Can the TPP widen the Latin America's divide?
With the signature of the TPP in Auckland, NZ, this February 2016, some important questions can be raised to assess the impact of a US-led mega bloc in Latin America. The conglomerates and alliances formed during the post-Cold War period account for the classic neorealist approach, in which countries ally with the most powerful or retreat from a hegemon. The Pacific axis (open economy, FTA's and WTO guidelines) versus the Atlantic axis (protective markets, less open economies, and ideologically allied to counterbalance American power in the wake of a multipolar world since 1989) can see countries bandwagoning on American power even more vis-á-vis those intensifying their balancing against America's hegemonic power in the world. The following analysis provides an insight into the TPP and the ideological rift in Latin America’s countries.
By 1989, the hegemonic power of the USA in the southern cone saw its retreat from Latin American soil. On the one hand, Latin American countries began a democratization process after military governments during the Cold War era. These countries started a new democratization era with democratically elected governments and launched commercial integration with world markets to greater or lesser degrees. A US-led globalization of the free market based on liberal values of democracy and liberties in a free society provided a path to liberalize the markets. However, not all the countries in Latin America went a a full scale in their economic liberalization.
Since the year 2004, Chile went on a "rush" to implement Foreign Trade Agreements (FTAs) with the major economies and commercial partners of the world to diversify its economy and avoid being trapped in a single conglomerate; these FTAs were signed under WTO guidelines on tariffs and barriers. Today, Chile exhibits one of the most open economies in the world; Chile is – in fact - the only country to drop tariffs and non-tariff barriers unilaterally. Countries like Argentina have taken a less liberal and more protective local market. Chile has signed many FTAs with the USA, Canada, Korea, Japan, and China. This has paid Chile well, providing the necessary foundations to build up its financial stability and economic prestige. In this wave of democratization in Latin America, the collapse of the Soviet Union, and neo-liberal policies implemented during the 70s and 80’s under the Washington Consensus, democratically elected presidents in Chile have maintained the structural reforms in Cold-war and have made a smooth transition to democratic rule - since the end of Pinochet’s rule in 1989- enabling Chile to enjoy the fruits of capital flow and steady growth.
At a time of contestation to American power and its legacy in terms of neo-liberal policies, Latin American countries appear to be “going left” to satisfy social demands for more efficient policies to tackle inequality gaps (Baker and Greene, 2011).
Even though the Latin American region has seen a widespread shift to the left in presidential voting, the ideological divide over neoliberal values versus protectionist markets still prevails. This rift is produced by antagonistic views that make countries revise, maintain, or reject the American legacy in terms of free market and capitalism. Revision of American power is also patent in regards to White House intervention in internal affairs such as the war on drugs in Bolivia, the military coups in Latin America during the Cold War, and the institutions and regimes under the Washington Consensus.
Therefore, countries such as Chile, Colombia, Peru, and Mexico are “bandwagoning” (Waltz, 1975) on American power under WTO guidelines and liberalization of markets. These countries are currently aligned in the Pacific Alliance or “Alianza del Pacífico” – they share an ideological affinity to capitalism and open markets; their basic prerogative is a bilateral commercial treaty with the USA. We also see countries “balancing” (Waltz, 1975) against USA superpowers such as Bolivia and Venezuela in revisionist ALBA and, in turn, Argentina and Brazil as partners in protectionist MERCOSUR (Briceño, 2013; Malamud, 2006, 2009, 2013; Riguirozzi 2010; Bernal-Meza 2004, 2006)
This ideological divide regarding America´s legacy is a stepping stone in creating a regional bloc in the post-Cold War or post-Washington Consensus. Certainly, America acts as a catalyzer in the region. This influence is more evident than ever in the Cuba deal, which seems to reshape the ideological alliances in the area; once de-freezing is complete and Cuba starts democratic elections, revisionist ALBA will see Cuba depart from the conglomerate. Venezuela – also a member of ALBA - is going through its worst political and economic phase, with a 200% inflation rate and massive national debt. These two countries could no longer sustain ALBA’s ideological frame as anti-American and anti-imperialist once the USA has a normal relationship with Cuba and democratic rule is established in Venezuela. Bolivia might stand alone in its contestation to US hegemony. Argentina is going north with right-wing Macri as their new president after decades of populist Peronist rule. One big task Macri has just embarked on is bringing investors back, regaining international confidence in fiscal austerity measures, and providing the necessary mechanisms by which the international community, especially the IMF, can pour new financial aid into an ailing economy.
Brazil’s contestation of American power reached a peak in the conformation of BRICS and the role that BRIC (without the participation of South Africa) had in the WTO’s negotiations for greater participation of emerging countries denouncing the hegemony of the Old Quaid or G-4 on voting quotas over global trade affairs. Today, the role of BRICS has been clouded by Brazil’s corruption cases involving the oil company Petrobras’s money being used in politicians’ campaigns. The move to impeach Brazil’s president Dilma Yousef has politically, economically, and financially paralyzed the country and eroded Brazil’s leading role in MERCOSUR and in the G-20 conglomerate where emerging countries like Brazil, Russia, and India were pressing for more participation in global affairs.
In the wake of the hegemonic role that the U.S. played during the Cold War in the South Cone, democratic governments began to emerge with the promotion of capitalism, liberal policies, and trade integration in global markets (Briceño, 2013). However, not all the countries of the South Cone were aligned in their openness to international trade. Naturally, they promoted cooperative behavior in the wake of an increasingly globalized market and formed commercial and political alliances in the region. However, to maintain a political and economic liaison with the Latin American countries, the United States was committed to bringing the Americas together in a mega-bloc known as the FTAA [1] - a mega trading bloc rejected by Brazil and Argentina in 2003. That is why the USA decided to sign separate bilateral agreements or free trade agreements (FTAs) [2] with countries of the South Cone that would play by WTO rules. Chile has pioneered the signature of FTA – first, Chile signed a deal with the USA and then with all major players across the globe, opening its economy and helping diversify it.
There are two distinct phenomena in the South Cone: on the one hand, signs of “bandwagoning” on American power, and on the other hand, signs of “balancing” [3] against the United States. The former is countries that followed the neoliberal model – sponsored by the United States under the Washington Consensus - such as Chile, Peru, and Colombia. The latter refers to countries that show a revisionist lens on the American superpower and try to distance themselves from its influence and show divergent views by openly rejecting the American legacy of neoliberal policies and capitalism and by way of establishing - for example - the anti-imperialist and anti-systemic ALBA (Venezuela, Bolivia, and Cuba) [4] or protectionist MERCOSUR (Argentina, Brazil, Uruguay) [5].
Influential leaders in the region
It would be presumptuous to deny the influence of Chavez in the formation of ALBA, but to state that Chavez influenced all decisions or the international agenda by Bolivia’s Evo Morales would be disproportionate (Albeiro 2013). Moderate decisions to nationalize the rich hydrocarbon resources in Bolivia are a clear example of Morales's acting with a degree of independence from Chavismo (Mayorga 2006).
At the same time, it would also be a big mistake to deny that the anti-establishment, anti-imperialist ideology that pervades ALBA is not inspired by Chavez (Albeiro 2013). Though charisma, Indianism, and Castrismo are different ideologies diverging from American hegemony, they all converge in the balance of power concerning the USA [6], forming alliances for security reasons against intrusive foreign policies by the White House in the Cold War.
In 2015, Bolivia was invited to be an active member of MERCOSUR following adjustments to its domestic economy. Here, constructivism provides a helpful explanation. New epistemic communities ensure that as a result of efforts made through institutionalism, the "elites are socialized”, (Johnston, 2001); in this way, the incorporation of Bolivia gives the empirical basis for the claim that there are learning units in the socialization of practices that bring collaboration and cooperation to a higher level.
Overall, in the South Cone, roles are differentiated from ideological views on America’s Washington Consensus, which provides the rift or divide we observe in the region. On the one hand, Chile, Peru, Colombia, and Mexico have formed the regional trade association in the “Alianza del Pacífico” (Pacific Alliance), extending an invitation to other countries to participate. A basic condition is to celebrate the signature of a commercial deal with the United States to ensure compliance with WTO standards. A second group plays a different role because these countries are not commercially linked with the USA through a deal and/or have been the subject of interference by the White House over drug trafficking in Bolivia (coca leaf) or the fact that populist leaders have come to power such the case in Venezuela. Bolivia’s Evo Morales has vowed to vindicate oil resources through a Nationalization Bill to gain sovereignty over hydrocarbons and end an era of privatization in the name of sovereignty.
In effect, Bernal-Meza (2004) summarizes the rift in the following words: "The level of hemispheric guidelines, factors which, from different angles of the policy, seem to be creating two axes of leadership in the region: one, led by the United States and Chile which includes Colombia, Peru and Mexico, and the other, consisting of Brazil, Venezuela and Cuba” (….) “The line split between these two axes are precisely each country's relations with the United States, the positions regarding hemispheric projects Washington, in the economy and security and relations with Cuba" ( p 88)
Therefore, in the South Cone, there is convergence and divergence, i.e., in the wake of the Washington Consensus, some countries converge on American values, such as free market and capitalism allying with America, and others, due to ideological and structural differences, diverge on those same values forming alternative alliances such as ALBA and Mercosur. Some are commercially linked with the U.S.A. through open regionalism and play under WTO rules, and others play an alternative role in economic cooperation; one is anti-imperialistic, and the other is protectionist. Therefore, it is fair to admit the regional divide is structural, ideological, and historic (Briceño 2013; Malamud 2006, 2009, 2013; Riguirozzi 2010; Bernal-Meza 2004, 2006)
UNASUR political conglomerate should be included in regional efforts for autonomy from the US as a political alliance to solve regional conflict [7]. Recently, the CELAC[8] conglomerate has excluded the United States as a full member to treat the Latin American and Caribbean issues exclusively.
According to Pearson and Rochester (2010), the conduct of external relations must be analyzed by such alliances. Therefore, In ALBA, countries converge over a critical look at American foreign policy and promote an alternative to the neoliberal model, marked by economic cooperation and solidarity. Thus, on one side, Bolivia converges with Venezuela and Cuba in ALBA and diverges from the other two regional alliances which are also present in the region, such as MERCOSUR and recently the Alianza del Pacífico conglomerate [9], providing a three-level institutional landscape in the South Cone that has given impetus to extensive research, some of them are optimistically highlighting the overlapping interests and other less optimistic as Malamud (2006, 2009, 2014) who concludes that by no means these three alliances can reach a level of integration due to long-standing, historical, structural and ideological fragmentation.
Institutionalism holds that in the case of Bolivia, she might be favored by multilateral organizations in the "socialization of elites": the classic example is the invitation from MERCOSUR as long as the necessary economic architecture is adjusted in Bolivia. This learning process, once again, according to constructivists, enables the socialization of a common institutional architecture, which in UNASUR, hopefully, might extend to government elites so they can share experiences and make decisions together.
This "socialization of the elites" (Johnson, 1975) would allow for the "spill-over" or transfer of democratic practices towards other public or international policy areas and/or to other states (Haas 1958; Lindberg 1963). This could be an outstanding achievement. To see an organization like UNASUR transformed into a supra-regional entity that succeeds in upholding the democratic clause for all of its member countries; however, the institutional architecture in UNASUR is still in the process of formation and consolidation (Baroni-Rubella 2010; Riguirozzi 2010; Malamud 2006, 2009) and remains at the intergovernmental level. This would explain why it has been so difficult to oblige Venezuela’s Maduro to grant more spaces of democracy. In other words, the pressure exerted on Venezuela from UNASUR cannot be as powerful or persuasive as it should be because UNASUR is not a supra-regional body, i.e., the socialization of elites has not been achieved due to substantive differences in local institutional architectures remaining at the stage of inter-governmental.
Therefore, an inter-governmental architecture can be associated with the realistic lens (Morgenthau 1948; Mearshmeir 2003-2007); these countries continue to behave as states preoccupied with surviving in anarchy in a new reconfiguration of power, either bandwagoning on American power or balancing against such power. This classical view is complemented by the balance of threat (Stephen Walt, 1985), where countries form alliances to secure themselves against a potent, feared threat posed by the hegemonic power of the United States.
The Bolivarian ideal in forming a South American Alliance to share the same Latin American identity should be regarded as an intervening constructivist variable, and both "bandwagoning" and "balancing" (balance of power and/or balance of threat), would be the neo-realistic independent variable which complements each other in two variables to explain the phenomena we observe in the rift observed the South Cone or the way the agent interacts with the structure. By analyzing the roles that each state in the South Cone has adopted concerning their perceptions on the Washington Consensus and their position in the region, we can explain the level of differentiation observed in the various alliances (González O, 2012, p 467). We can predict that the U.S. will continue to be a great catalyst in the geopolitics observed in South America (Bernal-Meza 2004). Therefore, the constructivist lens highlighting the search for a Latin American identity in a post-Washington Consensus is complemented by the classical realistic lens of "bandwagoning" and "balancing”. This applies to countries commercially integrated with the United States that seek their security by joining a powerful state - "bandwagoning" on American power (Waltz 1979) - but at the same time exclude the United States from entering CELAC – a forum devoted to Latin American issues.
Tom Dyson [10] (2013) warns us that the process of "bandwagoning" would make the United States even more potent than before and would make America even greater power. It should not be surprising that the US has continued to pursue a block similar to the failed FTAA. Today, countries with bilateral agreements with the USA and the Pacific Rim have just signed the Transpacific Partnership (TPP) mega-deal. We need to recall that the TPP is a classic example of "balancing" on the part of the USA against China pivot. What are the implications of the "bandwagoning" versus ''balancing" phenomena we observe in the region? The TPP has provided us with an answer. The chances for a regional mega-bloc in Latin America have been significantly diminished. The three-level institutional architecture based on two variables to explain the rift in Latin America could be shaped into a bipolar world: those in favor of the TPP and those left out by the mega-treaty.
A bi-polar scenario does not help in efforts for real integration or attaining a successful supra-regional bloc. What could happen to ALBA when Iran eventually agreed with the US? Iran had supported Bolivia and Venezuela as ideological allies and partners. What could happen with Bolivia if Venezuela is in the grip of an institutional crisis of significant proportion? Can UNASUR articulate the democratic clause? What could happen when Cuba finally achieves a trade agreement with the U.S. and normalizes diplomatic relations? We know that leaders acting solely based on nationalism, ideologies, and identity make it hard to adapt to changes in the balance of power and fall hostage to their ideologies. An exemplary case is Venezuela and its current internal crisis. Bolivia then could be faced with playing an essential role in the agglutination of ALBA members, but will Bolivia lead in that respect? Or will Bolivia take a more pragmatic stance regarding new geopolitics with Cuba? Bolivia rejects the Washington Consensus, and we should not be surprised by Evo’s rhetoric against open regionalism and the neoliberal, capitalist order. These are considered to be a threat to a new order - built on the "ethos" of the indigenous people who, for the first time, seized the Bolivian state in a democratic election. This aspect is significant. In a unipolar world, the hegemony exerted by the United States provides security but obliges countries to orbit around its monopoly atmosphere.
Therefore, the hegemony of the United States - as of 1945 onwards in the region - has been a significant factor in context. After the fall of the Berlin Wall, the end of the story that predicted Fukuyama (1991) was far from true. Quite the contrary, countries of the region faced the dilemma of "reviewing" their relationship with the U.S., “securing” or “rejecting” such relationship (Briceño 2012; Berger 2010; Riguirozzi 2010; Bernal-Meza 2004.
Let us remember that in the first CELAC forum celebrated in February 2013, in the inaugural address in Santiago, former right-wing President of Chile Sebastián Piñera recognized that the initiative of uniting Latin America and the Caribbean countries was largely due to the vision of Chavez t[11]. Remember that CELAC does not include the United States as a permanent member.
CONCLUSIONS
The ideological divide or rift observed in Latin America during the post-Cold War or post-Washington Consensus is largely due to America’s legacy in the region after decades of its hegemonic power during the Cold War. On the one hand, the level of structural neo-liberal reforms that each country in the South Cone was subjected to during that period explains the degree of integration with global trade. The rift also responds to ideological views on America’s power, legacy, and values, such as the free market and capitalism. Thus, countries in the South Cone show a defensive pattern that can be explained through a neo-realistic lens with the interaction observed between agent and structure. Therefore, some search for security bandwagoning on America’s power; others - due to ideological differences - opt for a revision or rejection of such power in the classical balancing of threat. Their views on the neoliberal legacy by the Washington Consensus have led to a 3-level institutional architecture in the South Cone - with smaller pockets of integration – namely CELAC - and larger pockets of differentiation (ALBA, MERCOSUR, Alianza del Pacífico) - that in the light of the TPP - might evolve into bipolarity thus impeding any initiative for a regional bloc. UNASUR is still inter-governmental and does not provide the supra-regional architecture needed to align countries on democratic rule, for example, in Venezuela. However, the integration of Cuba into the world order is a sign that America’s foreign policy under the Obama administration may positively affect the region's geopolitics by bringing together a revisionist country into the political game. This is good news against the backdrop of bipolarity that the TPP might pose in the region.
References
[1] FTAA: Free Trade Area in the Americas, it failed due to the opposition from Argentina, Brazil, and Venezuela in 2003
[2] FTA: Free Trade Agreement with WTO guidelines
[3] Bandwagoning: in the neorealist theory of Kenneth Waltz, countries seek security by becoming an ally with the most powerful country, explaining the configuration of the balance of power in anarchy
[4] ALBA: consisting of Bolivia, Venezuela, and Cuba, this axis is anti-imperialist and advocates a market based on the principle of solidarity and cooperation (Briceño, 2013)
[5] MERCOSUR, led by Argentina and Brazil, along with Uruguay and Paraguay, has invited Bolivia to join. It is a standard, protectionist tariff system on beef and agricultural products. It is a hybrid and does not show the traits of deep trade integration compelled by WTO guidelines (Briceño, 2013)
[6] Balancing: K. Waltz (1975) referred to the two processes of stabilization of anarchy: bandwagoning is jumping on the winner’s wagon, and balancing is the balance of alliances with other states to balance a pivot. Later, Stephen Walt (1989) added that this balance of power was sometimes a balance of threat or terror to counterbalance the more powerful state because of security reasons to a threatening country.
[7] UNASUR: Union of countries of South America, a political forum of great weight in the Southern Cone
[8] CELAC: Conference of Latin American and the Caribbean, forum or commercial window for Exchange
[9] Pacific Alliance: made up of countries with open regionalism, international insertion with WTO guidelines, and bilateral agreements with the USA (Chile, Peru, Colombia, and Mexico). These countries have brokered negotiations to enter TPP with the United States and others in the Asia-Pacific rim
[10] Ph.D. specialist in security and international defense, Director of International Relations Department at Royal Holloway, University of London, conference available on https://www.youtube.com/watch?v=gmIktY1EKmM consulted March 30, 2014, MGIMO University
[11] News Channel, 24 hours online: Moreno highlights the role that will take on Nicolas Maduro's date 07 March 2013. Available at http://www.24horas.cl/internacional/muerehugochavez/moreno-destaca-rol-de-maduro-tras-la-muerte-de-chavez-544927. Accessed 12 April 2015
