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Who Invented Mercosur?

Gian Luca Gardini Available online: 19 Dec 2007

To cite this article: Gian Luca Gardini (2007): Who Invented Mercosur?, Diplomacy & Statecraft, 18:4, 805-830 To link to this article: http://dx.doi.org/10.1080/09592290701807267

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Diplomacy and Statecraft, 18: 805830, 2007 Copyright Taylor & Francis Group, LLC ISSN 0959-2296 print/1557-301X online DOI: 10.1080/09592290701807267

1557-301X and Statecraft 0959-2296 FDPS Diplomacy Statecraft, Vol. 18, No. 4, November 2007: pp. 138

WHO INVENTED MERCOSUR?

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Who Luca Gian Invented Gardini Mercosur?

Gian Luca Gardini

This article explores the genesis of the Common Market of the South (Mercosur), the regional integration scheme grouping Argentina, Brazil, Paraguay and Uruguay since 1991, and which Venezuela joined in 2006. The aim is to portray an accurate account of the diplomatic history of the foundation of Mercosur during the years 19891991. Methodologically, a case is made in favour of the use of oral history in the study of high politics. Argentina and Brazils reading of the new international circumstances of the early 1990s are explored, and so are their respective international insertion strategies. The diplomatic negotiations leading to the 1991 Treaty of Asuncin constitutive of Mercosur are dissected. The relationship between Mercosur and the so-called ACE-14 agreement concluded by Argentina and Brazil in the framework of the Latin American Integration Association is also illustrated, as are the negotiations to incorporate new members to the incipient common market. The final section suggests that, while there was an overall continuity in the integration project in the Southern Cone between 1985 and 1991, nonetheless Mercosur was a departure from previous objectives, timing and methodology. For good or ill, Mercosur was the creation of the neo-liberal governments of Presidents Menem of Argentina and Collor of Brazil and the result of broader changes at the international level.

Much of the scholarly research on the Common Market of the South (Mercosur), the regional integration scheme grouping Argentina, Brazil, Paraguay, Uruguay and, since 2006, Venezuela, has targeted the years following its constitution in 1991. Also, a large part of these works have adopted a political economy perspective and focus.1 The diplomatic history of Mercosur and its origins remains a relatively under-explored dimension of the integration process in the South American Cone. Only a few accounts of the diplomatic history of the foundation of Mercosur exist in English and they are quite dated.2 Most of them are concise articles concerned more with general trends and themes than with diplomatic history and analytical assessment of facts and circumstances; the few books on the topic mainly come from Argentina and Brazil and are not translated into English.3 This article is intended as a contribution to fill this gap.

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The historical coverage of this piece is extremely focused and deliberately self-confined, comprising the years from 1989 to 1991. The choice of such a short time frame is based on one key reason: substantial negotiations for the creation of a common market in the Southern Cone were not launched until 1990 and the treaty establishing Mercosur was concluded in 1991. Argentina and Brazil had initiated their diplomatic rapprochement back in 1979 under military rule in both countries. Upon return to democracy in the mid-1980s, Argentina and Brazil announced their commitment to integration in 1985 and formalised it in 1986 with the signature of the bilateral Programme of Economic Cooperation and Integration (PICE), characterised by a gradual, selective, and negotiated reduction of barriers to trade in specific sectors of their respective economies. In 1988, the two countries reinforced their integrationist commitment with the signature of the Treaty of Integration, Cooperation and Development, but until this stage the integrationist exercise did not go beyond a bilateral free trade area. A clear boundary has to be set between Mercosur as such and the negotiations leading to its very foundation on the one hand, and a variety of precedents and preparatory events on the other. The 1988 Argentine Brazilian Treaty of Integration, Cooperation and Development, for the first time explicitly set the achievement of a common market as the final goal of the bilateral integration project. However this objective was at that time a mere aspiration. This is evident from the wording of the treaty as well as from the testimony of those who personally contributed to its drafting and conclusion.4 The first democratic administrations of President Alfonsn in Argentina (19831989) and President Sarney in Brazil (19851990) did not achieve a common market, they did not have either a design for its institutional structure and tasks or a concrete plan for its implementation.5 The legacy of the first democratic governments to their successors was the idea and will to pursue a common market, so while the issue was certainly already on the agenda in 1988, its elaboration, transposition into policy and legal commitment, and at last its implementation are to be sought at a later stage. No other significant agreement was concluded between Argentina and Brazil under the Alfonsn and Sarney governments. Consequently, it seems to make sense to start this investigation about who actually invented Mercosur with the period of impasse that followed the 1988 treaty and the 1989 first change of government in Argentina. The flow of arguments unfolds as follows. First, the changes in the international scenario of the early 1990s and the new international insertion strategies of Argentina and Brazil are examined. Then the diplomatic history of ArgentineBrazilian relations leading to the creation of an initially bilateral common market is explored. The negotiations for

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enlargement to neighbouring countries and the finalisation of the Asuncin Treaty follow. The relation between Mercosur and the so called ACE-14 agreement consolidating the several evolutions of the ArgentineBrazilian commitment will be spelled out. The concluding section argues that it is essentially the Menem and Collor administrations that have to be credited, or blamed depending on the readers perspective, for the emergence of Mercosur as shaped in its 1991 foundational treaty of Asuncin. On a methodological note, this work adopts a historical approach to the study of international relations. In historical methodology, empirical and theoretical analyses are synergic, but historical verification is the prior basis for any speculation and theorising. This research started from historical observation, and then tried to make sense of it, and not from a predetermined theory or hypothesis to be tested on a case study. In a historical approach, theory infrequently assumes the form of general propositions about state behaviour or international politics but is more humble and confines itself to the explanatory exercise of specific and limited, geographically or temporally, events and circumstances. As Hedley Bull observed, history may not be sufficient to understand international relations but cannot be overlooked for at least four reasons.6 First, certain political situations are not merely illustrations of general patterns but genuinely singular events. Second, any international situation is located in time and to understand it the scholar must place it within a sequence of events. Third, the quality, techniques and canons of judgement of diplomatic history as a discipline are often less obscure and controversial than those of theoretical studies. Fourth, history itself is the primary material for the social sciences, which have themselves a history and emerge within a defined historical context. Following this approach, the research method for this article largely relies upon fresh primary material, both written and oral. Intensive research was conducted in archives in Brazil and Argentina. However, only limited written primary sources on the early steps towards Mercosur exist or are disclosed to the public. In such cases, Oral History is a very useful complement to written material. Over sixty interviews were conducted with key Argentine and Brazilian politicians, diplomats, entrepreneurs, and academics. All the interviews have been carefully cross-checked with one another and tested against written diplomatic documents, where available, journalistic reports of the time, and secondary sources. Consistency, and therefore reliability are very significant. Oral History has often been used to discover the stories of those neglected by grand History, and, consequently, has itself been considered a marginal method to explore high politics and diplomacy. By contrast, here, Oral History is applied to the history of elites, and is used as an instrument to investigate behind the curtains of a major historical and political process in the South American Cone.

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STALEMATE IN INTEGRATION AND THE CHANGE IN INTERNATIONAL CIRCUMSTANCES When the ArgentineBrazilian bilateral integration project was first debated in the mid-1980s, the macroeconomic frame, at the international and the national level, was not particularly favourable to such an undertaking. Strong political will and determination went some way to overcome objective difficulties. However, integration in the Southern Cone was actually launched, and proliferated from 1986 onwards, under a conjunction of improved and relatively more stable political and economic conditions.7 Politically, the positive impact of restored democracy conferred great prestige and legitimacy upon the presidents and their governments. Economically, re-democratisation attracted international attention to the area, and economic support, including investment flows, followed political sympathy. Furthermore, apart from the European Economic Community (EEC), at that time the world did not offer many examples of structured regional integration, and the ArgentineBrazilian scheme, with its enlarged market, attracted potential investors. Finally, at the domestic level, when integration was implemented, in 1986, both countries were enjoying the first positive effects of their respective stabilization plans, which reduced inflation and facilitated economic recovery in the short run. By late 1988 and early 1989, all these favourable factors had been exhausted. The initial enthusiasm was vanishing and expectations of gains from integration had grown, probably disproportionately, and so had disillusionment. Neither the Alfonsn nor the Sarney administration could count any more on the sort of unconditional support that derived from democratic legitimacy alone. Inability to tackle economic and social problems debilitated the Presidents and their coalitions. Internationally, other regional undertakings overshadowed the ArgentineBrazilian enterprise. The EEC was marching determinedly towards the consolidation of the internal market and Canada and the United States had concluded their bilateral free trade agreement in 1987. Most importantly, the economic record remained poor. The worsening economic situation directly affected integration. In a climate of economic expansion, entrepreneurs are more keen to invest, compete, and open markets; on the contrary, in a climate of economic depression, protectionist attitudes prevail. Last but not least, the PICE itself was showing clear signals of tiredness.8 Its very approach was questioned and some of its creators left to take up different positions. The sectoral approach, with its corollaries of gradualness and flexibility, had favoured the initial smooth implementation, but was now obstructing further progress.

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Political concern for the future of bilateral integration was amplified by the forthcoming presidential elections of 1989 in both countries. The general political, economic and social climate was unfavourable to the incumbent administrations. Little was known about the oppositions intentions for integration. In Argentina, the Peronist partys rhetoric on Latin American integration was not a sufficient guarantee of commitment at the practical level. In Brazil, competition for nominations had not produced a strong candidate yet. At the official level, there was the fear that the PICE would be left to one side as part of a rejection of the previous administrations policies. By the beginning of the 1990s, the prominent features of the international system dramatically changed and so did the prospects for and the features of the integration project in the Southern Cone. Major political changes had important repercussions in the economic realm too. The fall of the Berlin wall and the break-up of Soviet power terminated the long peace9 bipolarity had assured after World War Two. The United States, and its political and economic system, appeared to emerge as the overwhelmingly dominant model throughout the world. The international agenda concentrated heavily on the spread of democracy and market economics. The consequences for Latin America were of unexpected magnitude. The attention of the international community shifted away from the continent, which risked international marginalization. The end of the Cold War robbed military regimes committed to fighting leftist subversion of any meaning and sapped support for them. In 1989, Paraguay and Chile, the two last remaining authoritarian regimes in South America, recovered democratic status. However, this wave of democratisation did not rescue South America as a whole from a curious paradox. Since the mid-1980s, reacquired democracy had been the main political capital of the area, but, towards the end of the decade, ironically, this became almost counterproductive. The new international agenda prioritised those countries setting up democracy in other parts of the world and neglected those that had already done so yet still needed support for consolidation. On the economic side, things were no better. Latin American efforts to stabilise and gradually open their economies were failing to attract international investments, which were instead heavily diverted to countries where market economy had to be built from scratch. The spectre of a division of world trade in cohesive regional blocs and the virtual paralysis of GATT by 1990 gave reasons for further concern to Latin American leaders.10 Globalisation, which had already been sensed by Argentine and Brazilian elites as a reason for integration, displayed its full features and effects from the beginning of the 1990s. On the domestic front, debt, capital flight, stagnation and dreadful

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hyperinflation completed the gloomy picture of Argentina and Brazils economy. Such was the situation in the early 1990s that drastic remedies were to be found at the international and the national levels. As the North American model of open market economy was the dominant paradigm, solutions tended to take this direction. In 1990, during a conference organised by the US Institute for International Economics, the North American economist John Williamson illustrated a set of economic principles defining the lowest common denominator of policy advice being addressed by the Washington-based institutions to Latin American countries. Hence the phrase Washington consensus. The original formulation included fiscal discipline, redirection of public expenditure priorities, tax reform, interest rate liberalisation, competitive exchange rates, trade liberalisation, elimination of restrictions to foreign direct investment, privatisation, deregulation of barriers to entry and exit, and secure property rights. Nothing was said about the right mix of these measures or their timing and intensity, and later Williamson claimed his study had been distorted and misused.11 The implementation of the Washington consensus and its model of an open economy, both at the international and the national levels, entailed a rethinking of regional grouping models too. In a context of increasingly free circulation of goods, services and capital, development and wealth had to be pursued through competitive insertion in the international trade system and not through artificial protection from it. Both central and peripheral countries saw a growing convenience in the formation of regional blocs as instruments to face global challenges. Weaker countries especially saw the regional space as a compromise between closed economy and complete unilateral opening. The new international logics informed and transformed, though at a different pace, the Argentine and Brazilian economic models. The newly elected administrations in Argentina and Brazil have often been identified with neo-liberal adjustment and proximity to US positions; however, while they adapted their strategies and programmes to the changing international order, neither came to power as a result of it nor were they empowered with a clear electoral mandate to drive their respective countries towards the neo-liberal paradigm. THE ARGENTINE PERSPECTIVE AND INTERNATIONAL INSERTION STRATEGY Carlos Menem was elected President of Argentina in May 1989 and took office in July. His election was no surprise to anyone. Since mid-1988, it had appeared clear that Menem was the favourite candidate to succeed Alfonsn.12 The electoral disaster of the incumbent coalition was due to its

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inability to manage the economic crisis, and in particular to halt hyperinflation. Yet globalisation, economic opening and neo-liberal policies were neither on the electoral agenda nor in Menems electoral platform.13 When Menem took office, his image was still that of an emblematic leader of Peronist populism.14 During the electoral campaign, he had promised to pursue a revolucin productiva,15 to raise the minimum salary and to stick to the traditional foreign policy of justicialismo, characterised by autonomy and commitment to the non-aligned movement. Yet as soon as he took office, Menem appointed Bunge y Born corporation managers to run the economy, chose consultants from entrepreneurial associations for public posts and concluded alliances with the liberal right. What immediately became clear was the strong emphasis the Menem administration put on economic issues.16 When Alfonsn took office, the international context had been characterised by the recrudescence of the Cold War, the debt crisis, the Central American conflict, and the prevalence of authoritarian governments in South America, while the internal agenda had been dominated by the quest for public liberties and human rights as well as by economic issues. The Alfonsn administration had read all these international and national factors as a threat to political stability and made the protection and consolidation of democracy the central objective of its action, including foreign policy. When Menem took over, the Cold War was coming to an end with a clear winner, the crisis in Central America was largely solved, and external debt was being rescheduled in multilateral forums; internally, economic concerns monopolised debate. The most serious threat to democracy moved from the military to the economic realm, and, in such a different context, the Menem administration defined Argentine national interest, and its foreign policy priority, essentially in economic terms.17 When this salience of economic issues, coupled with a strong realist stance towards the world, encountered the big international changes of 1989 and 1990, a peculiar theoretical and practical synthesis emerged. Attracted by this deep but still unstructured re-thinking of Argentine politics, a community of intellectuals, academics, economists, diplomats and politicians gathered around the menemista circle. They started a critical analysis of Argentine history in order to make sense of the countrys present situation and design policy guidelines to return Argentina to a primary status at the world level. The intention of translating theorising into practice led to the circle being characterised as an epistemic community.18 The reasoning was that Argentina was a geographically peripheral country, strategically irrelevant to the centre. Also, the country had experienced its golden age in a privileged relationship with the dominant power of the time, Great Britain. Import-substitution industrialisation was

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inherently responsible for the subsequent isolation and decay of the country. The point was now to search for a new privileged association, and the early post-Cold War international system provided a straight answer: the United States. These considerations were incorporated in the theory of realismo perifrico,19 which served as theoretical background to Menems foreign policy throughout the 1990s. Despite this pursuit of privileged political relations, economic transactions with the US never took off.20 The reason for these poor results has to be found in the fact that their respective agricultural and food production were scarcely complementary and even competitors.21 Argentina turned to Brazil to find an outlet for its production.22 As had already happened in the mid-1980s, Argentina, internationally disillusioned, had to seek for a further rapprochement with its neighbour to provide sustainability for its programme of economic development. Overall, the Menem administration was a real watershed for Argentinas foreign and economic policy. Integration in the South American Cone could not but be largely affected too. THE BRAZILIAN PERSPECTIVE AND INTERNATIONAL INSERTION STRATEGY Fernando Collor de Mello was elected President of Brazil in two rounds of elections between November and December 1989, and took office in March 1990. Unlike Carlos Menem, he was an outsider, and his victory was largely unanticipated. Like his Argentine contemporary, he had not explicitly declared what his economic programme would be during the electoral campaign.23 However, his foreign policy platform had generated three types of expectations: modernisation of the international agenda of the country; moderation on the conflictive issues with the US; and reduction of the terceiromundista approach to international relations.24 During the Collor administration, neo-liberalism inspired all public policies, including foreign policy.25 The analysis of the international context, and the relative position of Brazil in the world, resulted in the reformulation of the available options of external conduct. The increased cost of autonomy forced Brazil to put aside traditional foreign policy patterns and to adapt itself to new internationally prevailing imperatives, such as nuclear non-proliferation, opening to import of goods and services, environment, active participation in multilateral regimes, and avoidance of conflictive relations with the hegemon and its agenda. As in the case of Argentina, there was a strong coincidence between the internal and external agendas. Brazilian foreign policy pursued economic opening and favourable access to credit, markets and technology to support internal reform. The departure from identification with the developing world has to be understood in terms of a reinforcement of bargaining

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power vis--vis the industrialised world. Under Collor, foreign policy agenda and objectives tended to coincide.26 Important elements of both change and continuity characterised Collors foreign policy. On the one hand, traditional positions, such as autonomy on international questions, nuclear development, a firm stand towards the United States, and the protection of national economy all became more elastic; also, the nature of Brazilian international presence shifted from the essentially political to the essentially economic, as did the definition of national interest.27 On the other hand, Brazil never aligned itself automatically, uncritically, or broadly with the United States. Although its national interest was increasingly perceived in terms of economic modernisation, national development remained the rationale behind choices of international relevance. Within the constraints of the new international framework, Brazil preserved a developmentalist sensitivity and a broadly NorthSouth vision of international relations. The results of Collors administration were not positive. His economic policy was a failure: the privatisation programme was not implemented, the economic opening was more rhetorical than effective, the economy entered recession in 1991 and inflation reached 440% in 1991 and 1000% in 1992.28 Collors foreign policy, overall, was not successful either. He put strong emphasis on accession to the first world, which was reflected in his official visits abroad. His intention was to promote his governmental project and style among top politicians and businessmen in developed countries. His presidential diplomacy tended to identify his personal commitments and views with those of his country, so that when he was impeached by Congress in 1992 and lost respect and credibility, so too did the major initiatives he had proposed.29 Perhaps, the major achievement of the Collor administration was integration in the Southern Cone. This, too, was redesigned according to the new vision and objectives informing Collors political and economic action. MENEM, SARNEY AND THE CONTINUITY OF THE ORIGINAL MODEL The pace of integration indeed reflected the changes occurring in the international arena, and its progress was parallel to the adaptation of national strategies to the international agenda. When Menem took office in mid-1989, his counterpart in Brazil was still President Sarney. Modality of international interconnectedness and the balance of world power were about to change but had not quite done so yet. Integration proceeded on established lines. When the international modifications displayed their effects, Menem found President Collor to be a man with whom he had

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many political affinities. Each perceived the need to modernise his country, and most of all its economy, to face the new global order. Accordingly, the design of, and approach to integration was rapidly modified. Menems populist reputation as a governor of the province of La Rioja had reached Brazil long before he became President. Also, it was not clear what his attitude towards Brazil was. Menem had placed strong rhetorical emphasis on Latin American integration and shown firm personal commitment to it. This posture was rooted in Peronist thought and tradition. Yet in Brasilia perplexity remained about both his genuine friendliness to Brazil30 and his actual integrationist will.31 To reassure Brazil about his intentions if elected President, Menem entrusted Jos Octavio Bordon, Secretary of International Relations of the justicialista party, to hand to Sarney a personal letter. Bordon travelled to Brasilia in the summer of 1988. Menem was extremely confident that the opinions he expressed in the letter would be soon attributable to the next Argentine Head of government.32 Menem reiterated the true and profound vocation for Latin American integration of the justicialista thinking, and he stressed that his party has always thought that Argentine Brazilian integration constitutes a fundamental pillar for any attempt at continental integration.33 From the letter, it is also possible to detect how, in this phase, traditionally developmentalist elements intermingled with new global concerns in Menems thought about integration. The governor made reference to three types of need: not to act alone in the face of the big units defining todays international framework; to preserve our freedom of action in front of the economic concentrations running world finance and trade; and to pool our scarce resources to face technological challenge[A]nd to attain a reasonable degree of welfare.34 Menem concluded his message with the pledge that, if elected to government, he would continue to support bilateral integration. In his reply, Sarney expressed great satisfaction for the reassuring words by Menem.35 Yet Brazilian caution did not disappear. Also during the transition, Alberto Kohan, one of Menems closer aides, and later Secretary-General to the Presidency, frequently travelled to Brazil to promote the issue of integration.36 Indeed Brazilian prudence was fed by the unfolding of the menemista programme of economic and foreign policy, from which it appeared that the continuity of integration depended on its compatibility with the internal reform plan.37 Moreover, Domingo Cavallo, now Foreign Minister-designate, had been very critical of the sectoral methodology of integration when this had been launched. The Argentine administration promptly undertook a set of reassuring steps, which culminated in Menems visit to Brasilia, his first official working mission abroad. Foreign Minister Cavallo stated that his earlier

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criticism had concerned the methodology of integration, and that he had not questioned its political value. Furthermore, he added that, on the eve of Presidential elections in Brazil, it was important to give a strong signal of continuity and support, and Argentina had decided to stick to the existing methodology in the immediate future.38 Yet until the new Brazilian administration entered Palacio Planalto, ArgentineBrazilian integration was to experience an odd six months. The product by product approach was not compatible with Menems plans of a fast opening of the economy. His administration, and especially Foreign Minister Cavallo, sponsored a new and bolder approach to integration, but political pragmatism suggested they should put aside the plan at least until the presidential elections in Brazil. The Sarney government, instead, wanted to stick to the methodology it had helped to create, which still fitted its developmentalist approach to national and international economics. Although the Brazilian incumbent administration had already lost much credit and support internally, Sarney still appeared as the guarantor of the process, and Menem as the newcomer; therefore negotiations continued according to the old pattern. At this point, bilateral integration was an established state policy in both countries, and the new international circumstances argued for its reinforcement rather than its debilitation. The visit of President Menem to Brasilia, in August 1989, therefore was far from being confrontational; on the contrary, it was characterised by cordiality and a collaborative attitude. During the three-day summit, continuity with past practice was evident, not only in the sectoral approach. President Sanguinetti of Uruguay, as usual, was invited for joint discussion, and the three Presidents released a statement in which they reaffirmed their commitment to integration. Another significant trait of continuity was the reference President Menem made to the common will to strengthen democracy and promote the growth of Latin American peoples.39 Concern for the Argentine trade deficit, and Brazilian willingness to cooperate over this was an established pattern too. Perhaps, the most innovative element of the meeting was the charismatic presence of President Menem himself. He took the initiative to propose the adhesion of other countries to the project in order to create a bloc on the model of the European Union. This proposal could hardly be considered a novelty, but certainly highlighted Menems resolve in pushing for his own agenda. Also, Menem tried not only to reassure the Brazilians about his commitment to integration, but acted as the new guarantor of the process. When meeting the candidates for the Brazilian presidency, he insisted on the issue of integration and the candidates committed themselves to supporting the undertaking if elected.

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A reversal of positions was taking place. By winter 1989, Argentina appeared as the major supporter of the modernisation and strengthening of the process. Cavallo came out in favour of a more vigorous, extensive and effective integrationist project.40 The incumbent Brazilian administration bore the burden of impasse, and the incoming administration would have to prove itself able to cope with the renewed momentum.
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THE MENEMCOLLOR ENTENTE Similarities between the programmes of Menem and Collor were particularly strong, especially regarding the intention to open the economy and reduce import tariffs. Argentina had started its process of economic liberalisation in 1988, under Alfonsn,41 but it was not until 1990 that the Menem administration dramatically lowered customs duties. At the same time, Collor announced a 4-year plan for reducing customs tariffs. In both countries, the reduction programme envisaged a general approach, which affected the entire customs regime. This change robbed the integrationist principles of selectiveness and gradualness of much of their meaning, as many products, regardless of their geographical origin, would soon be able to enter the territories of Argentina and Brazil with a very low duty. The integration commitment had to be upgraded and adapted to this new reality if it was to retain a minimum of political and economic meaning. The 1988 Treaty of Integration, Cooperation and Development had provided for the creation of a free trade area within ten years. But by 1990 this objective was already obsolete. In a free trade area without a common external tariff but with low levels of import tariff, third country products could compensate for disadvantages derived from customs duties by relative advantages in quality and price. Moreover, with uncoordinated tariff reductions and a free trade agreement, only a very complex and sophisticated system of rules of origin could avoid unfair competition between ports and other stations receiving incoming goods. Almost necessarily, the project of a common market, including a common external tariff, became a topical issue. The first big change concerning integration decided by the Menem and Collor administrations derived directly from the strong emphasis they gave to the commercial aspects of economic policy. Even before deliberating on the future form or legal evolution of the free trade area, which was to be achieved by 1998, it was decided to proceed with a bilateral commercial liberalisation programme through tariff reduction. This exercise would be universal, in line with the national programmes, and automatic, that is with a scheduled timetable for application not subject to sectoral negotiations.

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It is now important to investigate how and when this thinking was put into practice, and who took the main relevant decisions. Negotiations between the Menem administration and the staff of president-elect Collor de Mello started as soon as the Brazilian electoral results became known. In January 1990, Collor travelled to Buenos Aires in his capacity of president-designate, and, together with President Menem, endorsed the common will to proceed with bilateral and Latin American integration. On 16 March 1990, the day after the inauguration of President Collor, Argentina and Brazil issued a Joint Declaration on the Integration Process, in which the two administrations announced the creation of a Committee of Implementation of the 1988 Treaty of Integration Cooperation and Development. The Joint Declaration emphatically defined this step as historical for relations between the two countries. Probably it was not, but it certainly gave a strong signal about the intention to re-launch the integration project. In June 1990, Francisco Rezek, Brazilian Foreign Minister, travelled to Buenos Aires. Conversations with Domingo Cavallo focused on the idea of launching the common market before the ten-year period that had been envisaged in 1988 for the creation of the bilateral free trade area.42 Also, the two ministers analysed prospects for the extension of integration to other countries. A certain reserve at diplomatic level about this meeting spread a general impression that something big was under preparation for the MenemCollor summit scheduled for the following month. An additional clue in this direction was given four days after this meeting, when Cavallo met Uruguayan Chancellor Gross Espiel, and diplomatic sources referred to talks to include Uruguay, Paraguay and Bolivia in the Argentine Brazilian undertaking.43 The presidential meeting between Menem and Collor took place in Buenos Aires on 5 and 6 July 1990. This was a milestone in the evolution of integration in the Southern Cone. Outstanding commitments detailed in the original sectoral agreements were decidedly fostered: in the food sector, the number of products included in the common lists was doubled and bigger quotas were granted to a significant number of other products. The common lists of capital goods were also remarkably expanded. Provisions to implement the agreement in the automotive sector were finally activated. The list of common items to be used in the construction of the nuclear plants of Atucha II in Argentina and Angra II in Brazil was approved. A social security convention on pension schemes and contributions was signed. The statute of bi-national enterprises, granting national treatment to companies with 80% or more of their capital in Argentine and Brazilian hands was finalised. The Buenos Aires Act of 6 July 1990, signed by Presidents Menem and Collor, incorporated, and gave a juridical frame to all the views and thinking

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that led the two administrations towards the change of approach to integration. In its preamble, the acceleration of integration is indicated to be the adequate response to international changes, such as the consolidation of the big economic spaces, the globalisation of the economic scenario, and the importance of an adequate international insertion of the two countries.44 The new setting of the integrationist project was given the form of a common market, to be completed by the end of December 1994. To this purpose, the two governments committed themselves to undertake all the necessary measures, and in particular, the coordination of their macroeconomic policies, the general, linear, and automatic reduction of customs tariffs, and the elimination of all non-tariff barriers. A bi-national working group, called the Common Market Group, was entrusted with the formulation of proposals to the two governments for implementation of the provisions of the Act. The mantra of general, linear, and automatic tariff elimination is easily explained. It required reduction to be applicable to all customs codes, to be regulated by a calendar of pre-set and progressive reductions, and to proceed without further negotiation. This formula was perfectly compatible with the timing of internal liberalisation, especially with the Brazilian schedule, which was to be completed by the time of entry into force of the common market. Additionally, despite the short time available, the fact that the deadline for the formation of the common market fell within the term in office of both administrations reinforced the credibility of the political commitment.45 However, the transitional period was so short that it raised the concern of many entrepreneurial sectors, also of those who in 1988 had expressed approval of the project to create a free trade area and progressive moves towards a common market.46 To check the negative effects on national industry of the drastic change, a system of exceptions was made available for highly sensitive or dynamic sectors. THE ENLARGEMENT PROCESS AND THE CREATION OF MERCOSUR Negotiations for enlarging the common market immediately started. The only formal condition was the membership of the Latin American Integration Association (LAIA). However, given the main political aim that had informed the original bilateral scheme, that is to say preservation of democracy, there was a second stringent condition: that new members be democratic states. This was not a formal rule; according to Secretary Lavagna, nobody at the time thought it was important to make it explicit since it was a de facto condition.47 The situation was clearly illustrated by the cases of Uruguay and Paraguay, the economies of which were highly dependent on the big neighbours. From 1985, democratised Uruguay was

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regularly invited to ArgentineBrazilian summits and later associated to some of the bilateral agreements; on the contrary, authoritarian Paraguay was never invited. The changes of the early 1990s affected this aspect of integration too. On the one hand, Chile and Paraguay returned to democracy in 1989; on the other hand, the new international system, and its growing division into blocs, urged a prompt enlargement of the bilateral agreements into a larger regional association. Despite growing rumours and rising expectations about the expansion of integration in the summer of 1989,48 it was only with the meeting CavalloRezek of June 1990, and the subsequent signature of the Buenos Aires Act that Argentina and Brazil started a vigorous diplomatic campaign to recruit new members. The two chancelleries meant to expand the common market first towards Chile and Uruguay, and later towards Paraguay and Bolivia.49 Chile was the first priority, as announced by Minister Cavallo soon after the Buenos Aires summit.50 The association of Chile with the enterprise had three considerable advantages for Argentina and Brazil: access to the Pacific, added value in reputation for solid economic management, and political representation of the whole Southern Cone. However, Chile was not inclined to enter into any commitment without a net benefit for the country. Santiago was fearful of the chronic macroeconomic instability of the other associates, and additionally saw its lower level of customs tariffs as an obstacle to joining a customs union. Both Minister Cavallo and President Menem travelled to Chile in August, but the integrationist enthusiasm showed by President Aylwin was more than counterbalanced by the scepticism of the powerful Chilean economic technocrats. After Menems visit, it remained clear that Chilean hesitation was hard to overcome. Uruguay had participated in the ArgentineBrazilian integration process as an observer since the very beginning. In 1988, it decided to be formally associated to some of the agreements forming the PICE, but the same year declined the opportunity to accede to the Integration, Cooperation and Development Treaty. However, its economy was largely linked to that of its big neighbours. In March 1990, President Alberto Lacalle took office, and his economic orientations had close similarities to the programmes of Menem and Collor. In June 1990, soon after their meeting in Buenos Aires, Ministers Cavallo and Rezek undertook working meetings with the Uruguayan Chancellor Gross Espiel, and the main issue reportedly was the incorporation of Montevideo to the ArgentineBrazilian integration.51 After the signature of the Buenos Aires Act, Uruguay voiced its will to join the common market and asked for the elimination of the 1988 Treaty clause impeding the accession of new members until 1993.52

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With the return to democracy, and the election of General Andrs Rodriguez to the Presidency, great expectations rose in Paraguay about the countrys participation in the Southern Cone integration. In summer 1989, an external consultant, hired by LAIA at the request of the Paraguayan government, delivered a report on the positive and negative aspects of a prospective Paraguayan accession to the ArgentineBrazilian scheme. The report recommended the adoption of a different treatment approach, based on the size and the different degree of development of the country.53 However, Argentina and Brazil, reversing a long accepted LAIA tradition, did not recognise the different treatment principle and stressed that, if the common market had to be enlarged, this would be done among equals, sharing gains and burdens of the enterprise.54 Towards the end of August 1990, Paraguay accepted this condition, as 35% of its global foreign trade was with Argentina and Brazil.55 The price of exclusion was far higher than that of accession. Eventually, Paraguay ended up gaining also a long list of concessions. This happened because, with the logic of a common market, Paraguay played a strategic role for both Brazil and Argentina. For Brazil, Paraguay is a reservoir of cheap labour indispensable to the economies of the Southern states. For Argentina, in case of economic recovery, Paraguay would be the main electric energy supplier. The application of Bolivia could not be accepted because it was a member of the Andean Pact and therefore predisposed towards another common market.56 Besides the existence of an undemocratic regime, what Minister Rezek defined double allegiance57 was another condition of ineligibility to membership of the incipient common market. At the end of August 1990, Argentina and Brazil invited the governments of Uruguay and Paraguay to participate in the project of the common market envisaged in the Buenos Aires Act. On October 1 and 2 the delegations of the four countries met in Brasilia to start negotiations for a quadripartite integration treaty. The text discussed on the occasion was accepted by the parties in principle,58 as consensus was reached about objectives and general principles of the treaty, but the provisions regarding the institutional setting and the transitional phase remained pending. The Paraguayan delegation proposed Asuncin as the venue for the formal signature of the common market treaty. At this stage, early October 1990, parallel negotiations were being conducted for the bilateral common market and for the quadrilateral one. The ArgentineBrazilian Common Market was finalised and formalised in the so-called Economic Complementation Agreement No. 14 (ACE-14) of November 1990, which systematised in a single document all the concessions Argentina and Brazil had made to each other since 1962 in the framework of LAIA. Now, it is important to understand the different

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levels of negotiation in order to grasp the relation between the PICE, the Act of 1990, the ACE-14, LAIA and the future quadrilateral treaty. Upon notification, LAIA provides members with the possibility of creating geographically limited preferential tariff regimes, departing from the general rule of generalised tariff concessions. This provision had made ArgentineBrazilian early integration possible. The PICE agreements involving tariff concessions had been notified to LAIA in the form of economic complementation acts. The ACE-14 incorporated all the previous economic complementation acts negotiated between Brazil and Argentina. Also, the ACE-14 gave implementation to most of the principles formulated in the 1990 Buenos Aires Act. The latter was a political commitment that did not contain tariff concessions, which were instead established in the ACE-14 according to a general, linear and automatic scheme of import duties reductions. Quadrilateral negotiations continued. A sensitive point concerned the degree of institutionalisation of the future common market. Argentina and Brazil wanted to retain a certain degree of control over the process and opposed the creation of supra-national organs. Flix Pea, Argentine Undersecretary of Economic Integration since January 1991, recalled that Uruguay and Paraguay were conscious of the fact that Argentina and Brazil were the main actors, in terms of size and economic volumes, but debate over the text of the treaty was genuinely quadripartite.59 The absence of special tensions or particularly unpleasant moments during the final phase of negotiations was also due to the fact the real negotiation had been that of the ACE-14.60 Once provisions for the bilateral common market were defined, the quadrilateral agreement largely followed the same scheme. The designation Common Market of the South, proposed by the coordinator of the Paraguayan delegation to the Common Market Group, Ambassador Antonio Lpez Acosta, was chosen because it incorporated two concepts: the final goal of the association was indeed the creation of a common market, and it allowed prospective enlargements to other LAIA countries.61 The acronym Mercosur was reportedly coined by the Argentine Undersecretary of Foreign Trade Ral Ochoa.62 On 18 February 1991, the last round of technical negotiations to prepare the text of the Mercosur Treaty and its annexes was launched. After three days, the final version was initialised by the representatives of the four countries. On 26 March 1991, the Presidents and Foreign Ministers of Argentina, Brazil, Uruguay and Paraguay signed the Treaty of Asuncin, formally establishing Mercosur. The treaty incorporated in its preamble all the principles inspiring the Buenos Aires Act of 1990, and confirmed the aspiration to Latin American integration. Its three pillars were: a) the free circulation of goods, services, and production factors, as well as the

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elimination of all tariff and non-tariff barriers among the member states; b) the creation of a common external tariff and the adoption of a common trade policy towards third countries as well as a common position in international economic forums; and c) the coordination of macroeconomic policies.
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CHANGE OR CONTINUITY? Presidents Menem and Collor brought elements of novelty into the foreign policy of their countries and the process of integration. In the field of integration, however, it is possible to debate to what extent those changes occurred in a framework of substantial continuity and to what extent they actually departed from past patterns. Analysis will first target those aspects where elements of both change and continuity coexist, it will then examine those features that display major signs of continuity and finally will assess the key elements of change introduced by the neo-liberal administrations. The style of government of Menem and Collor, in terms of how they managed the integration process and the interplay between the presidency and the diplomatic service, is the domain in which elements of continuity and change are more intermingled. The large recourse to presidential diplomacy, a well-rooted tenet of Argentina and Brazils foreign policy, was deepened. This attitude was applied to integration too. However, the personal relationship of empathy and friendliness linking Alfonsn and Sarney remained unique. There was not such a privileged personal relation between Menem and Collor.63 They shared similar views of international relations and had a common programme of economic modernisation, in which synergy was indispensable to enhance the international attraction of both countries.64 In their dealings much depended on the compatibility of the internal and external agendas, and mutual interest prevailed over common ideals. Internally, hierarchy was strengthened. The new general, linear and automatic character of integration centralised the decision making process. Roles and competences within the government and diplomatic structures were more clearly and strictly defined. The room and need for autonomous negotiation at the lower diplomatic levels, as well as the technical level, were dramatically reduced as compared to the previous phase of integration. In Argentina, at the beginning of integration, President Alfonsn trusted his Foreign Minister Caputo to find a practical form of implementation of his visionary rapprochement with Brazil to pursue peace, cooperation and democratic consolidation. By the same token, if the father of the political creature Mercosur was President Carlos Menem, the

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father of the content, of the public policies was Domingo Cavallo, the Chancellor.65 Menem was a man of limited academic education, but with extensive administrative and political experience. He was not keen on the details but was interested and directly involved in the general lines of actions of all governmental policies, from health to justice, from economy to foreign affairs.66 In particular, he had a strong interest in the international position of Argentina and a clear inclination towards Latin American integration.67 Menem recruited to his staff personalities whose technical expertise was suitable to implement his broad political view of integration.68 In Brazil, hierarchical relations at the beginning of integration had been less clearly defined, the initiative stemming from both presidential intuition and diplomatic pragmatism. Under Collor, this complex interaction persisted. According to Sergio Danese, former advisor to Sarney and later Minister Councillor at the Brazilian Embassy in Buenos Aires, Collor found an ongoing process, to which he gave support but not leadership.69 Danese also suggests that Collor was at the right place at the right time, but that the real inspiration and determination came from the bureaucracy. However, Celso Lafer, Foreign Minister in the last days of the Collor administration,70 affirmed that the impulse for the new approach clearly came from the Presidency,71 and found in the Foreign Ministry a devoted coordinator and executor. In Argentina, as in the previous phase, the Foreign Ministry was the coordinator of negotiations, but the process became much more centralised under Cavallo. He can be considered the ideologue of the reshaping of the integration scheme,72 as this was part of his plan of economic opening and competitive international insertion. However, two points have to be highlighted. The first is that decisions concerning integration, although inspired by the political vision of President Menem and the economic design of Domingo Cavallo, were discussed and endorsed by the whole administration,73 and received the support of the entire epistemic community surrounding Menem.74 The second is that Cavallo saw integration as a tool to pursue his economic design, which is not to say that he was particularly keen on Mercosur. Indeed, there are those who considered Cavallo, and his successor Guido Di Tella, lukewarm in their support for Mercosur, and reckoned that President Menem was more genuinely inclined to integration than his team.75 In Brazil, Foreign Minister Rezek appeared closer to the process than many of his predecessors, and Celso Lafer, who succeeded Rezek in 1992, attributed the main decisions concerning integration to both the President and the Foreign Minister.76 Both Collor and Rezek were in favour of integration, and they understood the ArgentineBrazilian strategic alliance as a multiplication of power rather than merely a sum of it.77 Yet

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the diplomatic bureaucracy maintained a considerable degree of autonomy within the process, and continued to provide a strong and qualitative source of input to integration. The domain in which continuity between the 19851988 and the 1989 1991 phases of integration is stronger is that of guiding principles and rationale for the whole integration exercise. The basic rationale for ArgentineBrazilian integration did not change significantly throughout the years. The main interest of Argentina in the association was intimately related to the maximisation of its return in terms of economic growth, that is to say that integration with Brazil was considered a chance to increase economic performance. Brazils core interest was instead related to the increase of its political weight in the world through the aggregation of regional associates, and integration with Argentina was primarily considered an instrument to enhance Brazils political performance. But this mutually utilitarian and complementary scheme was only part of the story. The most important trait of continuity between the two phases of integration lies in the fact that the associates, at no moment, lost the affinity derived from the existence of shared objectives and values.78 The commitment to integration was kept because the members perceived their basic similarities, in the realm of politics with the affirmation of democracy, and in the realm of economics with the necessity of modernisation and international insertion. In the first phase, under Alfonsn and Sarney, the preservation of democracy was the major political priority, and strategies of international insertion, including integration, were essentially subordinate to this goal. First, the formalisation of a diplomatic alliance diminished the possibility of conflict between the two countries, and this reduced the room for political manoeuvre by the military. Second, a closer association between the two countries was deemed likely to raise their international profile and relative weight, increasing the prestige, legitimacy and international ties of the ruling elites. Finally, it was felt that the creation of a larger market and the pursuit of joint economic modernisation would enhance economic performance, stabilising both regimes and reducing discontent. In the second phase, under Menem and Collor, integration shifted from the eminently political to the eminently economic; integration was still pursued as conducive to political and economic stability, but the main goal appeared to be economic competitiveness in a globalising world. The democratic creed never disappeared but was in fact reiterated more discretely. When Presidents Menem, Collor and also Lacalle of Uruguay took charge of the integration process, they repeatedly asserted that democracy was the basic guiding value underlying integration.79 Yet, decisive elements of clear-cut change emerge in the crucial issue of the paternity of the common market, which in the last instance

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determined the most significant departure from the previous approach. According to Roberto Lavagna, the methodology adopted in 1990 does not violate the intention of what was established in 19861988. What is altered is the temporal sequence, and consequentially, the final result.80 Three counterarguments may be advanced against this continuity model interpretation, concerning the intentions, the sequence, and the methodology of integration. First, in 1988 the objective was to achieve a free trade area within ten years and not a common market; indeed, the concept of a common market was introduced only as an aspiration in the long run, and its construction was not to be started until the full completion of the free trade area. Reportedly, President Collor, during the lunch offered at the Brazilian Embassy in Buenos Aires for the signature of the 1990 Buenos Aires Act, told Beatriz Nofal, Argentine former Undersecretary for Industrial Policy, that he was continuing the undertaking she had started, but Nofal replied that actually he was going to change it.81 Later, Nofal recalled that in the 1988 treaty there was no mention of customs union or common external tariff, which constitute one of the Mercosurs pillars. Second, Menem and Collor altered the scheduled temporal sequence of integration only in a very broad sense, as in 1988 there was no deadline for the establishment of the common market. Some observers have argued that the 1990 Act reduced the transitional period for the creation of the common market from ten to five years.82 This interpretation looks inaccurate as the ten-year deadline set in 1988 concerned the creation of a free trade area. It was Menem and Collor in fact who introduced the creation of the common market as a concrete objective of integration and they set an entirely new deadline of five years for this achievement.83 The crucial point is that Menem and Collor indeed reduced the duration of the transitional phase, but the two transitional periods, and their respective deadlines, concerned different instruments of integration. Third, the methodology chosen by Menem and Collor implied the abandonment of some of the principles previously inspiring integration. A general, linear and automatic tariff reduction was hardly compatible with a selective and gradual project of sectoral industrial complementation. Although Mercosur allowed a significant degree of flexibility to implement its commitments, with the exception of trade liberalisation, its timing and methodology exposed it and its creators to criticism of utopianism and excess of optimism84 and precipitateness.85 This was in stark contrast with the cautiousness and gradualness inspiring the previous model. This said it is still possible to argue that overall the process of Argentine Brazilian rapprochement and cooperation evolved in a linear trajectory between 1979 and 1991.86 Yet, this is a different question. It is also possible to maintain that the two phases of integration, 19851989 and

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19891991, appear to be a natural continuation of one another. And yet, this is also a different matter. As wittingly and accurately observed by Jorge Campbell, who served both in the Alfonsn and Menem administrations, each phase reflected the process appropriate to the historical, political and economic circumstances of that moment.87 The historical, political and economic circumstances following the international events of 1989 1990 were a significant change in world politics and international relations and so was the creation of the Mercosur in the framework of the regional integration project in the Southern Cone of Latin America. Mercosur is the almost natural consequence and evolution of its antecedents; yet, it is clearly distinct from them and its paternity and features are clearly different from those of its precedents. NOTES
1. Peter Coffey (ed.), Mercosur, (Boston and London: Kluwer Academic Publishers, 1998). Riordan Roett (ed.), Mercosur. Regional Integration, World Markets (Boulder CO: Lynne Rienner Publishers, 1999). Victor Bulmer-Thomas (ed.), Regional Integration in Latin America and the Caribbean: the Political Economy of Open Regionalism (London: ILAS, 2001). Jaime Behar, Cooperation and Competition in a Common Market. Studies on the Formation of Mercosur, (New York: Springer, 2000). 2. David R. Dvila-Villers, Competition and Co-operation in the River Plate. The Democratic Transition and Mercosur, Bulletin of Latin American Research, 11/3 (1992), pp. 261277. Sylvia M. Williams, Integration in South America: The Mercosur Experience, International Relations, 13/2 (1996), pp. 5161. Wayne A. Selcher, BrazilianArgentine Relations in the 1980s: From Wary Rivalry to Friendly Competition, Journal of Interamerican Studies and World Affairs, 27/2 (1985), pp. 2553. Monica Hirst, Mercosur and the New Circumstances for its Integration, CEPAL Review, 46 (1992), pp. 139150. 3. Jorge Campbell (ed.), Mercosur. Entre la Realidad y la Utopia (Buenos Aires: Nuevohacer Grupo Editor Latinoamericano, 1999). Sonia de Camargo and Jos Maria Vasquez Ocampo, Autoritarismo e Democracia na Argentina e Brasil (So Paulo: Editora Convivio, 1988). Andrs Cisneros and Carlos Pieiro Iiguez, Del ABC al Mercosur. La Integracin Latinoamericana en la Doctrina y Praxis del Peronismo (Buenos Aires: Nuevohacer Grupo Editor Latinoamericano, 2002). Luiz Alberto Moniz Bandeira, Brasil, Argentina, Estados Unidos. Conflito e Integrao na America do Sul. Da Triplie Aliana ao Mercosul (Rio de Janeiro: Revan Editora, 2003). 4. Articles 3 and 5 of the 1988 Treaty of Cooperation, Integration and Development. Authors interview with Francisco Thompson Flores (Undersecretary General of Economic Affairs, Brazilian Foreign Ministry, 19851988), Geneva 08/12/2004. Authors interview with Samuel Pinheiro Guimares (Head of the Economic Division, Brazilian Foreign Ministry, 19881990), Brasilia 22/05/2003. Authors interview with Beatriz Nofal (Undersecretary

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5. 6.

7. 8.

9. 10. 11.

12.

13. 14. 15.

16.

17.

18. 19. 20.

of Industrial Policy, Argentine Ministry of Economy, 19861988), Buenos Aires, 25/03/2003. Gian Luca Gardini, Two Critical Passages on the Road to Mercosur, Cambridge Review of International Affairs, 18/3 (2005), pp. 405420. Hedley Bull, The Theory of International Politics, 19191969, in James Der Derian (ed.), International Theory. Critical Investigations (Basingstoke and London: MacMillan, 1995), pp. 181211. Roberto Lavagna, Argentina, Brasil, Mercosur. Una Decisin Estrategica (Buenos Aires: Ciudad Argentina, 1998). Telegram No. OF03103EX of 27/10/1987, sent by the Brazilian Embassy in Buenos Aires to the Ministry of Foreign Affairs. Itamaraty Archive, Brasilia DF. Campbell, Mercosur. Sonia de Camargo, A Integrao do Cone Sul: 1960 1990, IRI Textos, Pontificia Universidade Catlica do Rio de Janeiro, 13 (1992). John Lewis Gaddis, The Long Peace: Inquiries into the History of the Cold War (New York: Oxford University Press, 1987). Lavagna, Argentina, Brasil, Mercosur. Campbell, Mercosur. John Williamson, Did the Washington Consensus Fail? (Washington DC: Center for Strategic and International Studies, Institute for International Economics, 2002). Correspondence between the then Governor of the Province of La Rioja, Carlos Menem and President Jos Sarney. Documents No. 1435 of 27 September 1988 and No. 1453 of 30 September 1988. Itamaraty Archive, Brasilia DF. Cisneros and Iiguez, Del ABC al Mercosur. Moniz Bandeira, Brasil, Argentina, Estados Unidos. Oscar Camilin, Memorias Politicas. De Frondizi a Menem (19561996) (Buenos Aires: Grupo Editorial Planeta, 1999), p. 313. Domingo Cavallo in: FLACSO, Tramos Seleccionados de Diversas Entrevistas Realizadas al Canciller Domingo Cavallo, America Latina Internacional, 21 June 1989, pp. 275278, p. 276. Camilin, Memorias Politicas. Domingo Cavallo, La Insercin de la Argentina en el Primer Mundo, in Silvia R. Jalabe (ed.), La Poltica Exterior Argentina y sus Protagonistas. 18801995 (Buenos Aires: Nuevohacer Grupo Editor Latinoamericano, 1996), pp. 357378. Roberto Russell, Politicas Exteriores: Hacia una Poltica Comn, in Fundacin Konrad Adenauer (ed.), Argentina y Brasil en el Mercosur. Politicas Comunes y Alianzas Regionales (Buenos Aires: Grupo Editor Latinoamericano, 1995), pp. 3440. Amado Luiz Cervo, Relaes Internacionais da America Latina. Velhos e Novos Paradigmas (Brasilia: IBRI, 2001). Carlos Escud, Realismo Perifrico: Bases Tericas para una Nueva Poltica Exterior Argentina (Buenos Aires: Planeta, 1992). Beatriz Carolina Crisorio, Las Relaciones de Argentina con los Bloques Econmicos Regionales en la Dcada del 90 y las Perspectivas hacia el Prximo Milenio, in Sandra Maria Lubisco Brancato and Albene Miriam F. Menezes (eds.), Anais do Simposio O Cone Sul no Contexto Internacional (Porto Alegre: EDIPUCRS, 1995), pp. 7797.

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21. Carlos Da Silva and Gabriela Zanin, El Mercosur ante el Regionalismo y la Globalisacin, in Camara de Diputados de la Nacin (ed.), Globalisacin e Historia (Buenos Aires: Camara de Diputados de la Nacin, 1998), pp. 377388. 22. Moniz Bandeira, Brasil, Argentina, Estados Unidos. Cisneros and Iguez, Del ABC al Mercosur. 23. Moniz Bandeira, Brasil, Argentina, Estados Unidos. 24. Ral Bernal-Meza, A Poltica Exterior do Brasil: 19902002, Revista Brasileira de Poltica Internacional, 45/1 (2002), pp. 3671. 25. Amado Luiz Cervo and Clodoaldo Bueno, Histria da Poltica Exterior do Brasil (Brasilia: Editora UNB, 2002). 26. BernalMeza, A Poltica Exterior do Brasil. 27. Authors interview with Celso Lafer (Minister of Foreign Affairs of Brazil, 1992 and 20012002), Sao Paulo, 02 June 2003. Bernal-Meza, A Poltica Exterior do Brasil. 28. Moniz Bandeira, Brasil, Argentina, Estados Unidos. 29. Sergio Frana Danese, Diplomacia Presidencial: Histria e Crtica (Rio de Janeiro: Topbooks, 1999). 30. Authors interview with Flix Pea (Undersecretary of Economic Integration, Argentine Ministry of Foreign Affairs, 19911992), Buenos Aires, 25 February 2003. 31. Authors interview with Luiz Felipe Lampreia (Minister of Foreign Affairs of Brazil, 19952001), Rio de Janeiro, 11 June 2003. 32. Letter by Carlos Menem to President Jos Sarney of 28 August 1988. Reproduced in document No. 1453 of 30 September 1988. Itamaraty Archive, Brasilia DF. 33. Letter by Menem to President Sarney. 34. Letter by Menem to President Sarney. 35. Letter by President Jos Sarney to Governor Carlos Menem, no date. Reproduced in document No. 1435 of 27 September 1988. Itamaraty Archive, Brasilia DF. 36. Authors interview with Alberto Kohan (Secretary General of the Argentine Presidency, 19891991), Buenos Aires, 14 March 2003. 37. Campbell, Mercosur. 38. Cavallo quoted in: Campbell, Mercosur. 39. La Nacin, 23 August 1989. 40. Cavallo in FLACSO, Tramos Seleccionados de Diversas Entrevistas Realizadas al Canciller Domingo Cavallo. 41. Marcelo Garriga, Polticas Exteriores: Hacia una Poltica Comn, in Fundacin Konrad Adenauer (ed.), Argentina y Brasil en el Mercosur. Politicas Comunes y Alianzas Regionales (Buenos Aires: Grupo Editor Latinoamericano, 1995), pp. 1320. 42. La Nacin, 16 June 1990. 43. La Nacin, 20 June 1990. 44. Buenos Aires Act, 06 July 1990. Preamble, paragraphs 3 and 4. 45. Campbell, Mercosur. 46. Authors interview with Roberto Favelevic (President of the Argentine Industrial Union, 19831987, and Vice-President of the Argentine Industrial Union,

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47. 48.

49. 50. 51. 52. 53. 54.

55. 56.

57.

58.

59. 60. 61. 62. 63.

64. 65. 66. 67. 68.

69. 70.

71.

19871994), Buenos Aires, 07 March 2003. Authors interview with Israel Mahler (President of the Argentine Industrial Union, 19911994), Buenos Aires, 14 March 2003. See also La Nacin, 06/07/1990, and Campbell, Mercosur. Authors interview with Roberto Lavagna (Secretary of Industry and Trade, Argentine Ministry of Economy, 19861987), Buenos Aires, 27 March 2003. Document No. unclear-00818 of 31 August 1989, concerning the prospective Paraguayan accession to the ArgentineBrazilian scheme, Itamaraty Archive, Brasilia DF. See also: La Nacin, 15 May 1989. La Nacin, 06 July 1990. La Nacin, 11 July 1990. La Nacin, 20 June 1990. La Nacin, 18 July 1990. Document No. unclear-00818 of 31 August 1989, Itamaraty Archive, Brasilia DF. Authors interview with Jorge Hugo Herrera Vegas (Minister Councillor at the Argentine Embassy in Brasilia, 19871992, and Head of Cabinet of the Argentine Foreign Minister, 19921993), Buenos Aires, 26 March 2003. Camargo, A Integrao do Cone Sul. Intervention of Foreign Minister Francisco Rezek at the External Relations Committee of the Chamber of Representatives, 05 December 1990. Box 37, Meeting No. 138, Archive of the Chamber of Representatives, Brasilia DF. Communication of Minister Francisco Rezek to the Brazilian Embassies to Argentina, Uruguay, Paraguay and LAIA. Document No. 18.239 of 14 March 1991, Itamaraty Archive, Brasilia DF. Minutes of the quadripartite meeting of Brasilia, sent by the Brazilian Foreign Ministry to its Embassy to LAIA. Document No. Of02001-00364 of 04 October 1990. Itamaraty Archive, Brasilia DF. Interview with Pea. Interview with Pea. Campbell, Mercosur. Interview with Pea. Authors interview with Jorge Castro (Member of the Secretariat of International Relations of the Justicialista party and chief ideologue of the Menemista project), Buenos Aires, 20 March 2003. Interviews with Lafer and Castro. Interview with Pea. Camilin, Memorias Politicas. Interview with Kohan. Camilin, Memorias Politicas. Authors interview with Andrs Cisneros (several government appointments between 1992 and 1997, including Head of Cabinet of Foreign Minister Guido Di Tella, Secretary General of the Argentine Ministry of Foreign Affairs, and Deputy Foreign Minister), Buenos Aires, 21 February 2003. Danese, Diplomacia Presidencial. Celso Lafer replaced Francisco Rezek as Foreign Minister on 13 April 1992 and remained in charge until the dismissal by impeachment of President Collor in October 1992. Interview with Lafer.

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72. Authors interview with Jorge Campbell (Undersecretary of Foreign Trade, Argentine Ministry of Economy, 19861987 and 1989; Undersecretary of Economic Integration, Argentine Ministry of Planning, 1991), Buenos Aires, 24 February 2003. Interviews with Castro and Cisneros. 73. Interviews with Castro and Kohan. 74. Interview with Cisneros. 75. Interview with Lavagna. 76. Interview with Lafer. 77. Interview with Thompson Flores. 78. Flix Pea, La Construccin del Mercosur. Anlisis de un Caso de Metodologia de Integracin entre Naciones Soberanas, book draft, unpublished, 1995, p. 7. 79. La Nacin, 23 August 1989 and 07 July 1990. Ambito Financiero, 27 March 1991. 80. Lavagna, Argentina, Brasil, Mercosur, p. 182. 81. Interview with Nofal. 82. Alfredo Aldaco and Guillermo J. Hunt, El Mercado Comn del Sur, in Felipe A. De la Balze (ed.), El Comercio Exterior Argentino en la Dcada de 1990 (Buenos Aires: Ediciones Manantial, 1991), pp. 370381. Camargo, A Integrao do Cone Sul. 83. Campbell, Mercosur. Interview with Castro. 84. Interview with Nofal. 85. Authors interview with Paulo Tarso Flecha de Lima (Secretary General of the Brazilian Ministry of Foreign Affairs, 19851990), Brasilia, 13 May 2003. 86. Interview with Pea. 87. Interview with Campbell.