May 21, 2007

New Parliament for Mercosur

Don Sergio Souza Pinto - President of the European Union's delegation for Latin America
Addressing the first session of the Mercosur Parliament, Click for larger version Tony Phillips

Montevideo, Uruguay: May 6th. & 7th 2007
On Monday and Tuesday May 7th and 8th in Montevideo, capital of Uruguay, the South American trade block Mercosur took a giant leap forward. The question is: “Toward what?”.

Logistics & Coverage
Following along the lines of the European Union, Mercosur, the economic union of five(1) South American countries, took one step closer to political union by forming it's own supra-national parliament.

The event was a tad late; Brazilian President Luiz Inácio da Silva (Lula) had celebrated the parliament's existence in December 2006 (the latest date required by Mercosur statutes for it's creation). This first session in Uruguay had been pushed back from a scheduled date in March 2007. However, better late than never, on May 7th the Mercosur parliament was born with great pomp and circumstance, a healthy 88 representatives.

This first incarnation required no direct elections. While this was practical to bootstrap the parliament, it is somewhat unfortunate, as the vast majority of Mercosur's population (in excess of 300 million) is blissfully unaware of their new parliament's existence. Had they to vote for their representatives they would at least have known about the parliament, especially since voting is compulsory in most countries in South America.

The private press corps of the member nations did not seem eager to enlighten their customers of their new parliament, as evidenced by the relatively small team of journalists present at the event. A weekly local soccer match in Buenos Aires or Rio would have had a larger team to cover it. The public South American station Telesur was present, the public stations of Channel Seven from Argentina and the senate channel of Brazil(2) also among a handful of others. Precious few private television stations who bothered to send a team to this once-in-a-lifetime event.

The first Mercosur parliament has an equal number of representatives for each country. In 2010 there will be direct elections to all posts in much the same way as MEP (Members of the European Parliament) are selected, i.e. by direct vote each by their own populace. It is uncertain exactly how many seats will be allocated to each member state for this election but rules protecting the smaller states have already been agreed. Uruguay will obviously have less seats than Brazil (São Paulo alone has seven times the population of the nation of Uruguay) but the exact numbers of seats to be allocated to each country is still up for debate. What is important is that the debate has started.

One reason that the correspondents and cameras were absent may be the lack of an all-star line-up. Soccer stars attract the attention of the cameras not soccer teams, Maradona and Pele, Tevez and Ronaldinho, are eye-catching; they draw the crowds so they are important for advertising revenue dollars. In political coverage, it is the faces of the national Presidents that attract the cameras. Most Mercosur press coverage happens at the Presidential meetings (known as 'Cumbres' in Spanish). While all five Mercosur presidents could have attended the first parliament, the organizers decided only to invite only two for protocol: current President of Mercosur, Óscar Nicanor Duarte Frutos of Paraguay, and host President Tabaré Ramón Vázquez Rosas. At the last minute President Vázquez pulled out, citing a meeting with his own party: Frente Amplio.

While coverage of Mercosur issues is scant, the politicians, on the other hand, realized the importance of the new institution. The new parliament could further their careers, or curtail their national power monopolies. The line-up was impressive, many powerful speakers attended, both members of the new parliament and visitors their to salute it.

Who gets to play?
The respective governments selected Mercosur parliament representatives for each of the five member states. The Latin American giant Brazil, the middle-sized economies of Argentina and Venezuela, and the smaller Republics of Uruguay and Paraguay, are each allocated 18 representatives, nine from each Senate and House. An exception was made for Venezuela, who dissolved their senate in 1999, and thus were allocated 16 deputies from their house, why 16 instead of 18 was never properly explained to me.

This exception caused all sorts of confusion with the press corps and many articles have gone out with this list of eight Venezuelan parliamentarians. Alberto Cardon the ever-courteous (and extremely efficient) press secretary of the Uruguayan Palace of Representatives gave me a list of nine Venezuelan house representatives. I was slightly perturbed to find that Venezuela was under-represented, so I asked a Venezuelan representative and she gave me her full list of 16 Venezuelan with their party affiliations (another detail lacking on my sheet). Maybe the author believed that Venezuela had become the one party State, as much western media has reported recently, which is simply not the case(3). The Venezuelan group find themselves in the position of being guest members; the country's full membership of Mercosur is still to be ratified by the congresses of Brazil and Paraguay. They therefore have seats but no votes, but they seemed to be enjoying themselves, nonetheless.

Much like the early sessions of the European Parliament, this observer was acutely aware of the immense cultural divides being bridged and the opportunity for interchange. One got the feeling that some of the representatives found themselves a little out of their depth in the presence of luminaries such as President of the Brazilian Senate, Renán Calheiros, or Minister for foreign Relations, Dom Celso Amorim, (two of the most powerful men in Brazil) and Argentine President of the House of Representatives, Alberto Balestrini. However as Europe learned, political integration begins when national parties, communist, socialist, centrist or conservative form coalitions for regional power in a regional parliament. In the words of Doutor Rosinha of Lula's governing Worker's Party (PT): "The time has come for the integration of solidarity".

Montevideo is a South American capital and in Latin America there is no politics without scandal and intrigue. Of course rumors were in the air but local press coverage was lacking; the tactic, one suspects, neither confirm nor deny.

High on the agenda of reactionary political scandal, was former president of Uruguay Luis Alberto Lacalle (1990-1995). This member of the right wing "National Party" was president of Uruguay and thus a founding member of Mercosur, but he seems to have had second thoughts. Mr. Lacalle was among a group of Uruguayan "citizens" who decided that this was an opportune time to challenge the constitutionality of Uruguayan Law number 18,063. This law recognized the legitimacy of the Mercosur Parliament. Challenging it was a direct attack on this new political power in Mercosur.

Other scandal revolved around the presence of the Mercosur Secretariat in Montevideo, capital of a country that recently threatened to sign a bilateral trade treaty with the United States? It would be difficult to imagine Belgium coming up with such an idea when Brussels was chosen as the bureaucratic hub of the European Union. Some more conservative Uruguayan politicians consider that coming closer to the United States would stimulate Uruguay's rather depressed economy. The threat can also be interpreted as pressure on Brazil, Uruguay's northern neighbor, to accept more of its agricultural surplus as imports. This later tactic, if indeed it was intended as such, has proven effective, especially since United States President George W. Bush's visit to Uruguay and Brazil

Uruguay signing a bilateral trade treaty with the USA would require demotion to associate membership of Mercosur (such as the current complimentary accord with Chile), or expulsion from the Union since Mercosur rules prevent unilateral negotiations. Realizing such a treaty with the USA is next to impossible for three reasons. The first is that Uruguay would isolate itself from its neighbors, a move tantamount to economic suicide. The second comes from leaks to the South American press from President Hugo Rafael Chávez Frías, of Venezuela, indicating that President Vázquez had told him that Uruguay would not leave Mercosur. Third, and possibly most concrete, is the fact that US Presidential fast-track signing rights for such treaties have (effectively) expired; this makes ratification of such a treaty by the US congress, if offered by Uruguay, highly unlikely. Reinaldo Gargano, Uruguayan Foreign Minister also stated in a recent interview with the magazine "Mercado", April 2007, that his country wasn't interested in a bilateral with the USA.

Other rumors circulating in Montevideo included one that the building that houses the Mercosur Secretariat was being requested back from Mercosur. Seemingly its owners were interested in converting it into a hotel to facilitate the casino next door. The rumor seems entirely unlikely to be true, and, given the glut of empty office buildings in downtown Montevideo, rather non-threatening.

Where Next Latin American Union?
So what are the real risks to the infant parliament, and to the regional political power that it ultimately may wield as the political arm of Mercosur?

Let's begin by eliminating some commonly cited non-risks: number one would be the resurgence of the US plan for their South American regional trade agreement: the "Federal" Trade Agreement of the Americas (FTAA/ALCA in Spanish). Any hope of its resurgence was quashed in Mar del Plata, Argentina, November 2005 (4). Another non-risk, as argued above, is the Uruguayan threat to sign a bilateral with the USA. Finally the Uruguayan constitutional challenge will most likely also prove to be no more than a red herring.

So what really could cause problems for Mercosur and it's infant parliament? Why did Senator Alfonso González Núñez mean in his speech when he said that Mercosur is frozen and needs to be thawed out?

Clearly there are a number of urgent issues for Mercosur including resolution of the "Papeleras"(5) issues between Argentina and host nation Uruguay, and a marked lack of Brazilian leadership, but these are small problems and can all be taken care of in the short-term. In the long-term however there are two major threaths, both of these lying firmly in the powerful hands of Presidents Lula and Chavez. They are the global environment and commodity, especially energy, dependence(6).

In both commodities and environment, Latin America is quite favored. Mercosur, with its recent entrant Venezuela and probable entrants Ecuador and Bolivia, is relatively flush with petroleum and gas reserves and it is not a major global polluter. It is a massive exporter of other primary commodities such as soy, various grains, bananas, coffee, gold and other minerals. The Amazon rainforests are the lungs of a healthy planet Earth and most of them are in Mercosur territory. Mercosur has a key role to play in the ecological stability of the planet. Recognition of this fact has become decidedly more urgent as planet Earth has been given seven years to get its ecological act together by the scientists in the recent IPCC (7) meeting in Thailand.

Consumption, Equity & The Environment
The nations in Mercosur are developing countries. This makes their union very different from the integration of the European Union. Traditional development policies are consumption and growth oriented. This is especially so in the case of treaties, such as Mercosur, whose charters are written during the 1990's, the golden age of neoliberalism. A growth focus makes economic sense of many ecological absurdities, including Amazon rainforest destruction. Seas of genetically modified soy plantations cover vast areas of Latin America where only decades ago there were rainforests. Most of this crop is grown for export to supply growing Asian consumption for plant oils. This is good for balance of payments, a focus of all export-oriented economics. Giant mono-growth eucalyptus plantations in Brazil benefit from carbon credits from polluting nations in the West, their wood being used to fuel increased world toilet paper consumption. Again the exports help to pay off debts incurred during the dictatorships of the 1970's and 80's but the plantations are like living deserts and consume water supplies. In short, neoliberal economic theories provide the intellectual framework to support agribusiness that risks ecological collapse.

This year the IPCC published it's "Fourth Assessment Report of the Intergovernmental Panel on Climate Change IPCC" in Bangkok, Thailand. The report even speaks of possible local compounding effects such as increased conversion of Amazon tropical rainforest to savannah if global temperatures continue to rise. Radically different policies will be necessary to drive sustainable growth in Mercosur guaranteeing ecological benefits for a planet at risk.

Another major risk factor are the gross inequities(8) in Latin American societies. Huge levels of inequality such as those levels currently seen in all Mercosur nations, lead to social upheaval and instability. High Gini coefficients literally risk tearing the members nations apart. Particularly sensitive are the giant mega-cities many swelled by peasants migration from the land cleared for mechanized industrial agricultural use. The largest of these and the capitals are São Paulo, Buenos Aires, Caracas and Rio de Janeiro. The fragility of their social contracts was evident in Rio de Janeiro this year when the mayor called in the Brazilian army to support his overwhelmed police forces in an attempt to control drug running in the poor mountain slums (favelas).

New Ideas
The only post-neoliberal treaties signed in Latin America recently which deal (even tangentially) with these two looming monsters, are those that emanate from Caracas and Havana, not from Montevideo or Brasilia.

ALBA, the Bolivarian Revolution, or socialism in the 21st. century, as President Chavez likes to describe it, is now growing faster than Mercosur. It encompasses treaties far more advanced in non-trade aspects than those still being discussed under the Mercosur umbrella, especially when it comes to non-profit motivated trade, and environmental protection as well as traditional nationalism. Health, the environment and social equality are now being discussed under the Mercosur framework but they have not yet received the attention they require. It may be time for Lula to step forward and take Mercosur further in this respect before this great opportunity dies of social neglect.

Elites in Brasilia and Buenos Aires may need to be convinced as will the USA. There is little room in market economics for social equity. However in the long-term, even from a purely capitalist perspective, social coherence, security, and healthy internal markets could be the result of increased attention to social equity, as the European Union has shown.

One can only hope that the paradoxical lure of abundant Venezuelan petroleum energy might lead Lula and Kirchner to move Mercosur faster than or at least in parallel with the ALBA/Unasur ideals signed recently on the island of Margarita Venezuela.

Maybe the IPCC will have the last word. The Latin American sub-continent might prove pivotal to stabilizing the global climate. One can only hope so; the alternative is unthinkable.


(1) Brazil, Argentina, Venezuela, Uruguay and Paraguay
(2) A specialized TV station which broadcasts the political debates in the Brazilian Senate, watched mainly by lawyers
(3) For the record only 12 of the 16 delegates were MVR delegate, others included Mi Gente, Podemos, PPT and the communist party delegate.
(4) Check out the next planned FTAA meeting on their Website for proof of this.
(5) Argentina is disputing the building of a paper pulp manufacturing plant on the river Uruguay bordering Argentina on the Uruguayan side. They cite treaties protecting the waterway and environmental damage.
(6) Particularly petroleum-based energy, (oil and gas)
(7) For details on current releases in multiple languages see the IPCC website
(8) The GINI coefficients of Latin American countries, which measure fiscal imbalance between the richest and the poorest of national citizens, are some of the worst on the planet.

Posted by Tony Phillips at 12:40 AM | Comments (6)