The Impact of New Regionalism on Trade Policy Making: The Case of Mercosur and the Ftaa*

By Botto, Mercedes | Ibero-americana, January 1, 2007 | Go to article overview

The Impact of New Regionalism on Trade Policy Making: The Case of Mercosur and the Ftaa*


Botto, Mercedes, Ibero-americana


I. INTRODUCTION

Since the '90s, Latin American Countries (LACs) have been signing and negotiating many trade agreements, constituting what is called new regionalism (BID/IADB, 2002). In contrast to the old type, new regionalism has two main features: on the one hand, is a uni-dimensional type of integration, in which the dominant goal is to coordinate the liberalization of trade and finance to achieve a larger economic market. On the other hand, when integrating countries display different levels of development (North/South for instance) there is no regional commitment to tackle down asymmetries nor do they provide compensation to the losers. Even if most governments reject the idea of creating supranational institutions or coordinating common policies, new regionalism carries big challenges, especially for developing countries when the agreements include developed countries as well, that are difficult to solve with intergovernmental instances of policies' coordination.

This paper focuses on the impact of new regionalism on the domestic policy making process. Most of the literature about policy making in economic integration processes is based on the European Union (EU) experience. In this sense, specialists highlight the pervasive effect that EU supranational policy and institutions generate in the policy-making of individual countries. Nonetheless, the array of institutions has generated not one, but several modes of policy making, depending on the policy domain and the period1.

Only a small part of the literature deals with the specificity of policy making within new regionalism. Most studies are based on individual country studies or focuses on integration process as occurring alone. Also, some authors remark the integration agreements ability to opening up and creating channels of participation for actors, traditionally excluded from a process, depicted as hermetic and elitist (Ostry, 2000; Botto, 2002). Others emphasize their capacity to renovate and update the management of the public sector in LACs. This is so because until the '90s, involvement in this kind of projects was characterized by the absence of presidential interest, a lack of trained, professional officials and stable bureaucracy and the delegation of authority on the part of the national Congress (Jordana & Ramio, 2002).

Assuming that new regionalism has opened up new spaces and windows of opportunity for the participation of new and old national actors, this essay attempts to evaluate to what extent these changes have improved policy making in terms of turning it into a more democratic process. Which are the new and old actors involved? In what arenas and phases of decision making process do they participate? And who really influences? We argue that this opening up does not necessarily imply democratization, but rather tighter technocratization.

The analysis is restricted to the process of decision making, where rules are made, and will involve two different experiences of new regionalism: the MERCOSUR (Mercado Comun del Sur) and the FTAA (Free Trade Area of the Americas). The information and data used in this paper correspond to three national cases: Chile, Argentina and Brazil. We have chosen these countries because they all have started a process of trade liberalization both through symmetric (S-S) and asymmetric (N-S) negotiations.

The paper is organized in three parts. In the first one, there is a brief description of the economic context and policy style each country had before new regionalism came to stage. In the second and third one, we analyze the actors, arenas and processes in the negotiation that brought MERCOSUR into existence and the FFTA negotiation process that is currently taking place.

II. HOW WERE CHANGES INITIATED? CHANGE AND CONTINUITY IN POLICY MAKING

The exhaustion of the import substitution model at the end of the 70's opened up the way to trade liberalization and a shift on the economic policies in the whole region. …

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