MercoPress. South Atlantic News Agency

Mercosur: “Civil society must help integration”

Alvarez quit as Argentina's vice-president in October 2000 in what many consider the beginning of the end of the Radical-Frepaso alliance headed by then President Fernando de la Rúa, which collapsed amid deadly riots in December 2001 as the country fell into its worst-ever economic crisis.

After a prolonged self-imposed silence, Alvarez was appointed to the Mercosur in December, 2005. He said that he was not planning a comeback into political competition or electoral posts.

Is integration possible in a subcontinent where, unlike what happens in Europe, there is only one prevailing power?

The European experience cannot be taken into account for South America because Europe developed with the strong sponsorship of the United States after World War II, when the US needed a strong capitalist continent to confront with the authoritarian systems of the Soviet Union and Eastern Europe. The Marshall Plan brought about the best years of capitalism and Europe was able to match a high-quality democracy with growth and the best social standards in the world. But it had the strength of a country like Germany that, despite having been defeated in the war, maintained its economic potential. Germany worked as a locomotive for European growth. Europe then was able to implement policies under which more developed countries helped finance the less developed ones ? like Spain, Ireland and Greece ? who were able to widen their markets, improve development. Integration was a result of both uniting capacities and reducing asymmetries. Here, in South America, we have the problem that poor countries are highly asymmetric and that the major countries suffer severe social and productive problems and hence are not able to finance the less developed nations. That is why South American integration is much more problematic than that of Europe.

Mercosur is in deep crisis, rocked by disputes...

Asymmetries conspire a lot. A lot of integration vocation is necessary in a world that is organizing itself into blocs. Mercosur and South America must do so too. But it is hard. Not for nothing, after so many years we haven't achieved integration yet. Brazil and Argentina have to help close the asymmetries gap with Paraguay and Uruguay. Also, we are making enormous efforts to separate the conflict (between Argentina and Uruguay) about the pulp mills from the integration issues. But it is complex. We have to make a great efforts so that bilateral conflicts don't bring the integration project into question. Argentina and Uruguay have two progressive governments with a lot in common, with similar views on many issues. Structural projects must co-exist with their own different national nuances. With Venezuela having 10 percent of world oil and Bolivia having four percent of world gas, their integration in the region would add to sovereignty in the energy field. Furthermore, civil society must also become more involved in integration issues. Integration is a strategic project and many times government officials are concerned with day-to-day needs and lose the scope of the more strategic concept of integration and that is why civil organizations must be more involved in the debate. This also means extending integration beyond trade and also looking at the social, industrial and production fields. Sometimes we are dominated by an excessively "trade approach," such as the one that prevailed in the 1990s and we lose perspective on human rights, culture, education and political issues that work as a cementing element.

Has the Free Trade Area of the Americas been interred during a summit in Argentina last November, as Venezuelan President Hugo Chávez has proclaimed?

Yes, as a project, it has, because the FTAA subjects countries with a certain vocation to developing their industries and services with more autonomy, to a full dependency on US policies. The FTAA must be gauged in terms of interest, not of ideology. In general, the FTAA is highly inconvenient for regional countries. It may suit some non-industrial countries that have deregulated services and produce just one or two products. It may suit some Central American countries that have small productive sectors and it may help them attract investments or improve the insertion of their products into the US market. But for those having more diversified economic structures and that aspire to a more competitive insertion in the international markets, the FTAA is very bad.

How are the negotiations between the Mercosur and the European Union?

They are delayed because they will be addressed at the World Trade Organization. Europe is proposing a scheme that does not consider the asymmetries between our countries and theirs. Spain and Italy are the more sensitive countries regarding Latin America and propose a strategic accord that, however, does not translate into beneficial trade agreements because they are not ready to lower subsidies for commodities.

In view of those difficulties with the FTAA and the EU, is China the alternative?

There is some sort of complementary ties that is emerging but we don't know how long it will last. There is a trade axis that has changed the world's geography to our benefit, to the benefit of countries that produce food. This could be a long process because China is increasing consumption of proteins and in that regard Mercosur countries and other Latin American countries are the best producers. This convergence can be used to diversify the productive base of our countries, add value and have a more competitive insertion in the world. To some extent, it can be compared to the complementary relations between Argentina and Britain in the 19th century, when we produced what they needed, only that model did not mean a more integrated development for Argentina. Let's hope that this important momentum generates in the region a serious, competitive capitalism, able to integrate domestic markets and to foster a better distributive justice in the area.

Isn't Chile's booming economy evidence that there are alternatives to integration?

Sometimes we over-simplify when we think that any country can replicate the Chilean model. It started in the mid 1970s-and the democratic governments implemented many of the economic policies traced by the dictatorship. Geography ? the Andes mountains, no border with Brazil or Uruguay ? contributes to isolating Chile from the Atlantic basin and opens it to the Pacific rim. I don't say what (former Argentine president Eduardo) Duhalde would, that we are fated to integration, but geography plays a very important role. Then, Chile has a productive structure based on five or six products ? copper, salmon, fruits ? which is complementary to the central economies and that has allowed it to successfully tap the international markets.

Is that sustainable in the long run?

It is sustainable, with a problem. That model is not enough to improve the distribution of income. It has been the most successful in Latin America (a region that is the capital of world inequality) to curb poverty but is still insufficient to improve distribution. (Former Chilean president Ricardo) Lagos told me that over 16 years they had won the cultural battle for a better income distribution but that they had not been able to change the distribution pattern of the economy. In terms of income distribution Chile may be the ninth or 10th unfairest country in the world.

What is the legal status of Venezuela regarding Mercosur?

It has a special status. It is an associate member that is in the process of becoming a full member. Venezuela has already denounced the Andean Pact and talks are already being held on how it adjusts its tariff structure to that of Mercosur. This will surely take some time. It is not just a few months' process. Buenos Aires Herald