THE MERCOSUR ROUTINE

Situation can force despair or trigger creativity

It is Mercosur Summit time again. This time in Paraguay. The presence of the new Argentine president Mauricio Macri is likely to be one of the most attractive items for the media. After all, he represents a significant change after 12 years in which Argentina espoused a totally different political regime under the Kirchner presidencies.

And there is an additional side-line: the current confrontation between Macri and Venezuela’s Maduro might provide some interesting headlines and reports from the accredited journalists. Apparently the Argentine president will raise the issue of human rights and political freedom in Venezuela. And as already reported in this column, the Venezuelan reply is unlikely to be friendly.

The skirmish is bound to trigger a debate in Argentina. Kirchner supporters will immediately accuse Macri of being part of a conspiracy to destabilize a democratic and popular (populist?) leader. The other side will reply that Human Rights do not have an ideology and that the same standards should apply to everybody,

Moreover, such a debate will rekindle a discussion which is discreetly taking place among some political analysts. They are wondering if Macri’s PRO means that a new kind of modern — and democratic — model of centre right political party is being born in Latin America. They are thinking in terms of a political format which can make social and human rights objectives, coexist with market oriented economic policies which — in addition — include some market regulation aimed at expanding democracy to aspects which — up to now — were a monopoly of the progressive side of the political spectrum.

In any case, should the controversy between the two presidents erupt, it would be simply one more obstacle in the way of this particular summit achieving much. There are others. First, there is the fact that the main partner, Brazil, is in the midst of a deep political and economic crisis. Not the best position to enter new long term commitments. In the case of Argentina, a number of sources suggest that different local government departments from within and without the Ministry of Foreign Affairs still have to agree on who is going to do what, and that, currently, there seem to be other priorities for the country’s economic and diplomatic teams. Some more or less as important as Mercosur but definitely more urgent.

This whole scenario would change dramatically if there were a solid hope about the possibility of finally reaching a free trade agreement with the European Union. The issue has been around since the birth of Mercosur approximately two decades ago. Both sides blame each other for the failure. And they are both probably right: simply put, there are too many interests to harmonize. Many say that this single item is the most frustrating issue on the Mercosur menu.

The stagnant Mercosur does not affect the five member states in the same way. Possibly, in the case of Venezuela, the political crisis simply pushes Mercosur out of the agenda unless it has to do with politics. Brazil and Argentina have a problem but have other economic and trade conflicts which create a more urgent and focused agenda. which also offers more options to explore. The two smaller partners, Uruguay and Paraguay get the short end of the stick. Mercosur limits their options and does not offer much in terms of compensation.

This situation can force despair or trigger creativity. Luckily, in the case of this week’s summit it has been the latter.

The Paraguayan Deputy FM announced last week that a list of approximately eighty non-tariff barriers for products manufactured and traded within the bloc had been identified. The idea is to scrap the antidumping measure and countervailing duties. This would ease up Uruguay and Paraguay’s life in Mercosur, allowing for increase trade, and, perhaps, more foreign investment.

It would be a good way of starting 2016. Not a break away from routine, but an interesting step in the right direction.

@andresfederman

CREDITS: BUENOS AIRES HERALD

MERCOSUR WELCOMES PRESIDENT MACRI

 

Trend of greetings transcends mere politics

A week from now, a new Mercosur summit will be held in Paraguay, the first one attended by the new Argentine president.

For better or worse, the bloc has not been a “hot” news issue for quite some time now, unless it appears linked to specific political issues affecting its member states. The new Argentine president managed to put Mercosur back on the front pages when he threatened to apply the bloc’s “democracy clause” to Venezuela, so as to punish Maduro’s alleged human rights violations. But the Venezuelan leader’s acceptance of his defeat in the December 6 elections made that confrontation unnecessary.

However, some special circumstances surrounding next week’s meeting suggest that perhaps — repeat: perhaps — we might see a departure from the rather uneventful tradition of the Mercosur and discover some changes. Not earth shattering, but nevertheless important.

The first is Macri himself. Many believe that his politics are — in theory — different from those of Mercosur’s heads of state with the possible exception of Paraguay’s Horacio Cartes. But this view might be simplistic.

The sole exception is, obviously, Nicolás Maduro, who has already removed all doubts about his views on Macri. But Venezuela has enough problems of its own to bully Macri. Or to muster Mercosur’s solidarity against him. There might be some noises coming from Paraguay, but the bet is that it will be rhetoric rather than business.

As for the other partners, there seems to be some real business worth paying attention to. In the case of the main partner, Brazil’s Dilma Rousseff made a point of offering Macri red carpet treatment when he visited her as president elect. But the welcome transcended politics.

The powerful Sao Paulo business lobby suddenly found the one Argentine (who happens to be the president) whose ideas they like. Many of them are quite critical of Mercosur, which they consider a barrier rather than a platform from where to expand to the rest of the world. And Macri has already voiced his opinions that it is important for the bloc to start looking at a wider — and more flexible — range of international trade options. Not to mention the fact that his Foreign minister went as far as suggesting that the FTAA (Free Trade Area of the Americas) is not necessarily “a bad word.” A total reverse of the views of those who were in government until last week.

In the case of Uruguay, despite former president Pepe Mujica’s open support for Daniel Scioli, it is assumed that the current President Tabaré Vázquez, let alone the Uruguayan people, expects that the new Argentine president will be friendlier to Uruguay than Néstor and Cristina ever were. There are a number of issues pending between both countries. And it should not be difficult for the new Argentine government to solve quite a few of them.

Others, especially those related with trade, might be more complicated. They depend more on the state of the economy than on political decisions.

But Uruguay’s interest might focus on aspects much wider than bilateral trade. Tabaré Vázquez is determined to use the opportunity of Uruguay’s presidency of the bloc, which begins next week, to “open up” Mercosur. In what seems to be a strong coincidence with Argentina’s new government, there is the view that Mercosur should start reaching towards a wider word (specially the Pacific) in search for trade and investment. The view seems to be “we cannot leave Mercosur because we would have to move Uruguay elsewhere.” But the way in which the bloc is working is far from satisfactory. Especially for the smaller partners.

In the last few years, Mercosur has been almost paralyzed. It remains to be seen if the recent political changes in the region impact on the workings of the bloc.

@andresfederman

CREDITS: BUENOS AIRES HERALD

 

WELCOME MS. MALCORRA

A new toolbox to tackle old problems of foreign policy

A word of warning: if you are absolutely convinced that the result of the presidential election is a blessing for Argentina, it is suggested you skip this column and invest your time in reading other sections of the Herald. The same applies if you believe that Scioli’s defeat is a tragedy. Again, do not waste time and read more valuable sections of the daily.

This column will focus on the appointment of Susana Malcorra as the incoming foreign minister, and has nothing to do with the merits or demerits of both the elected and incumbent presidents.

Her appointment came as a surprise at a time when most of the speculation suggested different members of the victorious alliance. All of them with clear political party commitments. By contrast, except for a minor involvement with the UCR, the lady is not a politician. In fact, the link with partisan politics is so tenuous that many of the press’ descriptions of the new foreign minster do not even mention it. And — in line with this — none of the reports about the participation of the UCR in the future Cabinet includes her as part of the deal.

The non-partisanship factor has caused surprise beyond Argentine borders. The foreign ministers of Uruguay, Chile, Bolivia and Paraguay are all active politicians. Just to cite further examples, the same happens in other countries, like the United States, the United Kingdom and Germany. The only possible exception would be Brazil’s Mauro Vieira. His merits for the job come mainly from a long, brilliant career as a diplomat.

But here again, there are no similarities. Some of the names mentioned as possible foreign ministers in a Macri presidency belonged or have belonged to the diplomatic service. In some cases as foreign ministers

But that is not the case with Ms Malcorra. She never served as an Argentine diplomat.

So what is so special about the new Foreign Minister? For starters, she was, until she shifted jobs, the UN Secretary General’s Chef de Cabinet. And before that, she had first been the Chief Operating Officer and Deputy Executive Director of the UN’s World Food Programme and then the UN’s Under-Secretary-General for Field Support. This last position implied guaranteeing the logistic for more than 100,000 people involved in peace-keeping activities. In addition, it should be noted that -before joining the UN - the lady had a very successful career in the corporate world.

Some Macri analysts or critics, suggest that Malcorra has been chosen for her top managerial skills in order to join peers with equally strong credentials. Both supporters and critics of the new president argue that he does not believe in traditional politics which, they argue, Macri feels can be replaced by professional managers.

It is strongly suggested that her managerial skills are a contributory bonus. But several other reasons associated with Ms Malcorra’s career path contribute to make her the ideal person for Mauricio Macri’s foreign policy needs, which are about conflict and high politics and not about logistics and management.

The work of any country’s diplomats is to promote its national interest. Praiseworthy of course. But frequently conflictive. Two or more sides determined to win, but often without much regard for rules and ethics. Or even life and death, if the stakes are high enough. Terrible, but such is life.

By contrast, the UN is mostly in the job of managing conflict. Keeping the peace even if the deep roots of the conflict cannot be solved. Stopping famine and feeding people even if it is done on the basis of donations from member governments. The UN is quite successful at limiting damage. Conflict resolution is always there as an objective. But damage containment is, perhaps, as much as you can ask for.

A review of many of Argentina’s current foreign policy problems show a striking similarity. Issues cannot be sorted out. Perhaps because they are too complicated, but they can be managed so things are not paralyzed causing even greater damage.

There is no shortage of examples. Rightly or wrongly, the next government plans to revise the alliances which —again, rightly or wrongly — the Kirchner governments entered into with Russia and China. In both cases, but especially in relation with China, there seems to be complicated business and cooperation arrangements from which it is not easy to walk away. So, at the same time that Argentina wants to try a rapprochement with its traditional EU and US partners it is also engaged in a deal with China that raises eyebrows from its newest would-be partners.

And then there is Brazil. The world economy, not to mention its own political situation, is harming Brazil, which — in turn — harms Argentina. Once again, the problem cannot be solved, there are too many independent variables at play, including the businesses from both sides. Realistically the best possible scenario seems to be one where conflict has to be managed without much hope of definite solutions.

And related to Brazil is Venezuela. Macri has decided to raise the political ante. He wants to punish Venezuela on account of Nicolás Maduro’s human rights policies. He has decided to pick up a fight and to try to apply Mercosur’s democratic clause on that country. Thus, our next President is choosing a fight not only with Maduro, but also with Brazil that is in favour of Maduro. Not to mention the barrage of local criticisms from Kirchnerite quarters. Susana Malcorra will have to find delicate balances in order to avoid having situations getting out of hand. And her UN experience, placing her above the problems in order to attempt damage containment, is likely to be more useful than any experience in defending positions of petty fights at nation state level.

@andresfederman

CREDITS: BUENOS AIRES HERALD