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Who Invented Mercosur?Gian Luca Gardini

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Diplomacy and Statecraft , 18: 805830, 2007Copyright Taylor & Francis Group, LLCISSN 0959-2296 print/1557-301X onlineDOI: 10.1080/09592290701807267

FDPS0959-22961557-301XDiplomacy and Statecraft, Vol. 18, No. 4, November 2007: pp. 138Diplomacy and Statecraft

WHO INVENTED MERCOSUR?

Who Invented Mercosur?Gian LucaGardini 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, acase 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 internationalinsertion strategies. The diplomatic negotiations leading to the 1991Treaty of Asuncin constitutive of Mercosur are dissected. The relation-ship between Mercosur and the so-called ACE-14 agreement concluded by

Argentina and Brazil in the framework of the Latin American Integra-tion Association is also illustrated, as are the negotiations to incorporatenew members to the incipient common market. The final section suggeststhat, while there was an overall continuity in the integration project inthe Southern Cone between 1985 and 1991, nonetheless Mercosur was adeparture from previous objectives, timing and methodology. For good orill, Mercosur was the creation of the neo-liberal governments of Presi-dents Menem of Argentina and Collor of Brazil and the result of broaderchanges 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 yearsfollowing its constitution in 1991. Also, a large part of these works haveadopted a political economy perspective and focus. 1

The diplomatic history of Mercosur and its origins remains a relativelyunder-explored dimension of the integration process in the South AmericanCone. 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 con-

cise articles concerned more with general trends and themes than with diplo-matic history and analytical assessment of facts and circumstances; the fewbooks on the topic mainly come from Argentina and Brazil and are not trans-lated into English. 3 This article is intended as a contribution to fill this gap.

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806 Gian Luca Gardini

The historical coverage of this piece is extremely focused and deliberatelyself-confined, comprising the years from 1989 to 1991. The choice of such a short time frame is based on one key reason: substantial negotia-

tions for the creation of a common market in the Southern Cone were notlaunched until 1990 and the treaty establishing Mercosur was concludedin 1991. Argentina and Brazil had initiated their diplomatic rapprochementback in 1979 under military rule in both countries. Upon return to democracyin the mid-1980s, Argentina and Brazil announced their commitment tointegration in 1985 and formalised it in 1986 with the signature of thebilateral Programme of Economic Cooperation and Integration (PICE),characterised by a gradual, selective, and negotiated reduction of barriersto 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 thisstage the integrationist exercise did not go beyond a bilateral freetrade area.

A clear boundary has to be set between Mercosur as such and the nego-tiations leading to its very foundation on the one hand, and a variety of precedents and preparatory events on the other. The 1988 ArgentineBrazilian Treaty of Integration, Cooperation and Development, for thefirst time explicitly set the achievement of a common market as the final

goal of the bilateral integration project. However this objective was at thattime a mere aspiration. This is evident from the wording of the treaty aswell as from the testimony of those who personally contributed to itsdrafting and conclusion. 4

The first democratic administrations of President Alfonsn in Argentina(19831989) and President Sarney in Brazil (19851990) did not achievea common market, they did not have either a design for its institutionalstructure and tasks or a concrete plan for its implementation. 5 The legacyof the first democratic governments to their successors was the idea and

will to pursue a common market, so while the issue was certainly alreadyon the agenda in 1988, its elaboration, transposition into policy and legalcommitment, and at last its implementation are to be sought at a laterstage. No other significant agreement was concluded between Argentinaand Brazil under the Alfonsn and Sarney governments. Consequently, itseems to make sense to start this investigation about who actuallyinvented Mercosur with the period of impasse that followed the 1988treaty 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 insertionstrategies of Argentina and Brazil are examined. Then the diplomatichistory of ArgentineBrazilian relations leading to the creation of aninitially bilateral common market is explored. The negotiations for

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Who Invented Mercosur? 807

enlargement to neighbouring countries and the finalisation of the AsuncinTreaty follow. The relation between Mercosur and the so called ACE-14agreement consolidating the several evolutions of the ArgentineBrazilian

commitment will be spelled out. The concluding section argues that it isessentially 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 thestudy of international relations. In historical methodology, empirical andtheoretical analyses are synergic, but historical verification is the priorbasis for any speculation and theorising. This research started from historicalobservation, and then tried to make sense of it, and not from a predeter-

mined theory or hypothesis to be tested on a case study. In a historicalapproach, theory infrequently assumes the form of general propositionsabout state behaviour or international politics but is more humble andconfines 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 understandinternational relations but cannot be overlooked for at least four reasons. 6

First, certain political situations are not merely illustrations of generalpatterns but genuinely singular events. Second, any international situation

is located in time and to understand it the scholar must place it within asequence of events. Third, the quality, techniques and canons of judgementof diplomatic history as a discipline are often less obscure and controversialthan those of theoretical studies. Fourth, history itself is the primary materialfor the social sciences, which have themselves a history and emergewithin a defined historical context.

Following this approach, the research method for this article largelyrelies upon fresh primary material, both written and oral. Intensive researchwas conducted in archives in Brazil and Argentina. However, only limited

written primary sources on the early steps towards Mercosur exist or aredisclosed to the public. In such cases, Oral History is a very useful comple-ment to written material. Over sixty interviews were conducted with keyArgentine and Brazilian politicians, diplomats, entrepreneurs, and academics.All the interviews have been carefully cross-checked with one another andtested against written diplomatic documents, where available, journalisticreports of the time, and secondary sources. Consistency, and thereforereliability are very significant. Oral History has often been used to discoverthe 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 usedas an instrument to investigate behind the curtains of a major historical andpolitical 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 firstdebated in the mid-1980s, the macroeconomic frame, at the internationaland the national level, was not particularly favourable to such an under-taking. Strong political will and determination went some way toovercome objective difficulties. However, integration in the SouthernCone was actually launched, and proliferated from 1986 onwards, under aconjunction of improved and relatively more stable political andeconomic 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 thearea, and economic support, including investment flows, followedpolitical sympathy. Furthermore, apart from the European EconomicCommunity (EEC), at that time the world did not offer many examples of structured regional integration, and the ArgentineBrazilian scheme, withits enlarged market, attracted potential investors. Finally, at the domesticlevel, when integration was implemented, in 1986, both countries wereenjoying the first positive effects of their respective stabilization plans,

which reduced inflation and facilitated economic recovery in theshort 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 sohad disillusionment. Neither the Alfonsn nor the Sarney administrationcould count any more on the sort of unconditional support that derivedfrom democratic legitimacy alone. Inability to tackle economic and socialproblems debilitated the Presidents and their coalitions. Internationally,

other regional undertakings overshadowed the ArgentineBrazilian enter-prise. The EEC was marching determinedly towards the consolidation of the internal market and Canada and the United States had concluded theirbilateral free trade agreement in 1987.

Most importantly, the economic record remained poor. The worseningeconomic situation directly affected integration. In a climate of economicexpansion, entrepreneurs are more keen to invest, compete, and openmarkets; on the contrary, in a climate of economic depression, protection-ist attitudes prevail. Last but not least, the PICE itself was showing clear

signals of tiredness.8

Its very approach was questioned and some of itscreators left to take up different positions. The sectoral approach, with itscorollaries of gradualness and flexibility, had favoured the initial smoothimplementation, but was now obstructing further progress.

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Political concern for the future of bilateral integration was amplified bythe forthcoming presidential elections of 1989 in both countries. Thegeneral political, economic and social climate was unfavourable to the

incumbent administrations. Little was known about the oppositionsintentions for integration. In Argentina, the Peronist partys rhetoric onLatin American integration was not a sufficient guarantee of commitmentat the practical level. In Brazil, competition for nominations had not pro-duced a strong candidate yet. At the official level, there was the fear thatthe PICE would be left to one side as part of a rejection of the previousadministrations policies.

By the beginning of the 1990s, the prominent features of the interna-tional system dramatically changed and so did the prospects for and the

features of the integration project in the Southern Cone. Major politicalchanges had important repercussions in the economic realm too. The fallof the Berlin wall and the break-up of Soviet power terminated the longpeace 9 bipolarity had assured after World War Two. The United States,and its political and economic system, appeared to emerge as the over-whelmingly dominant model throughout the world. The internationalagenda concentrated heavily on the spread of democracy and marketeconomics.

The consequences for Latin America were of unexpected magnitude.

The attention of the international community shifted away from thecontinent, which risked international marginalization. The end of the ColdWar 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, recovereddemocratic status. However, this wave of democratisation did not rescueSouth 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 counterpro-

ductive. The new international agenda prioritised those countries settingup democracy in other parts of the world and neglected those that hadalready done so yet still needed support for consolidation.

On the economic side, things were no better. Latin American effortsto stabilise and gradually open their economies were failing to attractinternational investments, which were instead heavily diverted tocountries where market economy had to be built from scratch. Thespectre of a division of world trade in cohesive regional blocs and thevirtual paralysis of GATT by 1990 gave reasons for further concern to

Latin American leaders.10

Globalisation, which had already beensensed 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 andBrazils 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 Americanmodel of open market economy was the dominant paradigm, solutionstended to take this direction. In 1990, during a conference organised bythe US Institute for International Economics, the North American economistJohn Williamson illustrated a set of economic principles defining thelowest common denominator of policy advice being addressed bythe Washington-based institutions to Latin American countries. Hence thephrase Washington consensus. The original formulation included fiscaldiscipline, redirection of public expenditure priorities, tax reform, interest

rate liberalisation, competitive exchange rates, trade liberalisation, elimi-nation of restrictions to foreign direct investment, privatisation, deregulationof barriers to entry and exit, and secure property rights. Nothing was saidabout the right mix of these measures or their timing and intensity, andlater Williamson claimed his study had been distorted and misused. 11

The implementation of the Washington consensus and its model of anopen economy, both at the international and the national levels, entailed arethinking of regional grouping models too. In a context of increasinglyfree circulation of goods, services and capital, development and wealth

had to be pursued through competitive insertion in the international tradesystem and not through artificial protection from it. Both central andperipheral countries saw a growing convenience in the formation of regional blocs as instruments to face global challenges. Weaker countriesespecially saw the regional space as a compromise between closedeconomy and complete unilateral opening.

The new international logics informed and transformed, though at adifferent pace, the Argentine and Brazilian economic models. The newlyelected 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 inter-national order, neither came to power as a result of it nor were theyempowered with a clear electoral mandate to drive their respectivecountries 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, ithad appeared clear that Menem was the favourite candidate to succeedAlfonsn. 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 hyperin-flation. Yet globalisation, economic opening and neo-liberal policies wereneither on the electoral agenda nor in Menems electoral platform. 13

When Menem took office, his image was still that of an emblematicleader of Peronist populism. 14 During the electoral campaign, he hadpromised to pursue a revolucin productiva ,15 to raise the minimumsalary and to stick to the traditional foreign policy of justicialismo ,characterised by autonomy and commitment to the non-aligned move-ment. Yet as soon as he took office, Menem appointed Bunge y Borncorporation managers to run the economy, chose consultants from entre-preneurial associations for public posts and concluded alliances with theliberal right.

What immediately became clear was the strong emphasis the Menemadministration put on economic issues. 16 When Alfonsn took office, theinternational context had been characterised by the recrudescence of theCold War, the debt crisis, the Central American conflict, and the preva-lence of authoritarian governments in South America, while the internalagenda had been dominated by the quest for public liberties and humanrights as well as by economic issues. The Alfonsn administration hadread all these international and national factors as a threat to politicalstability and made the protection and consolidation of democracy the

central objective of its action, including foreign policy. When Menemtook over, the Cold War was coming to an end with a clear winner, thecrisis in Central America was largely solved, and external debt was beingrescheduled in multilateral forums; internally, economic concerns monop-olised debate. The most serious threat to democracy moved from themilitary to the economic realm, and, in such a different context, theMenem administration defined Argentine national interest, and its foreignpolicy 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 Argentinepolitics, a community of intellectuals, academics, economists, diplomatsand politicians gathered around the menemista circle. They started a criticalanalysis of Argentine history in order to make sense of the countryspresent situation and design policy guidelines to return Argentina to a pri-mary status at the world level. The intention of translating theorising intopractice led to the circle being characterised as an epistemic commu-

nity.18

The reasoning was that Argentina was a geographically peripheralcountry, strategically irrelevant to the centre. Also, the country had expe-rienced its golden age in a privileged relationship with the dominantpower 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 theearly 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 toMenems foreign policy throughout the 1990s.

Despite this pursuit of privileged political relations, economic transactionswith the US never took off. 20 The reason for these poor results has to befound in the fact that their respective agricultural and food productionwere scarcely complementary and even competitors. 21 Argentina turnedto Brazil to find an outlet for its production. 22 As had already happened inthe mid-1980s, Argentina, internationally disillusioned, had to seek for a

further rapprochement with its neighbour to provide sustainability for itsprogramme of economic development. Overall, the Menem administrationwas a real watershed for Argentinas foreign and economic policy. Inte-gration 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 inMarch 1990. Unlike Carlos Menem, he was an outsider, and his victorywas largely unanticipated. Like his Argentine contemporary, he had notexplicitly declared what his economic programme would be during theelectoral campaign. 23 However, his foreign policy platform had generatedthree types of expectations: modernisation of the international agenda of the country; moderation on the conflictive issues with the US; andreduction 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 internationalcontext, and the relative position of Brazil in the world, resulted in thereformulation of the available options of external conduct. The increasedcost of autonomy forced Brazil to put aside traditional foreign policypatterns and to adapt itself to new internationally prevailing imperatives,such as nuclear non-proliferation, opening to import of goods andservices, environment, active participation in multilateral regimes, andavoidance of conflictive relations with the hegemon and its agenda. As inthe case of Argentina, there was a strong coincidence between the internal

and external agendas. Brazilian foreign policy pursued economic openingand favourable access to credit, markets and technology to supportinternal reform. The departure from identification with the developingworld has to be understood in terms of a reinforcement of bargaining

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power vis--vis the industrialised world. Under Collor, foreign policyagenda and objectives tended to coincide. 26

Important elements of both change and continuity characterised

Collors foreign policy. On the one hand, traditional positions, such asautonomy on international questions, nuclear development, a firm standtowards the United States, and the protection of national economy allbecame more elastic; also, the nature of Brazilian international presenceshifted from the essentially political to the essentially economic, as didthe definition of national interest. 27 On the other hand, Brazil neveraligned itself automatically, uncritically, or broadly with the UnitedStates. Although its national interest was increasingly perceived in termsof economic modernisation, national development remained the rationale

behind choices of international relevance. Within the constraints of thenew international framework, Brazil preserved a developmentalistsensitivity and a broadly NorthSouth vision of international relations.

The results of Collors administration were not positive. His economicpolicy was a failure: the privatisation programme was not implemented,the economic opening was more rhetorical than effective, the economyentered recession in 1991 and inflation reached 440% in 1991 and 1000%in 1992. 28 Collors foreign policy, overall, was not successful either. Heput strong emphasis on accession to the first world, which was reflected in

his official visits abroad. His intention was to promote his governmentalproject and style among top politicians and businessmen in developedcountries. His presidential diplomacy tended to identify his personal com-mitments and views with those of his country, so that when he wasimpeached by Congress in 1992 and lost respect and credibility, so toodid the major initiatives he had proposed. 29

Perhaps, the major achievement of the Collor administration was inte-gration in the Southern Cone. This, too, was redesigned according to thenew 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 theinternational arena, and its progress was parallel to the adaptation of national strategies to the international agenda. When Menem took officein mid-1989, his counterpart in Brazil was still President Sarney. Modality

of international interconnectedness and the balance of world power wereabout to change but had not quite done so yet. Integration proceeded onestablished lines. When the international modifications displayed theireffects, 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 Riojahad reached Brazil long before he became President. Also, it was not clearwhat his attitude towards Brazil was. Menem had placed strong rhetoricalemphasis on Latin American integration and shown firm personalcommitment to it. This posture was rooted in Peronist thought and tradition.Yet in Brasilia perplexity remained about both his genuine friendliness toBrazil 30 and his actual integrationist will. 31

To reassure Brazil about his intentions if elected President, Menementrusted Jos Octavio Bordon, Secretary of International Relations of the

justicialista party, to hand to Sarney a personal letter. Bordon travelled toBrasilia in the summer of 1988. Menem was extremely confident that theopinions he expressed in the letter would be soon attributable to the nextArgentine Head of government. 32 Menem reiterated the true andprofound vocation for Latin American integration of the justicialistathinking, and he stressed that his party has always thought that ArgentineBrazilian integration constitutes a fundamental pillar for any attempt atcontinental integration. 33

From the letter, it is also possible to detect how, in this phase, traditionally

developmentalist elements intermingled with new global concerns inMenems thought about integration. The governor made reference to threetypes of need: not to act alone in the face of the big units definingtodays international framework; to preserve our freedom of action infront of the economic concentrations running world finance and trade;and to pool our scarce resources to face technological challenge[A]nd toattain a reasonable degree of welfare. 34 Menem concluded his messagewith the pledge that, if elected to government, he would continue tosupport bilateral integration.

In his reply, Sarney expressed great satisfaction for the reassuringwords by Menem. 35 Yet Brazilian caution did not disappear. Also duringthe transition, Alberto Kohan, one of Menems closer aides, and laterSecretary-General to the Presidency, frequently travelled to Brazil to pro-mote the issue of integration. 36 Indeed Brazilian prudence was fed by theunfolding of the menemista programme of economic and foreign policy,from which it appeared that the continuity of integration depended on itscompatibility with the internal reform plan. 37 Moreover, DomingoCavallo, 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 reassuringsteps, which culminated in Menems visit to Brasilia, his first officialworking mission abroad. Foreign Minister Cavallo stated that his earlier

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criticism had concerned the methodology of integration, and that he hadnot questioned its political value. Furthermore, he added that, on the eveof Presidential elections in Brazil, it was important to give a strong signal

of continuity and support, and Argentina had decided to stick to the existingmethodology 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 Menemsplans of a fast opening of the economy. His administration, and especiallyForeign Minister Cavallo, sponsored a new and bolder approach tointegration, but political pragmatism suggested they should put aside theplan at least until the presidential elections in Brazil. The Sarney government,

instead, wanted to stick to the methodology it had helped to create, whichstill fitted its developmentalist approach to national and internationaleconomics. Although the Brazilian incumbent administration had alreadylost much credit and support internally, Sarney still appeared as the guar-antor of the process, and Menem as the newcomer; therefore negotiationscontinued according to the old pattern.

At this point, bilateral integration was an established state policy inboth countries, and the new international circumstances argued for itsreinforcement rather than its debilitation. The visit of President Menem to

Brasilia, in August 1989, therefore was far from being confrontational; onthe contrary, it was characterised by cordiality and a collaborativeattitude.

During the three-day summit, continuity with past practice wasevident, not only in the sectoral approach. President Sanguinetti of Uruguay, as usual, was invited for joint discussion, and the three Presi-dents released a statement in which they reaffirmed their commitment tointegration. Another significant trait of continuity was the referencePresident Menem made to the common will to strengthen democracy and

promote the growth of Latin American peoples.39

Concern for the Argentinetrade deficit, and Brazilian willingness to cooperate over this was anestablished pattern too.

Perhaps, the most innovative element of the meeting was the charismaticpresence of President Menem himself. He took the initiative to proposethe adhesion of other countries to the project in order to create a bloc onthe model of the European Union. This proposal could hardly be considereda novelty, but certainly highlighted Menems resolve in pushing for hisown agenda. Also, Menem tried not only to reassure the Brazilians about

his commitment to integration, but acted as the new guarantor of theprocess. When meeting the candidates for the Brazilian presidency, heinsisted on the issue of integration and the candidates committed them-selves to supporting the undertaking if elected.

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A reversal of positions was taking place. By winter 1989, Argentinaappeared as the major supporter of the modernisation and strengtheningof the process. Cavallo came out in favour of a more vigorous, extensive

and effective integrationist project.40

The incumbent Brazilian adminis-tration bore the burden of impasse, and the incoming administrationwould have to prove itself able to cope with the renewed momentum.

THE MENEMCOLLOR ENTENTE

Similarities between the programmes of Menem and Collor were particu-larly strong, especially regarding the intention to open the economy andreduce import tariffs. Argentina had started its process of economic lib-

eralisation in 1988, under Alfonsn,41

but it was not until 1990 that theMenem administration dramatically lowered customs duties. At the sametime, Collor announced a 4-year plan for reducing customs tariffs. Inboth countries, the reduction programme envisaged a general approach,which affected the entire customs regime. This change robbed the inte-grationist principles of selectiveness and gradualness of much of theirmeaning, as many products, regardless of their geographical origin,would soon be able to enter the territories of Argentina and Brazil with avery low duty. The integration commitment had to be upgraded and

adapted to this new reality if it was to retain a minimum of political andeconomic meaning.The 1988 Treaty of Integration, Cooperation and Development had

provided for the creation of a free trade area within ten years. But by 1990this objective was already obsolete. In a free trade area without a commonexternal tariff but with low levels of import tariff, third country productscould compensate for disadvantages derived from customs duties by relativeadvantages in quality and price. Moreover, with uncoordinated tariff reductions and a free trade agreement, only a very complex and sophisti-

cated system of rules of origin could avoid unfair competition betweenports 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 andCollor administrations derived directly from the strong emphasis theygave to the commercial aspects of economic policy. Even before deliber-ating on the future form or legal evolution of the free trade area, whichwas to be achieved by 1998, it was decided to proceed with a bilateral

commercial liberalisation programme through tariff reduction. This exercisewould be universal, in line with the national programmes, and automatic,that is with a scheduled timetable for application not subject to sectoralnegotiations.

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It is now important to investigate how and when this thinking was putinto practice, and who took the main relevant decisions. Negotiationsbetween 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 thecommon 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 IntegrationProcess, in which the two administrations announced the creation of aCommittee of Implementation of the 1988 Treaty of Integration Cooperationand Development. The Joint Declaration emphatically defined this step as

historical for relations between the two countries. Probably it was not, butit certainly gave a strong signal about the intention to re-launch theintegration project.

In June 1990, Francisco Rezek, Brazilian Foreign Minister, travelled toBuenos Aires. Conversations with Domingo Cavallo focused on the ideaof launching the common market before the ten-year period that had beenenvisaged in 1988 for the creation of the bilateral free trade area. 42 Also,the two ministers analysed prospects for the extension of integration toother countries. A certain reserve at diplomatic level about this meeting

spread a general impression that something big was under preparation forthe MenemCollor summit scheduled for the following month. An addi-tional clue in this direction was given four days after this meeting, whenCavallo met Uruguayan Chancellor Gross Espiel, and diplomatic sourcesreferred to talks to include Uruguay, Paraguay and Bolivia in the ArgentineBrazilian undertaking. 43

The presidential meeting between Menem and Collor took place inBuenos Aires on 5 and 6 July 1990. This was a milestone in the evolutionof integration in the Southern Cone. Outstanding commitments detailed in

the original sectoral agreements were decidedly fostered: in the foodsector, the number of products included in the common lists was doubledand 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 werefinally activated. The list of common items to be used in the constructionof the nuclear plants of Atucha II in Argentina and Angra II in Brazil wasapproved. A social security convention on pension schemes and contribu-tions was signed. The statute of bi-national enterprises, granting national

treatment to companies with 80% or more of their capital in Argentineand 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 tointegration. In its preamble, the acceleration of integration is indicated tobe the adequate response to international changes, such as the consoli-

dation of the big economic spaces, the globalisation of the economicscenario, and the importance of an adequate international insertion of the two countries. 44 The new setting of the integrationist project wasgiven the form of a common market, to be completed by the end of December 1994. To this purpose, the two governments committed them-selves to undertake all the necessary measures, and in particular, the coor-dination of their macroeconomic policies, the general, linear, andautomatic 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 governmentsfor 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, tobe regulated by a calendar of pre-set and progressive reductions, and toproceed without further negotiation. This formula was perfectly compatiblewith the timing of internal liberalisation, especially with the Brazilianschedule, which was to be completed by the time of entry into force of thecommon market. Additionally, despite the short time available, the fact

that the deadline for the formation of the common market fell within theterm in office of both administrations reinforced the credibility of thepolitical commitment. 45 However, the transitional period was so short thatit raised the concern of many entrepreneurial sectors, also of those who in1988 had expressed approval of the project to create a free trade area andprogressive moves towards a common market. 46 To check the negativeeffects on national industry of the drastic change, a system of exceptionswas made available for highly sensitive or dynamic sectors.

THE ENLARGEMENT PROCESS ANDTHE CREATION OF MERCOSUR

Negotiations for enlarging the common market immediately started. Theonly formal condition was the membership of the Latin American IntegrationAssociation (LAIA). However, given the main political aim that hadinformed the original bilateral scheme, that is to say preservation of democracy, there was a second stringent condition: that new members bedemocratic states. This was not a formal rule; according to Secretary

Lavagna, nobody at the time thought it was important to make it explicitsince it was a de facto condition. 47 The situation was clearly illustrated bythe cases of Uruguay and Paraguay, the economies of which were highlydependent on the big neighbours. From 1985, democratised Uruguay was

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regularly invited to ArgentineBrazilian summits and later associated tosome of the bilateral agreements; on the contrary, authoritarian Paraguaywas 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; onthe other hand, the new international system, and its growing division intoblocs, urged a prompt enlargement of the bilateral agreements into alarger regional association. Despite growing rumours and rising expecta-tions about the expansion of integration in the summer of 1989, 48 it wasonly with the meeting CavalloRezek of June 1990, and the subsequentsignature of the Buenos Aires Act that Argentina and Brazil started avigorous diplomatic campaign to recruit new members. The two chancel-

leries meant to expand the common market first towards Chile andUruguay, and later towards Paraguay and Bolivia. 49

Chile was the first priority, as announced by Minister Cavallo soonafter the Buenos Aires summit. 50 The association of Chile with the enter-prise had three considerable advantages for Argentina and Brazil: accessto the Pacific, added value in reputation for solid economic management,and political representation of the whole Southern Cone. However, Chilewas not inclined to enter into any commitment without a net benefit forthe country. Santiago was fearful of the chronic macroeconomic instability

of the other associates, and additionally saw its lower level of customstariffs as an obstacle to joining a customs union. Both Minister Cavalloand President Menem travelled to Chile in August, but the integrationistenthusiasm showed by President Aylwin was more than counterbalancedby the scepticism of the powerful Chilean economic technocrats. AfterMenems visit, it remained clear that Chilean hesitation was hard toovercome.

Uruguay had participated in the ArgentineBrazilian integrationprocess as an observer since the very beginning. In 1988, it decided to be

formally associated to some of the agreements forming the PICE, but thesame year declined the opportunity to accede to the Integration, Cooperationand Development Treaty. However, its economy was largely linked tothat of its big neighbours. In March 1990, President Alberto Lacalle took office, and his economic orientations had close similarities to theprogrammes of Menem and Collor. In June 1990, soon after their meetingin Buenos Aires, Ministers Cavallo and Rezek undertook working meetingswith the Uruguayan Chancellor Gross Espiel, and the main issue report-edly was the incorporation of Montevideo to the ArgentineBrazilian

integration.51

After the signature of the Buenos Aires Act, Uruguayvoiced its will to join the common market and asked for the elimination of the 1988 Treaty clause impeding the accession of new members until1993. 52

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With the return to democracy, and the election of General AndrsRodriguez to the Presidency, great expectations rose in Paraguay aboutthe countrys participation in the Southern Cone integration. In summer

1989, an external consultant, hired by LAIA at the request of the Para-guayan government, delivered a report on the positive and negativeaspects of a prospective Paraguayan accession to the ArgentineBrazilianscheme. The report recommended the adoption of a different treatmentapproach, based on the size and the different degree of development of the country. 53 However, Argentina and Brazil, reversing a long acceptedLAIA tradition, did not recognise the different treatment principle andstressed that, if the common market had to be enlarged, this would bedone among equals, sharing gains and burdens of the enterprise. 54

Towards the end of August 1990, Paraguay accepted this condition, as35% of its global foreign trade was with Argentina and Brazil. 55 The priceof exclusion was far higher than that of accession. Eventually, Paraguayended up gaining also a long list of concessions. This happened because,with the logic of a common market, Paraguay played a strategic role forboth Brazil and Argentina. For Brazil, Paraguay is a reservoir of cheaplabour indispensable to the economies of the Southern states. For Argentina,in case of economic recovery, Paraguay would be the main electricenergy supplier.

The application of Bolivia could not be accepted because it was amember of the Andean Pact and therefore predisposed towards anothercommon market. 56 Besides the existence of an undemocratic regime,what Minister Rezek defined double allegiance 57 was another conditionof ineligibility to membership of the incipient common market.

At the end of August 1990, Argentina and Brazil invited the governmentsof Uruguay and Paraguay to participate in the project of the commonmarket envisaged in the Buenos Aires Act. On October 1 and 2 the dele-gations of the four countries met in Brasilia to start negotiations for a

quadripartite integration treaty. The text discussed on the occasion wasaccepted by the parties in principle, 58 as consensus was reached aboutobjectives and general principles of the treaty, but the provisions regardingthe institutional setting and the transitional phase remained pending. TheParaguayan delegation proposed Asuncin as the venue for the formalsignature of the common market treaty.

At this stage, early October 1990, parallel negotiations were beingconducted 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 theconcessions Argentina and Brazil had made to each other since 1962 inthe 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, theAct 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 fromthe general rule of generalised tariff concessions. This provision hadmade ArgentineBrazilian early integration possible. The PICE agree-ments involving tariff concessions had been notified to LAIA in the formof economic complementation acts. The ACE-14 incorporated all theprevious economic complementation acts negotiated between Brazil andArgentina. Also, the ACE-14 gave implementation to most of the principlesformulated in the 1990 Buenos Aires Act. The latter was a political com-mitment that did not contain tariff concessions, which were instead estab-

lished in the ACE-14 according to a general, linear and automatic schemeof import duties reductions.Quadrilateral negotiations continued. A sensitive point concerned the

degree of institutionalisation of the future common market. Argentina andBrazil wanted to retain a certain degree of control over the process andopposed the creation of supra-national organs. Flix Pea, ArgentineUndersecretary of Economic Integration since January 1991, recalled thatUruguay and Paraguay were conscious of the fact that Argentina andBrazil were the main actors, in terms of size and economic volumes, but

debate over the text of the treaty was genuinely quadripartite.59

Theabsence of special tensions or particularly unpleasant moments during thefinal phase of negotiations was also due to the fact the real negotiationhad been that of the ACE-14. 60 Once provisions for the bilateral commonmarket were defined, the quadrilateral agreement largely followed thesame scheme.

The designation Common Market of the South, proposed by thecoordinator 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 acommon market, and it allowed prospective enlargements to other LAIAcountries. 61 The acronym Mercosur was reportedly coined by the ArgentineUndersecretary of Foreign Trade Ral Ochoa. 62

On 18 February 1991, the last round of technical negotiations toprepare 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 Ministersof Argentina, Brazil, Uruguay and Paraguay signed the Treaty of Asuncin,

formally establishing Mercosur. The treaty incorporated in its preambleall the principles inspiring the Buenos Aires Act of 1990, and confirmedthe aspiration to Latin American integration. Its three pillars were: a) thefree 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 commontrade policy towards third countries as well as a common position in inter-

national economic forums; and c) the coordination of macroeconomicpolicies.

CHANGE OR CONTINUITY?

Presidents Menem and Collor brought elements of novelty into theforeign policy of their countries and the process of integration. In the fieldof integration, however, it is possible to debate to what extent thosechanges occurred in a framework of substantial continuity and to what

extent they actually departed from past patterns. Analysis will first targetthose aspects where elements of both change and continuity coexist, itwill then examine those features that display major signs of continuityand finally will assess the key elements of change introduced by theneo-liberal administrations.

The style of government of Menem and Collor, in terms of how theymanaged the integration process and the interplay between the presidencyand the diplomatic service, is the domain in which elements of continuityand 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, thepersonal relationship of empathy and friendliness linking Alfonsn andSarney remained unique. There was not such a privileged personal relationbetween Menem and Collor. 63 They shared similar views of internationalrelations and had a common programme of economic modernisation, inwhich synergy was indispensable to enhance the international attractionof both countries. 64 In their dealings much depended on the compatibilityof the internal and external agendas, and mutual interest prevailed over

common ideals.Internally, hierarchy was strengthened. The new general, linear andautomatic character of integration centralised the decision makingprocess. Roles and competences within the government and diplomaticstructures were more clearly and strictly defined. The room and need forautonomous negotiation at the lower diplomatic levels, as well as thetechnical level, were dramatically reduced as compared to the previousphase of integration.

In Argentina, at the beginning of integration, President Alfonsn

trusted his Foreign Minister Caputo to find a practical form of implemen-tation of his visionary rapprochement with Brazil to pursue peace,cooperation and democratic consolidation. By the same token, if thefather 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, theChancellor. 65 Menem was a man of limited academic education, but withextensive 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 economyto foreign affairs. 66 In particular, he had a strong interest in the interna-tional position of Argentina and a clear inclination towards Latin Americanintegration. 67 Menem recruited to his staff personalities whose technicalexpertise was suitable to implement his broad political view of integration. 68

In Brazil, hierarchical relations at the beginning of integration had beenless clearly defined, the initiative stemming from both presidential

intuition and diplomatic pragmatism. Under Collor, this complex interactionpersisted. According to Sergio Danese, former advisor to Sarney and laterMinister Councillor at the Brazilian Embassy in Buenos Aires, Collorfound 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 Colloradministration, 70 affirmed that the impulse for the new approach clearlycame 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 thecoordinator of negotiations, but the process became much more centralisedunder Cavallo. He can be considered the ideologue of the reshaping of theintegration scheme, 72 as this was part of his plan of economic opening andcompetitive international insertion. However, two points have to behighlighted. The first is that decisions concerning integration, althoughinspired by the political vision of President Menem and the economicdesign of Domingo Cavallo, were discussed and endorsed by the whole

administration,73

and received the support of the entire epistemic communitysurrounding Menem. 74 The second is that Cavallo saw integration as atool to pursue his economic design, which is not to say that he was partic-ularly keen on Mercosur. Indeed, there are those who considered Cavallo,and his successor Guido Di Tella, lukewarm in their support for Merco-sur, and reckoned that President Menem was more genuinely inclined tointegration than his team. 75

In Brazil, Foreign Minister Rezek appeared closer to the process thanmany of his predecessors, and Celso Lafer, who succeeded Rezek in

1992, attributed the main decisions concerning integration to both thePresident and the Foreign Minister. 76 Both Collor and Rezek were infavour of integration, and they understood the ArgentineBrazilian strategicalliance 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 andqualitative source of input to integration.

The domain in which continuity between the 19851988 and the 19891991 phases of integration is stronger is that of guiding principles andrationale for the whole integration exercise. The basic rationale forArgentineBrazilian integration did not change significantly throughoutthe years. The main interest of Argentina in the association was intimatelyrelated to the maximisation of its return in terms of economic growth, thatis to say that integration with Brazil was considered a chance to increaseeconomic performance. Brazils core interest was instead related to theincrease of its political weight in the world through the aggregation of

regional associates, and integration with Argentina was primarily consideredan instrument to enhance Brazils political performance. But this mutu-ally utilitarian and complementary scheme was only part of the story.

The most important trait of continuity between the two phases of inte-gration lies in the fact that the associates, at no moment, lost the affinityderived from the existence of shared objectives and values. 78 Thecommitment to integration was kept because the members perceived theirbasic similarities, in the realm of politics with the affirmation of democ-racy, 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 internationalinsertion, including integration, were essentially subordinate to this goal.First, the formalisation of a diplomatic alliance diminished the possibilityof conflict between the two countries, and this reduced the room for politicalmanoeuvre by the military. Second, a closer association between the twocountries was deemed likely to raise their international profile andrelative weight, increasing the prestige, legitimacy and international ties

of the ruling elites. Finally, it was felt that the creation of a larger marketand the pursuit of joint economic modernisation would enhance economicperformance, stabilising both regimes and reducing discontent.

In the second phase, under Menem and Collor, integration shifted fromthe eminently political to the eminently economic; integration was stillpursued as conducive to political and economic stability, but the maingoal appeared to be economic competitiveness in a globalising world. Thedemocratic creed never disappeared but was in fact reiterated morediscretely. When Presidents Menem, Collor and also Lacalle of Uruguay

took charge of the integration process, they repeatedly asserted thatdemocracy was the basic guiding value underlying integration. 79

Yet, decisive elements of clear-cut change emerge in the crucial issueof 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 doesnot 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 modelinterpretation, concerning the intentions, the sequence, and the methodologyof integration.

First, in 1988 the objective was to achieve a free trade area within tenyears and not a common market; indeed, the concept of a common marketwas introduced only as an aspiration in the long run, and its constructionwas 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 repliedthat actually he was going to change it. 81 Later, Nofal recalled that in the1988 treaty there was no mention of customs union or common externaltariff, 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 deadlinefor the establishment of the common market. Some observers have argued

that the 1990 Act reduced the transitional period for the creation of thecommon market from ten to five years. 82 This interpretation looks inaccurateas the ten-year deadline set in 1988 concerned the creation of a free tradearea. It was Menem and Collor in fact who introduced the creation of thecommon market as a concrete objective of integration and they set anentirely new deadline of five years for this achievement. 83 The crucialpoint is that Menem and Collor indeed reduced the duration of the transi-tional phase, but the two transitional periods, and their respectivedeadlines, concerned different instruments of integration.

Third, the methodology chosen by Menem and Collor implied theabandonment of some of the principles previously inspiring integration. Ageneral, linear and automatic tariff reduction was hardly compatible witha selective and gradual project of sectoral industrial complementation.Although Mercosur allowed a significant degree of flexibility to implementits commitments, with the exception of trade liberalisation, its timing andmethodology exposed it and its creators to criticism of utopianism andexcess of optimism 84 and precipitateness. 85 This was in stark contrastwith the cautiousness and gradualness inspiring the previous model.

This said it is still possible to argue that overall the process of ArgentineBrazilian rapprochement and cooperation evolved in a linear trajectorybetween 1979 and 1991. 86 Yet, this is a different question. It is alsopossible 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 byJorge Campbell, who served both in the Alfonsn and Menem administrations,

each phase reflected the process appropriate to the historical, politicaland economic circumstances of that moment. 87 The historical, politicaland economic circumstances following the international events of 19891990 were a significant change in world politics and internationalrelations and so was the creation of the Mercosur in the framework of theregional 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 areclearly 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 Compe-tition 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. TheDemocratic Transition and Mercosur, Bulletin of Latin American Research , 11/3(1992), pp. 261277. Sylvia M. Williams, Integration in South America: TheMercosur Experience, International Relations , 13/2 (1996), pp. 5161. WayneA. Selcher, BrazilianArgentine Relations in the 1980s: From Wary Rivalry toFriendly Competition, Journal of Interamerican Studies and World Affairs , 27/2(1985), pp. 2553. Monica Hirst, Mercosur and the New Circumstances for itsIntegration, 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 JosMaria Vasquez Ocampo, Autoritarismo e Democracia na Argentina e Brasil (SoPaulo: 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 Inte-

grao 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 Develop-ment. 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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of Industrial Policy, Argentine Ministry of Economy, 19861988), BuenosAires, 25/03/2003.

5. Gian Luca Gardini, Two Critical Passages on the Road to Mercosur, Cam-bridge Review of International Affairs , 18/3 (2005), pp. 405420.

6. Hedley Bull, The Theory of International Politics, 19191969, in James Der Derian (ed.), International Theory. Critical Investigations (Basingstoke and London:MacMillan, 1995), pp. 181211.

7. Roberto Lavagna, Argentina, Brasil, Mercosur. Una Decisin Estrategica (BuenosAires: Ciudad Argentina, 1998).

8. Telegram No. OF03103EX of 27/10/1987, sent by the Brazilian Embassy inBuenos Aires to the Ministry of Foreign Affairs. Itamaraty Archive, BrasiliaDF. Campbell, Mercosur . Sonia de Camargo, A Integrao do Cone Sul: 1960 1990 , IRI Textos, Pontificia Universidade Catlica do Rio de Janeiro, 13

(1992).9. John Lewis Gaddis, The Long Peace: Inquiries into the History of the Cold War (New York: Oxford University Press, 1987).

10. Lavagna, Argentina, Brasil, Mercosur . Campbell, Mercosur .11. John Williamson, Did the Washington Consensus Fail? (Washington DC: Center

for Strategic and International Studies, Institute for International Economics,2002).

12. Correspondence between the then Governor of the Province of La Rioja, CarlosMenem and President Jos Sarney. Documents No. 1435 of 27 September 1988and No. 1453 of 30 September 1988. Itamaraty Archive, Brasilia DF.

13. Cisneros and Iiguez, Del ABC al Mercosur. Moniz Bandeira, Brasil, Argentina,Estados Unidos .

14. Oscar Camilin, Memorias Politicas. De Frondizi a Menem (19561996) (BuenosAires: Grupo Editorial Planeta, 1999), p. 313.

15. Domingo Cavallo in: FLACSO, Tramos Seleccionados de Diversas EntrevistasRealizadas al Canciller Domingo Cavallo, America Latina Internacional , 21June 1989, pp. 275278, p. 276.

16. Camilin, Memorias Politicas . Domingo Cavallo, La Insercin de la Argentinaen el Primer Mundo, in Silvia R. Jalabe (ed.), La Poltica Exterior Argentina y

sus Protagonistas. 18801995 (Buenos Aires: Nuevohacer Grupo Editor Lati-

noamericano, 1996), pp. 357378.17. 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.

18. Amado Luiz Cervo, Relaes Internacionais da America Latina. Velhos e Novos Paradigmas (Brasilia: IBRI, 2001).

19. Carlos Escud, Realismo Perifrico: Bases Tericas para una Nueva Poltica Exte-rior Argentina (Buenos Aires: Planeta, 1992).

20. Beatriz Carolina Crisorio, Las Relaciones de Argentina con los BloquesEconmicos Regionales en la Dcada del 90 y las Perspectivas hacia el PrximoMilenio, 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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19871994), Buenos Aires, 07 March 2003. Authors interview with Israel Mahler (President of the Argentine Industrial Union, 19911994), Buenos Aires, 14March 2003. See also La Nacin, 06/07/1990, and Campbell, Mercosur .

47. Authors interview with Roberto Lavagna (Secretary of Industry and Trade,Argentine Ministry of Economy, 19861987), Buenos Aires, 27 March 2003.

48. Document No. unclear-00818 of 31 August 1989, concerning the prospectiveParaguayan accession to the ArgentineBrazilian scheme, Itamaraty Archive,Brasilia DF. See also: La Nacin, 15 May 1989.

49. La Nacin, 06 July 1990.50. La Nacin, 11 July 1990.51. La Nacin, 20 June 1990.52. La Nacin, 18 July 1990.53. Document No. unclear-00818 of 31 August 1989, Itamaraty Archive, Brasilia

DF.54. Authors interview with Jorge Hugo Herrera Vegas (Minister Councillor at theArgentine Embassy in Brasilia, 19871992, and Head of Cabinet of the ArgentineForeign Minister, 19921993), Buenos Aires, 26 March 2003.

55. Camargo, A Integrao do Cone Sul .56. 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.

57. Communication of Minister Francisco Rezek to the Brazilian Embassies toArgentina, Uruguay, Paraguay and LAIA. Document No. 18.239 of 14 March

1991, Itamaraty Archive, Brasilia DF.58. 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.

59. Interview with Pea.60. Interview with Pea.61. Campbell, Mercosur .62. Interview with Pea.63. Authors interview with Jorge Castro (Member of the Secretariat of Interna-

tional Relations of the Justicialista party and chief ideologue of the Menemista

project), Buenos Aires, 20 March 2003.64. Interviews with Lafer and Castro.65. Interview with Pea.66. Camilin, Memorias Politicas .67. Interview with Kohan. Camilin, Memorias Politicas .68. Authors interview with Andrs Cisneros (several government appointments

between 1992 and 1997, including Head of Cabinet of Foreign Minister GuidoDi Tella, Secretary General of the Argentine Ministry of Foreign Affairs, andDeputy Foreign Minister), Buenos Aires, 21 February 2003.

69. Danese, Diplomacia Presidencial .70. Celso Lafer replaced Francisco Rezek as Foreign Minister on 13 April 1992 and

remained in charge until the dismissal by impeachment of President Collor inOctober 1992.

71. 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 Eco-nomic Integration, Argentine Ministry of Planning, 1991), Buenos Aires, 24February 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 (BuenosAires: Ediciones Manantial, 1991), pp. 370381. Camargo, A Integrao doCone 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.

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