• Argentine, Brazilian, and Chilean Presidents, invited by Prime Minister Tony Blair, will participate in the Third Way forum sponsored by the British Labor Party this weekend.

• The gathering provides an opportunity for Latin American leaders to strengthen their relationship with ranking officials of the European Union.

• The EU could provide an important trade alternative to the FTAA, marking the beginning of the end to Mercosur nations’ overdependence upon the U.S.

• Waning of the U.S.-Latin American Relationship?

 

Kirchner, Lula, and Lagos Head to Europe

Argentine President Néstor Kirchner, Brazilian President Luiz Inácio Lula da Silva, and President Ricardo Lagos from Chile will participate in the Third Way forum sponsored by the British Labor Party this weekend. This trip will be particularly important for Kirchner, as it marks his first visit to Europe as Argentina’s president and precedes his scheduled journey to the United States later this year. Kirchner will be the second Argentine president, following Carlos Menem, to visit London since the Falklands War in 1982. Having championed Argentina’s sovereignty over the Falklands (Malvinas) since his days as governor of the nearby province of Santa Cruz, his British stopover could be challenging. After the forum, Kirchner will travel to meet several other prominent European leaders, including EU Commission President Romano Prodi, French President Jacques Chirac and Prime Minister Pierre Raffarin, as well as Spanish President José Maria Aznar and King Juan Carlos.

The international social democratic convention, hosted by British Prime Minister Tony Blair, will also count on the participation of center-left representatives from Canada, the Czech Republic, Ethiopia, Germany, New Zealand, Poland, Romania, South Africa, Sweden, and Hungary. At the forum they will discuss the “Third Way” concept, where neither capitalism or state socialism are seen as viable political models.

Despite their resistance to British and U.S. intervention in Iraq, Blair invited the three South American presidents to the meeting, somewhat in the way of a peace offering. However, the invitation was not originally extended to Kirchner. Blair decided to invite him at the behest of Sir Anthony Giddens’, who has written extensively on the “Third Way”. In an interview with a Buenos Aires daily, Clarín, Giddens, an English sociologist at the London School of Economics, stated that he considered Argentina to be an important country and thought that it would make sense for Kirchner to be invited, considering that the presidents of Brazil and Chile would be attending. Argentina, Brazil, and Chile could then be grouped together as Latin American countries that today make up the most formidable political bloc in the region.

The concept of the “Third Way” has taken on a new meaning with the growing extremism of the Bush White House. With a mounting predilection for interventionism, Washington routinely displays an unprecedented level of an arrogance of power and the capacity for “regime change” that could have profound implications for all of Latin America. Recent U.S. interference in the internal affairs of countries like El Salvador, Nicaragua, and Bolivia, in addition to Washington’s numerous threats over the Iraq issue, remind many Latin American nations of that unlamented period when every country in the region suffered the consequences of the U.S. cold war-driven foreign policy. In fact, Kirchner and Lula themselves are beneficiaries of an increasing movement away from Washington’s meddlesome diplomacy within their own country toward the more reasonable embrace of the EU.

 

History of Relations between Argentina and the EU

The request for Kirchner’s presence at the Third Way forum is a testament to the Argentine President’s and the EU’s shared commitment to issues such as human rights, world peace, and the promotion of democracy. In fact, relations between the EU and Argentina have been generally positive since the signing of the EC/Argentina framework agreement on trade and economic co-operation in April 1990. Through Mercosur, Argentina has emphasized the importance of strengthening relations with the EU and the rest of Europe. During President Carlos Menem’s administration, Argentina implemented neoliberal economic policies and developed into a brisk open-market economy, becoming Washington and the IMF’s sweetheart. The privatization process that defined its transformation would not have been possible without large-scale investments coming from Europe.

On December 15, 1995, the inter-regional framework agreement on EU-Mercosur co-operation ushered in a new era of relations between the two regions. But Argentina’s period of growth and economic liberalization came to a jarring halt in 1997, and within months the country was witnessing a social and economic crisis that eventually produced disastrous spillover effects in the other Mercosur member countries. In response, the European Parliament adopted a resolution on September 27, 2002, that expressed its distress over the region’s crisis and reaffirmed its commitment to continue support of South America’s political and economic integration.

 

An Attractive Alternative to the FTAA

The EU countries make up Argentina’s main source of investment and constitute the country’s principle trading partner. According to an EU Commission report published in May 2003:

The EU contributed 47% of this FDI to help the country’s massive production transformation, while NAFTA contributed 41% and Mercosur 9%. These resulted in Argentina’s successful insertion into the international flow of goods and services, and its overall trade exchange with the EU has grown from US$ 4.7 billion to US$ 12 billion in the 90’s. The EU has always been a major importer of Argentinean products with half of these being manufactured products of agricultural origin, and 35% being primary products. Only 14% are manufactured products of industrial origin.

The Third Way forum provides an opportunity for Argentina and the two other Mercosur-related Presidents to further strengthen their relationship with key EU leaders. Mercosur’s present and future success is in part contingent upon creating stable and mutually beneficial trade agreements with Europe and this could be a crucial chapter in such a development.

The Latin American leaders’ trip could be one of a series of events ushering in the end of Argentina’s and its regional partners’ traditional dependence upon the United States. This would not only give the region more leverage for its trade negotiations with the U.S., but make available the EU’s own vast market, which already accounts for a greater percentage of Mercosur exports than does the U.S.

 

The Resurrection of the ABC Countries

Prime Minister Blair did not invite the southern cone Presidents to the Third Way forum just as a matter of protocol or to fill the seats in the conference room. Rather, Europe is beginning to view Argentina, Brazil, and Chile as among the primary representatives of a region slowly creating a strong social democratic bloc. By stabilizing their economies, generating sustained growth, and finding new ways to address social inequalities, Mercosur and its associates could help regain the international preeminence that the “ABC countries” had at the beginning of the 20th century, although now collectively, and as part of a strong regional bloc.

To date, Washington has been reluctant to acknowledge that these nations have come of age. But be it by trade, third party security issues like Iraq, or the future of the inter-American relationship, the voice of these countries can be ignored only at a great damage to the well being of the parties involved. For Washington, the menacing reality is that Mercosur has the potential to challenge U.S. supremacy in the hemisphere, a consideration that the White House would do well to factor into its policy-making process.

 

 

This analysis was prepared by Maria Julia Bocca and Bruna Genovese, research associates at the Council on Hemispheric Affairs. Issued July 11, 2003.

The Council on Hemispheric Affairs, founded in 1975, is an independent, non-profit, non-partisan, tax-exempt research and information organization. It has been described on the Senate floor as being “one of the nation’s most respected bodies of scholars and policy makers.” For more information, please see our web page at www.coha.org; or contact our Washington offices by phone (202) 216-9261, fax (202) 223-6035, or email coha@coha.org.