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DRAFT VERSION
1
Transfer of the European Regional Policy to Latin America
Ida Musiałkowska, Ph.D.
Poznan University of Economics, European Studies Department (Poland) [email protected]
In contemporary world there are still disparities very much visible among regions (understood
as sub-national units). In the European Union (EU) one of the instrument aimed at cohesion
and the regional potential spurring is its regional/ cohesion policy1. Lately, the interest in the
European integration model and governance has started to be noticed in the international
organizations and the third countries. Also the cohesion/ regional policy of the EU has been
inspiring the policy-makers world-wide. The European Commission started dialogues with the
third parties through which policy transfer can be observable. The main aim of the article is to
analyze the process of possible EU regional policy transfer and regional/ cohesion policy-
forming in Latin America (with special focus on MERCOSUR). The transfer depends on
many factors among which the level of integration and institutionalization of international
organization are very important. The article is divided into the following sections: the EU
support to the integration process in Latin America (LA) with the emphasis on MERCOSUR,
brief presentation of basic foundations of the EU regional policy, the possibilities of the
policy transfer to MERCOSUR followed by the example of cross-border co-operation (CBC).
1. European Union as a supporter of regional integration in MERCOSUR
To-day we do observe increasing interdependence of many states in the globalised world.
Also in the Latin America one may enumerate many bi- or multilateral agreements,
superimposed each other, as well as existence of new geographic and functional areas of
integration. They co-exist despite of the debates on the protectionism, populism and reference
more towards bilateral contacts of many states. There is also a strong debate on the reason of
maintaining neoliberal approach to policy-making or seeking new solutions in the area of
economy.
Since the nineties of the 20th
century one may observe both integration process and
proliferation of the Latin America countries’ external relations (see graph 1).
1 In the article the author would rather use the notion “regional policy” that focuses on the relations between
institutions; modes of governance and management of the policy. In the EU the name “Cohesion Policy” is more
frequently used, which stresses one of the integration aims that is economic, social and territorial cohesion of the
whole territory.
DRAFT VERSION
2
Graph 1. Example of the Latin America countries’ external relations proliferation since
the 1990’s
Source: Sanoussi Bilal; The Coherence of Multi-Level Negotiations:Challenges for
developing countries; UNU-CRIS e-Working Papers; W-2004/11 in: Musiałkowska I. Do
Business Cycles in Latin America Synchronise, CESLA, Warsaw, 2007
Integration trials in the LA can be observed since Central American Common Market
appeared in 1960, then Andean Community – in 1969, Caribbean Community (CARICOM) -
in 1973 or the Southern Common Market (MERCOSUR) – in 1991. Lately, appearance and
significance of UNASUR and ZICOSUR has been also discussed.
The levels of institutionalization of each international organization are different due to
different approaches of the Member states towards integration. What can be characteristic for
DRAFT VERSION
3
the process is building of a sort of institutional structure in cases of CARICOM or CACM and
lack of real strong structures in case of the MERCOSUR or the Andean Community. In the
opinions of some authors (i.e. C. Ramon-Berjano) this shows “worrying” fact of non-learning
form the past Latin American experiences. There are many factors that are influencing
insufficient integration progress.
The decision on founding MERCOSUR was political and economic because of the
Argentinean and Brazilian governments will to foster regional trade since 1991 [Rosenberg,
Bozzalla, 2008]. Since that date it comprises: Argentina, Brazil, Uruguay, Paraguay.
Currently Venezuela has to be ratified by Paraguay, despite its application for full
membership in 2006.
The functioning of the MERCOSUR one can divide into three phases:
- 1991-1998 – phase characterized by increase of the trade volume and the FDI (foreign
direct investment) among its Member States, which is contributed mainly to:
introduction of liberal reforms and lowering custom duties in mutual trade. In 1996
also Chile and Bolivia declared their will to join the MERCOSUR.
- 1992-2002 – phase characterized by stagnation in deepening the reform process. It was
due to the crises that affected the economies of the Member States, namely: Asiatic,
Brazilian, Russian and Argentinean.
- 2003-2009 – phase characterized by revitalization of integration processes in the
MERCOSUR. New instruments to rebuild the custom union and trials to create the
common market were introduced in the organization. Moreover, Venezuela applied for
membership of the MERCOSUR and at the same time Ecuador, Columbia and Peru
got the status of the associate countries, while Mexico got the observer status.
However, the share of trade volume against the total import and export volumes can be
noticed last years (except for Argentina in case of import). Main groups of traded
goods are agriculture and raw materials that can be easier traded outside the
MERCOSUR. That factor is non-favorable for the co-operation development among
the countries belonging to the community[Chwiej, 2010, pp.208-216].
When dealing with the economic integration phases one may observe that MERCOSUR is
now trying to finish free trade area and complete the common market.
DRAFT VERSION
4
The European Union is trying to support integration process in the Latin America. One may
distinguish the objectives and elements of potential EU help to strengthen a process of LA
integration (see table 1.)
Table 1. Objectives and elements of the EU support to regional integration in Latin
America
Regional
integration
Regional co-
operation
Political
dialogue
Trade Development
cooperation
Rio Group-LAC X X
MERCOSUR X X X
Andean
Community
X X
Central America X X
Adaptation based on Lombaerde…The EU and World Regionalism…Ashgate, 2009 p. 15.
In case of MERCOSUR there are three areas of potential support: regional integration,
political dialogue and trade. The relations between Latin America and the EU are
characterized by “institutionalized and multi-layered” approach. The EU institutions:
Commission and Parliament set the strategic framework for co-operation. For years 2007-
2013 the Commission cooperation policy is based on four elements that are related to the
areas shown in table 1:
intensification of political dialogue;
creation of environment for trade and investment (by i.e. creation of Association
Agreement based on region-to region approach);
support for Latin America in gaining stability and prosperity;
better cooperation to improve mutual understanding [Lombaerde, Schulz, 2009 p.18].
The support for regional integration is targeted not only on institutional regional bodies but
also organizations that represent economic and business sectors: trade unions, trade
organizations, chambers of commerce and associations. This shows contemporary vision of
the economic/ trade diplomacy acting from both: European and American sides. In case of
MERCOSUR the Regional Strategy Paper for 2007-2013 allocates ca. 50 million EUR to
support projects in:
- MERCOSUR institutional strengthening
- supporting MERCOSUR in preparing implementation of the Association Agreement
DRAFT VERSION
5
- fostering the participation of civil society to MERCOSUR integration process
Lombaerde, Schulz, 2009 pp.21-22].
There are also numerous indicators of measuring the progress in regional integration used by
the European Union. The indicators in the table 2 reflect the methodology proposed by de
Lombaerde and van Langenhove and are modification of the DG DEV (European
Commission) and other international organizations like World Bank etc. proposals of such
indicators. They can, according to the authors, facilitate observation of the processes and
effects in many areas, including the EU support areas described before, that are shaped in the
strategies. The main categories are indicators referring to actors, structural factors,
implementation, effects and interdependence [Lombaerde, Schulz, 2009 p. 37]. In case of
MERCOSUR the majority of indicators are enumerated in “implementation” section and refer
to functioning of custom union and trade agreements (see table 2).
DRAFT VERSION
6
Table 2. Indicators used by the European Union while monitoring regional integration. Case of Latin America
Category MERCOSUR CENTRAL AMERICA CAN
ACTORS - Effective participation of all countries in
all institutions
- Repartition of legislation competence
between different actors
- Effective participation of all countries in
all institutions
- Repartition of legislation competence
between different actors
STRUCTURAL FACTORS
Institutionalization and Policies
- Elaboration of public procurement
regime
- Common policies
- Sustainable financing mechanisms to
support institutional set-up
- Common External Trade Policy (CET)
- Common Policy in Agriculture
- Sustainable financing mechanisms to
support institutional set-up
- Common External Trade Policy
- Common Policy in Agriculture
IMPLEMENTATION Application of CET
Harmonization of regulatory frameworks:
- Application of the MERCOSUR
framework Agreement in Services
- Consistency with the WTO agreements
on Technical Barriers to Trade (TBT)
- Definition of norms (also consistent
with TBT)
- Validation of market procedures,
including consultations with Party
States before consideration by the
Common Market Group
Safeguard Measures:
- Scope and application
- Examination of import prices
- Economic factors
- Qualified applicants
- Initiation; measure; investigation
- Verification
- Provisional measures
- Definitive measures
Implementation of common trade regulatory
frameworks:
- Legislation on competition
- Trade defence instruments
- Sanitary and Phytosanitary Norms
(SPS)
- Investment
- Government procurement
- TBTs
- IPRs
- Geographical indications
- Implementation of legislation on
minimum prices, subsidies etc.
- Implementation of CET
- Implementation of Customs procedures
(valuation of goods, requirements for
release in free circulation)
- Implementation of dispute settlement
mechanism
- Implementation of regional
liberalization of trade in services
Implementation of common trade regulatory
frameworks:
- Legislation on competition
- Trade defence instruments
- Sanitary and Phytosanitary Norms
(SPS)
- Investment
- Government procurement
- TBTs
- IPRs
- Geographical indications
- Implementation of legislation on
minimum prices, subsidies etc.
- Implementation of CET
- Implementation of Customs procedures
(valuation of goods, requirements for
release in free circulation)
- Implementation of dispute settlement
mechanism
- Implementation of regional
liberalization of trade in services
DRAFT VERSION
7
- Appeals/ dispute settlement
- Public interest
- Authorities (trade defence & safeguard
committee; MERCOSUR trade
commission)
- WTO notification\adjustment plan
Implementation of anti-dumping legislation:
- Normal value
- Volume of imports/ market share
- Minimum dumping
- Support for complaint
- Deadlines for proceedings
- Period of investigation
- Verification of the information
submitted
- Confidential information submitted by
parties
- Provisional measures
- Definitive measures
- Regional application
- Lesser duty rule
- Appeals/ dispute settlement
- Legitimacy of third parties (consumers
and users, other regional or foreign
parties)
- Public interest/ community interest
- Measures on behalf of a third country
- Circumvention
- Definition of domestic production
- Normal value and export price
comparison
Competition rules:
- Completion of FTA Completion of FTA
DRAFT VERSION
8
- Restrictive acts
- Concentrations
- State aid
Rules of origin:
- Basic origin rules
- Direct transport
- Principle of territoriality
- Cumulation of origin
- Insufficient working or processing
- Tolerance provision
- Neutral elements\documentary of proof
- Harmonization of SPS
EFFECTS - Equal treatment for any EU products
entering CA from any port
- Progress of intra-regional trade
- Equal treatment for any EU products
entering CA from any port
- Progress of intra-regional trade
INTERDEPENDENCE Level of intra-regional trade Level of intra-regional trade Level of intra-regional trade
Source: P. Lombaerde, op. cit. pp. 34-37
DRAFT VERSION
9
Analyzing the table 2. one can evaluate that the EU support has concentrated mainly on
facilitating and measuring trade relations within the organization. Despite the fact that
majority of activities refers to the trade relations enforcement, in MERCOSUR, as in one of
not so many international organizations, the structural interventions have been undertaken in
order to strengthen completion of the common market [Dabene, 2009]. Those actions form a
part of regional policy formulation and cohesion obtaining.
2. Regional policy-making
Deepening of the internal market/ common market (as one of the economic integration phases
classified by B. Balassa) is based not only on free circulation of factors of production and
goods, services or entrepreneurship but also on improvement of functioning of many more
areas. One of them is reducing regional and structural disparities among regions (understood
as sub-national units) and existing social imbalances. Such “equalization” helps to pursue
common policies from the organization level i.e. monetary policy, trade policy or stronger co-
ordination of fiscal policies. Besides, the development of territories and so called integrated
approach have been now the key-points for regional policy-makers.
2.1. Regional/ Cohesion policy of the European Union
In international organization such as the European Union one of the policy that contributes to
deepening the integration process is its regional/ Cohesion Policy, introduced in contemporary
form in the nineties of the 20th
century. It is based on the shared competences of the European
Commission - the main implementing body from the EU level and national and regional
authorities from the EU Member States (MSs).
One may analyze the regional policy taking into consideration strictly economics side and
effects and paradigms of development, or broaden it also by policy management or
governance.
Contemporary focus of the European policy-makers is based on the approach proposed by the
Organization for Economic and Co-operation Development - OECD [OECD, 2009], where
regional growth has to be supported by investing in three areas at regional scale:
- creation of innovation and support of business environment;
- formation of human capital;
- infrastructure provision.
DRAFT VERSION
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Graph 2. OECD regional development approach
Source: OECD, 2009
The support coming from the EU budget cannot be transferred only to one area because of
potential lose of efficiency. Regional economic growth has to be based on balanced
development of conditions necessary for economic growth that interact with each other. It was
stated that majority of the countries (developed and some of the developing ones) are
reforming to that direction, however the implementation of such a model can be difficult.
As the opposite, the World Bank (WB) proposed its vision of economic (and regional
economic) development with the possibility of separating support and concentration on one of
the before-mentioned areas. The use of certain instruments depends on the number of
problems (dimensions). As an example one may take the case of Brazil analyzed by the WB
together with a set of solutions proposed to respond to problems identified in the report
[graph 3, World Bank, 2009].
DRAFT VERSION
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Graph 3. Brazilian problems identified by the World Bank
Source: World Bank, 2009
Brazil was characterized as a country with two main problems (dimensions – 2D):
- high poverty rate and numerous number of poor inhabitants;
- lagging areas with problems coming from long distances and misplaced densities.
The instruments (2 I) proposed by the WB were the following:
- to create institutions that can help with solving social problems and help to combat
poverty,
- to provide infrastructure to connect leading and lagging places in the space. [World
Bank, 2009]
When comparing two approaches one can easily judge that instrument facilitating operation of
business sector was neglected in the WB proposal.2
Another aspect of analyzing possibility of EU regional “policy transfer” is the way of
pursuing and shaping such a public policy in other organizations and countries. This approach
bases on the public administration management/ governance theories.
2 Brazilian government in the National Regional Development Policy prepared in 2010 takes the EU and OECD
approach rather than the World Bank one. www.mi.gov.br DOI 07.08.2011
DRAFT VERSION
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The main features of the regional policy of the EU are embedded in its principles and inter-
relations between actors involved in policy implementation. The principles of regional/
Cohesion policy reflect both axiology, governance and management. Those are namely:
- solidarity, subsidiarity, programming, concentration related to multiannual financial
planning of the EU budget, and partnership.
Those principles have influenced enhanced modes of co-operation and governance present in
contemporary public sphere such as multilevel governance, network co-operation based on
the horizontal and vertical co-operation/ partnership/ of the European, national, regional and
local authorities in the process of the programming and implementing the regional policy.
Another characteristic feature is presence of the different authorities and agencies in each
phase of the policy cycle and delegating tasks to national and regional levels. Policy cycle is
based on the Project Cycle Management (PCM) methodology used by the European
Commission for many years (see figure 1).
Figure 1. Political cycle according to PCM methodology
Source: Molle, 2007
4. Implementation
and results/ effects
achievieng
5. Control of cohesion and
efficiency
6. drawinglessons
1. Identification of problems
and causes
2. System of intervention oriented
towards problem solving
3. Formulation of aims and
instruments
DRAFT VERSION
13
Such policy approach stresses the way of proper planning of interventions with clear response
to problems identified, monitoring of the policy implementation together with evaluation of
cost/effect relations in terms of public spending.
According to solidarity principle all Member States contribute to the EU budget and
depending on the level of economic development of its regions are eligible for obtaining
certain levels of support reflected in the policy objectives. Two of the regional policy
objectives, Convergence and Regional competitiveness and employment classify all EU
regions for co-financing depending on the fact whether their GDP per capita exceeds the 75%
of the EU average GDP per capita. In case of the poorer regions the availability of financial
instruments – the Structural Funds is bigger. Moreover, the poor countries (with the GNI per
capita lower than 90% of average indicator for all Member States) are eligible for additional
funding from the Cohesion Fund. Another crucial aspect is developing transnational: cross-
border and international co-operation between MSs’ regions.
Reaching the EU objectives and the use of financial instruments is guaranteed in the EU
primary law (Treaty on the functioning of the EU, title XVIII, art. 174-179) and main
regulations on funds (Council Regulation (EC) No 1083/2006, (EC) No 1081/ 2006, (EC) No
1082/2006, (EC) No 1084/2006). There are possibilities of obtain repayable (loans and credits
from the European Investment Bank, European Investment Fund or Structural Funds) and
non-repayable (grants) forms of co-financing. It is also important to mention that public
funding from the EU budget co-finances operations in the Member States and their regions
that forces also the MSs to learn the EU way of policy-making in that particular area.
The European Commission highlights also most important facts that can be taken into
consideration by the third countries and international organizations while analyzing the EU
regional policy. Those are:
- the importance of economic framework conditions taken as crucial;
- a need for tailored strategies with an appropriate policy mix;
- the importance of stable budgets and coherent programming;
- the need for cross-border cooperation;
- agglomeration economies and urbanism;
- the role of small and medium sized towns and local centers;
DRAFT VERSION
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- local employment and capacity building initiatives;
- strong institutional support (including strong institutional leadership, sound political
judgment, robust economic analysis and policy-planning, technical expertise to guide project
managers in the “field” plus strong inter-institutional co-ordination);
- multilevel governance [European Commission, DG REGIO, Inforegio, 2009].
Moreover, the European Commission basing on the EU experiences proposes some “lessons
that can be useful” for the countries outside the EU:
- long term strategic vision of what needs to be achieved;
- an objective/ “non-political” method or raising and allocating resources – there is a strong
necessity for clearness in allocating money for certain progammes and methods of
measuring the effects (in other words – methods of efficiency measuring);
- system combining co-financing and partnership enhances ownership – and in this meaning
projects should belong to the community that benefits from them, which is problematic
when i.e. local and regional authorities both are participating in project costs;
- dissociation of the legal framework setting out the broad rules governing the
implementation of the policy from individual project decisions (in the EU there are shared
competences between the EU level, when the Commission and the European Parliament
set out the legal basis and regulation referring to regional policy objectives and general
rules; while the Member States decide on their way of the implementation of the whole
systems in the countries).
- decisions are needed whether to support integrated approach or support individual projects
(the EU does both via different funds).
- decision whether to rely on grants or repayable forms of support or combination of both
(the EU does the combination so far) that depends on the economic incentives to be
desirable from the economic point of view and the strength of the financial and banking
sector.
- adequate formal and informal institutional capacities are of crucial role for the progammes
and projects management (those capacities are in the fields as: financial management and
control, economic development planning, identification and motivation of suitable
partners); this issue is especially important in case of cross-border co-operation that brings
together actors from different administrative systems;
DRAFT VERSION
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- monitoring and evaluation is crucial for ensuring the efficiency and effectiveness of the
programmes; that requires technical capacity within co-funded programmes and presence
of i.e. research institutions or universities to model macroeconomic development across
regions;
- conditionality that requires respect for open markets in case of the EU including
competition rules on the state-aid, open public procurement rules), respect for so called
“horizontal policies”: environment policies and rules; respect for principle of equal
opportunity; an approach based on partnership and democracy. Non-respect in the EU may
cause with the imposition of financial penalties;
- transparency in policy and programmes implementation – treated as an essential
component of “good governance”; effective communication and information systems
should be included in the administration of the programmes (i.e. indicating the projects that
have been assisted, the results of the monitoring and evaluation exercises, explanation how
to obtain public aid to prospective beneficiaries) [European Commission, DG REGIO,
Inforegio, 2009].
3. Regional policy transfer to MERCOSUR?
In case of regional policy one may observe a lot of inspiration taken from the European Union
example in MERCOSUR and other places in the world.
The European Commission, as described in the section 1., established political dialogue with
many countries and international organizations through which more elements of policy-
making can be discussed and introduction of which can be supported.
When taking into consideration theoretical background policy transfer concepts will be used
in this section of the article. The basic model can answer the following questions: who is
involved in the process of transfer (actors) , where from, where to and why (reasons) transfer
can be observable, and what (subject) and in what form can be transferred (see figure 2.)
DRAFT VERSION
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Figure 2. Simplification of policy transfer model
Own elaboration based on Evans, 2004
According to i.e. Evans, Rose, Marsh et al. reasons of transfer can be political, pragmatism,
efficiency in other countries, in organization - voluntary, legitimization of own/ already
achieved/ aims. Actors of transfer are i.e.: civil servants, policy-makers, consultants/ experts,
society. Forms of transfer answer the question to what extent it was done: inspiration,
adaptation, emulation, drawing of conclusions and own policy-making based on the basis of
experiences of other countries. Subject of transfer in case of regional/ Cohesion policy can be
i.e.: the whole policy cycle or cycle phase, strategic management introduction, planning/
MLG, financial instruments- „cohesion/ structural funds”
In the analyzed area of the EU regional policy transfer some basic assumptions can be made.
The EU is treated as a place where the transfer starts due to its accumulated knowledge and
experiences in the area of the regional/ cohesion policy-making. Regional policy or its
elements are subjects of transfer. Recipient is the international organization (MERCOSUR)
that is a „beneficiary” of regional policy solutions adopted and it implements policy elements.
Moment of transfer beginning are the date of the official documents signing by the EU i.e.
Regional strategy Paper for 2007-2013 and previous Communication from the Commission to
the Council and the European Parliament COM(2005) 636 final.
Who? What? Form?
Where from? Where to? Why?
DRAFT VERSION
17
It is also worth mentioning that European Commission (DG REGIO) concluded Memoranda
of Understanding on regional policy cooperation with the third countries: China, Russia,
Brazil3, Ukraine or recently with the South Africa and all of which are confronted with:
- wide regional disparities;
- major challenges in terms of co-ordinating the different levels of government, and ensuring
that decentralization can be achieved without compromising efficiency (DG REGIO
http://ec.europa.eu/regional_policy DOI 5.08.2011].
The regular input of the European Commission to promote regional policies in Latin America
has played a crucial role in interest in the European regional policy model. [AEBR, 2010]
First action undertaken by the European Commission was “problem mapping” where main
area of possible policy transfer were indentified. In case of the MERCOSUR and Brazil the
common/ similar/ problems where the EU experiences can be useful are presented in the table
3.
Table 3. Common problems and areas of possible transfer identified for the EU-
MERCOSUR and EU-Brazil by the European Commission
Problems and areas of possible cooperation/ transfer
EU-MERCOSUR EU-BRAZIL
• to co-operate and exchange information on
geographically targeted and other relevant
policies contributing to growth,
competitiveness, employment and to achieve
a better, and sustainable, territorial balance in
the framework of a market economy;
• to exchange information on experiences in
setting up and implementing regional policy
with special emphasis on ways to promote
the development of disadvantaged regions
and areas including urban, rural and border
areas;
• to exchange views and best practices on the
organization of multi-level forms of
• similar challenges in the global context:
• social polarization,
• the developments in the energy market and
climate change;
• the urban-rural divide.
3 The agreement between the EU and Brazil signed in Brasilia in November 2007 can be treated probably as the
cornerstone of a growing cooperation between the EU and Latin America in the field of territorial cohesion and
it begun a very dynamic EU-Brazil Dialogue on Regional Policy.
DRAFT VERSION
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governance and on participative governance
through the involvement of partners in the
conception and implementation of regional
programmes;
• to exchange experience on developing
regional strategies and methodologies of
multi-annual programming and
implementation
Own elaboration based on the DG REGIO materials www.europa.eu DOI 25.07.2011
In MERCOSUR one of the element supporting creation of common market is introduction of
the regional policy elements preceded by introduction decentralization of power to the
administrative units in i.e. Argentina and Brazil. The levels of task delegation and impact on
sub-national policies may vary among the MERCOSUR states depending on the
decentralization model adopted. [Faletti, 2010].
In 2005 financial instrument that should have helped in structural interventions - Structural
Convergence Fund (FOCEM) was created to spur cooperation and integration among the
four full MERCOSUR members (Argentina, Brazil, Paraguay and Uruguay) and to
increase support for the lesser developed economies. It was based on the MERCOSUR
decisions: Decisión CMC Nº 45/04, Decisión CMC Nº 18/05 and final Decisión CMC Nº
01/10. [MERCOSUR www.mercosur.int DOI 7.08.2011].
MERCOSUR Member States contribute to the fund depending on their wealth measured by
GDP level) with the richest countries being the biggest contributors and poorest – the
recipients.
FOCEM resources are concentrated in four programmes: structural convergence, development
of competitiveness, social cohesion and strengthening of institutional structures and
integration processes. They are intended for projects like i.e.: infrastructure works, increase in
competition in smaller economies, promotion of social inclusion and strengthening the
institutional structures. It appears that while the approval process is multi-stage, projects such
energy inter-connection are getting underway. [MERCOSUR].
In that sense shaping of the financial instruments and use of similar principles as in case of
the EU is strongly visible: solidarity, programming, concentration and even conditionality,
DRAFT VERSION
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when certain agencies are supposed to evaluate projects along certain lines (environmental,
social rates of return).
There were also additional instruments introduced through decisions No 34/06 and 33/07 that
reflected strategic plan to overcome asymmetries and aimed at opening smaller MERCOSUR
economies as Paraguay and reduction of development gaps. [Dabene, 2009].
In the next sub-section of the article one of the form of pursuing regional policy – cross-
border co-operation in Latin America, with emphasis on MERCOSUR will be analyzed.
3.1. Cross-border co-operation (CBC) in MERCOSUR4
Another interesting aspect of developing co-operation among Latin American regions is
cross-border co-operation developed with the use of the European experiences.
Despite differences in the geographic location, distances, and economic development5, the
Latin American regions started co-operation based on the European Union INTERREG
projects and current third objective of the regional policy – European Territorial Co-
operation. Many European regions established contacts with their Latin American partners
and started with exchange of experiences, study visits and sharing knowledge on regional
development in the EU. Those are mainly Spanish, Portuguese, Italian and German regions
that employed also consultants, local and regional authorities and research institutes in order
to help with international projects6.
The European Commission created also a possibility to present results of such co-operation
and enforce the dialogue during i.e. the Open Days – conference for regional and local
4 Subsection is based on the AEBR Final Report “CROSS-BORDER COOPERATION IN LATIN AMERICA.
Contribution to the regional integration process”, Reference nº 2009.CE.16.0.AT.118, October 2010 5 “The total border lines of South America are less than in the EU, while the surface of the European Union
covers only half of Brazil. With the exception of Buenos Aires the economic centers in Latin America are settled
more in the interior of the states. Also important ports and metropolis at the seaside are far away from the
borders. In Europe some important economic centers are located close to the border (Vienna, Bratislava, Berlin,
and Copenhagen), being some of them already established cross-border metropolitan areas. Compared with
Europe, distances are much longer, while transport infrastructure is less developed.”AEBR, 2010 6 Spain and Italy are mostly related to protect indigenous communities and the environment. The Spanish
Agency for International Cooperation has promoted some interventions in this sense. Another relevant project is
the project Fronteras Abiertas (Open Borders), supported by the Italian Government and implemented by the
Centro Studi di Politica Internazionale (CeSPI) and the Istituto Italo-Latino Americano (IILA), with the aim to
build an interregional network for Latin American cross-border cooperation and integration. AEBR pp. 7-8
DRAFT VERSION
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authorities, practitioners and academia, co-organized with the Committee of Regions in
Brussels.
Documents that mainly refer to development of the CBC in Latin America are:
- Communication from the Commission to the Council and the European Parliament
(COM(2005) 636 final): A stronger partnership between the European Union and Latin
America, in which the European Commission underlines the importance of cross-border
cooperation concerning sustainable development: water resources, energy and planning of
transport axes.
- Sugerencias de politicas públicas de integración fronteriza en el MERCOSUR: el proyecto
“Integración Fronteriza en el MERCOSUR 2009-2011 (Suggested public policies for
border integration in MERCOSUR: the project “Border Integration in MERCOSUR 2009-
2011). Main objective is to define action lines to design and manage border integration
policies.
- and besides: Decisions of the Andean Council of Foreign Ministers on Zonas de
Integración Fronteriza (ZIF) en la Comunidad Andina.[AEBR, 2010 p. 23.]
In case of MERCOSUR, apart from access to the FOCEM, the biggest financial contributions
and at the same time most useful activities come from the national budgets (with top-down
approach). Recent opening up the possibility to use the FOCEM resources for establishing the
CBC and implementation of projects has given, in experts opinions, big impetus for
development. Also financial institutions like the Andean Development Corporation
(Corporación Andina de Fomento, CAF) and the Inter-American Development Bank (IDB)
are including CBC in their agendas to promote development and integration in the continent.
[AEBR, 2010]
What was observed that until now “there has not been a Latin American place-based approach
for CBC with functioning structures like those developed in the EU during the last twenty
years. At present this cooperation has taken mainly place on an informal level.” [AEBR,
2010, p. 20]
Taking into consideration the imbalances and fact of lagging behind border regions it is stated
that the CBC formal interventions in these borders could be divided into three main axis:
environment, human development and trade, and MERCOSUR7 and related to it the network
of MERCOCIUDADES include those lines in their programmes. The development of CBC is
7 Also the Andean Community of nations, SICA, Organization of American States OAS/OEA include CBC in
their declarations.
DRAFT VERSION
21
linked fundamentally to supranational and national/sub-national political processes. Multi-
level governance and subsidiarity are key issues. The strong need for bigger involvement of
local administrative level is also stressed in the Latin American CBC [AEBR, 2010, p.28].
One of examples of the adoption of the EU way of thinking on the territorial co-operation is
the set of interventions towards CBC listed in the Brazilian “National Policy of Regional
Development”. “The Development Programme for the Frontier Strip - PDFF (150 kilometres
wide) was established along the borderline between Brazil and its 11 neighbours, defining
objectives and lines of action. The frontier strip is now considered a priority area instead of
an area of national defence, with plenty of barriers and restrictions, particularly after the
redefinition of the Development Programme for the Border Strip. The focus is on sustainable
regional development and integrated growth. It should be implemented in conjunction and
compliance with the neighboring states of Brazil in order to achieve its objectives. The
programme concentrates on the development of twin cities, intra- and intergovernmental
structures, and integrated actions with the priorities of several “meso-regions”. The size of
these regions is going beyond European ideas of border areas, but they have to be taken into
account if CBC is concerned. Within the programme also a transnational strand
exists.”[NPRD, 2010; AEBR, 2010]
The Brazilian Government is developing and supporting many activities i.e.:
- constitution of an inter-federal working group on border integration in 2008 with the
participation of federal departments, involving also municipalities and regions, in order to
make proposals to develop and implement border integration activities with neighbouring
countries, particularly with MERCOSUR.
- a pilot project between the EU - French Guyana and Brazilian Federal Government, the
States of Amapá, Amazonas and Pará, and Surinam. This project, in the framework of the
Operational Programme Amazonia (European Territorial Objective, ERDF), aimed at the
territorial development of border areas, the protection of the Amazonian natural and
cultural heritage, and the development of cross-border economical activities and social
cohesion, where the DG Regio of the European Commission is involved.
- support to “Interregional Cross-Border Cooperation and Latin American Integration
Network” (Open Borders). An Italian programme aiming to build an interregional network
for cross-border cooperation and Latin American integration through the implication of
sub-national authorities. It focuses in the triple border Brazil-Argentine-Paraguay;
- Border Municipalities, developing special measures (education, labour, social services) for
citizens living in border areas.
DRAFT VERSION
22
and some more. [AEBR, 2010]
Brazil is also perceived as a country with the biggest impact on the cohesion in MERCOSUR
as well as a leader in the CBC spurring. While using the European experiences the Brazilian
authorities have already begun a process of regionalization and exchange of information with
the EU, developing the concept of border areas with shared competences between national
and sub-national governments. Further decentralized CBC at regional/local level in
partnership with national governments and supra-national organizations seems to be the most
suitable instrument to create the way for a new quality of borders as meeting places offering a
wide range of opportunities.
It is also underlined that thanks to MERCOSUR functioning also mobility for cross-border
working was reinforced due to an agreement between Brazil and Uruguay. Some time to
implement it is required however. As regards to veterinary and food control, a programme to
strengthen the activities and a special capacity building programme for people involved in this
field are available. Uruguay and Paraguay have also developed own regulations and bi-
national treaties for border control. The biggest problem seem to be but finding and
harmonizing common funding. In each country national funds are devoted for national
projects (Brazil, Uruguay, Argentine, and Paraguay), but real common funding did not exist.
That is why FOCEM opening seems to be promising.
Some scientists highlight quoted in the AEBR report the relationship between formal and
operational integration, while other scientists stress the relationship between the populations
across the borders. One of examples is the Uruguayan-Brazilian cooperation aims to develop
border areas as “free-trade zones” and they have proposed to create a “border citizenship” (a
border statute), which means: free movement of people, manpower, goods, services and
capitals; common services for urban infrastructure, more flexible controls, single customs in
check points, tax exemptions for personal goods, simplification of trade, elimination of
double taxation for citizens, cultural integration, etc. There are many juridical, institutional,
financial and structural gaps. This process can be seen in twin cities (laboratories for
integration), where very important lessons can be learned and new actions can be planned.
In the AEBR report also SWOT analysis showing strong and weak parts as well as threats and
opportunities for the LA CBC were included (table 4).
DRAFT VERSION
23
Table 4. SWOT analysis for CBC in Latin America
Strenghts Weaknesses
- growing awareness of the importance of
cross-border areas for the future of South
America
- a set of political declarations, laws and
instruments for cooperation
(bilateral/trilateral treaties, agreements,
associations)
- numerous studies, publications, and other
papers on cross-border cooperation (CBC)
- mostly rural areas with a dominating
- agricultural sector (big farms, large
enterprises)
- development of SMEs and small businesses
services and activities
- importance of twin cities
- capitalization of differences along the border
- several cross-border areas cooperate
- numerous “one-off activities” to establish
- contacts for cooperation
- numerous single cross-border projects
- economic and social partners active in CBC
- (informal cooperation)
- consultants dominate the process
- borders keep somehow their role of
separation and military areas
- national peripheral location of border areas
- too many different instruments
- implementation rather weak
- mainly national approaches
- bi- or multi-national studies rather
- exceptional
- weak economic structures
- often strong dependence on border related
- danger of mono-structure
- positive single effects are too small
- places of illegal activities borders only poorly
controlled
- no definition of a cross-border area
- no coordinated activities
- too much depending on concrete individuals
- no coordinated activities
- potentials for CBC hardly exploited in
economic and social terms
- regional/local authorities depending on
consultants
Opportunities Threats
- increasing favourable framework conditions
- for CBC
- favourable MERCOSUR rules for free trade
- strong export of agricultural products
- twin cities as a laboratory for CBC
- some positive developments on the labour
- market due to big firms
- a common bank for Latin America
- some integration funds
- raising awareness of the need for regional
development
- strong feeling, that CBC requires a bottom-
up
- approach
- support of national governments to
encourage
- CBC at regional and local levels
- starting dialogue between national and sub-
national
- level
- economic and social partners ready to
- cooperate
- political will at all levels to support CBC
- strong interest in a more strategic and
- sustainable approach
- growing awareness of the need of cross-
border structures
- languages favourable
- starting contacts with the EU and European
- long distances
- weak infrastructure
- transport still difficult
- long waiting time at the border pending on
large enterprises and big farm
- taking profit from low wage level
- up to now twin cities often places of illegal
- activities
- national governments in favour of
implementation of sensitive projects in
border areas
- not many specific funds for CBC or
transnational activities
- depending very much on political
developments,
- weak subsidiarity
- lacking knowledge capacity at regional and
local levels
- conditions very different in political,
historical,
- economic and geographical terms
- national governments playing a dominating
- role
- border regions not at the top of the political
- agenda
- decentralization of financial resources rather
weak
DRAFT VERSION
24
organizations experienced in CBC
- missing distribution of tasks and
responsibilities
- no coordinated activities
- up to now sustainable implementation rather
- weak
- politicians hardly involved on a regular basis
- no experience in developing decentralized
cross-border strategies and programmes
- networks and permanent cooperation
structures missing
- prejudices prevailing (media)
- no systematic training of regional and local
actors to do it by themselves (like in the EU)
Source: AEBR Report, 2010 pp. 43-44
The contacts with the EU representatives and points of reference made toward the European
experiences are pointed as potential opportunities for the CBC development in LA. Similarly
to the EU, it can also be observed that national governments tend to support the
implementation of sensitive infrastructural and economic projects in border areas. Currently
the tendency (with the support of MERCOSUR) is more to change national development
policies in border areas in favour of supporting CBC. The AEBR experts stress that the Latin
American CBC faces multiple challenges out of those enumerated in the table 4.:
-the traditional concept of sovereignty;
-own national priorities;
-lack of subsidiarity;
-the consideration of border areas as marginal (only few national investments);
-long-lasting border disputes;
- the need to increase autonomy of territorial authorities;
-the need to ameliorate citizens’ life conditions;
-low local capacities;
-permanent and temporary migrations control;
-the need to protect natural and cultural heritage. [AEBR p. 48-49]
At the same time there is a chance to transform the national peripheral situation of border
areas in Latin America into a more favourable internal position within the continent. CBC is
not about abolishing borders, but reducing them to administrative limits like those between
provinces and departments.
Based on this background, in the recommendations short-term objectives (concrete projects,
need of decentralized cooperation, establishment of partnerships, informal structures for CBC
in general); mid-term objectives (to increase local/regional/national capacities for sustainable
DRAFT VERSION
25
CBC, to elaborate joint strategies/programmes and projects, as well as strengthening cross-
border institutions); and long-term objectives (with a view to a regional integration process
throughout Latin America) are developed (compare pp.26-28 of the article).
While referring to actors of the CBC and previous potential transfer of the EU model many
current and potential key actors in the process have been identified:
- national, regional and local authorities, from both side of the (selected) borders;
- supranational structures;
- universities and research institutes,
- enterprises from selected economic sectors,
- social and cultural organizations,
- trade unions and employers organizations(as feasible),
- third sector organizations in concrete cases;
- organizations responsible for infrastructures [AEBR, 2010, p. 60].
There are also key elements for successful CBC in Europe that can be adapted to the needs on
the ground and can also be used in LA:
- step-by step development (first the tasks, then the structure);
- strengthening of regional and local tasks and responsibilities;
- strategic/ programmatic approach;
- real joint projects;
- a permanent working structure per cross-border area (informal, later formal) as the main
player (with joint decision making bodies, joint secretariat and staff);
- own joint financial resources.
This requires the following framework conditions and steps:
-the political will of all states concerned;
-bottom-up approach, where regional/local actors are playing the main role in partnership
with the national government (external partnership, avoiding conflicts of competences);
- involvement of politicians at all levels from both sides of the border to build up lobby in
favour of CBC;
- hands-on participation of all actors in both sides of the border (public/private and public-
equivalent bodies, NGOs, etc.) in order to create a solid basis for CBC by using already
existing knowledge on both sides of the border (internal partnership, avoiding conflicts of
competences).
DRAFT VERSION
26
- the awareness that socio-cultural cooperation is as important as economic cooperation (and
often a precondition for successful CBC as a whole);
- in the starting phase, informal cooperation based on private law;
- at the end, creation of permanent cross-border structures based on public law. [AEBR, 2010,
p.64]
The AEBR recommends also using the following instruments:
- permanent advisory support and training;
- exchange of experiences on best practices and information;
- workshops/seminars, including targeted training;
- international conferences.
Besides, capacity building at regional/local level and a more sustainable and strategic CBC
the following practical results can be achieved step by step:
- stronger bottom-up approach;
- better distribution of tasks and responsibilities,;
- genuine cross-border programmes and projects;
- solutions for daily border problems;
- solutions for social problems;
- improving CBC of SMEs;
- development of new CBC between manufacturers and suppliers;
- intensified cooperation in sectors like health, environment, innovation and research and
tourism;
- improved cooperation in education, especially bilingual schools (borders with Brazil);
- stronger role of universities through cooperation in targeted analyses and studies (cross-
border infrastructure, environment, diversification of economy, service sector, development
of city centers, spatial planning);
- creation of a network for a cross-border labour market through cooperation between
workers, trade unions and public authorities;
- promotion of cross-border vocational training and the mutual acknowledgement of national
qualifications;
- creation of cross-border commercial sites;
- long-term cross-border development plans taken into account in national programmes;
- CBC between police, customs and border police departments.
DRAFT VERSION
27
Example of strategic planning of the CBC development in MERCOSUR.
Referring to such an important aspect of the regional policy, introduction of strategic planning
in short, mid and long term can be observable. In case of the Latin American CBC one can
identify three of afore-mentioned terms.
Short-term (by the end of 2010 and 2011)
“-At the very beginning concentration on the area of MERCOSUR and its members having
already regional development and cross-border cooperation (CBC) in their agendas.
- realisation of concrete cross-border projects (with external assistance):
- Bi-national Joint Management Commission of River Paraná;
- Touristic Route of the Jesuit Missions;
- Twin-Cities;
- Transnational Strategy for La Plata (River Plate);
- Cooperation of Universities on Cross-border Studies.
-Exchange of politicians and staff;
- Establishment of a cross-border organization/association and targeted training in the area of
analyzed CBC projects;
In parallel, stronger bilateral relations between the EU (Commission, Parliament, Committee
of the Regions) should be established (like up to now with Brazil) with other MERCOSUR
members (Argentine, Paraguay, and Uruguay) and associated (Bolivia, Chile, Colombia,
Ecuador, and Peru) in order to prepare the ground for further implementation of regional
development and CBC in South America.
- seminars and conferences in the area of the Andean Community of Nations (Bolivia,
Colombia, Ecuador, and Peru), offering quite favourable conditions for CBC among
themselves and also with Argentine, Brazil, Uruguay and Paraguay, focusing on information,
initial capacity building, European experiences and best practice coming from the two case
studies.
- Elaboration of cross-border statutes based on private law.
Some long-lasting conflicts are in their way to be solved, with the intervention of the
International Court of Justice, but other obstacles do not.
“There is also a general feeling among the society that CBC will generate sustainable benefits
for people living in border areas, with the added value of joint protection of natural resources,
and subsequent benefits for participating countries.
DRAFT VERSION
28
There are already bilateral and multi-lateral agreements, showing a strong institutional
commitment at national level, but the participation of the sub-national level is still too
reduced. A stronger support to ongoing processes of local development, stressing
decentralization and CBC interventions, is needed within their main development strategies.”
Mid-term (2012-2014)
Targeted training will be organized in selected areas:
- Chile-Argentine;
- Brazil-Bolivia;
- the triangle Northern Chile, Southern Peru and Western Bolivia (the traditional areas
of the Aymara ethnic group).
- First cross-border initiatives and concrete activities in the following areas:
- Bolivia-Peru (Bolivian path to the sea);
- Chile-Peru (dispute on the maritime border);
- Venezuela-Colombia;
- in regions where the preconditions for CBC from the geographic point of view and
regarding the population density are rather unfavourable: the river basins of the
Amazonas and Paraguay.
- The legislation of border activities in all countries has to be ensured.
- Bi- and trilateral treaties between national governments concerned in favour of territorial
cooperation.
- Strengthening of a “Latin American Cross-Border Association” all over the continent as a
platform and lobby for all border regions.
Long-term (end 2014-2016)
-Further strengthening of the role of MERCOSUR on the implementation of free trade and
free movement of persons, goods, services and knowledge.
- A supra-national financial framework for territorial cooperation in South and Central
America with a main focus on CBC (like INTERREG), assuring multi-annual implementation
of territorial programmes.
- Elaboration of a legal instrument for territorial cooperation, applicable throughout Latin
America (voluntary, not obligatory).
- Building of sub-national authorities’ capacities to manage cross-border programmes and
projects by themselves.” [AEBR, 2010, pp.69-70]
DRAFT VERSION
29
To conclude, the European Union is treated as the most advanced organization in terms of
integration. Besides, it has accumulated knowledge in many policy areas. Due to this, the EU
is a source of inspiration for other international organizations and third countries. One of the
policy that nowadays has started to be in the centre of interest of many actors is the regional
policy pursued by the European Union. It is characterized by the use of integrated approach as
well as multilevel governance and its own principles that can be valuable to implement with
necessary modifications in the other parts of the world. One of organizations where transfer of
policy elements can be observable is MERCOSUR that introduced regional interventions in
order to deepen the integration process on its own territory. Set of activities was undertaken
by the organization like strategic planning especially visible in the area of cross-border
cooperation, introduction of the structural funds-like-instrument: FOCEM, or involvement of
many national and regional actors in the development policy. As the summary the table 5 will
serve, where the elements present in the concept of policy transfer are confronted with the
similar elements present in the transfer of the EU regional policy to Latin America with
emphasis on MERCOSUR.
Table 5. Elements of the EU regional policy transfer to Latin America
Elements of policy transfer from developed
to developing countries (Evans, 2004)
Regional EU policy transfer to MERCOSUR
(own study)
Reasons of transfer:
• political, pragmatism, efficiency in other
countries, organization - voluntary,
legitimization of own/ already achieved/ aims
Reasons of transfer:
– efficiency in other countries,
organization - voluntary,
legitimization of own/ already
achieved/ aims
Actors of transfer: civil servants, policy-makers,
consultants/ experts, society
Actors of transfer
– consultants/ experts; governments
policy-makers, universities, society
in case of CBC: NGOs, trade
unions; enterprises
Forms of transfer: inspiration, adaptation, emulation,
drawing of conclusions and own policy-making based
on the basis of experiences of other countries
Forms of transfer
o inspiration, adaptation,
emulation – Brazil?,
drawing of conclusions and
own policy-making based
on the basis of experiences
of other countries
DRAFT VERSION
30
Subject of transfer (in case of regional policy):
– Regional policy cycle/ its phase,
– strategic management, plannning/
– MLG,
– Financial instruments: Structural
Funds, Cohesion Fund, EIB, EIF
resources
Subject of transfer :
– policy (cycle), cycle phase,
– strategic planning/ management
– introductory MLG,
– Financial instruments- FOCEM,
bank resources
Own elaboration
The role of the EU seems as is to encourage and facilitate the whole process through
intensifying political contacts and allocation of some financial resources enabling the
implementation of the recommendations. In a first step the EU-activities are more
concentrated on providing advice, training, exchange of staff and politicians. But, in the long
run, advice and training will not be enough to cover the high expectations placed in Europe.
[AEBR, 2010]
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