Pacific Alliance Rises, Mercosur Disappoints

When Simón Bolívar was born, he was born into a world where there was an independent United States.  By the time Bolívar died, the world could say there were many free and independent nation states in South America.  Bolívar was a liberator of people who is said to have dreamed of a Latin America that was more united like the United States.  In 1991 many would have said that Bolívar’s dream was finally coming true with the creation of Mercosur.  Alas, since then it has only proven to be a massive disappointment and Latin America has been aching for a new economic union.  On June 6th 2012, Bolívar’s dream might rise up once again, this time from the foundation of the Pacific Alliance.

Image courtesy of !quecomunismo!, © 2009, some rights reserved.

Image courtesy of !quecomunismo!, © 2009, some rights reserved.

The Pacific Alliance is the brainchild of former Peruvian President Alan Garcia.  The idea behind the Alliance is to unite four of the region’s fastest-growing economies: Peru, Chile, Colombia and Mexico.  These four economies are home to over 200 million people whose socioeconomic conditions are improving with more access to education and different kinds of jobs.  The combined GDP of these four countries is over $2 trillion USD. While this all sounds great, some may find themselves asking: why have a new economic union in Latin America?  What exactly is the problem with Mercosur?

The problems with Mercosur are many.  The organisation was originally made up of four members: Brazil, Argentina, Uruguay and Paraguay.  Then in June of 2012 the organisation was down to three members after Paraguay’s membership was suspended.  The reason for suspension was because Paraguay’s Congress legally according to Paraguayan law, ousted President Fernando Lugo.  Mr. Lugo was a left-wing leader and the government which replaced him would not be the friendliest with President Kirchner of Argentina and other regional left-wing leaders.  Therefore rather than respect democracy and the rule of law in Paraguay, Mercosur suspended the country’s membership.  Not only was Paraguayan membership suspended but then Mercosur extended membership to Venezuela which joined in July of 2012.

For Mercosur to try and speak with authority about a supposed ‘lack of democracy’ in Paraguay while they give Venezuela membership is just laughable.  It is pathetic as well.  Mr. Lugo was ousted because the Paraguayan people through their representatives in Congress deemed Mr. Lugo incompetent.  As a matter of fact, Mr. Lugo was not just incompetent but he was a liar as well.  He lied to the Catholic Church and the parishioners he served when he had them all assume he took his vow of celibacy seriously.  Just before he was impeached, Mr. Lugo admitted to his second (yes, second) child he fathered while still in the Church. Typically I do not care what a politician does in the privacy of their bedroom but when Mr. Lugo’s claim to office was his work experience in the Church, there is a problem.  When he wasn’t taking his vow of celibacy in the Catholic Church seriously, how can he be expected to run a country effectively?  Ultimately the Paraguayan people saw through this man and Mercosur did not like it.

Yet the flaws of Mercosur go beyond the organization’s irrational defense of Mr. Lugo.  There is also the fact that Mercosur has openly embraced Chavez and the reason they were able to do so was because Paraguay (the one member which consistently opposed Venezuelan membership) had its own membership suspended.  Now there is talk that Ecuador (whose President constantly suppresses the press) and Bolivia (which has a crazed left-wing leader) will soon join Mercosur. Mercosur is no longer an outward-looking economic union.  Mercosur isn’t even an economic union anymore; it is really just a small political club.  To be in the club your government must be a left-wing government.  There is no room for opinions that leave the sphere of left-wing politics as Paraguay has just learned the hard way.  However if we were to give Mercosur the benefit of the doubt and assume it is still an organization with economic goals then unfortunately all that can be said is the organization is highly protectionist.

This is where the Pacific Alliance comes in.  It is the unison of four of the most vibrant and open markets in the region.  The Pacific Alliance will look to Asia to drive growth through exports as part of the economic union.  This young alliance has also come to the attention of various countries such as Panama and Costa Rica (which are both interested in membership), even Canada which is an observer. Attention garnered by the Alliance can be attributed to the fact its member-states make up over 30% of Latin America’s GDP and over 70% of the region’s exports.

However this union goes beyond embracing international markets and capitalism.  This union looks to have Latin America claim a large and important place on the world stage.  The leaders of the Pacific Alliance understand that you cannot nationalize businesses and silence the press; this is not how moral authority and power are attained.  The members of the Pacific Alliance have a chance at success because they recognize their painful national histories, the progress that has been made since certain dark periods, and the steps that must be taken to solve current problems.  The Pacific Alliance recognizes its flaws and seeks to rectify them.  It is through the Pacific Alliance that Simón Bolívar’s dream of a more united Latin America will come to fruition.

It is only when democracy and capitalism come together that freedom and prosperity is possible.  False prophets in Mercosur such as President Cristina Fernández de Kirchner and President Hugo Chavez will soon learn they have chosen a failed model.  Mercosur is a sinking ship.  The Pacific Alliance is an iceberg of morality and righteousness hitting that ship hard and rightfully so.  Let us hope that Brazil realizes it is part of this sinking ship and may Dilma Rousseff take a stand and leave Mercosur.  Without Brazil, Mercosur would truly be a shadow of its former self, and that is quite alright.