negotiate with neighboring countries.

A departure from materialism would reduce the consumption of primary materials, produce less garbage, and generate more employment because it would enhance the production of those goods which have greater utility. That which generates more employment is not the manufacture of goods, but the maintenance of them. Such is a more austere model, but one of a higher quality.

For all of this, Gudynas emphasizes, one needs autonomy with respect to globalization. Countries have formal sovereignty, but under a false autonomy: they depend upon international markets to sell their basic products, credit organizations define their political economy, and foreign stock exchanges fix the price of their minerals.

To win autonomy and be viable, no other road exists except to coordinate with one’s neighbors, harmonize rules at the regional level, develop connections in production chains, and establish joint policies that plan for and solve disputes.