This monograph seeks to examine the motivations for the European Union’s (EU) policy towards the Common Market of the South (Mercosur), the EU’s most important relationship with another regional economic integration organisation. This monograph argues that the dominant explanations in the literature -- balancing the US, global aspirations, being an external federator, long-standing economic and cultural ties, economic interdependence, and the Europeanization of Spanish and Portuguese national foreign policies – fail to adequately explain the EU’s policy. In particular, these accounts tend to infer the EU’s motives from its activity. Drawing extensive primary documents, this monograph argues that the major developments in the relationship -- the 1992 Inter-institutional Agreement and the 1995 Europe Mercosur Inter-regional Framework Cooperation Agreement – were initiated by Mercosur and supported mainly by Spain. This means that rather than the EU pursuing a strategy, as implied by most of the existing literature, the EU was largely responsive.
The study of European Union relations with Mercosur
Arantza Gomez Arana
This monograph seeks to examine the motivations behind the European Union’s (EU) policy towards the Common Market of the South (Mercosur), the EU’s most important relationship with another regional economic integration organisation. In order to investigate the motivations (or lack thereof), this monograph will examine the contribution of the main policy and decision-makers, the European Commission and the Council of Ministers, as well as the different contributions within both institutions. By doing so, it will be possible to show the degree of “involvement”/”engagement” reflected in the EU’s policy towards Mercosur, which is the dependent variable in this study. The analysis offered here examines the development of EU policy towards Mercosur in relation to three key stages: The non-institutionalized relations (1986-1990), official relations (1991-1995), and the negotiations of an association agreement (1996-2007 and 2010-present). This degree of engagement will be measured using a scale of low, medium and high degree. The outcome of the measure is created by analysing two factors, the level of “ambition” and “commitment”.
This chapter establishes the analytical framework that will be used to examine EU- Mercosur relations. The chapter begins by offering a critical review of the existing literature. Until now, the existing literature on EU-Mercosur has been very descriptive but not very analytical. It has tended to cover very specific moments of the relations and as a consequence it has forgotten to look at the bigger picture. Most authors have chosen to explain EU-Mercosur relations by using more than one argument at the same time without choosing one as the most representative. Furthermore, some authors explicitly say that until the end of the negotiations of the Association Agreement there will not be a final answer. This is hardly a clear and strong debate on a policy.
The European Union (EU) is not a state and is not a traditional International Organization. It is common to characterize it as a hybrid system with a federal component. Since nothing comparable to this exists at this point, understanding the internal system of the EU is crucial. In addition to outlining the internal policy-making of the EU, it is also important to understand the internal system of the Mercosur, particularly given that the Mercosur has tried to replicate the institutional design of the EU. Since its creation in 1957 with the Treaty of Rome, the EU has changed dramatically in a variety of ways in a short period of time. The discussion will examine these changes in relation to the period between 1985 and 2007. In addition to analysing the changes in policy-making over this period of the time it is also important to note that the number of EU member states has quadruplicated since it was created in 1957. It could be argued that this has resulted in a decline in the amount of power held by each individual member state. In 1986 Spain and, to a lesser extent, Portugal brought a Mediterranean influence into EU politics. This was later balanced out by further enlargement in 1995 which saw Austria, Finland and Sweden joining the EU. However, the single largest enlargement in the history of the EU took place in 2004 when 10 Central and Eastern Europe countries became EU members. Prior to 2004, this issue was the main focus of the EU external relations since 1989 until it came into effect in 2004. The end of the Cold War and the breakup of the Soviet Union into several independent republics absorbed EU external relations to the point that it had an effect on other external relations, including external relations with Latin America. The enlargement of the EU in 2007 is not discussed in any detail here because it did not have an impact on the EU policy towards Mercosur.
This chapter covers the first stage of EU-Mercosur policy relations by focussing on the period of 1985 to 1990. At this stage, policy relations were not institutionalized. Policy relations began in 1985 for several reasons. Firstly, the European Union signed the Treaty of Accession of Spain and Portugal which meant the beginning in terms of a new direction in policy towards Latin America, including the Mercosur countries; this is a clear reflection of the creation of a “commitment” towards Latin America, although at a very low level due to the low “ambition” towards the region. Secondly, in 1985, Mercosur countries also started their own regional integration programme. This stage proved to be key in the development of EU-Mercosur relations because it established a new emphasis on EU policy towards Latin America by establishing channels for communication between the two regions, particularly through the development of the annual EU-Rio Group meetings; without this engagement, the EU and Mercosur would have not developed their relationship, and the fact that it came at this point helps to explain the events of the following stages. By the time Mercosur was officially launched in 1991, the EU was fully aware of the integration movement in South America thanks to these years of European Union-Latin America relations. In relation to the engagement of the European Union towards Mercosur, the conclusion comes from a low “ambition” and “commitment” on the European side. This stage of the policy shows the lowest engagement of the three stages. But this engagement is certainly superior to the pre-Iberian membership era.
This chapter covers a new stage in EU policy towards Mercosur and Latin America. This stage started with a new framework of policies within which agreements between the European Union and Latin American countries, including the Mercosur countries, were made. By explaining EU-Mercosur agreements within the general context of EU-LA relations it is possible to bring some clarity to the EU level of engagement with Mercosur in relative terms so it is neither over nor underestimated. In doing so it will show how EU-Mercosur relations were the most important ones within the EU-LA framework. As has been established before, the level of engagement will be explained by discussing two aspects of it, “ambition” and “commitment”. This chapter shows that there is a medium level of “ambition” and a high level of “commitment” which helps to explain the outcome of a medium level of engagement. In relation to this stage, in the literature it has been accepted that, in 1990, the EU’s means of dealing with Latin America changed (Aldecoa Luzarraga 1995; Bizzozero 1995; Laporte Galli 1996; Birochi 1999). Detailed explanations for this have not yet been offered. Some indicate that these changes were due to wider changes in the international arena. With the end of Cold War, the EU was given a chance to develop a global vision and a space in which to do it (Aldecoa Luzarraga 1995; Birochi 1999). The internal changes in the European Union, especially its increased integration, have also been mentioned in this regard (Aldecoa Luzarraga 1995).
This chapter aims to explain the phase in EU-Mercosur relations which negotiated the association agreement without reaching a successful ending. Both parties developed those negotiations under the European Mercosur Interregional Cooperation Agreement (EMIFCA). It was agreed that this agreement would be carried out in two phases. The first phase related to the preparation of the ground for future negotiations by comparing standards, statistical systems, trade procedures, whilst the second phase focussed on trade liberalization. The second phase of this agreement was also focussed on the actual negotiations. In the end, both parties were unable to reach an agreement and the negotiations were stopped in October 2004. This chapter will focus on the period up until the period where the EU became set on developing a political partnership with Brazil. In doing so, this decision marked the beginning of a new stage in history of EU policy towards Mercosur. By looking at how these two parts of the policy were developed, and how far both sides went in both their statements and actions it will be possible to discuss the level of engagement on the EU side towards Mercosur. It seems that there were actors within the EU willing to both increase and decrease the level of “ambition” and “commitment”. Also, Mercosur countries helped to overcome some of the obstacles and this should be considered in order not to attribute the whole outcome solely to EU behaviour. The EU developed the association agreement towards Mercosur at this stage because of the efforts of the Commissioner in charge of the policy until 1999.
From the moment the European Union and Mercosur stopped their negotiations there was not progress or a real intention to re-start the negotiations again until 2010. Officially the EU and Mercosur “continued” negotiating the Association Agreement but it is fair to say that after such a failure at the last minute in October 2004, both sides becoming cautious in their hopes for a successful agreement. Considering that the negotiations failed publicly it is understandable to expect some years of “healing” before considering a new attempt. One more time, the right momentum was necessary to facilitate the re-launching of the negotiations. The economic environment was completely different from 2004. At this moment Europe is the one recovering from a financial crisis and from a weak Eurozone, while in Latin America this international crisis did not have that much of an effect. However in 2004 Brazil and Argentina were recovering from the economic crisis of the late 1990s early 2000s. The negotiations between the EU and other Latin American regional groups or individual countries were being successful. At the same time a third major investor and trader became an important piece of the puzzle, China. To some extent this could be seen as a better scenario for a successful agreement between both regions. The facilitator of the re-launching of the negotiations was one more time the Spanish presidency of 2010. Since then, several meetings have taken place between the EU and Mercosur, the last one in mid-June in Brussels 2015.
“(…) Russia and China, as well as partners in Latin-America, deserve a clear European strategy. Africa has, unfortunately, been absent from the EU’s strategic agenda for years and needs to be reengaged. (…)The Union can be a global actor considering we possess the objectives, principles and instruments. Unfortunately the political will is often lacking and the question is whether the EU Member States will take action to change this.” (Miguel Angel Moratinos, Spanish Minister of Foreign Affairs and Cooperation, 20 January 2010). The views of Miguel Angel Moratinos during the Spanish Presidency recognize a series of gaps in the strategic behaviour, the existence of partiality in the strategic agenda, and a lack of will in the European Union external relations. These quote suggest that if this has the situation in 2010, then EU policies during the 1980s and 1990s towards a Latin-American region such as Mercosur were not the most structured nor did the EU develop these policies to their full EU potential. At the same time, the EU’s internal institutional and legal frameworks also changed as a result of different treaties and enlargements. These internal changes affected either positively or negatively EU relations with Latin America. On the one hand, the Iberian enlargement affected EU policy positively towards Latin America, whilst on the other hand, policy towards Central and Easter European countries which culminated in the 2004 enlargement was affected negatively on EU-Latin America relations.