Latin American states have failed to make their own EU, but they should keep trying

EPA-EFE/ANDRES CRISTALDO

Foreign ministers of Mercosur: Aloysio Nunes from Brazil, Rodolfo Nin Novoa from Uruguay, Eladio Loizaga from Paraguay, Jorge Faurie from Argentina, Canadian Minister of International Trade Francois-Philippe Champagne and Minister of Industry, participate in the signing of a joint statement that will give way to negotiations between Mercosur and Canada at the headquarters of the Ministry of Foreign Affairs of Paraguay in Asuncion, Paraguay, March 9, 2018.

Latin American states have failed to make their own EU, but they should keep trying


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Throughout Latin America’s history, the continent’s borders have been subject to change as a result of colonialism. Simón Bolívar, the man who fought for the independence of large swaths of Latin America, fantasised about a continent which, independent of European rule, would join together and rule itself. Almost all of Latin America is now independent, yet attempts at continent-wide political union have failed.

Attempts to move towards wider political unions with Mercosur, the Pacific Alliance, Caricom, and the Union of South American Nations have not worked. No serious attempts at regulatory alignment or political convergence have successfully taken place. In fact, many can argue that the countries that make up the continent are diverging further. Earlier this year, six member states of the Union of South American nations left the body, citing a lack of consensus on who to appoint as Secretary General, as well as greater political differences.

Any political union, wherever it may exist in the world, faces the risk of being plagued with disagreement and stalemates. Mercosur, the South American trading bloc, temporarily suspended Paraguay in 2012 and brought about the indefinite suspension of Venezuela just last year, exemplifying how the continent’s divergent politics can impede collaboration. Political and partial fiscal union is so difficult because linguistic similarity does not translate to automatic political alignment. Finding a centre ground is difficult in a continent which entertains figures as diverse as Maduro and Peña Nieto. And while political union does not require uniformity or homogeneity, the fact that not all the countries even democratically elect their leaders is a proven obstacle. Honduras and Cuba have most recently shown this, but it is not a trait unique to them.

However it is the view of some experts that, despite difficulties, an EU style union would serve the continent’s interests well, and that forging a path towards such a union is in the best interest of everyone on the continent. Although the kind of fiscal alignment of the European Union is farfetched for Latin America at this moment in time, one can start to look at models that Latin America could follow. Uniting under one banner which reads, ‘We’re open for business’ is a much more attractive prospect when it is on behalf of 600 million people instead of just one country. Of course the European Union is not a completely perfect model. The Eurocrisis and Brexit clearly warn against too much integration. Nevertheless, a Latin American political union would undoubtedly bring about certain levels of stability and economic bargaining power that individual countries could never dream of attaining on their own.

And despite internal tensions, even the smaller and much less powerful political and economic unions of Latin America are starting to see these benefits. Mercosur is on the cusp of finalising a trade agreement between its four constituent nations and the European Union, which will see them further lower trade tariffs and attain cheaper access to European goods. Students from the Pacific Alliance can study at each other’s universities without visas. The Caricom single market attracts more petrochemical investment because companies only pay taxes on their product once, rather than every time it leaves one port or enters another.

A union comprising all the constituent countries of these smaller three unions would achieve benefits on a much larger scale. The ability to represent and advocate for over 600 million people would mean that the smallest countries in Latin America are less likely to be left behind.

The most visible effect of this would be a greater bargaining power against the United States, the nation which by far does the most trade with Latin America and is renowned for getting a very good return on its investments to the South, going back hundreds of years. Similarly, with China’s investment in the region growing at a staggering pace, a unified voice for all of Latin American nations in negotiations would mean a better deal for their citizens and businesses against this superpower too.

2018 will witness presidential elections across six countries, including big players Brazil, Colombia and Mexico. Predictably, national politics are defining the agenda of these elections. AMLO wants tighter controls on foreign business investment and Temer has put forward a populist platform. The lack of a Bolivarian figure in Latin American politics means that an expansive union is probably far away. But the EU was built from the ashes of disparate and opposing forces in Europe. It began with a small economic union between a handful of countries, before reaching a tipping point at which all wished to join – so it might just be a matter of time before Latin America achieves this too.

 

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