Regional Integration in Europe and Latin America

Contents

1. Introduction

2. Basic notions and general information with respect to the topic

3. Regional integration processes in Europe and Latin America – A historical outline

4. Regional integration processes in Europe and Latin America – Strengths and weaknesses

5. Integration Theorists on integration in Europe and Latin America

6. Summary and Conclusion

Bibliography

1. Introduction

The European integration has been in progress since shortly after the Second World War. Already in 1946, the British Prime Minister Winston Churchill held a speech in Zurich and within this speech he expressed the idea of France and Germany as the constituting countries of a European Union. At this time, the patriotic French press was outraged about this idea. But already in 1949 the Council of Europe was founded, and only two years later in 1951 the European Community for Steel and Coal was created and became effective in 1952. In 1957, the member states of the ECSC signed the Treaty of Rome to start the European Economic Community (EEC) (Schmuck, n.a.).

The European integration has been a unique process (Rosamond, 2006, S. 450) that lead also to a separate field of studies, the European integration studies. Even though Europe is unique and the integration process that has been taken place there is unique as well, efforts to compare the process in Europe with integration processes in other regions of the world were undertaken. I will tackle the matter with this regard. This paper will be concerned with the integration process in Europe compared to integration processes in Latin America. My motivation to do this arises from the fact that I am a Brazilian student and thus have a Latin American origin and I am studying in Germany, which is in my opinion and most probably not only in my opinion the most important constituting country of the European Union. It is not only the biggest economy in Europe but it is also one of the few constituting states of the predecessor of the EU the already mentioned ECSC and the EEC. A second fact, which is in my opinion intuitive, is the one what the differences of integration processes are and how those can be explained. The first world with Europe and the third world with Latin America might show different difficulties and challenges with respect to efforts on regional integration.

To restate more in detail the intention of this work: The regional integration processes in Europe and in Latin America will be compared and at the same time the theories that were created with the integration processes - trying to explain them - will be brought into context with the processes. For Europe the regional integration process or processes, if one wants to divide them into different phases, are those that led to the European Union and beyond, and for Latin America one can tag the results of the processes Mercado Común del Sur (MERCOSUR) and Central American Integration System (SICA (Sistema de la Integración Centroamericana)).

The structure of this paper will be as follows: In the first part basic notions will be explained that are deemed to be important for the further text. After this, the integration processes in Europe and in Latin America will be presented with the help of major events that are seen to be constituting events – thus events that are seen to be major steps in the development of the integration process. Following this historical outline, the processes will be compared in terms of what their strengths and weaknesses are. It should be found out why integration has been gone that far or not. This will be followed by outlining the theories that were developed to explain regional integration processes. It is the intention to find out what those theories intended or could explain especially with respect to the question whether they are and can be used in different regional contexts – theories developed for Europe applied on Latin America or vice versa.

The methodology used to work out the paper is basically literature research whereas sources from the different continents were used. Key words and fundamental information will be explained in the following chapter.

2. Basic notions and general information with respect to the topic

Regional integration. Regional integration is a term already used, but it should also be explained here to avoid misunderstandings. As will be shown, there is not a single definition but various. It is not the purpose to make a clear cut and entirely explaining definition for integration. In the context of this work the following definition is more a guideline of what is meant with integration. This guideline is sufficient for the understanding of the following. Eilstrup-Sangiovanni (2006, p. 7 f.),^[1] in the book “Debates on European Integration”, reviews scholars of various integration theorists and their understanding of what integration is. Ernst Haas sees integration as a “process whereby political actors in several distinct national settings are persuaded to shift their loyalties, expectations and political activities towards a new centre, whose institutions possess or demand jurisdiction over the pre-existing national states” (Eilstrup-Sangiovanni, 2006, p. 7). There is a variety of definitions also due to the variety of the matters that could be integrated or integrating. Those matters could be economic ones, whereas integration could mean economic unification, or political matters and then one would talk about political unification. The creation of political institutions at the community level or ideas and opinions are also used to create a definition of integration (Eilstrup-Sangiovanni, 2006, p. 8). In this paper, integration will also be seen as a process and not as a condition for the reason Ernst Haas mentioned: It is hardly possible to distinguish between the situation prior to a state of integration and what happened to get into this state (Eilstrup-Sangiovanni, 2006, p. 7). Thus seeing it as a process seems to be more suitable and so it will be done in this paper. Furthermore, the definition given by Haas will be the reference for the notion integration.

Context to International Relations (IR). International relations, which is a very broad field including many sciences such as economics, psychology, sociology and more (Viotti & Kauppi, 2009, S. 2) is often referred to together with integration studies. As broad as international relations are defined or can be defined, the study of European integration can be seen as a “subfield of the study of IR” (Eilstrup-Sangiovanni, 2006, p. 12). But it has to be noted that a problem with the generalization of results from European integration studies might occur, since Europe can be seen as a unique case (Eilstrup-Sangiovanni, 2006, p. 10). This will also be discussed in the course of the paper. Even if this view, that European integration studies is a subfield of IR, is not shared, as a minimum, both fields are very close and share lots of the same theoretical background. One sentence from Eilstrup-Sangiovanni (2006, p. 33) further shows the relation of the fields of study: “At a time when the discipline of IR seemed fixed on the notion that conflict was the beginning and the end of the subject matter IR, integration theorists drew attention to collaboration for welfare ends as an important aspect of contemporary interstate organization”. Thus, if European integration studies is not seen as a subfield of IR, it lent its ideas to IR, and with that, both kinds of studies strongly overlap. This can be seen just through observing the theoretical approaches that are applied. Those are the same in both cases^[2].

The next chapter is dedicated to presenting the integration processes in Europe resulting in the European Union and in Latin America resulting in MERCOSUR and SICA.

3. Regional integration processes in Europe and Latin America – A historical outline

The regional integration processes will be summarized shortly in the following. The resulting organizations here are the European Union (EU) for Europe, which arose from the European Economic Community, and for Central America we have the SICA and Central American Common Market (CACM), which is one of several subsystems - the economic subsystem - of SICA. For South America MERCOSUR is the name of the economic integrational body, which arose from the Latin American Trade Association (LAFTA) and its successor the Latin American Integration Association (ALADI), which will be shown in the following. The European Union has currently 27^[3] member states whereas Germany, France, Italy, Belgium, Luxembourg and the Netherlands were the constituting countries of the predecessor organization of 1952 (European Union). SICA has seven member states with five states constituting the predecessor organization in 1951, Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua, and two additional states with Belize and Panama (SICA Central American Integration System). MERCOSUR has four full members with Argentina, Brazil, Paraguay and Uruguay, whereas Venezuela has a pending full membership and Bolivia, Chile, Colombia, Ecuador and Peru are associate members (BBC News).

a) The 1940s until the 1950s

Europe. As initially mentioned, the European Union has its origins in the time short after the Second World War. The British Prime Minister Winston Churchill held a speech in Zurich in 1946. He stated his idea of a European Union with France and Germany as the constituting countries, which was not taken very seriously by the press. Shortly afterwards in 1949, the Council of Europe was founded, and only two years later in 1951 the European Community for Steel and Coal was created and became effective in 1952. The United States were a major influencing factor that brought the integration process forward. It can be assumed with a high probability that without the U.S. the integration would most have taken much longer and would not be as it is today regarding to its size and contents that form part of the union. This support was intended to strengthen the counter weight against the Soviet Union. In 1957, the member states of the ECSC signed the Treaty of Rome to start the European Economic Community (EEC) (Schmuck, n.a.). Together with the EURATOM, the European Atomic Energy Community, the three communities were called the European Communities. The articles one to three of the treaty lay down what this community intended to reach: a common market with all its aspects such as the abolishment of import and export restrictions and tariffs among members and a common policy regarding these issues towards third countries.

Latin America. In Latin America there were some attempts for political integration already in the 19th century. Simón Bolívar, the Venezuelan Liberator, expressed his idea of a unified Hispanoamerica following the example of the US. But history went another way. Most former colonies could not maintain their territories except Mexico and Brazil, which mainly kept it. Only after the second world war ECLA`s proposal was fruitful with the initiation of CACM for Central America and LAFTA for South America.

The origins of the Integration System of Central America (SICA) where CACM is a part of it can be found in the Charter of San Salvador, which was initiated in 1951 by the creation of a predecessor organization - the Organization of Central American States (ODECA). The integration was furthered in the 1950s with several treaties and the installation of its headquarters in 1956 in San Salvador. The Multilateral Agreement on Free Trade and Central American Economic Integration was signed in 1958 to establish a free trade area within ten years (SICE - Foreign Trade Information System).

b) 1960s until the 1980s

Europe. In the 1960s further steps with regard to integration were undertaken in Europe. A common agricultural policy was established and later in 1960s all tariffs were completely abolished. In 1967 the three European communities were laid together and then had common executive organs. In 1972 a currency mechanism was introduced to allow for stable exchange rates in the EEC. Two years later, a fund to support less prosperous regions was created. In the 1980s Greece, Portugal and Spain – all of them former dictatorships - joined the European Community. In 1986, the rights of the European Parliament were extent and a plan to harmonize the legislation of European Community states with respect to trade laws was set up. At the end of the 1980s, the community of the Warsaw Pact states started to crumble (Das Gesicht Europas wandelt sich – Fall der Berliner Mauer, n.a.).

Latin America. In 1960, El Salvador, Guatemala, Honduras, and Nicaragua signed the General Treaty on Central American Integration which initiated the Central American Common Market (CAMC) (SICE - Foreign Trade Information System). Within five years a common market and a customs union should be created. Costa Rica joined in 1964.

With respect to MERCOSUR, in 1960, with the Treaty of Montevideo the Latin American Free Trade Association was founded. Article 2 of the Treaty determined a 12 year period to implement the treaty. In 1980, again in Montevideo, the new treaty had the goal of economic integration and turned the Latin American Free Trade Association (LAFTA) into the Latin American Integration Association (ALADI). 11 countries formed the association: Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Mexico, Paraguay, Peru, Uruguay and Venezuela. According to the first article of the Treaty of Montevideo the contracting parties pursued a “harmonious and balanced socio-economic development of the region” and the “long-term objective of such process shall be the gradual and progressive establishment of a Latin American common market”.

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^[1] For an additional categorization see (Wiener & Diez, 2003).

^[2] Compare for example (Viotti & Kauppi, 2009) International Relations Theory, where constructivism, institutionalism and functionalism are explained. The same theoretical approaches can be found in (Eilstrup-Sangiovanni, 2006) Debates on European Integration.

^[3] The member states of the EU with the year of entry are Austria (1995), Belgium (1952), Bulgaria (2007), Cyprus (2004), Czech Republic (2004), Denmark (1973), Estonia (2004), Finland (1995), France (1952), Germany (1952), Greece (1981), Hungary (2004), Ireland (1973), Italy (1952), Latvia (2004), Lithuania (2004), Luxembourg (1952), Malta (2004), Netherlands (1952), Poland (2004), Portugal (1986), Romania (2007), Slovakia (2004), Slovenia (2004), Spain (1986), Sweden (1995) and United Kingdom (1973).