Make your work easier and more efficient installing the rrojasdatabank  toolbar ( you can customize it ) in your browser. 
Counter visits from more than 160  countries and 1400 universities (details)

The political economy of development
This academic site promotes excellence in teaching and researching economics and development, and the advancing of describing, understanding, explaining and theorizing.
About us- Castellano- Français - Dedication
Home- Themes- Reports- Statistics/Search- Lecture notes/News- People's Century- Puro Chile- Mapuche

World indicators on the environmentWorld Energy Statistics - Time SeriesEconomic inequality

    Globalization and the External Relations
    of Latin America and the Caribbean
    Edition Nº 53.

    January-June 1998.

    TITLE MERCOSUR and Alternative
    World Orders
    AUTHOR Helio Jaguaribe
    Dean of Brazil's Institute for
    Political and Social Studies.


    I. Introduction

    The following study examines the alternative world orders that may emerge at the end of this century up to the first quarter of the XXI Century. Within this context, it briefly analyzes MERCOSUR's possibilities, including the hypothesis that other South American countries will join the original four members of the group.

    The author will attempt a prospective analysis in which probable future structural trends will be anticipated in a rational manner and through the available scientific methodology. In order for this kind of prospective exercise to be meaninful the historical and social process must be understood as a phenomenon subject to four types of factors: real factors, ideal factors, human freedom and chance.

    Real factors are those that condition life's material aspects, from the natural resources available to the society or societies that are being researched, in specific areas and during specific historical periods, to the existing modes of production, including their demography.

    Ideal factors are those that pertain to that society or societies' culture –in its wider social and anthropological aspect–during the same historical period, including, if need be, the surrounding cultural conditions that influence the system being analyzed.

    Human freedom refers to the way people, who produce significant changes in the system, could behave during the selected period.

    Chance refers to the arbitrary way the above mentioned factors may combine at any time.

    Within this historical and social concept, prospective exercises are valid only in relation to the general structural tendencies, that is, the tendencies deriving from the way in which the behavior of the main variables, conditioned by real and ideal factors, may be reasonably anticipated, for a specific time-period. The possible reasonable forecasts are necessarily of a general nature, they are never specific. The main real and ideal conditions that will determine the behavior of historical agents, within a specific future time frame, may be foreseen. Specific deeds or situations may not be predicted, not even in the short term, due to the unforeseable ways historical agents will behave, within the general circumstances that may be-in principle- anticipated, and the specific way (chance) these agents will experience the real circumstances.

    Another important limitation of prospective analysis has to do with the duration of structural forecasts. All structural tendencies are subject to modifications which alter their direction and intensity. No structural variable may sustain indefinitely the same growth or down growth rate or its initial qualitative and directional traits. The duration of structural forecasts varies according to the case analyzed. Without entering into details on this issue, suffice to say that such forecasts are seldom valid for more than two or three generations, as understood by Ortega and Gasset (15 years per generation). In this study, the time-frame considered covers up to the first quarter of the XXI Century.

    II. Alternative Scenarios

    With the fall of the Berlin Wall and the disintegration of the Soviet Union, the United States has emerged, at the end of the century, as the only world super power. On the other hand, Europe, as it emerged from the Treaty of Rome, has increased considerably its socioeconomic integration level and the number of countries belonging to the system- currently called the European Union- has grown. From an economic perspective, this has granted it just as much, if not more, importance as the United States.

    Other new important developments, besides European integration, characterize the post-Cold War world. Japan retains its position as the second most important national economy, in spite of the fact that it is currently undergoing a period of relative economic stagnation and recently experienced an important financial crisis.Russia, the most important national system to emerge from the disintegration of the Soviet Union, can still –albeit in a very disorganized fashion, for now– rely on power resources unlike those of any other country, with the exception of the United States, even though its chaotic transition from a communist, socialist regime to a democratic, capitalistic one has unleashed a very serious crisis in all the areas of its collective life.

    Within this context, China's emergence must also be pointed out. Ever since Deng Xiaoping, the country has succeeded in overcoming Mao Zedong's irresponsible dogmatism. During the last twenty years its GDP growth rate has increased annually by over 8%. With a 1,200 million population and an important level of scientific and technological skills, China is governed by a regime of neo Confucian characteristics, capable of administering in a rational fashion the resources at its disposals, in spite of the limitations imposed upon it by its totalitarian past.

    We must also take into account India's important potential, the dynamism –currently contained– of South East Asia's countries and the emergence of MERCOSUR as an integration system encompassing the four South American countries most representative of the region's potential, a system that tends to expand with the incorporation of other countries of the region.

    Within this framework, a clear alternative post Cold War world order may be discerned for this end of the century and probably up to the beginning of the XXI Century: the consolidation and expansion of the United States' hegemonic power, leading to – regardless of whether this is a deliberate aim of the United States– the configuration of a United States world empire1. The consolidation and expansion of the European Union into a system with a shared international political project and the means needed to put it into practice would be another option. It should be pointed out that this option implies the possibility of Russia recovering its international power, China's consolidation as a major international power, an increase in India's international standing and, among others, the consolidation and expansion of MERCOSUR.

    If the first alternative were to take shape, the United States, as imperial nation, would hold world wide political and military power. This does not necessarily mean arbitrary power. If the second alternative were to prevail, there would be a multipolar world order.This would imply strongly different levels of influence and a significantly more independent international role for the United Nations.

    III. The United States Empire

    The world order option according to which United States' hegemony would consolidate and expand, is already taking shape. A world order determined by Pax Americana depends, essentially, on three types of factors: (1) Internal factors that may support an imperial project, (2) the existence of international conditions that do not hinder the launching of an imperial project and (3) the availability of enough operative conditions to launch an imperial project compatible with internal and international conditions.

    1. Internal conditions

    The United States lacks the social and political conditions conducive to an imperial project. Throughout history, the empires that emerged and survived during long periods of time, did so under regimes such as: divine monarchy, in the ancient Orient; executive dictatorships disguised as republican regimes, as in the Roman Empire from Augustus to Marcus Aurelius; a type of government ostensibly needed to preserve the advantages of an established empire, as during the Late Roman Period;divine right monarchy, as in the Sacred Roman-Germanic Empire, or the Hapsburg Empire in its Austrian and Spanish versions; or oligarchical democracies, as the British Empire.

    Up to and including the Kennedy era, the United States was a democracy with an oligarchical orchestration (yet not oligarchical rule) by the Senate and other WASP (White, Anglo Saxon, Protestant) East Coast agencies. The Vietnam War broke the national consensus and allowed East Coast liberals to exercise their enlightened rule through the Senate and other bodies. The idea of the"national interest" began to erode as citizens no longer identified with it. In its place, other types of identifications began to emerge: identity based on ethnic origin, region or corporation. Thus, we speak of the "United States Negro", the "US Hispanic", the "Italo-American", or of "Californians", the "Sunny Belt", "New Yorkers", etc. Those who participate in public life in order to preserve corporate interests, be they of unions or of producers of specific goods and services, identify with the corporation. These different types of identification determine the priority each group will grant its own interests, their insistence, beyond any other consideration, on policies and public services that favor such interests and their refusal to accept any sacrifice, be it fiscal or personal , in the name of the national good. To the detriment of national integration, the United States has become, mostly, a confederation of interest groups, yet it has been able to exercise some measure of national administration.

    On the other hand, it should be pointed out that because of its civil and religious traditions, values such as the preservation of human life, freedom, fair play, a rejection of arbitrariness, among other traditional elements of Anglo-Saxon culture, still prevail in the United States. People's rejection of the Vietnam War was due to the fact that the massacre of women and children by napalm bombs could be witnessed on television and to the difficulties suffered by US troops in the Vietnamese jungle. As opposed to this, Romans did not feel pity when faced with the spectacle (narrated, rather than transmitted live) of Caesar's massacre of the Gauls, or of one million Gaul prisoners brought to Rome as slaves.

    Finally, it should be pointed out that, as long as they do not feel threatened, mass democracies, show little interest in the rest of the world, concerned as they are with their own internal needs. Also, their foreign policy is seldom marked by continuity, rather it is based almost exclusively on stereotyped visions of the world and a superficial linking of immediate internal interests with external developments.

    Under such social and political conditions it would be fair to assume that internal conditions in the United States unable it to carry out an imperial project. In reality, as we will see further on, they do negatively affect its ability to exercise world hegemony in a coherent manner. This, however, does not mean that such project is not formulated or partially executed, even though imperfectly.

    Two are the reasons that make the implementation of a US imperial project viable, in spite of unfavorable internal circumstances. The first has to do with the fact that globalization is a reaction to United States' economic and technological hegemony (of which US power groups have recently become aware). The second reason, which became apparent during the Gulf War, is that the United States can impose its political will through overpowering military aggression, at low financial costs, a minimal cost in terms of US lives and practically without any external risk.

    In order to understand these two conditions that would render a US empire viable, in spite of unfavorable internal conditions, we must distinguish between the US people and the US power elites. The complexities of modern societies have given rise to two distinctive types of power elites. The more technologically advanced the society the more pronounced are the differences between these two elites.

    One of the power elites typical of democratic societies is the one brought to power by popular vote and, to a lesser extent, the union vote. The formal power players are elected by the people or, in the case of unions, by union members. This is the power elite of, mainly, the presidency and the federal senate. It tends to mirror society's main characteristics and, thus, the unfavorable conditions that hinder an imperial project. Nevertheless, it so happens that in the case of the presidency of the republic – to a lesser extent– and the federal senate –to a larger extent– the elected power elite depends for election on another power elite, and the more so given escalating campaign costs. On the other hand, in order to be able to govern the elected power elite depends totally on a minimum consensus from the other power elite.

    The other power elite –the technocratic one, which, together with selected members of the elected power elite represents the center of US power– is made up of men and women who rule, in the widest application of the term, the productive system, control the media, command the Armed Forces, control the bureaucracy and enlist the participation of the most prominent members of the academic sectors (for ex., Henry Kissinger) who have the knowledge needed for the formulation and implementation of public decisions.

    This second power elite modality is the one that in recent years understood that the globalization process paralleled US economic and technological hegemony in the world, as long as US firms overcame the competitiveness deficit they registered with Japan during the 1980's. We will not analyze here how was such deficit reversed. Suffice to say that such reversal occurred during the 1990's and was strengthened by the fact that Japan 's economy entered a phase of relative stagnation, partially as a result of the United States' increased competitiveness.

    The second condition needed to launch an imperial project is the capacity to exercise coercive power at the international level, by military might if necessary. As the Vietnam War demonstrated, the United States is not up to this. For the reasons mentioned above, the US people are not ready to pay the economic and human price of conventional military interventions, nor are they willing to witness through direct TV transmission, for an extended period of time, the massacre of civilian populations. The Gulf War revealed to the technocratic power elite the United States' overpowering capacity to destroy other societies' vital systems at low financial cost, practically minimum human cost and no external risks. To make this possible, the enemy must first be made into a demon before US public opinion, in order for people to be willing to pay the price of a certain number of human lives in the society to be attacked. For this type of attack, it is also extremely convenient, even though not indispensable, to be able to enlist the support of the First World or of the United Nations Security Council.

    2. Limitations of the United States Empire

    United States' world hegemony is a far from consolidated project, however, it is being carried out partially. It is one of the possible alternative world orders from now to the beginning of the XXI Century. However, such scenario will face internal and external obstacles that may hinder its realization and this, in turn, could lead to the multi polar alternative.

    Further on in this essay, we will analyze the multi polar alternative and its possibility of success for now, let us just point to the internal and external obstacles the US imperial project may face in the future.

    We already mentioned the unfavorable internal circumstances that negatively affect the United States' imperial project. Let us now analyze to what extent such project may overcome these obstacles on the strength of the other two above mentioned conditions, that is, the elements deriving from globalization that automatically favor such imperial project and the capacity to inflict devastating harm on other societies, with impunity, at low financial cost and with very low US casualties.

    The issue involves several aspects, such as the need for firm public support, continuity in the policies adopted to carry out the project, a satisfactory level of international support- at least from the important First World countries- United Nations connivance and, last but not least, the inherent attractiveness of the imperial project.

    The above list of conditions reveals the multiple difficulties the US imperial project faces. To be brief, we will just consider the last aspect: the inherent attractiveness of the imperial project.

    The Roman Empire is the most successful imperial project in history. Many were the internal and external conditions that favored its formation and consolidation. Internal conditions in Rome, regardless of historical considerations, were completely different to those in present day United States. On the other hand, from an international perspective, once Carthage –which almost won the Second Punic War– was defeated, there was only one civilization left that could compare with Rome: the Hellenic Empires. Because of the tragic divisionist tendencies that characterized them Hellenic cultures were unable to unite against Rome. On the contrary, continental Greece supported Rome against Macedonia and the Kingdoms of Rhodes and Pergamum backed Rome against the Seleucids.

    Beyond the fact that internal conditions in Rome favored its imperial project and that in the international arena, following Carthage's destruction and the defeat of the Hellenic Empires, no other power, with the exception of Persia which was never conquered, could stand up to Rome, the important thing to keep in mind is that the Roman empire was only marginally coercive. It is true that Caesar's legions defeated the Gaul army, thus incorporating Gaul as a Roman province, and that they repeated this feat in the Iberian Peninsula, Egypt, Dacia, the Asian territories neighboring the Mediterranean, and Britain. However, following the conquest and once Roman rule was established in those provinces, the local elites, with a few exceptions as in the case of the Jews, accepted and actively collaborated with Rome. Why did they? Because Pax Romana greatly benefited the provinces' local elites. On the one hand, Pax Romana meant protection against foreign barbarians and, on the other, an equitable and enlightened legal order that afforded the provinces a legal system they previously lacked, personal protection, equality before the law, contract guarantees, trade expansion, the development of each region's productive capacity, access to education and high culture and a non racial system whereby the higher echelons of society were accessible to all who voluntarily embraced Greco-Roman culture. Pax Romana rested on the equitable Jus Gentium principle and the impartiality and objectivity of the Praetor Peregrinus principle. Rome fell only when, for reasons we will not discuss here, Pax Romana became Oppressio Romana, under the decadent conditions of the III and IV Centuries A.C. The Roman Empire fell when it ceased to be attractive for the provincial elites.

    The United States' imperial project, for reasons inherent to it, is greatly harmed by the fact that, as opposed to Rome's imperial project, it is not attractive to the provinces. During Caesar's times Rome underwent a profound internal transformation as a result, precisely, of the empire that began with the Second Punic War. Rome ceased to be a city-state which viewed the empire as an object for looting, to become, effectively with Caesar and institutionally with Augustus, the administrative center of an imperial system, for the benefit of the system as a whole, even though Rome enjoyed some advantages as the empire's administrator.

    On the other hand, the United States views its emerging system of dominance- which is not conceived as an empire- as an opportunity to obtain economic advantages, regardless of what may be the interests of the regions under its domain. The American judicial system does not include any equivalent of the Jus Gentium. On the contrary, what we have is the arbitrary imposition upon the world of US laws, through a mixture of coercive intimidation and unwarranted exclusion from the US market. Instead of developing the local productive capacity and insuring markets for the empire as a whole, as Rome did with its provinces, the globalization process sponsored by the United States results, in the name of free trade's real and assumed advantages, in the inutilization of the under competitive industries of the Third World –and many European ones. This plunges those countries back to under development, producing raw materials and importing finished goods.

    IV. The Multipolar System

    The second possible alternative world order, up to the beginning of the XXI Century, is the consolidation of a multi polar system of world power.Up to the first trimester of the coming century, the multi polar system that will emerge will be characterized by the sharp difference in the level of the countries members of the international community. Three levels may be discerned: at the higher level will be the countries that play a determining role in the world's economic and political order, whether alone or through the integration systems they constitute. These countries will make up, formally or informally, a sort of World Directorate2 which will operate directly or through the United Nations. At the intermediate level are countries that play an important role in looking over the interests of their respective regions, whether alone or through integration systems and exercise an undeniable weight as the World Directorate's collaborators. The third level includes the great majority of the members of the international community which are unable to play an important international role.

    Within this multi polar system, the United Nations will play a much more relevant and independent role. Multi polarity requires institutional proceedings, more so than in the imperial country hypothesis. The way in which power will be exercised within this possible future multi polar system, presently unforeseeable, will also determine the way in which the United Nations will be able to play its role as the future world order's institutional tool and the degree of autonomy it will be allowed.

    In the present world situation, it may be predicted that some countries or international integration systems will be almost surely, or very probably, members of the future World Directorate, while others are possible candidates. The United States and the European Union are among the first. Japan, China and Russia are among the most probable candidates to the Directorate.India, MERCOSUR and, less so, Indonesia and an Islamic system (if a satisfactory mode of integration is achieved) are possible candidates.

    We will not examine here the issues concerning the second level candidates. Suffice to say that MERCOSUR, besides having the possibility to acquire the conditions for entrance into the World Directorate, also has the highest probability to become a member of the group of countries exercising influence in the region.

    Should this scenario prevail, the multi polar system's main characteristics will depend essentially, on the one hand, on the political profile of the European Union and, on the other, on the role Russia and China will play. Equally relevant will be the way in which the United States, currently on its way to the imperial project, will adjust to the multi polar system, if this should prevail.

    1. The European Union

    In the medium term, the multi polar alternative depends on the European Union successfully establishing an internal consensus system that may allow, in a coherent manner, for the satisfactory formulation and application of a shared international policy. In the longer term, probably the conditions that will determine a multi polar system will depend on Russia's and China's evolution.

    During the last decade of the 1990's, as the case of the European Union has demonstrated, it became apparent that a merely macroeconomic policy is not enough to fuel the final stages of an economic and political integration arrangement. During the 1990's the European Union has achieved an extremely high level of economic and social integration, and it is highly possible that the Euro will be adopted as currency by most of the EU countries within the established date or after minor time extensions. This, in turn, will strengthen even more the degree of integration between those countries adopting the Euro, weakening their ties with those EU countries that do not join the single currency system. However, it is important to point out that there is a gap between the macro economic policies of European Union countries as a whole and, on the one hand the economic and social needs of each country and, on the other, the possibility to formulate a shared international policy.

    All the more deeply integrated systems face the problem of making the macro economic policies of the whole compatible with the economic and social needs of each member country. A discussion of this issue goes beyond the brief considerations of this study. Suffice to mention that in the case of the European Union there are strong indications that such problem will be solved partly because the adjustment difficulties stemming from economic policies are greater in the smaller countries, in which the European Union's compensatory mechanisms have proven to be effective. The problem is more pronounced in the case of the United Kingdom, due to its social and cultural components.However, in this case, the issue may be examined from a political perspective.

    The political problem faced by the European Union stems from the fact that, contrary to what was expected by those who adopted a merely economic view of society, political options are not determined solely by economic reasons, but rather by social and cultural ones. Undoubtedly, economic reasons are extremely relevant since they motivate many political decisions and effectively inhibit others. The political option is a projection into the future of that which "we" wish for. In this case, "we" is of a social and cultural nature. It encompasses human groups joined by links of solidarity determined by social and cultural factors.

    The problem of social and cultural solidarity within the European Union is experienced at three different levels. The first and more general one refers to the separation that exists between Great Britain's insular vision and that of the continent and, to a lesser extent, the continental vision and Britain's insular vision. The second level has to do with the main four ethnic and cultural groups of the European Union, five when the Slavs enter the Union. These four original groups are: the Latin, the Germanic, the Anglo Saxon and the Nordic groups. The third level refers to each nation's individual character, which is stronger the older a country's history as nation state.

    As the behavior of European Union member countries' has demonstrated regarding political issues, narrow local nationalistic thinking has been greatly overcome during the current decade. The Germanic and Latin groups have progressed considerably in their efforts towards political consensus. On the other hand, consensus is more easily reached between the Germanic and the Nordic groups, and this paves the way for a consensus with the Latin groups. Nevertheless, it is considerably harder to harmonize the insular with the continental view of the world and, as a whole, the Latin-Germanic view with the Anglo Saxon one.

    Given these characteristics, which will hardly change during the next ten or fifteen years, it is pertinent to ask to what extent will the European Union -–which, moreover, tends to incorporate Slavic nations– be able to achieve the conditions that will allow it to formulate and carry out a reasonable common international policy. The possibility of achieving, from now to the first quarter of the XXI Century, a world order based on a multi polar system depends totally on to which extent will European Union countries succeed in achieving a consensus regarding a common external policy.

    If we view the issue in global terms, then the answer to this question will hardly be positive, as the history of the European Union, including recent developments, demonstrate. Just as the Hellenic world, whose civilization level and economic and military potential was greater than Rome's, was dominated by the latter due to its divisionism, the European Union, whose civilization level and economic potential is greater than that of the United States, will tend to be dominated by that country if it does not overcome the social and cultural obstacles that inhibit a common external policy. This, however, does not seem currently feasible.

    There are, however, other considerations that must be taken into account when examining the feasibility of a common European foreign policy. On the one hand, different circumstances, particularly of an economic nature, are altering, even if not deliberately, the level of integration between European Union members. Joining or not the common currency is a decisive factor leading to differentiation. Other circumstances refer to what have been called "variable geometries" and whether the European Union members will be able to achieve them. The integration level that has been achieved will probably continue for the group as a whole, maybe with some weakening. However, a more reduced group seems to be taking shape, that of countries joining the Euro. The fact that this is a small group and that it could lead to an even smaller one, indicates that a common foreign policy may be attained. On the one hand, France and the Latin countries and Germany on the other, have made it clear that their aim is to develop a common foreign policy independent from the United States. A continental Europe common foreign policy, with or without the Nordic countries, is more than enough for the creation of a multi polar system.

    The second consideration that must be taken into account has to do with the fact that both Russia and China have made clear their intention to develop, in the long term, a foreign policy independent from the United States. That position will have a decisive influence on the strengthening of a Latin-Germanic position in favor of a foreign policy independent from the United States. It remains to be seen to what extent Russia and the Latin and Germanic European countries will share common international objectives. What is already apparent is that they do share one objective: to be independent from the United States. Another unknown variable is what will be China's long term foreign policy. That country's aim to be independent from the Unites States has already been made clear.

    The creation of a world order based on a multi polar system does not, however, depend solely on whether continental Europe, Russia and China succeed in adopting a common foreign policy independent from the United States. It also depends on the extent to which these countries will be able to formulate a world order alternative different from that of the United States –something that does not result simply from a common independent foreign policy– and on whether this proposal will be more attractive for the rest of the world than the Pax Americana.

    This issue, as many others discussed in this study, is still merely hypothetical. Because of its economic and cultural conditions continental Europe's international policy is more cooperative and less divisive than that of the United States. On the other hand, the USA has a greater immediate capacity to bestow favor or to coerce. Other factors, among them MERCOSUR's foreign policy decisions –in spite of this systems' relatively small international pull– will tend to affect this position.


    The 1991 Treaty of Asunción, which created a common market between Argentina, Brazil, Paraguay and Uruguay –the MERCOSUR– marked the beginning of an integration process that has made great strides in the fulfillment of its objectives and the strengthening of integration. The agreement has also been expanded to include, in the short term, Chile, Bolivia and Venezuela and, in the long term, all South American countries. In 1997, member countries' exports among themselves grew to US$ 20,339 million, which represents 25% of all of MERCOSUR's US$ 82,267 million exports to the rest of the world.

    We will not discuss MERCOSUR here, nor will we analyze the results it has obtained to date. Our analysis will just focus on MERCOSUR 's importance within the international arena as a regional system, vis-á-vis the two world order alternatives discussed above. This issue is particularly important and urgent given the United States' proposal to create, in the short term, a Free Trade Area of the Americas (FTAA) encompassing all the continent's countries.

    Given the obvious conflicting elements between MERCOSUR and the FTAA, MERCOSUR countries, particularly Brazil, have attempted to delay the negotiations for the creation of the FTAA, suggesting to postpone to the year 2005 such decision. The united States, on the other hand, has proposed the year 2005, or even 2002 as deadline for the full implementation of the FTAA. The creation of the FTAA will result, practically, in the disappearance of MERCOSUR, since it will lead to the elimination of tariff barriers between all the countries of the Americas, thus including the common external tariff which is MERCOSUR's fundamental tool.

    Given that the FTAA will result in the exclusion of MERCOSUR, the latter's member countries must concern themeslves with the issue itself, rather than just attempt to delay the signing of the FTAA agreement. What does MERCOSUR represent for other members? What does the FTAA represent for MERCOSUR members and how would it benefit them to participate in this system? What type of international role should MERCOSUR countries play, given the two alternative world orders discussed above?

    We will limit our analysis to three questions: (1) Which of the two world order alternatives is more convenient for MERCOSUR? (2) Once the best alternative has been established, which are the institutional tools that are more conducive to it, are they MERCOSUR, the FTAA or some other integration arrangement? (3) In the assumption that the world order that will prevail is not the most convenient for MERCOSUR countries, how could these best defend their interest?

    1. Under Competitiveness and the FTAA

    As far as the first question is concerned, there is no doubt that a multi polar system in which they could reasonably intervene,would be the better alternative for MERCOSUR countries. However, we must keep in mind that the US imperial project does not appear as such and, in reality, is not perceived as such by the United States' power elites, with the exception of some more lucid personalities such as Kissinger and Huntington. The FTAA project is a sign of this. The FTAA is not a cynical attempt to attract Latin American countries into a free trade regime in which they will be losers from the start. The United States believes in the neo-liberal doctrine according to which a wide, open international market is an option that favors all since the distribution of factors will be according to the criteria of profit maximization. If some countries will have to close down their industries, this would mean that these are not competitive and that those countries must produce other goods or services, precisely those the free market play will allow them to produce.

    We will not enter here in a discussion of the neo-liberal doctrine. Suffice to say that the USA adopted the Hamilton Tariff at a time when its competitiveness was clearly below Europe's and that it was thanks to this that it succeeded in becoming, half a century later, the most competitive world economy.

    When faced with this kind of objections, neo-liberals present a two-fold argument. On the one hand, they argue that the free distribution of factors regime, along with competitiveness, lead the capital and technology centers to invest in those countries lacking such factors. This will insure them greater gains and will re establish a balance between their levels of competitiveness. On the other hand, they argue that, given the current globalization of the economy, neo-Hamiltonian tariffs worsen technology obsolescence and lead protectionist countries to impoverishment. According to this theory, the FTAA's advantages for Latin America derive from this situation, since, on the one hand, the agreement would supply the region's markets with good quality and inexpensive US products and, on the other, it would attract a large flow of US investments which , in the medium term, would reestablish those countries' industrial competitiveness without sacrificing their people.

    Arguments in favor of the FTAA fail on two accounts. First, globalization will change the direction of traditional protectionism, when this is applied with autarchic purposes on isolated countries. As opposed to traditional protectionism, the modern and efficient type of protectionism does not have autarchic purposes, nor is it applied against small, isolated countries, but rather against vast integration systems such as the European Union ( agricultural protectionism and some industries' veiled protectionism), or MERCOSUR and continental countries such as China. The new proteccionism's aim is to insure the conditions that will increase the competitiveness of those sectors that could become competitive in the future if duly modernized and protected during a certain period of time.

    Second, the theory that the FTAA will cause large numbers of US investors to invest in the member countries is also incorrect. On the contrary, the elimination of tariff barriers will also do away with all incentives to invest for US firms. These would no longer need to invest heavily in those countries –which would reduce the number of jobs available in the United States– in order to sell their products, but would just sell such products without having to pay any tariff. Large markets protected by tariffs in which foreign investment is granted a preferential or non discriminatory treatment are what foreign investment is attracted to. MERCOSUR offers such conditions –which explains the vast annual flow of dollars into a country such as Brazil– and these would cease to exist if the FTAA prevails over MERCOSUR.

    As the above analysis clearly indicates, there is an economic need to preserve, consolidate and expand MERCOSUR. Also, MERCOSUR countries need to abandon immediately their policy of stalling negotiations on the signing of the FTAA agreement and to replace it with a clear and open rejection of the FTAA as long as the South American economies' competitiveness level continues to be well below that of the United States.

    2. MERCOSUR and the International Arena

    MERCOSUR does not just provide its members with a wider market –which is a considerable fact for all countries except Brazil whose market, nevertheless, has greatly expanded– it is also a fundamental foreign policy tool.

    MERCOSUR's international importance depends, on the one hand, on the extent to which it will succeed in formulating and implementing a common foreign policy; on the other, on the world order alternative that will prevail.

    As in the case of the European Union, MERCOSUR's international importance depends on whether it will be able to reach internally a consensus on a common foreign policy. To this end, MERCOSUR presents more favorable circumstances than the European Union. With two common languages that allow for direct, reciprocal understanding and without conflicting external interests, MERCOSUR has all the conditions needed to formulate and implement a common foreign policy. Nevertheless, within MERCOSUR, and in Latin America in general, there are important sectors that think that their countries can benefit most by joining the US imperial project than by adopting an independent position. Cultural dependency has led some to seek US approval and to regard US concessions as something that expands the international prestige of those upon whom they are bestowed. Others think that supporting US foreign policy stimulates capital and technology transfers. Finally, others yet feel that US support is necessary to contain Brazil's imperialist expansion in South America.

    Preferences motivated by psychological reasons are beyond the scope of rational analysis and, obviously, do not lead to rational options. What is important to point out here is that both assumptions are incorrect. To assume that to support US foreign policy will lead to important capital and technology transfers is to ignore the fact that foreign investment, especially US foreign investments, is affected by several factors. It is true that a policy hostile to the United States will not stimulate the flow of US capital and, in some extreme cases, could result in a US economic embargo, as in the case of Cuba. What would, perhaps, stimulate foreign investments, including US capital flows, is a large market protected by reasonable tariffs, with favorable or non discriminatory investment conditions.

    On the other hand, to assume that an alliance with the United States is a necessary condition to forestall the risk of Brazil's imperialism within MERCOSUR or Latin America in general, is to misread the situation. To begin with, Brazilian culture is lyrical, not epic and, therefore, not given to imperialistic tendencies. Moreover, even if a country such as Brazil wished to be imperialistic, it would have no opportunity for it within a free association arrangement as MERCOSUR, both as it is today, with a limited membership, and as it would be if the rest of the Latin American countries joined it. Any country member of MERCOSUR that were to become the object of Brazil's imperialism could simply withdraw from that arrangement and join the US orbit. Small scale imperialism cannot be exercised in areas subject to the automatic large scale imperialistic intervention of the hegemonic power.

    If conditions exist for a common foreign policy and, objectively speaking, nothing stands in the way, what are the benefits that could be derived from such policy? Given the international conditions outlined above, the adoption by MERCOSUR of a common foreign policy, if properly aimed, would: (1) Contribute significantly to the establishment of a multi polar world order, (2) provide MERCOSUR countries with important economic and political benefits during this system's formative process and within the multi polar system that might emerge, (3) improve MERCOSUR countries' relative position in the event that a US imperial system were to prevail.

    MERCOSUR's contribution to the formation of a multi polar world order may be extremely significant, in spite of MERCOSUR's relative importance within the world's scenario. This is due to the fact that a multi polar world order depends on Latin and Germanic Europe's adoption of a common foreign policy. MERCOSUR's implementation of an appropriate foreign policy could be the factor that leads Europe to review its current indefinite position. This would create additional benefits for those sectors in favor of a common European foreign policy and improve the conditions needed for them to prevail.

    A closer coordination between MERCOSUR and the European Union could produce additional benefits. Given that the average competitiveness level of Europe is similar to that of MERCOSUR -the advantages enjoyed by some of MERCOSUR's productive sectors balance those enjoyed by Europeans in other sectors- in the short and medium term, both systems would greatly benefit from closer economic cooperation. In the long term, if a multi polar world order were to prevail, MERCOSUR's contribution to it would create conditions that would insure it a role in a probable future World Directorate.

    If, on the other hand, the United States were to prevail in a new world order, then MERCOSUR's close links with the European Union would insure it the most favorable conditions. In such a scenario, MERCOSUR would be in a better position to negotiate its adherence to the US imperial system than if it already were a satellite of the United States, as would be the case if South America's countries join the FTAA.

    VI. The New World Order

    Faced with the alternative of a Pax Americana or a multi polar world order, the regulatory regimes based on either of these alternatives will face the dilemma –already posed by Roman stoics and later reformulated by Kant in his eternal peace proposal– of how to regulate the international system in an equitable, rational, stable and empirically viable manner. Assuming that this objective would tend to be more viable in the case of a multi polar world order, the question arises of whether the world can be better than it is. Kant answered this question in the most coherent affirmative way by stating that the universalization of the rule of law would consequently lead to a confederate system that would universalize it.

    Kant's impeccable analytical coherence led him to a formally correct formulation. As Kant himself pointed out, the problem resides in the empirical conditions on which such analytically correct possibility depends. That is, in this case, the conditions of power on which a possible world order would be based. If the world order were to be based on the hegemony of an imperial nation, such as the United States, the question depends on the extent to which the conditions leading to the formation of its power center would inherently lead to an equitable, rational and stable world order. As the arguments sketched above demonstrate, an equitable and rational world order can hardly be achieved through undisputed US world hegemony nor can the stability of such order be insured.

    Could an equitable, rational and stable world order be achieved under a multi polar system? This brief analysis does not allow for an elaborate discussion of this issue, however, a relative and moderately positive answer can be given. The world can, in a stable manner, be better than it is.In terms of social and human quality, the world will not reach a better level than the average level of social and human quality of, in general, the societies that constitute it and, in particular, its leaders. However, it may reach, in a stable manner, a higher level of social and human reasonableness than the one it has today.

    A multi polar world will tend to be regulated, formally or informally, by a World Directorate which, in turn, will tend to lean upon the United Nations' institutional machinery for support, with this organization retaining a certain level of autonomy and independence. This regime will work only if it is based on internationally stable and reasonably equitable legal norms, in order to minimize the need for coercive interventions which are always expensive and unbalancing. Countries with greater or lesser capacity to interfere in this probable future World Directorate's deliberations will soon realize that their international interests can be safeguarded more effectively and less costly if they are made basically compatible with the international community's general interests. Thus, as Kant suggested, a reasonable and sanctionable legal world order would be achieved. What Kant's reasoning lacked was the development of an international system, which during his times was fragmented into many power centers, that would lead, through the concentration of the decision making power into the hands of a small number of nations, to the formal or informal creation of a World Directorate.

    In the international field, as well as in the national, the possibility of achieving a stable, reasonable and equitable order depends on an Hobbesian type of adjustment. The people delegate upon the ruler, or acknowledge, his right to order society in exchange for, and under the condition, that this be done in an institutional manner and that their fundamental interests are respected and safeguarded. At both, the national and the international level, governability requires a balance between the ruler's privilege to exercise power and the people's acceptance of his rules.In the long run, the prince's capacity to coerce is only effective if marginal. The essential thing is the acceptance of the norm.

    To conclude, we could say that to the extent that the current evolution of nations is leading them , albeit informally, towards social and liberal regimes in which competitiveness combines with the preservation of essential social interests, a multi polar world order will tend to lead, albeit moderately, towards social international neo-liberalism. The conditions that lead nations towards reasonable levels of equality of opportunity will increase, however, economic, political and cultural competitiveness will persist and increase, thus creating difference among societies, placing them at different levels of importance and world power.


    1. As opposed to conventional empires, the USA empire would preserve the formal independence of the countries subject to its hegemony, as well as their administrative autonomy, but it would impose on them the economic policies and the foreign policy most convenient to the metropolis.

    2. The Group of Seven is a partial and rudimentary example of what could become in the future, with a different membership, a World Directorate.