Research and International Trade Policy Negotiations
Routledge Studies in Latin American Politics
1. Research and International
Trade Policy Negotiations
Knoweldge and Power
in Latin America
Mercedes Botto
Knowledge and Power in Latin America
First published 2010
by Routledge
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Simultaneously published in the UK
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Library of Congress Cataloging in Publication Data
Research and international trade policy negotiations : knowledge and power in Latin
America / edited by Mercedes Botto.
p. cm.—(Routledge studies in Latin American politics ; 1)
Includes bibliographical references and index.
1. Latin America—Commercial policy—Research. 2. Latin America—Economic integration—Research. 3. Economic development—Latin America—Effect of education on. 4. Policy sciences—Research—Latin America. I. Botto, Mercedes.
HF1480.5.R388 2009
382’.3098—dc22
2009010320
ISBN10: 0-415-80191-5 (hbk)
ISBN10: 0-203-87074-3 (ebk)
ISBN13: 978-0-415-80191-1 (hbk)
ISBN13: 978-0-203-87074-7 (ebk)
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In recent years FLACSO Argentina has been creating arenas for analysis and building communities for reflection and learning on processes connected to the establishment of new institutional systems that support economic and trade policy decision making. This book, coordinated by the Study Program on International Economic Institutions (PIEI), is a particularly important contribution to those efforts. Clearly, moreover, it is a timely contribution in light of the need for comparative and multiperspective analyses of the paths taken by different countries in Latin America.
We are now in the second half of the first decade of the twenty-first century, and for Latin America in particular this is a period marked by greater eagerness among various social actors to analyze the present and to be able to determine states’ capacities for forward-looking thinking about Latin American countries’ insertion into the regional and global contexts. The importance of reviewing the ups and downs of reform in the past two decades is still apparent in technical and political fora, and doubtless there are important lessons to be learned from that period. Nonetheless, the use of those reflections in guiding present-day decisions, as well as in building, documenting, and communicating scenarios for economic growth and an improvement in the distribution of that growth among societies, has acquired equal or even greater force in the meeting point between evidence, knowledge, and decision making.
Consistent with those trends, the core contribution of this book is in the area of the interaction between ideas, their construction, and the formulation and implementation of external trade policy. To that end, as well as taking on the challenge of integrating the outlooks of various actors in this field, the book proposes a multidisciplinary approach to identifying the lessons learned from the progress of market reforms and their implications, with a view to understanding the present context and how it might evolve.
The book analyzes the reforms and trade policies from a sectoral perspective, and from the standpoint of systems that offer evidence on how to manage external trade relations. It thus presents the challenges that the state faces in assuming responsibilities at the domestic level and with its peers, taking positions in various structures that facilitate better outcomes in external commercial insertion—such as regional integration agreements, or arenas for international and regional coordination of the conditions for opening toward global markets. From that perspective the book shows the reader the importance of trade policy, and the significance of how it is made and implemented, in the democratization of states and of many transnational arenas.
One of the goals of the International Development Research Centre (IDRC) is to facilitate the use of knowledge and the results of technical research in decision making on public policies, thereby promoting knowledge as a democratizing factor. In that light, collaboration with this publication—with those who have contributed their analysis from the initial activity that gave rise to this exercise in reflection and synthesis, and with those who have added their interest to this endeavor—is an accomplishment for the IDRC and a very important means of shared learning. The Center’s contribution is part of its collaboration with knowledge-gathering institutions and networks that are geared to the production and use of research in a way that pays particular attention to the many demands of such knowledge and its users.
The chapters of this book explore a common theme: the capacity and limitations of academic research in contributing to the design and implementation of trade policies and strategies for international insertion. By studying experiences in Latin America, the authors address a diverse field: conceptual matters, regional issues, and analysis of national and sectoral cases.
We considered it interesting and useful for IADB/INTAL to support the dissemination of this material. First, though the research methodology is a matter of debate in academic circles, the studies cover those developments and thus enrich the analytical level of the discussion. In addition to this conceptual endeavor, several chapters also use information from field research that enhances and expands our understanding of the issues being examined. In that respect, the book makes a contribution to a field in which there has been little previous research.
Second, given the issues discussed and the way they are addressed in the various chapters, the book is of interest to a wide readership: students, specialists, researchers, and public-policy makers. Students will find here accounts of national experiences and sectoral negotiations that are not always easy to acquire by those who have not had an opportunity to take part in these processes. Specialists in the field can verify the more robust aspects of the studies, as well as those hypotheses that require more analysis and evidence. Finally, the book is also an invitation to a dialogue with policy makers and trade negotiators, those responsible for international relations, and leaders of agencies working on development and trade policy. In this regard, it should be noted that the authors signal a doubly constructive posture. On the one hand, they indicate that academia has managed to gain access to and offer support in a field and issue area that previously was the preserve of governments. On the other, they also acknowledge that the quality of academic output would benefit from greater exchange and dialogue with the actors directly involved.
Finally, from the institutional standpoint, IADB/INTAL became involved in this research project in its final stage. The book’s editor, Mercedes Botto, and the various authors had previously undertaken the coordination of the project, the field-work, and the research. All that was needed was a supplementary but essential effort to edit the draft studies and publish them. That is how the Institute has supported the project: by facilitating the final steps leading to publication. This allowed the findings of an endeavor that was almost complete, and that otherwise would have had a smaller readership, to be made available to those who are interested in trade negotiating processes. For these same reasons, INTAL’s support for the publication does not necessarily imply agreement with the authors’ conceptual approaches, opinions, or viewpoints.
To know and understand civil society’s role in current regional integration processes has been an aim of my work since I joined FLACSO in 1999. With the passing of time I have discovered new ways of addressing this issue and have expanded on them. In 2004, an international competition organized by the Global Development Network (GDN/World Bank) led me to focus on a particular civil society actor, academia, and the influence that its research has on public policies.
The proposal presented at that time centered on the making of trade policies and, specifically, on international-trade negotiations—an area in which FLACSO’s international relations section has a long history of academic research and involvement. I found the issue highly interesting, not only because of its novelty (there were no systematic studies of the matter) but also because it makes all of us who make a living from research the subject of our own inquiries. It allowed us, and to some extent even obliged us, to consider and reflect on the purpose of our profession.
Thus we embarked on a series of interviews with academics and decision makers involved in formulating and implementing external trade policy in the Southern Cone (Argentina, Chile, and Brazil). Our interest in the issue was matched by that of our interviewees, bolstering the idea of extending the study to other countries of Latin America. Thus we proposed holding a workshop on the nexus between research and foreign-trade policy in Latin America, as part of a forum organized by UNESCO and the Argentine government in February 2006. This book sprang from the richness of the papers presented at the workshop and the enthusiasm of colleagues from other countries who were interested in furthering the debate on the issue.
I want to give my deepest thanks to the many people and institutions that participated and collaborated in this endeavor. First, to the authors, who undertook an arduous labor of fieldwork and analysis, which is reflected in each of the chapters in the book. Second, to the institutions and organizations—such as the International Development Research Centre (IDRC), the Secretariat for Science, Technology and Productive Innovation (SECyT) of Argentina’s Ministry of Education, Science and Technology, and the Institute for the Integration of Latin America and the Caribbean (IDB/INTAL)—which made possible each initiative from the emergence of the idea to the distribution of the book. I also want to thank all those colleagues who dedicated time and effort to reviewing the studies, and who are mentioned individually in each chapter, and to my colleagues at the Program of International Economic Institutions (PIEI) at FLACSO, especially to Daniela Perrotta and Jorgelina Loza who helped me in the coordination and edition of this book. Finally, I owe my special thanks to Agustin Rojo, my husband, my life partner, who patiently accompanies me and supports me both personally and professionally.
Mercedes Botto
Senior Researcher
FLACSO Argentina—CONICET
Concern with understanding how academic knowledge affects decision making is not new. It dates back to the early days of social science, and has persisted in contemporary debates about the knowledge-policy nexus and the functions of experts with regard to decision makers, assessing who is subordinate to whom, and in the name of what legitimacy. Only in the postwar period was analysis of these matters systematized as a specific branch of the recently created science of public policies.2
Currently there is renewed interest in these questions. That interest is nourished by a growing and varied number of initiatives at both the international and national levels (UNESCO, World Bank, GDN, IDRC, DFID, EGDI, and others) that seek to reinforce the impact of knowledge on public policies as an instrument of social change (development, equity), and as a means of effecting social policies and practices that are ever more robust and effective.
No nation that wants to shape informed policies and take effective action . . . can afford to be without its own independent capacity in science and technology . . . Every nation [should] develop a science and technology policy that reflects local priorities. (Annan, 2004: 925).
While it is possible to distinguish different theoretical approaches, as well as the political and/or ideological perspectives and interests they pursue, all these initiatives agree on the need to strengthen the production of local knowledge that is geared to resolving each community’s own development problems through empirical research. The more robust the findings and the better they are communicated to decision makers, the greater the chances that the research will find echo in high-quality and effective public policies—that is, policies that can solve a given problem (Guimaraes et al., 2006).
Analysis of this issue is not simple, however, and there are many challenges to reaching verifiable and generalizable conclusions. First, the distinction between specialists and decision makers seems to be ambiguous at the level of both conceptualization and conduct; often, the two roles seem to be embodied by a single person. Second, the extensive literature and available evidence on the links between research and public policies concerns the experience of the industrialized member countries of the Organization for Economic Cooperation and Development (OECD). There is practically none on the developing countries. The reasons for this lie not only in the wide cultural, economic, and political diversity of the different contexts, but also in the basic role that international actors play in both research and political processes (Court and Young, 2004).
In the particular case of Latin America, however, during the past twenty years there has been a proliferation of studies analyzing the role of experts and technocracies in public policies. Most of these studies focus on national cases, and they seek to explain the prominence of these actors in the implementation of structural reforms in the 1990s (Centeno, 1994; Valdés, 1995; Silva, 1996; Conaghan, 1997; Hunneus, 1997; Montecinos, 1997; Camou, 1997; Babb, 2001; Schneider, 1997; Neiburg and Plotkin, 2004). This exploration of the role of expert knowledge in public policies persists today in studies on think tanks, also dubbed knowledge factories. Most of these studies undertake a morphological mapping of the varied array of organizations that have been set up and have reproduced in the fertile ground of the region’s new democracies (Thompson, 1994; Uña et al., 2004; Braun et al., 2004).
In light of the open discussion and the gap left by the local literature, this book seeks to deepen empirical knowledge and analysis of the links between research and decision making in a particular field: Latin America’s external trade policy. The choice of this policy as a particular area of study is warranted by the importance of international trade negotiations in recent decades as a result of globalization. In the late 1980s and early 1990s, most countries in the region embarked on trade opening. Initially this took the form of unilateral liberalization, but later it swung toward international negotiations for preferential agreements or for deeper regional integration. At present, the new progressive leaders in the region who are critical of neoliberal orthodoxy do not downplay their interest in external economic negotiations. Although the nature and strategy of the talks seem to change, the negotiations remain a priority in efforts to ensure growth with greater equity.
This book begins with a review of the literature on the role of research and academia in the making and implementation of public policies. It continues with a description of the main challenges that the new, postreform context opens to research. It then presents a series of studies that, with different perspectives and levels of analysis (regional, national, and sectoral) reveal how local academia has been participating in Latin American trade policy in recent years.
The literature identifies at least two models of how knowledge affects decision making. Both are highly consistent with the rationalist and incrementalist approach that has characterized the study of public policies since the field began in the 1950s.3
The first model springs from a linear and rational view of the decisionmaking process, one that sees social researchers and public decision makers as its leading actors with convergent trajectories (Brunner and Sunkel, 1993). While social research provides the knowledge and instruments needed to rationalize and coordinate the decision-making process, the decision makers are responsible for putting it into effect and for tackling the system’s complexity. These roles are not interchangeable. Rather, the former provides a basis for the latter, and the superiority of knowledge stems from management of empirical evidence in line with the rules of “scientific” learning. This allows problems to be clarified and helps lessen the uncertainty that is attendant on any decision. For this convergence to take place, however, there are certain prerequisites: the information has to be available and accessible; the research findings have to be rigorously backed up; the results have to reach decision makers in a timely manner and an appropriate format; the recommendations have to be understandable and understood; and above all, the suggestions should not conflict with strong political interests.
The second model is more realistic and is skeptical about the rationality of decision making. It sees the simultaneous presence of the afore-mentioned assumptions as unrealistic and rare. Quite the contrary, its view is that there is not one but several juxtaposed realms of decision making that regulate themselves through a process of mutual adjustment. The participants in this process are a range of actors who have partial information and different kinds of knowledge (interests, intuitions, previous experiences, and so on). Academics and/or experts comprise only one of these actors, and their knowledge—based on scientific rules such as evidence, verification, and/or measurement—is only “one” kind of knowledge. Hence this approach concludes that technical knowledge is of relative and secondary significance, and that only exceptionally does empirical research have direct, instrumental, and clearly identifiable effects on decision making.
Amid these constraints, social science expertise can have an impact only if it competes or overlaps with local knowledge provided by one of the participating actors. Most often the outcome of this impact is a framework of empirical generalizations and ideas that might be absorbed unwittingly by decision makers.
The differences between the two models persist today, signaling a clear divide between international organizations and national agencies that finance and use social research in developing countries.
One set of interests, grouped around the theory of “bridging research and policy,” points to the need to improve the links and communication between researchers and decision makers (Global Development Network, 2002; Lucas and Cornwall, 2003; Court and Young, 2004). It is by linking these two privileged actors in the process that the quality and effectiveness of public policies are guaranteed. This proposal for intervention brings together at least two assumptions from the rationalist approach: first, that researchers and decision makers are the only actors to be considered in the decision-making process; and second, that decision making can be made more effective and efficient through political and social engineering. At present, this possibility is aided by the rapid development of new information and communications technologies. These, coupled with investments to build international networks, allow local researchers to access the knowledge available in the “global market of ideas” (Rius, 2003).
A second group of institutions and authors centered on the “embedding research and policy” approach criticizes the preceding outlook as elitist and works to build inclusive, multistakeholder and problem-oriented networks (IDRC, 2004; Gibbons, 1994; Rius, 2003). In contrast to academic networks, this approach ensures a greater exchange of outlooks and knowledge, and—as the incrementalist model indicates—it enhances the impact of knowledge on decision making. On the other hand, and in the context of developing countries, these networks help consolidate pluralist and open democracies by allowing the different actors (the “users” of knowledge) to take part in defining public policies, not merely in implementing them.
Despite the differences about how to do it, therefore, both approaches agree on the need to finance empirical research and encourage its use as a means of solving development problems.
Most empirical studies of the links between knowledge and decision making reflect the state of the issue in developed countries: the case of the United States is by far the most referenced, followed by studies of the French, British, and Italian systems (Peters and Baker, 1993; M. Smith, 1991; Restier Melleray, 1990; Regonini, 1992; Hall, 1990; Xifra, 2005). There are no specific studies of the issue in Latin America, and the few existing analyses of decision making tend to reach conclusions that are questionable or useless because in general they reproduce, templatelike, conceptual categories from the pluralist democracies (Cabrero Mendoza, 2000).
From being an issue of very limited interest to Latin America governments, the role of academics and research became an object of analysis and questioning in studies on the implementation of the structural reforms of the 1990s.4 The depth and speed of the changes wrought by those reforms attracted the attention of many analysts and gave rise to a vast literature. Three hypotheses have sought to explain the significant economic policy shift toward neoliberalism in the region. The first attributes the change to the gravity of the crises inherited by the new governments. The external debt crisis confronted the region’s governments with a worn-out development model and simultaneously spurred a widespread public perception that the countries were in a blind alley. Huge social sectors supported the reforms because of the lack of alternatives at a time of crisis (hyperinflation) and/or the collapse of confidence in the postwar development model. In these circumstances, political leaders could take approaches that in normal periods would have been seen as against the interests of the population (see, among others, Stallings, 1992; Keller, 1993; and Grindle, 1991).
The second hypothesis links structural reforms to democracy. In fact, this is less an explanatory hypothesis than a revision of an intellectual debate of the 1980s, one that associated trade liberalization with authoritarian regimes. Authors such as Remmer (1990), Pzersworsky (1991), and Haggard and Web (1994), among others, showed that, contrary to popular belief, democracies could tackle market reforms successfully. Even though the implementation of structural reforms entails costs and losses, support for them was justified on the grounds that democracies guarantee protection of basic, primary values such as private property and individual rights.
Both the crisis argument and democracy argument aided understanding of why there was support for the implementation of the reforms, but they say nothing about the substance of those reforms. The third hypothesis seeks to explain why neoliberal prescriptions were chosen and not others. It centers on the pressure exerted by international financial institutions by means of the conditionalities to which loans and aid were tied. This largely explains why these prescriptions were set out almost identically in the various countries’ payment commitments, and why they were implemented simultaneously throughout the region (see, for example, Haggard and Kaufman, 1992; Buira, 2003). This argument about financial pressure, however, is understandable only in light of the countries’ urgent financial needs and the lack of credible alternatives.
Only in recent years has a fourth explanation emerged. This focuses on the role of ideas and epistemic communities in the application and continuance of this paradigm. Most of these studies analyze the ideas and networks revolving around trade liberalization (Goldstein, 1994; Fitzgerald and Thorp, 2006; Jordana and Levi Faur, 2006). One sound reason for this is that of all the policies that form part of the structural reforms package, for both the World Bank and the International Monetary Fund (IMF) this issue was the cornerstone of their advice and technical training. Between 1979 and 2001, these institutions financed and produced a total of 283 books or other publications that explicitly highlighted the benefits of opening and the economic and political problems generally faced by governments that apply the reforms (Niño, 2004: 15).
The importance of transnational knowledge networks or epistemic communities at times of crisis is not new in Latin America politics. The most immediate precedent is the influence of the model posited by the economists of the Economic Commission for Latin America (ECLA) in the 1950s and 1960s when, in the face of a global decline in the prices of agricultural exports, they recommended a model of inward-oriented growth. But the impact of the “Washington Consensus” was greater because of the preferential access of its member organizations to global capital and markets, which guaranteed them greater capacity to influence economic outcomes (Gourevitch, 2005).
Of the institutions that make up this policy transfer, the World Bank had and still has preeminence as a transmitter of the doctrine at the global level. There are several reasons for this leadership, including: the bank’s extensive research agenda; its capacity to mediate between developed and developing countries; its apparent independence from the U.S. government; and, most importantly, public recognition of its academic legitimacy and credibility as a “global knowledge institution.” The global legitimacy and credibility that its expertise enjoys stem from the circular linkage between the knowledge that it produces and the audience that legitimates that knowledge, thereby ensuring that it is reproduced (St. Clair, 2006).
Another important group of studies sheds light on the fundamental role of academics and/or intellectuals in effecting structural reforms in various Latin American countries. All these authors agree that economists became key interlocutors of reformist leaders and occupied central posts in national cabinets. Thanks to certain professional qualities, therefore, they became the leading heralds of reform (Montecinos, 1997). Notable among those qualities are the following: they were trained to engage in their activities close to centers of economic and political power, either public or private; they comprised the most cosmopolitan elite in the region; and they were pragmatic in forums for dialogue. In fact, after the crisis of the 1980s, economists of all stripes—conventional and structuralist—agreed on the need for a new economic consensus, either because of the pressure exerted by the rules of the international economy and foreign creditors or because they acknowledge their own past mistakes.
Some authors argue that the decision to include these experts was a response to domestic matters such as the need to curb distributionist demands from interest groups and end clientelist practices. Hence they isolate the reforms from traditional political and electoral management (Bates and Krueger, 1993; Gueddes, 1991). For others, the inclusion of these “technical specialists” was a response to external factors: the reformist leaders wanted to give a positive signal to the developed world in order to restore investor confidence and demonstrate government commitment to the reforms (Schneider, 1997).
This book brings together a series of studies presented and discussed in the “International Forum on the Social Science-Policy Nexus,” organized by UNESCO in Buenos Aires in February 2006.5 Before going fully into the substance of each chapter, we should clarify some conceptual and methodological definitions that guided the preparation of the studies and that also link them together as an integrated whole. The first definition concerns the term academia. Throughout the book, the terms academia, researchers, experts, and technical specialists are used interchangeably to refer to the actor whose power to have an impact is under analysis. Although they are not the same thing from an epistemological viewpoint, it is true that academia in the traditional, university sense has ceased to be the only field of activity for researchers, and that today a wider range of institutions are competing in the market of ideas. Currently, academics undertake a broad array of activities defined as “symbolic-analytical services” related to identifying, solving, and mediating material problems by manipulating knowledge (Reich, 1992).
The second definition concerns the kind of decisions that knowledge can affect by lessening (as mentioned earlier) degrees of uncertainty. For this we use a typology that distinguishes between shifts in paradigms, strategies, or circumstances (Hall, 1990; Sabateir and Jenkins-Smith, 1993). As regards the first of these, not only the means but also the purposes of public policies are reviewed and modified. In the postreform context, for example, a similar kind of decision would entail questioning the opening. As regards strategy decisions, the changes are confined to policy instruments, and the basic goals remain the same. To return to the issue of trade policy, this kind of change would find expression, for example, in the option of negotiating with the United States to create a free-trade area or deepening integration with Brazil through Mercosur. Finally, situational decisions consist of incremental adjustments in the use of some policy instruments, while the entire set of instruments remains unchanged. An example is the technical decision to have a uniform tariff level. The experiences analyzed in this book show that, in the postreform context, changes were confined to the second and third types, the same as with the academic output that accompanied them.
The third definition is methodological and concerns how to measure impact. It is widely known that impact is hard to capture. The challenge is even greater in the field of ideas or knowledge because their effects may become evident over the long term and indirectly. There are two ways of approaching the matter: the ex-ante approach and the ex-post approach (Davies, Nutley, and Walter, 2005). The former seeks to identify the academic output produced on a particular issue and assess its impact by means of public-policy decisions and guidelines. The second seeks to identify a change in policy and assess the impact of knowledge and academics, as distinct from the participation of other actors. These methodologies pose problems of attribution,6 and thus the chapters include elements of both analytical approaches.
The fourth and final definition concerns the book’s aims and the consensus among its authors on the importance (apart from contributing to greater knowledge of the issue) of providing tools to improve the production and use of research in public decisions. To that end, all the chapters include recommendations or possible courses of future action for each particular experience. Some are short-term initiatives that require few resources and little political will. Others are longer-term and call for a greater investment of resources and political will.
With the consequences of the structural reforms as backdrop, we will analyze the postreform period. As this section shows, external trade policy has peculiarities that foster the production and use of research in decision making. The trade opening undertaken by most Latin American countries in the late 1980s basically consisted of lowering tariffs on exports and imports, and eliminating domestic promotion measures (subsidies, quotas, and so on). By doing that the governments hoped to improve their exports’ access to new markets, attract direct investment, and consolidate state reform (the “lock-in” effect).
To carry out the reform, they adopted two strategies: unilateral opening, whereby on their own initiative the governments determined the levels and calendar for tariff reduction; and opening by means of preferential agreements, whereby the scope of reform was the outcome of an exchange of concessions between the countries taking part in the negotiations. There is a correlation in time between the two strategies: before the establishment of the World Trade Organization (WTO), the opening was mainly unilateral; after 1994, and following the entry into force of the North American Free Trade Agreement (NAFTA), the “domino effect” spurred a negotiating race that all countries joined, for fear of being excluded and having to pay the costs of discrimination.
In general terms, external trade policy has some peculiarities that distinguish it from other public policies of national scope. On the one hand it involves processes and actors from different spheres, national and international, to mention some peculiarities with two very different models of collective action that interact constantly.7 On the other, trade policy has a strong distributive element that is comparable only to that of fiscal policies. When the economy is opened and protection is eliminated as a result of the commitment to reach a zero tariff and deregulate, the tension between general and individual interests resurfaces to demand more detailed definitions by the state: it is no longer only a matter of opening new markets, but of defining the model of integration.
International negotiations add new challenges to these peculiarities of trade policy. The first challenge concerns the greater liberalization commitments that the governments assume in the WTO. Although trade negotiations are not new for most Latin American countries,8 the kind of negotiations that began in the 1990s sought to establish free-trade areas. In the process of creating these areas, the governments pledged to eliminate tariffs on all goods traded between the countries involved, thereby giving rise to a distributive struggle in which gains for one sector (agriculture, for example) became losses for others (such as manufacturing). An added difficulty is that the trade-off between the two sectors is more apparent in negotiations than in unilateral opening. This struggle between internal forces can lead to a deadlock in decision making, whereby the status quo predominates because of sheer inertia. The main challenge for governments, therefore, stems from their capacity to break this immobility and devise negotiating and integration strategies that bring benefits to their broader societies rather than simply to particular interests.
A second problem springs from the expansion (in number and type) of negotiating agendas. Until the Uruguay Round, trade negotiations were confined to the issues of goods trade and tariff deregulation. These days, by contrast, the agendas include nontariff matters that take primacy over national regulations in order to adapt the latter to WTO norms. For most developing countries, the inclusion of these regulatory issues brings with it an obligation to make very significant sacrifices in the area of sovereignty. The challenge is to assess the opportunity costs imposed by these standards for society as a whole. To that end, the governments need information about and knowledge not only of the national economy and regulations, but also of the country with which they are negotiating.
The third challenge arises from the multiplicity and simultaneity of the negotiations on which the governments have embarked. In the prereform period, international trade negotiations were a minor issue on the agendas of most Latin American governments, and most of them were between countries of equal development levels. In the event of asymmetrical negotiations, governments had recourse to the principle of special and differentiated treatment, which sought to compensate for differences in negotiating capacity between developing and developed countries. In the postreform period, by contrast, there is a marathon of negotiations at different levels (multilateral, regional, bilateral) among which the most attractive—in terms of market access and investment—are the asymmetrical ones; but in these there is no special and differentiated treatment. This complexity obliges the governments of the developing countries to improve their negotiating capacity by professionalizing their negotiators and producing appropriate knowledge in the public and private sectors.
A fourth challenge in the postreform period is the growing demand for participation in government activities, and for transparency in those activities. Before the 1990s, trade negotiations involved only a small number of public and private actors with a direct interest in market opening. Today, the complexity and greater number of issues on the negotiating table arouse the interest of new actors and ensure a more open debate. This expansion springs from international and local pressures to make government decisions public and transparent (Botto, 2003). These management standards, spurred by the ideal of good governance and the reevaluation of democracy as a process, cause the actors involved in trade negotiations to take ownership of them and to strive to use them as a means of protecting their interests. Faced by these powerful demands, the governments are obliged to make the debate clearer and to justify their actions by means of information and credible studies.
The idea of the present book emerged from this mapping of the issues, which is by no means exhaustive but which does indicate the importance acquired by the production and use of social research in these fields.
The studies in this book have been grouped into three types of experiences that seek to capture the research–trade policy nexus from different perspectives. The regional studies and comparative experiences consider the common features of the production and use of knowledge in Latin America and its contribution to regional integration processes. The national experiences, on the other hand, examine the specific technical and cognitive requirements of each country and the capacities that are either available or have to be gained in order to meet those requirements. Finally, the book analyzes sectoral experiences and explores the extent to which the production and use of knowledge is changing in line with the subject matter of the negotiations.
The book begins with a study by Diana Tussie, assisted by Pablo Heidrich. They take a political economy approach to analyzing the opportunities that the new context offers for the emergence and establishment of a new epistemic community in the region. The distinctive feature of the recent period stems, on the one hand, from an electorate that is tired of so much orthodoxy, demanding higher growth and distribution and, above all, citizen participation. On the other, it springs from pressure exerted by alliances of export interests to continue and deepen the opening. The new progressive governments respond to this tension between societies and markets with pragmatic policies that cannot be seen as a black-and-white matter of right versus left or the state versus the market. The authors argue that this national and regional context offers an opportunity for social research— especially research based on national needs—to act as a focal point in mediating between these interests, and in creating mental maps that are shared among the community. Their empirical analysis draws on three case studies. The first two examine the links between knowledge and trade in two areas of regional commerce: physical infrastructure and energy integration. The third concerns the role of the WTO’s technical assistance.
In the light of her experience as a technical adviser in Mercosur’s Technical Secretariat, Deisy Ventura analyzes the links between learning, technical knowledge, and decision, making in the region. She argues that, at the moment, the research that is commissioned and used does not help deepen integration; on the contrary, it weakens it. Several factors contribute to this circumstance: the false conflict between research and decisions, whereby the technical specialist produces and the politician decides; the weak institutionalization of the integration process; the difficulty of coordinating technical work among Mercosur’s different areas; the scarcity of knowledge on some issues; and lack of access to public and affordable information. Consequently, the research produced ends up serving the interests of the diplomatic groups and private actors that seek to nationalize the debate and/or demand protectionist measures to safeguard their sectoral interests. To counter the status quo, the author recommends strengthening research that ensures Mercosur is on the agenda of state authorities and in the portfolios of the member governments, and that helps the gradual establishment of a grassroots political movement.
From a comparative policy perspective, Mercedes Botto examines the role of think tanks in the Southern Cone that seek to have an impact on public policy. She explores the extent to which countries that have opted for different models of integration and opening, such as Argentina, Brazil, and Chile, use social research for decision-making purposes. The chapter centers on three main questions: What kind of studies are produced and how are they funded? How are the findings conveyed to decision makers? And to what extent are the findings used? The research is based mainly on surveys of eighty academics and officials in three countries. The conclusion points to a strong similarity among the three cases, which follow a traditional pattern inasmuch as the production and use of research remains in the hands of governments. Nonetheless, she points out some novel common features: the increasing trend to hire consultants; a high rotation of academics into public administration (and vice versa); and the use of research as a mechanism to mediate among domestic sectoral interests.
The book continues with a selection of national cases that describe the issues that have emerged in two different geographic areas with distinct models of integration: Mexico and NAFTA, and Uruguay in Mercosur.
From an international relations perspective, Blanca Torres characterizes the Mexican case as the most abrupt opening in Latin America. On the basis of information received from twenty-four researchers and decision makers, the author shows how the role of research has changed over time as the opening has deepened. While in NAFTA the contribution of economists was to justify its entry into force, today the role of academia is more analytical and critical with regard to new agreements. As regards impact, the author concludes that although academia remains a secondary actor relative to business lobbies, its growing presence helps improve national governance by making the decision-making process more transparent and participatory.
Cristina Zurbriggen examines the Uruguayan case from a public administration perspective. The chapter begins with a description of the political and technical difficulties that globalization and regionalization pose for the government of a small country like Uruguay. On the one hand, as a smaller partner, Uruguay does not have political leadership in the regional bloc. On the other, as a relatively undiversified economy, its prospects of securing market access and attracting investment are limited (today they are confined to the negotiations with the United States). The outcome is readily apparent: because its trade policy lacks a medium-term strategic vision, decisions are taken implicitly and on the basis of personal considerations (those of the officials in office at the time and/or representatives of the strongest lobbies), rather than on the basis of general interests. To counter these circumstances, the author proposes strengthening the state’s policymaking and technical capacity by coordinating the resources available in the various public agencies, professionalizing the participation of and linkages with the private sector, investing in staff training, and giving primacy to technical knowledge in public administration careers.
Unlike the other chapters, the two cases discussed in this section analyze specific episodes in the negotiations that have arisen recently (Tussie, forthcoming).
The first of these centers on the use of local and international academic research in the negotiations on tariff issues. Its authors, Mercedes Botto and Cintia Quiliconi, analyze the process of defining Mercosur’s common external tariff (CET). Once the countries had decided in the Asunción Treaty (1991) to create a customs union, it was to be expected that the research produced would be basically technical and confined to contextspecific decisions such as the kind of protection and tariff level to apply to extra-subregional trade. In Argentina, however, the debate spurred an abundant literature on strategic questions, such as the advisability of pursuing negotiations with the United States to establish a free-trade area, or of forging closer links with Brazil in a common market. While more than sixty studies were produced in Argentina, in Brazil there were fewer than ten. Analysis of the substance and impact of these publications highlights the important role that academia and social research played in this case, as local-level mediators between the contending interests in both the public and private sectors.
The second sectoral experience centers on services negotiations in the fields of health and education. Juliana Peixoto Batista and Mercedes Botto explore the role of academia in defining the negotiating positions that the Argentine government adopted in different fora between 1997 and 2004. They thereby shift the perspective on the production and use of research: while the other chapters examine its impact on tariff issues, this one focuses on regulatory matters. In areas like these, there was very limited academic input to the negotiations (analysis of regulatory frameworks, impact studies, examination of empirical data). Nonetheless, such input did exert significant pressure that helped shape the defensive posture that the government adopted in each of the fora. The authors conclude that this position was short-term and markedly ideologized. The balance of preferences came to sustain a functional status quo among particular interests, to the detriment of the general interest.
Comparison of the various cases analyzed in this book provides a basis for outlining a common pattern of links between knowledge and decision making in the region. This pattern emerges from the proliferation of studies and the participation of an increasing number of actors in the production, communication, and use of research. In the past the production of knowledge was the sole preserve of governments, given their monopoly of information and financing. Today, sectoral research centers and think tanks more often produce research and convey their findings to national officials and negotiators. This process of expanding knowledge and its consequent democratization has been abetted by the availability of international financing, the creation of international networks, and easier access to information. Nonetheless, this is an incipient and markedly asymmetrical opening in which access to these resources is very unevenly shared among the actors and sectors that seek to affect the process.
The chapters in this book also recall continuity with the past. While the number of actors involved in producing and communicating knowledge has increased, governments continue to define the research agenda in line with the interests of those sectors that traditionally have dominated foreign policy. In this respect, the ongoing international negotiations seek to secure access to agricultural markets, and most of the research that governments produce or commission tries to address urgent needs that come to the fore as the negotiations advance. By contrast, there are virtually no studies on medium- and long-term negotiating scenarios, or impact assessments that indicate the costs and benefits of the negotiations in nontrade areas such as labor, education, and so on.
The same is true of studies produced by business sectors or those financed by international organizations. The great majority are economic impact studies that use the same analytical methodology and technical language as the negotiators. For these groups, knowledge is another lobbying instrument that can be used to uphold their offensive or defensive interests in the negotiations. Unlike traditional lobbying mechanisms, however, the management of information legitimates their positions relative to other nongovernmental actors—unions, nongovernmental organizations (NGOs), small and medium-size enterprises (SMEs)—that take part in the negotiations with the government but that, unlike the traditional sectors, lack empirical data to support policies that are in line with their interests and outlooks.
The proliferation of trade negotiations in the 1990s had contradictory effects on the decision-making process. On the one hand, the expansion of the talks brought a growing number of actors into the discussion; but simultaneously it fostered an elitist type of integration in which a small group of interests or businesses benefited from the negotiations to the detriment of the majority. Today, by contrast, the context is marked by a global and national debate in which “good procedures” are not the only thing that matters, but also “good causes.” The former include the privileged position that the literature and public opinion accords to the institutional reforms and the urgent need for greater social control over (and transparency in) the public realm. The latter include a growing debate about the impact of trade liberalization on poverty and inequity, which is conducive to a discussion of how to ensure not only economic growth but also greater and more equitable distribution (Rius and Vigorito, 2001; Espino and Azar, 2004; Giordano, 2007; Ventura-Dias, 2006).
This new agenda is apparent on all levels—global, regional, and national. These levels are intertwined and they nourish each other, but they have their own peculiarities. At the global and regional levels, the concern of the 1990s for economic growth and trade liberalization now gives ground, as mentioned, to good causes and global goods (individual human and social rights, climate change, access to knowledge and learning). At the national level, the concern with improving market competition entails the need to ensure growth with fair distribution, especially the development of SMEs.
It is not only the public agenda that has changed, but also the collective actions of the different actors at play. In the 1990s, the scenario was marked by the exaltation of the markets and civil society, which became substitutes for the state (PNUD, 2004; CEPAL, 2004). Now, Latin America seems to be witnessing the reappearance of more-inclusive fora of political activity, fora that act as a needed counterweight to the state in building a development model that is less subordinate to globalization.
Although it is too early to make recommendations, the preliminary analysis of the studies in this book offers some interesting suggestions to induce decision makers, researchers, and donors to encourage the production of knowledge based on local needs and on the management of information on these issues. As mentioned at the outset, we are aware that very often these roles could overlap in a single individual.
• As regards decision makers, the evidence prompts the assertion that the negotiators and public officials working on external trade policy are more open to new ideas than are officials in other areas of domestic policy. While the latter base their decisions on simpler narratives that adhere to previous experiences, international negotiators are more sensitive to innovation and to changes in scenarios, most of them proposed from outside. Nonetheless, they prefer research that they commission themselves or that is produced in their own environments. They are wary and somewhat mistrustful of research findings from groups with direct interests in the negotiations, or from academics who propose substantial changes in the way they act. This endogamous thinking, however, contains some contradictions, such as the tendency to lose sight of the indirect impact of the negotiations and to trim their demands to short-term emergencies. There is also a contrary attitude on the part of other ministries, such as those responsible for education, labor, health, and so forth. These have been included in the negotiations only recently, and their officials maintain maximalist positions that disregard the political and theoretical constraints of international negotiations. In both cases there is a need for knowledge that enhances coordination in state bureaucracies, and that helps increase their capacity to commission and interpret research findings, as well as to put them into practice.
• With respect to researchers, the lessons learned from the national cases indicate that three aspects of knowledge production are important if knowledge is to influence decision making, albeit not immediately. The first is the quality of the information used, which should reflect and interpret, in the most credible way possible, links of causality that are not immediately clear in reality. This difficulty explains the success of econometric analyses in quantifying the trade impacts of the negotiations. The second matter concerns the way in which knowledge is communicated: if the research findings are to reach the ears of decision–makers, they have to be expressed in an accessible and direct language, make practical proposals on immediate needs, and, above all, be adapted to the short time available and the negotiating timetable. Finally, a researcher’s personal reliability and academic credibility are also crucial. The evidence presented in this book shows that a very small circle of researchers have links to decision makers. In general these researchers have experience in public administration and strong international links, and they are part of academic networks. In these kinds of public policies, isolated academic milestones (such as a book or methodological innovation) matter less than a long career path and vertical linkages.
• Donors are, without question, key actors in breaking the vicious circle linking the immediate needs of the negotiators and the financial dependence of researchers with consultancy studies. The chapters in this book speak of the production of local knowledge that is geared to the negotiators’ immediate needs (in which analysis is confined to considering scenarios for and the economic impact of the ongoing negotiations) when the main demand of those needs is the implementation of trade-opening policies. What is required, by contrast, is an expansion of horizons and research topics in order to generate empirical knowledge of the links between trade and other aspects of sustainable development, such as labor, gender, SMEs, education, and health. The number of people who use this knowledge must grow, so that the findings not only help negotiators to define their negotiating strategy but also serve to train the various social and economic actors hereto excluded from the policy-making process and its outcomes. What is needed, finally, is to foster alliances that link local and regional organizations in order to give them voice, and help them influence the way in which agendas are designed.
1. The author is grateful for the comments of Juan Carlos Torre and Ricardo Carciofi, and for the generous assistance of Daniela Perrotta.
2. Known as “knowledge utilization,” this branch directly addresses matters such as individualizing the conditions that help or hinder acceptance of analyses provided by technical specialists, the deontological criteria with which the specialists must comply when they are asked to assess policies whose goals they do not share, and the possible right or obligation to uphold solutions that are technically better than the preferences of public opinion (Regonini, 1992: 496).
3. The rationalist view takes us back to authors such as Lasswell and Kaplan (1950), who defined public policies as a planned program of values, ends, and practices in which good planning necessarily entails good implementation and a good outcome. In the incrementalist view, public policy is only an approximation of a desired goal, which is the same one put under constant consideration and in which each stage assumes an adjustment of ends and a reciprocal negotiation and accommodation (Lindblom, 1959).
4. These reforms involve not only a change to the development model—from one centered on protection of the domestic market to one based on free trade—but also a profound transformation in the procedures used to devise and apply public policies. In effect, time speeded up, legislative processes were omitted, and public and private actors—which traditionally had lobbied heavily—gave ground to new actors (see, for example, Torre, 1998; Botto; 1999).
5. Apart from the fact that the meeting served as a forum for the exchange of ideas among Latin American specialists on the impact of academic research on trade policy decision making, it has been part of the work plan of FLASCO’s International Economic Institutions Program (IEIP) since 2004. In this workshop, the IEIP presented the initial findings of its research on Mercosur and defined with the other researchers the terms of reference for future research. In view of the quality of the studies and the novelty of the issue, the IEIP later coordinated the publication of this book, in collaboration with Canada’s International Development Research Centre (IDRC), the IDB’s Institute for the Integration of Latin America and the Caribbean (INTAL), and Argentina’s Secretariat for Science and Technology.
6. As regards looking forward, from research to its consequences, questions of particular importance are what to look at and where to look, and on the basis of what time period. As regards looking back, from the decisions to the influence, the problem arises of how to separate the impacts of many influences and participants on the decision.
7. The first person to identify this reciprocal influence was Putnam (1988) with his “two-level” game: on the national level are actors and institutions that sit at the domestic negotiating table according to national rules, uses, and customs; international negotiation is advanced among governments at the negotiating table, with the participation of international networks and organizations, working in line with international law and the rules of the WTO.
8. In the 1960s and 1970s, there were negotiations among various countries of the region to reach preferential agreements in the LAIA framework.
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Like everyone else, I have only three means of assessing human existence: studying myself; observing others, who almost always manage to hide their secrets from us and make us believe that they have them; and books, with the particular errors of perspective that emerge between the lines. On the other hand, life clarified the books for me later.
—Marguerite Yourcenar, Memoirs of Hadrian
Intellectuals’ time does not coincide with political time, and there will always be debate about which should be adjusted to which.
—Oscar Terán, Intellectuals and Politics in Argentina
Knowledge, learning, and research are always intrinsic components of the policy-making process. When, what, how, and to what extent are matters that are widely discussed, as evidenced by the epigraphs at the start of this chapter. Nonetheless, these exercises in self-reflection have not been extended to the more technocratic and polemical fields, such as trade policy and negotiations. The debate on trade policy, an inherently distributive policy, has paid little attention to the struggle of ideas or the role played by research and the systems used to disseminate it. How research is used, produced, and viewed by public policy in developing countries, and the specific nature of the trade policy field, are matters that have not been subject to close scrutiny, despite the extent to which thinking has shifted as times have changed. It is as if this kind of knowledge is deemed to be absolved of the duty to examine and question itself, or to justify the validity of its explicit or implicit assumptions.
Consistent with the rest of the book, the present chapter seeks to contribute to the discussion by advancing some thoughts on the various contextual factors that play a key role in defining a trade policy problem, one whose resolution is often subject to influence, for the specific case of Latin America since the reforms of the 1990s and their aftermath. In different ways, all the countries of the region have since sought to diversify markets and have taken various steps to conclude more bilateral and regional trade agreements, as well as accords with other parts of a geographically mobile world. The world is set to be one of permanent negotiations. Taking the experience of Latin American countries at the start of the twenty-first century as a point of reference, one can discern the development of a trade policy that seeks a better distribution of global income. The debate is no longer framed in terms of right versus left or statism versus the market. When there is widespread disillusion with the poor results of the 1990s, elected governments seem resolved to maintain the same course in trade policy, a course that emerged after their economies were devastated by the cycles of boom and subsequent financial breakdown that succeeded each other like a trail of gunpowder from the Mexican crisis of 1995 to the Uruguayan crisis of 2002. Currently, the debate seems to be framed in terms of securing a new balance between growth and distribution, of the necessary and inevitable power sharing between the state and the market, both of them mutually dependent on each other and neither of them conceivable without the other.
Given the social discredit suffered by orthodox policies, Latin American public opinion has evinced less fascination with the free play of market forces and is mobilizing in various ways in favor of more state intervention. The electorate is plainly displaying a greater tendency to mobilize, and is simultaneously expressing a deep weariness with the reforms of the 1990s. For more than a decade, those reforms received a blank check for pro-opening and pro-market policies promising benefits that would be widely distributed. Too often the outcome was high rates of unemployment, stagnation, and rising inequality. The gap between the rhetoric and the much more gloomy reality has proved to be fertile ground for discontent, mobilization, and electoral reactions against pro-market orthodoxy. What are the challenges for academic research in this volatile context of permanent negotiations?
Part of our discussion is fueled by the results of the evaluation of the program of technical assistance that the World Trade Organization (WTO) provides to developing countries.2 We will use that assistance as a case study. At the same time, the debate that prompted these reflections, as well as previously published studies and those presented in this volume, have provided additional inputs to this chapter. The aim is to make a contribution, from the sidelines, to two fields of thought: on the one hand, to engage with the incipient but fast-growing body of work on the link between policy making and the production of research (which is part of a much broader debate on the role of ideas), and to extend it to trade issues; and on the other hand, to engage with those studies that focus on the reasons for, causes of, and context of the increasingly intense trade negotiations in which the countries of the region are involved, and with the demand for analytical capacity attendant on that process.
The chapter is divided into four sections following this introduction. The first outlines the shift that has taken place from trade opening to the current setting of permanent trade negotiations. The second briefly analyzes the debates about the role of ideas and research in the economic sphere. The third examines how technical assistance can be used to build a set of ideas. Before the conclusions, the fourth section discusses the research challenges in a context of permanent negotiations. The purpose of these sections is to analyze the place of ideas in the economic field, specifically as regards a contingent issue such as trade negotiations. To these ends the final sections use current examples to illustrate conditions in the countries of the region.
In developing countries, import substitution policies regulated and restricted trade flows during the greater part of the twentieth century. It is widely known that from the perspective of liberalism and neoliberalism, the omnipresence of closed economies throughout history was an aberration that hampered proper resource allocation. Protection was explained by the power of sectoral interests that operated under the cover of import substitution and that had extensive political resources to ensure colonization of significant parts of the state.
In that regard we can recall the notion, one that was broadly accepted in the late 1970s, that authoritarian regimes, especially the military dictatorships of the Southern Cone, were more able to embark on opening because they used terror and repression to eradicate resistance. Experience, however, showed that the political explanation (democracy versus dictatorship) seems to refer to context-specific conditions that enclosed and shaped government elites, and that demanded responses in the form of different policies—policies consistent with the challenges and pressures in which they are subsumed and in line with the prevailing culture. The preference for protectionist or liberal policies, in both democratic governments and authoritarian regimes, was a function of circumstances, and the aim was to manage the distributive struggles that emerged from the kind of external insertion chosen.
The revolution in trade policy during the 1990s, which drew one country after another toward unrestricted opening, spurred a new series of explanations that focused on the recurrent and ever more serious economic crises experienced by the countries of the region (Torre, 1998; Drazen and Grilli, 1993; Keeler, 1993; Bruno, 1993). The crises certainly produced a powerful incentive to reform: they opened up a window of opportunity for dormant interests and gave rise to trade reforms. Another spate of studies focused on analyzing the influence of the international financial institutions, such as the World Bank and the International Monetary Fund. The terms under which the rescue loans were guaranteed were not simply financial: in many cases the changes in trade policy came in response to the financial conditionalilties in extensive loans for structural adjustment or more targeted loans for trade policies. Such studies tended to seek explanations in indebtedness, and especially in World Bank adjustment loans (Kahler, 1992; Botzman and Tussie, 1992; Drazen, 2002).
There were some gaps in the explanations for the reforms, whether based on the crises of the 1980s or the conditionality to which they gave rise. First, for a crisis to trigger a particular reform, there has to have been a structured political option, one that was ready to grasp the opportunity and drive the process in the desired direction. Absent such a political force, the crisis can explain only the change, not the choice and adoption of a particular policy. Why did the crises of the 1980s lead to opening while earlier crises did not, and those of the 1990s produced an array of responses, both for and against opening? Similarly, as regards the role of financial conditionality, why was (urgent) stabilization in the 1980s accompanied by opening while the same combination did not emerge under earlier circumstances of conditionality? Moreover, the knowledge offered by the classical and neoclassical theory underlying the doctrine of conditionality was far from maintaining that such a combination was necessary or even feasible. Quite the contrary, it was generally known that unless it were properly timed, opening posed the danger of undermining stabilization by causing currency depreciation. Alternatively, stabilization undermines opening because of the overvaluation of the exchange rate, stimulating imports, and hampering exports (Papageorgiou et al., 1991).
If the trade opening attendant on stabilization programs had not been based on the available knowledge, it must be assumed that in their time the crises (and the accompanying conditionality) were seen as a window of opportunity for latent interests: a pragmatic expedient to promote ideas and interests that had been waiting to appear on the public agenda and take part in devising policies.
The result of the crises of the 1990s, the so-called crises of globalization, is that this agenda of unilateral opening has been replaced by more moderate and pragmatic strategies featuring demands for guarantees in return— in short, reciprocity in access to external markets. Thus began the stage of permanent negotiations to conclude market access agreements in the form of free-trade areas, customs unions, or simple fixed-preference accords.
In this context of permanent negotiations, new questions arise about the acquisition of technical capacities and the ability of the state administration to tackle the negotiating agenda. The effort to build capacity is closely linked to the current demands and complexities of trade negotiations, which are remote from strategic calculations and must be addressed not only with greater mental openness but also with staff that have a range of technical skills. The effort is also consistent with the need to imagine possible scenarios and make sense of them, and to avoid becoming trapped in analysis of what must inevitably happen, as if it were impossible to bring about change or progress. Many studies (Laird and Messerlin, 1990; Rodrik, 1995; Jordana and Ramió, 2002; Niño, 2004) argue that effective decision making depends on how institutions locate and distribute responsibilities, such that they can insulate the economic technocracy from immediate pressures and thereby foster a long-range vision of the advisability of the available alternatives—in terms both of one negotiating front versus another and of the acceptability of an offer (or concession) in a particular forum. Institutions, ideas, the participation of experts, and the influence that legitimate political decision makers can exert—these seem to be the elements of the “virtuous circle” required to reconcile the field of ideas with the field of policies.
Which ideas and which policies in particular? Autarkic models that are closed to international trade have been abandoned, and now there is broad acceptance of lower levels of protection for national markets than in the past. But there is still a dispute about the level of protection that allows significant growth, job–creation, and improvements in economic efficiency. Institutions may not have the proper structure to operate in a context of uncertainty, where a lack of clear knowledge about the effects of proliferating negotiations can lead to a multiplicity of decisions.
There is no doubt about the significant change in the intellectual landscape from which emerged a new consensus on opening as the starting point for new development strategies. With the preaching of a new paradigm, government elites have not only accepted the initial opening but are increasingly willing to deepen it through trade negotiations. In this context of multiple negotiations, export interests in every country have gained fresh and flourishing influence relative to the once more powerful producers who are tied to the domestic market, those who previously had enjoyed the benefits of import substitution. Today, the alliance of export interests leads trade negotiations whenever there is a chance or hope of gaining access to international markets. When a negotiating partner offers access to its market, exporters see a clear sectoral benefit. That mobilizes a powerful interest group that will push for the state apparatus to be deployed in favor of the negotiations. The cost, in the form of a “reciprocal concession” for the access granted to the export alliance, will be borne by another sector or industry—the one that the country decides to open to international competition. Aware of the attraction of the potential gains, and naturally moved by economic logic, exporting interest groups organize themselves, link their interests to the export market, and exert pressure to ensure that their sectoral preferences are acceptable and made viable in the trade negotiations.
Today, business interests not only are organized sectorally through their national chambers of commerce, but have also forged links through transnational networks to monitor the negotiations (see Chapter 3, comparing Chile, Argentina, and Brazil). Since the Third FTAA Ministerial Meeting in Belo Horizonte, for example, businesspeople have formalized their transnational activities in the Business Network for Hemispheric Integration (BNHI) with a view to closing ranks among the region’s businesses and creating bonds of trust. Thus the national actors themselves sought to convince their governments, which were resisting the FTAA, of the benefits of opening. On that occasion the BNHI demanded that the governments allow it to play a greater role in the FTAA decision making and negotiations as observers in the ministerial meetings and the working groups. Similarly, in each subregion, business interests organized themselves for the negotiations with the European Union (EU). They seek not only to influence the decisions of their respective governments, as well as to build trust and foster coordination within their own sector, but also to influence public opinion in general (Botto and Tussie, 2003).
Obviously, nobody can doubt the influence and strength that these actors have gained, but it is also true that their interests require mediating networks. The creation of a common framework of economic ideas with policy makers is clearly essential if those ideas are to be sustained in practice. This approach offers a broad array of opportunities to affect the tradenegotiating agenda, such that it does not solely respond to short-term gains for the factors of economic power. In this respect there is fertile ground to explore the impact that these ideas can have—especially their strength and legitimacy—in shaping behavior and policy.
There is practically no economic policy in Latin America today that does not define itself as pragmatic.3 Used well or poorly, on the one hand, this broad definition entails staying the course of pro-market reforms; and on the other hand it entails moving the rudder a few degrees to “listen to demands” and take steps to achieve greater social cohesion. The agenda features the economic and social demands of growth and redistribution, as well as demands for citizen participation. An example of this pragmatism is the inclination of Uruguay’s government, which emerged from the left-wing Frente Amplio coalition, to consider negotiating a free-trade agreement (FTA) with the United States despite the two governments’ ideological differences, the marked degree of anti-American feeling among its own electoral base, and the closer affinities with its political partners in Mercosur. While the United States remains the main guarantor of investment or the most dynamic market for exports, agreements with Washington cannot be excluded from or diluted in the agenda of any Latin American country. In practice, the search is for creative formulas that allow government leaders a freer hand than with a merely ideological approach.
Acknowledgment of the errors that hamper understanding of many public-policy processes has led some academics to focus on rediscovering the importance of ideas, beliefs, and research in making and sustaining policies. In this context, research (especially research rooted in national demands) can serve as a focal point for members of a community to share symbolic maps and beliefs regarding the characteristics of the milieu and the consequences of policies. Thus the explanations of decision making in a context of uncertainty require, in addition to shared interests and institutional factors, cognitive elements, mental maps to tackle uncertainty, to arrange the possible visions of reality in proper order, to assess consequences, and to share perspectives on action to be taken. The cognitive elements make it possible to build an intersubjective consensus among the actors, one that constructs or reconstructs their identities and interests. Shared knowledge shapes the actors and their interests, a circumstance that also alters their behavior. But how should the link between research and policy making be examined? Before answering that question, a few points should be clarified.
Development policy has always been subject to fads and fashions.
— Rodrik (2004)
In economic matters, the adoption of ideas has certain specific qualities. Hall (1989) suggests that a new system of economic ideas will materialize in a society when there is a clear need for them, as well as a political outlook that is consistent with that need.
Summarizing the empirical and theoretical literature on the role and power of ideas, and making reference to the European and U.S. experiences, Gourevitch (2006) offers three explanatory factors that act with differing degrees of intensity as drivers of change:
• First, the influence of “epistemic communities” or intellectual elites within a particular discipline—in this case, economics.
• Second, the impact and scope of external pressures on the part of the international community.
• Third, the role of domestic political actors, especially those who have the ear of decision makers.
In contrast to how new economic notions spread in industrialized countries, in developing countries international pressures should be regarded as an active factor in building ideas and models, rather than as a mere condition or circumstance. Education and economic training in select universities is a crucial transmission mechanism in the creation of thought communities. Moreover, the abundance of information emanating from international organizations, as well as being a window of opportunity offered by conditionality, facilitates the creation of broad and active networks for cooptation. In the context of this paradigm shift, a series of studies have stressed the power and influence of multilateral institutions as knowledge factories and “auxiliary intelligence services” for governments, and as producers of thought communities (Corbalán, 2002; Boas and McNeill, 2004).
External political and economic interests are present in the world of ideas by omission or commission: the availability of a set of ideas featuring recommendations does not in itself bring about a change in policy. While institutions can produce stable and predictable patterns of behavior, ideas can influence policy outcomes only under certain circumstances. This has led to ideas being viewed as “hooks” that are used selectively by political actors to pursue their interests (Shepsle, 1985; Jacobsen, 1995). Often there is more than one way to resolve a problem, and that is when related research helps frame the debate and focus attention on possible policy options underpinned by evidence and convincing argument.
The sociology of revealed policy preferences suggests that whoever supports or opposes a particular policy and the resources it commands will condition change. Hence class or sectoral interests have a greater or lesser impact at different moments in time. In short, the third driver of change—national policy and the configuration of interests reflected by it—is the dominant factor. To understand this dimension, attention must be paid to the distribution of institutional power and its relationship to the construction of communities of beliefs and knowledge production, the so-called espistemic communities. Unlike other transnational networks, such as trade unions or professional and business associations, these communities are linked by an issue and a set of analytical methodologies that apply to the development of their subject matter. Because of this joint development, they can strengthen their own position and technical resources at the national level. The question that arises, then, is how the knowledge that the epistemic communities produce can be introduced into the public management of national policy—a question to be addressed by analyzing the interactions between the two spheres of policy design.
The management of trade negotiations is revealing the need to introduce new kinds of knowledge and new skills into public administration. This means that, though academics and researchers probably have not had a significant role in changing trade policies, in the wake of wholesale opening there is a constant need to draw sustenance from that development in several ways. In the subsections that follow is a description of cases in which our own research shows how government capacities constrain or affect the policy instruments used to meet the goals of their mandates. We hope to draw some lessons from these experiences. Although they are not limited solely to trade issues in the strictest sense, they are all important for their link to trade, and especially to the way the negotiations are conducted and their consequences.
The first case concerns the physical infrastructure for international trade, an area in which regulatory failings in the 1990s led to an inadequate supply of roads and excessive costs for users in Latin America. The privatization of a large proportion of infrastructure in that period did not yield the expected benefits, since operational profits were not used to finance infrastructural improvements or to upgrade connections between the region’s main industrial centers, much less to bring about the integration of less developed areas. This relative lack of infrastructure has been identified repeatedly as one of the greatest obstacles to a more balanced regional integration (Sánchez and Wilmsmeier, 2005; Acosta Rojas et al., 2005).
In the late 1990s, a Brazilian undertaking sought to remedy this situation in South America. The Initiative for the Integration of Regional Infrastructure in South America (IIRSA) was created with technical assistance from the Inter-American Development Bank (IDB) in collaboration with the Andean Development Corporation (CAF) and the Financial Fund for the Development of the River Plate Basin (FONPLATA). A similar undertaking was begun in Mexico during the same period in the form of the Plan Puebla-Panama, which sought to improve connections between Mexico and the Central American countries. It should be stressed that the capacity arising from the combination of national diplomacy (Brazil’s) and a multilateral organization (the IDB) was the architect and engine of this initiative, while the other countries of the subcontinent, apparently, have delegated their interests to this new organization. IIRSA’s long list of roads, bridges, and railways includes projects accorded priority by the other governments of the subcontinent, and there is consensus on the timing of the investments. But because of the asymmetry of planning capacities (which favors IIRSA’s creators), the physical integration of South America, if realized, will largely be consistent with the interests of Itamaraty and the suggestions of the regional organizations providing technical support (the IDB, the CAF, and FONPLATA). In this case the instruments of influence are essentially technical, since the funding of these projects combines private capital with the financial resources of each country.5 Neither Brazil (outside its own territory) nor IDB-CAF-FONPLATA play a significant role in this respect (Tanzi, 2005; Giacalone, 2006).
For the purposes of our analysis, which is concerned with the importance of research in trade and integration policies, IIRSA offers several lessons. First, it is evident that some kinds of policies can arise outside the agendas of the “usual suspects”—private interests or external actors (developed countries)—because in this case it is a national bureaucracy, Brazil’s, that proposes something that is not necessarily of priority interest to the domestic private sector. Second, it is interesting that these programs, which have substantial impact on trade relations, can become accepted very rapidly by all other South American countries when there is a shortage of alternative national projects and many more regional-level initiatives in this field. Third, it is worth noting the continued lack of academic interest, and perhaps the lack of capacity in each country and regionally, to assess the progress of IIRSA as a structure that could alter the ways in which trade is conducted in South America.
Energy integration is a second case in which the combination of privatization and deregulation in the 1990s (with new regulatory frameworks for private initiative) gave rise to serious policy and market failures at the start of this decade. These failures were evident in the energy crises in Brazil in 20016 and Argentina in 2004, the unsettled supply of Argentine gas to Chile from 20047 onwards, and the sharp social protests in Bolivia between 2003 and 2005 in favor of nationalizing the gas industry, which had been privatized only in 1997. In Ecuador, something similar was barely prevented by an interim government’s expulsion of the leading foreign oil company, Occidental Petroleum of the United States, which was accused of speculative dealings with the country’s oil resources. That led to the cancellation of negotiations for an FTA between Ecuador and the United States in 2006.
South American energy integration played an important role in all these cases. This was either because the energy crises sprang from a lack of adequate supply from a neighbor; or because of sharp protests spurred by the possibility that energy would be sold to a neighbor with which a source country had a territorial dispute; or because of highly favorable treatment granted to foreign investors from within the region (as with Petrobrás in Bolivia) or from a prime trading partner (as with the United States in Ecuador’s case) so that they could exploit a nonrenewable resource such as gas or oil.
In this context of continuous and even mounting conflict, a new series of initiatives has arisen under the coordination of the various national governments. They seek to ensure some degree of security in the supply and affordability of energy, thereby obviating crises and lessening the likelihood that energy issues might destabilize the region’s governments. It is still too early to talk of a South American energy integration scheme, but some significant steps have been taken: the offer by Venezuela’s PDVSA to provide investment and cooperation to the Mercosur countries, as well as Ecuador and Bolivia; the bilateral agreements between Bolivia and Argentina; and the strategies pursued by Chile and Brazil to diversify their energy supplies. In a context of high energy prices, energy is gaining importance in Latin American trade, especially intraregional commerce.
For a study of the links between research and trade policies in Latin America, the energy issue offers other lessons. In contrast to infrastructure, in the area of energy there is a strong regional research network, the Latin American Energy Organization (OLADE), which supports the national bodies responsible for energy policy, as well as several transnational and local business groups that undertake studies of the issue. There are also national research groups in universities and other centers financed by domestic business associations in most of the leading countries, especially following the wave of privatizations in the 1990s.8
Thus the research that informs the discussions about and subsequent implementation of policies or policy changes is, to some extent, acting on behalf of the interests that finance it, be they national bureaucracies or business lobbies in the energy sector. This is a serious problem for academics and researchers working on trade matters, since energy agreements have a marked impact on the other trade agendas under negotiation, as has recently been evident in the Andean Community, Mercosur, and the bilateral talks with the United States. This lack of impartiality in the information provided and in much of the analysis of energy makes it even harder to include such material in more general studies of trade and integration issues. Since the specific knowledge required permeates to only a limited degree—and since the field is unlike agriculture or industry, for example, where there is trade in goods subject to tariffs or quotas—arguments about energy integration involve considerations that are inherent to a country’s whole economy, such as its total energy demand, the intensity of energy use per unit of GDP, and the probable sources of energy to meet the demand.
Apart from these specific examples, in all developing countries there are important experiences in the field of training for trade policy making. This is partly because of the strong growth of trade-related technical assistance from multilateral institutions and development organizations, by means of training courses for public officials. Of particular note is the technical assistance provided by the WTO. Since the start of the Doha Round, the WTO has had an expanded mandate and a very generous budget to help developing countries improve their capacities to implement and make use of multilateral trade agreements. Much of the training consists of coaching in the legal complexities of the commitments that countries made before they had acquired the appropriate analytical skills. The programs are designed to provide the skills needed to meet the commitments on agriculture, services, intellectual property, technical barriers, and phytosanitary rules that developing countries have assumed and must implement. Only a very small part of this training concerns WTO rules on drawing up regional and preferential agreements, on the more common negotiating practices in multilateral discussions, or on the several possible interpretations of a single clause. There is no training on how to put in place systems to monitor separate and unfulfilled commitments that could adversely affect acquired rights. Such assistance is valuable in itself for public officials working in areas related to trade negotiations, but several problems prevent the knowledge imparted through this assistance from empowering developing countries in global trade. These problems can be grouped into the areas of design and reception.
The technical assistance is designed in such a way that it is biased toward ensuring that countries comply with the rules, but without instruments to monitor if there is compliance elsewhere and thus determine if rights are being infringed. In other words, there is a bias toward acceptance of the status quo in multilateral trade negotiations, since the rules are taught as they have been written and the emphasis is on the gains from implementing them. No mention is made of the costs of implementation, such as rules related to intellectual property, government procurement, and other matters that remain fundamental to development policies in Latin American countries. Second, many of the courses are designed without regard for the huge differences in size, resources, and development levels among the recipient countries. The courses are devised with the idea that the same knowledge is equally useful to everybody, as evident in the frequent choice of examples drawn from countries that are very different from the one in which a particular course is being given (for example, in a course on services for Latin American countries, reference is made to the case of India in order to explain how the WTO services agreement is implemented in a national economy). Third, there is no explanation of the degrees of maneuvering room still available to implement the agreements in each country (CUTS-FLACSO-NSI, 2006). That is to say, although a set of skills and aptitudes is transmitted, that happens in the form of a decalogue of duties and rules that help recipients take part only passively in a framework of established regulations, with no chance of seeking to bring about change.
This knowledge might help to increase the technical capacity of the governments, but reception of it is generally defective because the candidates selected to receive the training are not adequately spread among the various ministries and offices affected by each of the agreements. There is a strong bias in designating the officials to be trained: the WTO courses are mostly geared to Foreign Ministries and Economy Ministries, and there are few or none for their counterparts in Ministries of Industry, Agriculture, Development, Technology, or even Education. Partly because of that, developing countries are unprepared to deal with the mounting pressure of multilateral trade disciplines on the margins of independent policy (see Chapter 7, by Botto and Peixoto Batista). Second, because of the high rate of turnover among skilled staff and the lack of instruments to create institutional memory that stores the knowledge received, public officials trained by the WTO often leave their posts. The bureaucracies thus lose the opportunity to apply the knowledge acquired by those people, who in only a few cases have a chance to train their replacements. This failure by national, trade-related agencies to retain the technical capacity received is fostered by a constraint on the part of the WTO: it trains only public officials and not members of private research centers, academics (including those from public educational institutions), or representatives of the business sector. These latter groups receive only short courses on the general work of the WTO in the global trading architecture.
For the purposes of our analysis, it is important to highlight how technical assistance, which is apparently neutral, comes accompanied by a mechanism to transmit a set of ideas that fosters the construction of thought communities. Technical assistance conceived as merely neutral ceases to be a condition or circumstance and becomes, in effect, an active factor in reproducing the given distribution of costs and benefits. Even within the WTO paradigm, moreover, and taking account of its internal dynamics, it is widely known that, often, the implications of what is negotiated are not all known at the time of the negotiations. Hence the art of negotiation resides in “creative ambiguity”—that is, in ensuring that the signed agreements expressly contain gray areas for later interpretation. In other words, the very design of the agreements does not conceive of a sole interpretation. If technical assistance terms itself neutral, in fact it interprets in order to ensure a form of implementation: it is creating obligations that might not have been so clear at the time of the negotiations.
Interpretation, on the other hand, not only is ambiguous; it also cannot be static. On the contrary, the interpretation of what has been negotiated changes over time. In the field of law, this is not an easy matter to resolve. Is justice provided solely through what the books say or also through what is imposed or applied in real life? Or rather what, independently of the hallowed books, obliges compliance with the code of an age?
Hence technical assistance that seeks to transmit only one possible “neutral” interpretation of what has been negotiated not only detaches itself from reality but also, implicitly, interprets, legislates, and adjudicates. It generates a mental map of conformity, one that is often dysfunctional for the interests of the recipient countries, perpetuating rules of the game in which the initial winners guarantee that they will persist. This masks the presence of weak links in the agreements, links that could be used as windows of opportunity to renegotiate commitments or to demand rights that have been eroded. Without space to explore the possibilities of new contractual arrangements, the veil of ignorance is maintained beneath the impartial cloak of technical knowledge—a subtle means of reproducing the status quo by means of technical assistance.
If to know, research, and learn means focusing on what already exists in order to acquire new knowledge, what should research bring to the negotiations? In these cases, research directly affects the general framework for the adoption of a policy direction. Research is not undertaken in a vacuum: it is the interaction between the production of research and the political process that aids understanding of when and why research influences policy design and decision making. As we argued in the preceding sections, research and policies are the outcomes of a cycle in which events lead to new ways of thinking and new policies. Consequently, new problems are often uncovered and thus new developments—ideas and recommendations—arise in the same process. Both thought and policies, however, are strongly influenced by interests that in turn are shaped by the consequences of the policy. Research, therefore, is part of an unequal world in which producing results or disagreeing with them is not only costly but often impossible unless adequate resources are available.
To analyze the challenges posed by permanent trade negotiations, it is important to view negotiations as a process of interaction between policy makers and private interests. An exogenous obstacle to international trade—be it market access or essential resources—will spur enthusiasm for research that seeks to explain or surmount such obstacles. Similarly, international trade agreements that can be seen as resolving market access issues represent a window of opportunity for empirical research.
Each stage of the cycle requires different kinds and sources of research. All trade-negotiating processes can be divided into at least four stages:
• the decision-making stage (to open negotiations or choose a strategy—for example, yes or no to the FTAA);
• rule making;
• exchanging concessions;
• and finally, implementation.
Each of these (see Table 1.1) has a different logic: the demand for knowledge varies, and moves contrary to the prominence of the espistemic communities that influence governments and thus serve as “hooks” for decisions. Hence, for example, if the governments’ role is significant, the first stage of the process is influenced by learning and the culture of the age. In this case, in the reforms of the 1990s and the conclusion of FTAs with the United States, espistemic communities have played a central role. In general the most influential research has come from outside the region, especially from international organizations.
As the negotiating process advances, there is a need for data and concrete responses. At the same time, a constant flow of research is needed to revise, refine, and adapt a policy so as to move forward on technocratic terms, choosing instruments, setting timetables, classifying products. How can the policy of opening be adapted to national circumstances? What are the sectoral costs? What is the value and impact of a negotiating offer? It is during these stages of refinement and adaptation that national-level research grows in line with the need for specific responses and plays the most important role—as most of the cases studies in this book demonstrate.
Table 1.1 The Negotiating Cycle
|
|
Participation and Impact |
|
|
Stage |
Public |
Private |
Design |
1. Decision to negotiate |
Leadership with possible consultation |
Confined to public invitation (impact studies) |
|
2. Rule making |
Leadership |
Low participation (normative studies) |
Implementation |
3. Exchange of concessions |
Intense consultation |
Active participation (sectoral cost-benefit studies) |
|
4. Implementation and compliance |
Consultation with preservation of political interest |
Confined to monitoring the concessions received |
|
In this stage there is intense product-by-product bargaining, bringing business groups to a state of alert and prompting them to turn to research. In this case research plays a central role in ordering and arbitrating among interests. The novelty and complexity of the negotiations calls for experts and opens a window of opportunity for national knowledge and research to exert an influence. The studies in this book show how, through their participation in the decision-making process, academics were asked to identify international experiences in order to lessen the uncertainty prompted by these new challenges, as well as to obviate the costs associated with the negotiations and seek compensatory modifications.
In turn, both the governments and society as a whole are engaged in a learning process (see Chapter 3 on the role of think tanks in the Southern Cone), through which the experiences of completed negotiations have been examined and in many sectors the outcomes have been called into question. In the context of a regional political mosaic that is experiencing marked change, there is a striking reassessment of the role of the state and less acceptance of the free market as a promoter of economic activity and a leader of certain development initiatives. In this regard it can be expected that the convergence of this new faith in state activism with a trade policy that is subject to a greater degree of democratic discussion will form the basis of a more stable consensus on economic policy than has prevailed in the distant and recent past. Just as the continuance of yesteryear’s statist model beyond its natural limits and “natural life” led to the deification of the state and the “national interest” under brutal dictatorships in the 1970s and 1980s, so many neoliberal reforms of the 1990s prompted a series of very serious political and institutional crises in a number of countries.9 Today, therefore, the search for an effective and human pattern of development, one that has appropriate institutional channels, is essential for the region’s governments and civil societies.
There is vigorous renegotiation not only in Venezuela, Bolivia, and Ecuador, but also in bastions of greater orthodoxy such as Colombia, Peru, and Chile. These endeavors stem from a haste to cover social costs and reduce poverty, an urgent agenda in a democratic context and in light of the outcomes of the 1990s reforms. These circumstances bring with them a necessary endogenization and nationalization of research output. Impact and quantification studies of negotiating offers, for example, are increasingly produced at the national level in most countries. Moreover, research-supported coalitions have been formed for the purposes of trade negotiations. This is how alliance building in the WTO should be understood. An example is the Group of 20, which is led by Brazil and India and includes Argentina, Bolivia, Brazil, Chile, China, Cuba, Ecuador, Egypt, Guatemala, India, Indonesia, Mexico, Nigeria, Pakistan, Paraguay, Peru, the Philippines, South Africa, Tanzania, Thailand, Uruguay, Venezuela, and Zimbabwe. This group is far from being a typical, defensive, developing-world alliance. On the contrary, it expresses the booming export interests of market actors from agro-industry, industry, and services, and it has devised technical proposals on a wide range of issues on the multilateral agenda. Linking the concerns of its civil societies with those of its business sectors, it has begun to engage in a kind of trade diplomacy geared to securing greater internal consensus and thus greater legitimacy than in the recent past.
In this sense we are witnessing a process through which trade negotiations are seeking their institutional course at the same time as they are being internalized in the policy discussion of the democracies. Given the diversity of interests and sometimes of ideologies, which are normally evident in every country of the region, as in any other, there are vigorous debates about the sectors to be liberalized, the means and time frames for liberalization, and what concession to ask of trading partners. What many today might see as resistance is really the result of the time needed to calculate costs and benefits on the one hand, as well as for democratic consultation; and on the other hand for harmonization among the membership of the negotiating alliances that the countries have joined. Once the analysis and consultation have been carried out, moreover, the countries must build technically reliable agendas that pay due regard to the array of interests at stake. The social costs borne by many countries undoubtedly make this discussion a difficult one, but they also spur governments and civil societies to think at length about what proposals to make now, to consider what to accept and what to reject, and to explore the limits of their resistance to external pressures. In this regard national research makes a fundamental contribution to considering possible scenarios and, through them, to transforming uncertainty—defined as inexact knowledge of future events—into a risk that can be assessed and, more importantly, shared in the democratic debate.
Throughout this chapter we have sought to investigate the links between academic research and the implementation of trade policies that are in a state of permanent negotiation. Why the insistence on this context of permanent negotiations? The state of the negotiations gives rise to a reconfiguration of incentives, which has distributive implications. And those incentives are permanently under negotiation, being weakened and rebuilt, thereby affecting costs and benefits.
We have examined different approaches that have been taken in an effort to respond to the main questions in a still incipient debate. And we have outlined different kinds of changes, identified by different kinds of research, that transform uncertainty into manageable risk—thereby providing policy with stability, visibility, and direction. Contextual factors shape policies and research, and they also have a direct influence on the relationship between the two. In this initial exploration of the issue we have sought to argue for what we judge to be the first response to the questions posed: on the one hand, acceptance of cognitive reflexivity in the field of study itself; and on the other hand, acceptance of the multidimensional nature of processes of change, specifically as regards trade policies. This dual exercise will facilitate the reappropriation of expertise as fallible knowledge in designing policies that aim to meet their stated goals, establishing as a condition for those goals acceptance of positions from different social sectors.
Large policy changes emerge from battles lost. Research is undertaken on uneven ground in which producing results or disagreeing with them is not only costly but also, and often, impossible without vast resources. At present, the emergence of China and the consequences of the crises of globalization are clear examples of historic events that have immediate resonance in the Latin American economic debate. The lessons being learned from these events is that there is no magic key or single formula. These historic changes have affected the production of academic knowledge as well as the political future. Policy and social science thinking are intrinsically linked, even though they respond to somewhat separate dynamics. The relationship between the two has changed in line with the evolution of social phenomena that call, with greater or lesser urgency, for intellectual and political assistance and intervention. The discussion developed in this book is important inasmuch as it assumes that this relationship is not conflict-free and is susceptible to change under more inclusive and pragmatic conditions. External advisers and development gurus from elsewhere did not go to China. Hence it is important to recover the role of institutions engaged in intellectual work, in activities that make a significant contribution to thinking about society, its actors, its potential, and its contradictions, institutions that do not have a direct advisory role and whose aims differ from those of the public sector. It will be the task of an epistemic community, forged in the heat of these global phenomena, to think about how research can be linked to current policies in order to face the challenges posed by these paradigm shifts. The future is being sketched in the present through the reflexive organization of the realms of knowledge.
1. We are grateful for the generous assistance of Jorgelina Loza and the always salutary, stimulating, and affectionate encouragement of Mercedes Botto.
2. See CUTS-FLACSO-NSI, Strategic Review of WTO-Provided TRTA Activities: Final Report, 2006, available at www.wto.org and www.flacso.org.ar. That evaluation, with field studies in nine countries, is used as a counterpoint to analyze the socialization of governmental technical personnel.
3. No government has suggested closing its economy to the international market. In fact, they very skillfully use those connections to the global and regional market in order to further their reform strategies. Chávez in Venezuela might be the exception.
4. This section draws on a generous contribution of research studies by Pablo Heidrich, which are cited in the text.
5. See Giacalone (2006) for further details of how the channels of influence work to structure political power and IIRSA’s physical infrastructure agenda.
6. Though privatization of the energy sector in Brazil did not advance as much as in Argentina and Bolivia, the extreme cases were undertaken with a yet more inappropriate regulatory agenda that eliminated incentives to generate additional energy and reduced coordination among the generating plants. For details see De Oliveira (2003) and Vélez (2005).
7. The regulatory failings of the private exploitation, transport, and distribution of natural gas in Argentina led to a situation in which the quantities of gas available for domestic consumption and export did not match the growth of domestic demand, obliging the Argentine government to reduce exports to Chile in order to meet domestic needs and secure promises of higher investment from the privatized companies. For details see Uniren (2004) and Kozulj (2005).
8. See www.olade.org.ec. An example of business associations with research units as part of their lobbying setup is the Argentine Institute of Gas and Petroleum (IAPG) www.iapg.org.ar. The multinationals have a research center that finances studies from universities and consultants at the Latin American regional level at www.arpel.org.
9. Argentina, 2001; Bolivia, 2002–2004; Brazil, 1992; Paraguay, 2000; Dominican Republic, 1998; Ecuador, 2000 and 2004; Peru, 2000; Venezuela, 1989, 1992, and 1998; Mexico, 1995 and 2006; Guatemala, 1992; Nicaragua, 2000.
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Web pages consulted:
Robust and enduring economic integration demands structural changes in broad fields of the regulation of social life. Thus it is a serious mistake not to view it as a policy of the whole state. To treat regional integration as simply a part of trade policy is to give primacy to mercantilist conceptions of integration, which make up a kind of long-term cannibalism since they relinquish the process to the bipolar disorder of the market.
Apart from trade, when integration is also regarded as political integration, there is a risk of viewing it as simply a part of foreign policy, warranting the concentration of power in foreign ministries—even though their very nature hampers the coordination of a complex process of internal negotiation that is as important as (or more important than) international action on the matter. It should also be recalled, however, that regional integration processes have fostered institutional opening in those ministries, causing them to coordinate other state institutions and even private-sector organizations. Note, for instance, the creation of Argentina’s Civil Society Consultative Council (see the comparative analysis of Argentina, Brazil, and Chile in Chapter 3 of this book).
Hence, since regional integration is a typical issue of domestic and international governance, its practical viability and political legitimation depend on the capacity to do at least two things: first, to include it on the agenda of the state’s constituted powers and all government portfolios; second, gradually to create a socially-based political constituency that builds a public consensus around integration as a state policy, but one that also respects dissent about how the process is undertaken. The role of academia is linked to both of these challenges. If this book’s focus is to create a “virtuous linkage” between Latin American academics and negotiators, the goal of this chapter is to consider the matter in the specific case of the Southern Common Market (Mercosur).
We lack a specific dimension that allows for the controlled translation of technical knowledge into practical knowledge and the rationalization of political domination, since the light that in principle we could provide to inform political will over the technical power that it has, is either viewed as superfluous by the technocracy or is disregarded by those who prefer pure and simple decisions.
—Jürgen Habermas (2000: 131–32)
The antagonism between technical knowledge and politics is embedded in the unconscious technical expert2 and in the political culture of our societies: it is the classic question of the links between knowledge and power.3 Some believe that learning is good, technical knowledge is ambivalent, and politics is bad. Others claim that ethics is weaponless against an amoral learning and a politics that is often immoral.4
Nonetheless, there are no closed compartments in this field. While learning has a theoretical vocation (the exploration of an object distinct from the consciousness that studies it), technical knowledge has a practical vocation (it is not a matter of interpreting the world, but of changing it).
Historically, technical knowledge based on learning has served industrial production and has responded to economic imperatives, especially to increase productivity and develop new markets. Hence academic output is not neutral, neither in the goals that motivate it nor in the consequences of its use.
In the more consolidated democracies, the value given to technical knowledge in decision-making processes, part of the search for economic progress and an improvement in the efficiency of state and corporate structures, gave rise to a distortion in the political discourse, which termed it “technocracy.” Academia also refers to the technocracy, providing a very abundant literature. In general terms, it is a matter of establishing that hyperspecialization:
• leads to a loss of a sense of the whole;
• reduces or eliminates the political responsibility of the actors, who are protected by the incomprehensibility of their discourse; and
• gives state power to actors that have no mandate.
At the other extreme is “decisionism,” which denies that technical knowledge is a prior element of political decision making and gives priority to contextual and empirical factors. The preponderance of immediate politics:
• causes institutional instability and juridical insecurity;
• brings about inefficiency in government activities; and
• over the long term, devalues the political goals that justify it.
The two caricatured distortions cannot mask the fact that, in the current debate, these two variables are held to be indissociable, and there is a constant effort to balance them in the complex equations of power.
Politics is more a matter of “what to do,” while technical knowledge is more a question of “how to do it” (Maldonado, 2004). Whenever the discussion is about tools, ways, and means of attaining a given policy goal, that is a technical debate. The complementarity of the two ways of thinking is therefore evident.
The production of technical knowledge is not solely a function of academia. Though the state has technical units, however, as does the private sector, it has large-scale demands for knowledge, especially in the hard sciences and cutting-edge research. In the last decade there has been a huge expansion of cooperation between the state and academia.
In the field of the applied social sciences, particularly as regards international relations, the state has only limited demands for cooperation. It tends to approach intellectuals who are favorites of the officials in office at any particular time, either directly or through the careful selection of consultants in the area of international technical cooperation, and to give primacy to the later justification of policy strategies.
Technical knowledge becomes a “determined variable” of the power equation when the contending or juxtaposed interests in the political sphere manage to become technical knowledge. On the other hand, efficiently facing reality calls for knowledge as an “undetermined variable.”
The automatic response that “the technical specialists offer alternatives and the politicians decide which is best” is unconvincing, because to define options is to practice politics. Similarly, when politicians choose from among the options, they are entering the field of professional or technical definitions (Astori, 2000: 26).
This is the first reason why the plentiful academic output on Mercosur has filtered into the negotiating realm to only a limited extent: as an undertermined variable, knowledge that is independent of governments offers alternatives that the governments are unwilling to discuss.5
The second reason is that a process of scant institutionalization like Mercosur’s has still not developed its own technocracy. Rather, there is the temporary movement of national bureaucratic sectors to the regional institutional sphere. Thus we can speak of sectors of the national bureaucracies responsible for negotiations, presumably specialized in regional integration, with a marked asymmetry among the member states in terms of the number and quality of the human resources assigned to technical work.
According to the governments themselves, at the regional level they face the classic difficulties of retaining the best personnel in government service and of guaranteeing that they maintain the high level of specialization needed to deal with complex and changing circumstances.
At the same time there are chronic problems of coordinating the technical work emanating from the different areas of government; this is often a source of internal disagreements in the delegations. The regional negotiating process is markedly impoverished by the fluctuation between the predominance of (a) nonspecialized diplomacy6 that is resistant to the technical culture of regional integration and (b) technocrats from different ministries forged in a culture of defending immediate national interests.7
The end result is a technical deficiency that in some issues reaches the point of simple inconsistency. Only the inertial force of the status quo can explain the fact that Mercosur’s institutional system has so violently rejected the first supranational, technical advisory body in it history, which was set up within the Mercosur Secretariat in Montevideo.8 Comprising officials recruited through international public competitions and appointed by the Council (thus not chosen by the national governments and with no duty to obey them), the Secretariat’s Technical Advisory Sector (SAT) was created by Council Decision 30/02 as an “arena for joint reflection on the development and consolidation of the integration process.” The functions foreseen in that decision, however, were later disfigured by restrictive regulations that were incompatible with the spirit of the decision itself. Technical support was hampered by Common Market Group Resolution 16/04 and by a deliberate policy of confining technical functions next to the negotiating fora. The SAT’s biannual reports were classified as confidential. Its studies program became a negotiable matter among the national delegations, depleting its capacity to devise a thematic research field of its own—apart from meeting specific requests from the decision-making bodies. Not one agreement was signed with a university or a research institute. Finally, the controls on the juridical consistency of draft norms were suspended, even though Mercosur continues to have significant gaps in the area of legislative expertise and serious problems of systemic coherence that undermine its effectiveness.
Since Mercosur is a highly political process, however, in which diplomacy takes enormous precedence over technical thinking, at the moment it makes no sense to speak of a conflict between “technification” and democratization.
On the contrary, at present a move toward transparency in the decisionprocess making would favor an increase in both its technical robustness and its legitimacy. The alleged obstacles pointed out by the governments are often nothing more than covert, nationalist political positions or expressions of the governments’ recurrent inability to identify the common interest and convert it into technical tools. The dissemination of information and greater openness toward society (including academia) would do much to aid the effectiveness of Mercosur’s decisions, since it is difficult to help apply or offer political support for the unknown, or for issues on which no opinion has been sought.
The diversity of our opinions arises not because some are more reasonable than others, but only because we conduct your thoughts along different paths and do not consider the same things. It is not enough to have a good mind; the main thing is to use it well.
—René Descartes (2005: 19)
Daily experience teaches that, very often, ideas serve to give actions justifying motives rather than real motives (Habermas, 1973). In this respect, we can begin to answer our question in the negative: the role that academia should not play is to justify the positions of the governments in international negotiations.
In Mercosur, part of academia has been serving diplomatic corporations by assessing certain political decisions solely from the perspective of each member state. This also serves the purposes of part of the private sector, which opposes integration and demands protectionism in order to uphold the old model of à la carte integration. On the positive side, however, what is the role of intellectuals in regional integration?
When intellectuals take part in the political struggle to such an extent that they put themselves in the service of one ideology or another, they are said to have betrayed their mission as scholars; when they place themselves above the fray, their work is said to be fruitless, useless, and teacherly (Bobbio, 1997: 21–22).
But this is a false dichotomy embedded in the collective mind. In reality, intellectuals are more than producers or transmitters of ideas; they are also mediators, legitimators, and producers of social practices, and they play a highly political role (Giroux, 1997). They can act as ideologues, drawing up the principles that justify and legitimate an action (principles–guide and ethics of conviction), or as experts, indicating the proper knowledge needed to reach a particular end (knowledge–means and ethics of responsibility) (Bobbio, 1997: 97).
The role of ideologues is even more important, given that political actors do not resist change itself but rather change that seems to go against their interests or against their idea of their interests.
At present, in the field of regional integration the most important role of intellectuals, as ideologues and as experts, is to change the representation that the political actors have of their own interests.
The breakdown of Westphalian mental continuities that inform the entire state apparatus requires a significant shift in ideas to support the changes required for integration—as happened in the European integration process, where the political and administrative elites slowly joined the regional endeavor.
This process, of course, is dialectic: the circulation of learning and knowledge can have a clear impact on ways of “reading” current circumstances and, sometimes, on policy making. Similarly, the perception of current circumstances that emanates from governments (and is introduced into the political debate by the media) causes researchers to redirect their research agendas or even “discover” new kinds of subject matter (Zagefka, 2004: 97).
On this point, however, note that as well as the false antagonism between technical knowledge and policy, in Mercosur other myths have held equal sway, myths that ensure that national bureaucracies retain absolute control of the negotiating process.9 It is a question of recovering, among other things, the anachronistic opposition between theory and practice: the best way to discredit technical specialists in regional negotiations is to “accuse” them of being academics.
1. I am grateful for comments by Tullo Vigevani.
2. According to Régis Debray there is a unconscious technical specialist (just as there is an unconscious psychoanalyst) that the subject finds very hard to accept because it is uncomfortable, in light of the supposed sovereignty of the individual, to acknowledge that independently of his or her will the tools of technical knowledge are present in all stages of our thinking. See Société d’éditions scientifiques (2005), 86.
3. Lanzaro (2000), 12.
4. Morin (2004), 84.
5. According to Raymond Aron (2005), governments fear the social science community because of its absence of restrictions on: (a) the search for and establishment of the facts; (b) the right to debate and criticize, applying not only to partial findings but also to bases and methods; and (c) the right to detach from the real: many politicians do not want to impede technical knowledge’s slide from the realm of positive knowledge to the realm of mythology.
6. Similarly, we do not deny—inasmuch as trade policy is a priority on the government’s agenda, in a context of permanent negotiations—that such diplomacy tends to be self-teaching and to acquire expertise in line with new challenges. On the basis of its national and sectoral studies, this book reveals this tendency toward professionalization on the part of government personnel.
7. See Chapter 7 in this book.
8. The story of how the process of making the Secretariat a technical body was suspended, and of the slow asset stripping of the Secretariat’s SAT, is starting to be told in the specialized literature. See, for example, Mario Filadoro (2006) and Marcela Fonseca and Fernando Meinero (2005).
9. “Awareness of having an influence on men, of taking part in the power over them and, most particularly, the feeling of managing the thread of important historical events, lifts professional politicians, even those who occupy formally modest posts, above the everyday. The question that thus arises is what are the qualities that will let them be worthy of that power (however limited it might be in concrete cases) and of the responsibilities it brings . . . More than once we have had to watch how an official-made-politician becomes a bad character with his technically poor management of an issue that in this sense was good” (Max Weber, 2005: 115 and 153, respectively).
ARON, R. (2005) “Introducción” a Max Weber. In El político y el científico, by M. Weber, 9–77. Madrid: Alianza Editorial.
ASTORI, D. (2000) “Interrelación entre el ámbito técnico y el político: la difícil búsqueda de equilibrios.” In Técnicos y política—Saber y poder: encuentros y desencuentros en el Uruguay contemporáneo, 21–26. Montevideo: Trilce/Instituto de Ciencia Política.
BOBBIO, N. (1997) Os intelectuais e o poder: dúvidas e opções dos homens de cultura na sociedade contemporânea. São Paulo: UNESP.
DESCARTES, R. (2005) Discurso del método. Buenos Aires: Reysa.
FILADORO, M. (2006) “Eficacia de las instituciones en el Mercosur. El caso de la Secretaría Técnica.” In Anuario de Derecho Constitucional Latinoamericano 2006, 667–701. Montevideo: Konrad Adenauer.
FONSECA, M., and F. MEINERO (2005) “A transformação da Secretaria do Mercosul: avanços e retrocessos.” Revista de Derecho Internacional y del Mercosur 9, no. 1: 47–60.
GIROUX, H. (1997) “Intelectuales públicos y la crisis de la enseñanza superior.” Revista Interuniversitaria de Formación del Profesorado, 29: 77–87.
HABERMAS, J. (1973) La technique et la science comme idéologie. Paris: Gallimard.
——. (2000) La technique et la science comme “idéologie.” Paris: Gallimard.
LANZARO, J. (2000) “Viejos y nuevos perfiles de una cuestión clásica.” In Técnicos y política—Saber y poder: encuentros y desencuentros en el Uruguay contemporáne, 11–20. Montevideo: Trilce/Instituto de Ciencia Política.
MORIN, E. (2004) La méthode 6—Éthique. París: Seuil.
SOCIÉTÉ D’ÉDITIONS SCIENTIFIQUES (2005) “L’hypersphère—Entretien avec Régis Debray.” In Les collections de l’Histoire, Vol. 29. Paris: Société d’éditions scientifiques.
WEBER, M. (2005) El político y el científico. Madrid: Alianza Editorial.
ZAGEFKA, P. (2004) “Comprendre l’Amérique latine: les récents apports des sciences sociales.” In Amérique latine, organized by Jean-Michel Blanquer, 97–110. Paris: La documentation française.
Today, think tanks are more significant actors in Anglo-Saxon countries than ever before, and they have grown markedly in other developed countries (Xifra, 2005). As we will see throughout this chapter, however, in Latin America they seem to be associated with the democratic game and the use of persuasion as a tool of political action.
As their name indicates, think tanks are marked by the ability to produce practical knowledge or, better said, ideas. But unlike traditional research centers, the research they produce is not motivated by an interest in knowing, nor by its originality or critical thinking,2 but by its ability to contribute to policy design and implementation, as well as to political communication. In the case of think tanks, it is more correct to speak of symbolic-analytical services than of academic research.3
Think tanks first appeared in the interwar period and were geared to national issues and national public opinion. During the Cold War, by contrast, there was a discernible development in some countries with geopolitical ambitions—the United States, Germany, Great Britain, and Australia. It was only in the 1980s that these institutions spread and their activities were internationalized. Then the real boom in think tanks began, motivated in part by the expansion of the international agenda, challenges to state sovereignty, and the growing power of international epistemic communities. Another important factor in the development of think tanks was the availability of financial support and assistance from international foundations and government agencies (Stone, 2000).
In the developed countries, the growth of think tanks in the 1980s filled the gap left by the decline of political parties and parliamentary democracy (Smith, 1991). In Latin America, political instability and military intervention reduced the arena for academic debate in universities and government departments, thereby opening the way for alternative arenas. In the 1960s they took the form of research centers, but in the 1980s they also turned to training the government officials of the new democracies (Thompson, 1994).
By now, think tanks have not only grown in number but have also become more organizationally complex. Normally they are private or independent organizations devoted to public-policy research. Their legal standing places them among nonprofit organizations or those in what is known as the “third sector.” Nonetheless, government-created, in-house think tanks have also been established to provide knowledge and inputs to decision makers. As with nongovernmental organizations (NGOs), it is not easy to distinguish among them because many of them depend on the same sources of public or international financing.
Their main audience is the state and, in the particular case of Latin America, the executive branch—that is, the branch that mainly carries out public policies. Apart from the state sector, however, think tanks have gained other audiences by providing publications to students and scholars, and by forging communications links among different audiences (public with private, entrepreneurs with NGOs, and so on). They have offered themselves as arenas for the exchange of opinions, providing the fruits of their academic research in practical policy briefs and presenting international lessons and experiences to local audiences.
Their general goal is to influence public policies by offering ideas and recommendations, though this can take two forms. One role is that of an adviser that makes recommendations and suggestions to decision makers or the public on how to solve problems or legitimate decisions taken. A second role is that of advocacy in the interest of specific group causes.
This chapter aims, first, to identify the think tanks that undertake research on trade policies in Argentina, Brazil, and Chile, the main economies of the Southern Cone. Second, the chapter analyzes the activities of the think tanks and assesses which of these two roles—adviser or advocacy—they play.
The chapter is divided into three sections. The first compares the political and economic contexts of the three countries. The second describes the characteristics of the think tanks in each of them in terms of the links between the production and use of their research. The chapter then concludes with an assessment of the think tanks’ similarities and differences. Is there a regional model of production-linkage-use, or do national characteristics take primacy?
Methodologically, the data in the sections that follow are drawn from fieldwork4 that included eighty interviews with researchers and decision makers connected to trade policy design in the three countries between 1990 and 2003 (see Table 3.1).
Table 3.1 Description of the Interviewees
|
Characteristics |
Chile |
Argentina |
Brazil |
Function |
Decision makers |
14 |
14 |
10 |
|
Researchers |
6 |
16 |
16 |
|
Others |
3 |
3 |
3 |
Profession |
Economist |
10 |
23 |
8 |
|
Noneconomist |
13 |
10 |
21 |
Studies |
Ph.D./Master’s |
17 |
18 |
18 |
|
Bachelor’s |
5 |
10 |
10 |
|
Nonuniversity Bachelor’s |
1 |
1 |
1 |
The literature on the influence of research on decision making puts particular stress on the importance of the “political context” (Carden, 2004; Court, 2004). While context is hard to delimit, this chapter characterizes it by means of two variables that foster and/or constrain the think tanks’ prospects of having an impact: the economies’ degree of opening at the start of the negotiations, and the extent to which the public-private linkage is institutionalized.
Chile’s military dictatorship began the process of structural reform in the 1970s through unilateral and wholesale opening. The instruments used to liberalize foreign trade changed over time: between 1974 and 1979, an abrupt tariff reduction and the setting of a zero tariff; later, more flexible mechanisms until the end of the dictatorship. The high social costs and Chile’s noncompliance with international commitments led to the country’s isolation from the global context.
The first democratic government—that of the Concertación under Aylwin and his successor, Frei—took office in 1990 and found an open and consolidated economy (see appendix 3.1). Two problems, however, had to be tackled: high inflation and a sharp asymmetry in income distribution. In these circumstances the government decided to maintain and deepen the opening. While not questioning the model it had inherited, the government changed the strategy: instead of persisting with unilateral opening, it opted to continue tariff reduction through trade negotiations.
This shift in strategy offered certain advantages and also indicated the challenges of the new democratic context. First, agreements with other countries highlighted Chile’s interest in returning to the global fold, obeying the rules, and strengthening international law. Second, negotiations in the World Trade Organization (WTO) allowed Chile to consolidate the previous unilateral opening, thereby averting any dispute with protectionist sectors that now had mechanisms to express their views and guarantees that they would be listened to. In this latter regard, a third benefit of the decision to pursue negotiations was that the political costs were shared with Congress, which was now a coparticipant in the decisions leading to the signing of the agreements.
Thus began the series of free-trade and cooperation agreements (there are now forty-two of them) that make Chile a global trader. A review of these agreements reveals that there were three waves of negotiations, depending on the negotiating partner, the issues included in the accord, and the extent of the liberalization (see appendix 3.2).
The first wave (1990–1998) was marked by economic complementarity agreements with bordering countries: a modest, low-cost agenda whose goal was partial tariff reduction. A second wave (1998–2003) featured negotiations with more economically developed countries for a free-trade area; the negotiations included nontariff issues such as investment, intellectual property, services, and so on. Finally, in a third wave from 2003 onwards, Chile signed bilateral agreements of varying scope and substance with countries in Asia.
Pursuit of this negotiating strategy was a real and novel challenge for the democratic government. The new administration lacked negotiating capacity and experience. During the dictatorship, the agency responsible for trade liberalization had been the Economy Ministry. The Foreign Ministry played a purely formal role through an ad hoc Foreign Trade Directorate (DIRECON). Congress had also taken part in the process in order to give a veneer of legality to decisions imposed by force. At the time, the export sector took no part even though it was the chief beneficiary.
Over time, and by maintaining this strategy as a state policy, one without volte-faces, the government’s negotiating capacity was professionalized and public-private links were strengthened, spurring an exchange of ideas and knowledge (Bull, 2006). In the first wave of agreements, responsibility for the negotiations was shared among several ministries (Interior, Economy, and Foreign Relations), which competed with each other to achieve results and to be recognized for doing so.
In the second stage, the presidency gave the lead to the Foreign Ministry, thereby strengthening DIRECON as the coordinator of the various voices and public agencies. The private sector also began to play a role, its participation being institutionalized through what is termed the “side room.” The state’s role was key in training entrepreneurs and in determining who would speak for business in its dialogue with the government. ASEXMA was chosen for that purpose, a group of export interests with close contacts among government elites.
It was in this stage that an “informal” dialogue began with civil society organizations through the same public-private council in which business, unions, and NGOs took part. This expansion was a result of pressure from networks and governments in the North during the negotiations. There was an active policy of providing access to information and of ad referendum consultations on the part of governments and negotiators (Botto, 2003).
In the third stage, DIRECON’s staff was truly professionalized. Negotiators stayed in their posts for a long time, had experience in various negotiating fora, and were very well paid. The private sector was also professionalized. SOFOFA, an industrial business association, replaced ASEXMA in the dialogue with the government. This was largely because of its greater resources and the larger number of its members in sectors deemed strategic. SOFOFA brings together the leading, internationalized businesses in the service sector (electricity, telecommunications) and commodities (forestry and mining). In exchange, the government gives these firms preferential access to decision makers, training courses, and so on (Bull, 2005).
As regards civil society, participation ended and the channels for dialogue were deactivated in South-South negotiations that the public does not view as threatening.
As in Chile, Argentina’s military dictatorship embarked on trade opening in the 1970s in a context marked by the suppression of democratic institutions and civil liberties. Argentina, however, differed from Chile in two important respects. First, the opening was not indiscriminate. The average tariff was sharply reduced, but some industrial sectors, such as steel, paper, petrochemicals, textiles, and so on, remained heavily protected (Basualdo, 2001). Second, the opening did not strengthen or deepen over time. Quite the contrary: around 1981 the strategy was reversed, and protection reached levels similar to or higher than those in the previous period (Viguera, 1998).
This fluctuation, a characteristic of Argentina since the 1930s, evidences the struggle between two development models that persist in Argentine thought (Wynia, 1983). One is an effort at accumulation based on the export of primary products, preferably agricultural goods. The other is based on the development of the domestic market with modest industrial growth. The novelty of the past thirty years is that this latter group has diminished and has coalesced into “captains of industry,” a small number of monopoly businesses with ambitions to conquer the regional and global markets. Income from foreign trade, however, still amounts to only 25 percent of GDP.
In the late 1980s and under the supervision of international economic institutions such as the World Bank and the WTO, this internal fluctuation reached certain limits. The democratic government of Alfonsín faced the first external limit when, obliged by the World Bank, in 1987 it began to reorganize the country’s tariff structure, making it more open through progressive tariff reduction and the elimination of protectionist measures.
The Menem government embarked on a second stage in this process. Unlike the previous phase, trade liberalization was abrupt and was pursued through various strategies. There was a unilateral strategy, in which the government cut import and export tariffs by decree. There was a strategy of external negotiations in several fora. At the multilateral level (WTO), Argentina set an average tariff of 35 percent; at the regional level (Mercosur), the tariff was reduced to 12 percent; and at the hemispheric level the country began negotiations with the United States to conclude a free-trade agreement (zero tariff) with the main economy in the Americas (see appendix 3.1).
Of all the negotiations in which the government has taken part since the late 1980s, the Mercosur talks have involved the most significant trade liberalization. Though the agreements with the United States and the European Union (EU) involve more issues and greater commitments, they are still being negotiated and the parties are facing substantial difficulties in reaching an agreement (see appendix 3.3).
As regards the management of international negotiations, since 1983 Argentina’s democratic governments have had a public sector with limited professionalism and very modest human and technical capacities, the result of successive breakdowns in the institutional order and the lack of a career path in the public sector (Jordana and Ramió, 2002). In the private sector the situation was more diverse. A few private companies and chambers of commerce, most of them dominated by captains of industry, had experience of the Latin American Integration Association (LAIA) negotiations in the 1970s and/or enough money to hire specialists to protect their interests. Small industrialists, for their part, lacked the knowledge and experience to face the new context of economic opening.
In the more than fifteen years since Mercosur was founded, the intrasubregional negotiations have changed this situation. State capacities have increased, and the private sector’s various voices have managed to coordinate among themselves (Botto and Bianculli, 2006). The negotiating issues are no longer confined to agricultural matters but now include new fields. The Economy Ministry, traditionally the interlocutor in dialogue with the private sector, has been joined by the Foreign Ministry and others, depending on the particular negotiations. Finally, new channels for private-sector participation have been created: the so-called “adjoining room” for some business sectors and the Civil Society Consultative Council, whose members include trade unions, NGOs, academics, cooperatives, and so on. Though progress has been made in these areas, some things remain to be done: the public sector’s internal coordination must still be institutionalized so as to avert false interministerial competition, as must the channels for private-sector participation, so as to ensure that they continue and are representative.
In Brazil, trade opening began in the 1990s.5 The military regime that governed for more than two decades applied a developmentalist policy and created an industrial momentum that made Brazil the region’s main source of manufactures and industrial goods.
President Fernando Collor de Mello presented the liberalization strategy as a solution to the financial problems arising from the external debt. With no party ties or links to Brazil’s industrial elite, and supported by the results of a referendum, he embarked on an abrupt and wholesale opening whose goal, like that of Menem in Argentina, was to demonstrate his will to change. The strategy combined unilateral opening with negotiations at several levels, and the results were swift: the average tariff fell from 35.5 percent to 13.5 percent and para-tariff barriers were lowered.
The sectors affected by the changes were not slow to react, and Collor was forced from office following impeachment in the third year of his term. After his fall, the opening was rolled back and tariffs were raised. The new government of Fernando Henrique Cardoso laid the ground for a consensus on “conditional opening” that sought to protect national industry but demanded that it be more competitive in order to reintegrate Brazil into the international economy (Motta Veiga, 2000).
Within this strategy, Mercosur was far from a threat; indeed, it was a launch pad for negotiations in asymmetrical fora (FTAA, EU, WTO). Negotiations with the other three member states revealed Brazil’s superiority in protecting its own interests and industrial sectors (Motta Veiga, Bouzas, and Torrent, 2002). Thus the staggered common external tariff came to protect Brazil’s productive structure, imposing high tariffs on capital goods and information technology products in order to provide protection against third parties6 (see appendix 3.1). For Brazil, however, the priority and prime challenge was the multilateral negotiations in the WTO. Brazil and India have become undisputed referents of the developing world in the current discussion of the reduced Doha Agenda (Hong Kong and the 2004 Work Program). In these negotiations the developing countries demand, in exchange for concessions on nonagricultural market access (NAMA) and services, that the developed countries finally eliminate their agricultural subsidies.
As regards the public-private relationship, the novelties introduced by Mercosur mainly involve changes in the state’s institutional and bureaucratic structure. Until Mercosur was created, trade negotiations were monopolized by the Foreign Ministry (also known as Itamaraty), which had a very professional, enclosed, and small staff of negotiators entrusted with defining the fine print of the national interest. Mercosur broke this tradition by bringing representatives of other ministries and agencies (basically Development, Treasury, Agriculture) into the negotiations. The WTO negotiations had a similar effect in terms of linking the private sector’s expertise, essentially in the area of agribusiness. Past negotiations for the FTAA, and the current talks with the EU, have obliged the governments to include the unions and Congress in the debate (see appendix 3.4).
The inclusion of each new actor (public or private) in these discussions requires greater interministerial coordination. To that end, and for the purposes of the Mercosur negotiations, Brazil set up the Chamber of External Trade (CAMEX), an organization that reports to the Ministry of Development, Industry, and Foreign Trade and that brings together the Ministries of the Interior, Foreign Affairs, the Economy, Agriculture, and Planning, as well as some business sectors. Later, as a result of the FTAA negotiations, the government set up within Itamaraty a channel for dialogue with the main chambers of commerce, such as the National Chamber of Industry (CNI), the Federation of Industries of São Paulo State (FIESP)—and parts of civil society, such as the unions in the Single Workers’ Central (CUT) (Botelho et al, 1999). This channel is called SENALCA, and its structure is reproduced in the negotiations with the EU but with the name of SENEUROPA.
To describe the link between research and decision making in each of the national cases, we will use the categories proposed by authors such as Regonini (1992) and Brunner and Sunkel (1993), who argue that for knowledge to have a satisfactory outcome it must not only be produced. There must also be channels for its expression, a willingness to use it, and a possibility of its being used. In this respect, the questions we try to answer in each of the national cases are: Which actors produce knowledge on these issues? How are they financed? What kind of studies/approaches take primacy? How is the knowledge conveyed to decision makers? How do they use it? With these matters clarified, the chapter proceeds to indicate the similarities and differences in the links between think tanks and decision makers in each country, so as to assess whether there is a regional pattern of production-linkage-use.
Before describing research and decision making under Chile’s democratic governments,8 we will briefly review the links between the two during the military regime. That was when the decision was made to adopt a new trade policy, one that would outlive the dictatorship and be maintained by successive democratic governments.
As in the rest of Latin America, the grand themes and ideas that justified the neoliberal model were imported from the leading centers of power and business. In Chile, where trade liberalization preceded the Washington Consensus, liberal prescriptions were brought and applied dogmatically by the Chicago Boys.9 In this context, where the authoritarian government took over the universities and the political parties, critical research that argued against the neoliberal model was confined to research centers financed by foreign foundations, and limited itself to making timid policy recommendations in markedly defensive tones.
With the return to democracy, there was a shift in the locus and capacity of local research. Many academics returned from abroad, and the universities recovered their central role in knowledge production and critical debate. But there was a significant exodus toward the state when renowned academics and researchers sought elective office in Congress and/or became officials in the new government.
Production came to be financed mainly by the government, which understood that this was a priority issue for the public debate. The financing was provided through two channels that were not necessarily connected. On the one hand, more academic and university research was financed by the National Commission for Scientific and Technological Research (CONICYT). On the other, research was undertaken or commissioned by the ministries taking part in the negotiations; this, unlike the former kind of research, focused on specific issues stemming from immediate daily needs.
This state-centrist pattern of production persisted, albeit with some changes. The first democratic administration hired renowned academics or partisan think tanks to produce particular consultancy studies. The next administration, by contrast, led by the socialist Ricardo Lagos, preferred to incorporate knowledge and professionalize the experience within the government itself, thereby giving stability to technical specialists from the previous administration and introducing others under DIRECON (Frohmann, 2004). Over time, the sources of financing and the areas of production were diversified. In addition to financing from the national budget, the country received technical cooperation through asymmetrical agreements (Canada, the United States, and the EU), as well as from international organizations, all of these resources being managed by the state (see Table 3.2).
Table 3.2 Characteristics of Chile’s In-House Think Tank
|
General Directorate of International Economic Relations (DIRECON) |
History |
Created during the Pinochet regime but consolidated as an agency responsible for external trade policy under the Concertación Democrática government. At present, its role is to negotiate and promote the deepening of international economic and trade agreements, following up on the decisions of the Interministerial Committee on International Economic Agreements. The latter comprises the Foreign Ministry, Treasury, the Economy Ministry, SEGPRES, and Agriculture. In light of the priority that the government gives to this policy, it is considered a superministry. |
Structure and organization |
Reports to the Foreign Ministry and is organized as follows. A director general is in charge of three directorates and departments, with a cabinet, an advisory office to the general directorate, communications, internal audit, and a project execution unit for an IDB program. The bilateral directorate is divided into market access, coordination of the management of agreements, Latin America, Europe, Africa and the Middle East, Asia and Oceania, North America, and trade defense. The multilateral directorate has agencies devoted to APEC, the WTO, the OECD, trade and sustainable development, services, investment and air transport, and intellectual property. |
Human and financial resources |
Most of the numerous technical staff are experts in economics. Material resources come directly from the government, with IDB support for its activities. |
Production |
Mostly projections and econometric studies, impact assessments, and so on, using the methodologies of the discipline. It also produces sectoral studies (specifically, on Chilean export products). |
Source: Prepared by the author on the basis of Aninat and Botto (2005), http://www.direcon. cl and www.direcon-prochile.cl.
For their part, the chambers of business provide funds to commission studies on issues of interest to them. The participation of agro-export chambers and firms with interests abroad, especially SOFOFA, has been professionalized. Initially their participation consisted merely of their presence and was confined to the expression of their sectoral demands through the “adjoining room.” But now their technical capacity and ability to make proposals has been boosted by external consultancies or the establishment of their own research teams, which provide the negotiators with relevant information to strengthen their positions in international fora relative to other national groups and actors (see Table 3.3). In this competition, even some of the powerful and traditional business associations, such as the National Agricultural Society, have lost ground because of a lack of studies and data to back up their views.
Table 3.3 Chilean Private Sector Think Tank
|
Industrial Promotion Society (SOFOFA) |
History |
Founded on 7 October 1883. Represents Chile’s industrial sector. From the outset it has recognized the importance of knowledge: in 1897 it created the Trade Institute, and in 1883 it began to create a statistical record of the country’s manufacturing industry. The report was published in the society’s bulletins from June 1895 onwards. In 1925 it laid the groundwork for the decree law on intellectual property. Today it is a preferred interlocutor with the government. It brings together the most powerful entrepreneurs with interests abroad, essentially services and commodities firms. |
Structure and organization |
As regards its legal status, it is a nonprofit business federation that brings together 80 percent of the firms in the industrial sector: about 2,500 companies, forty-six sectoral associations, and eight regional affiliates, represented by the industrial associations of Arica, Antofagasta, Valparaíso, Curicó, Talca, Concepción, Malleco-Cautín and Valdivia. These firms account for 30 percent of the country’s GDP. As to its internal organization, it has a directing board, an executive committee, an executive body, a general council (with honorary and merit counselors), elective counselors, and business counselors. |
Human and financial resources |
The staff comprises graduates specializing in foreign trade and economists, most of who have done graduate study in the United States. Its financing comes from the dues of the member associations and industries. |
Production |
At present it provides the Foreign Ministry with studies and analysis of how the sector works; develops and promotes sectoral negotiations with business chambers and firms from other countries with a view to opening new markets; advises its members on a number of tax, labor, customs and foreign trade, environmental, and regulatory matters, among other issues; and trains its members on corporate social responsibility. |
Source: Prepared by the author on the basis of www.sofofa.cl.
The same is true of civil society actors such as NGOs and unions, which very recently have been included in the debate on these issues. Their training activities mainly focus on coaching staff and networking, activities that are financed by international networks and foundations. Normally, they do less research. Though they take part in the dialogue with the government, their opinions are not heeded and most often they are considered to be of little relevance because they lack the data to back them up.
To answer this question, we grouped academic output into five main categories: theoretical work, which explores paradigm shifts and the development model; studies of strategy and alternative negotiating scenarios, which cover a wide range of analytical methods (ex post or ex ante impact; comparative analysis; macroeconomic or micro approaches); and technical analyses of current conditions. With this classification in hand, the information was collected, and in the Chilean case, two methods were used: interviews with researchers and decision makers; and analysis of 250 publications issued between 1976 and 2004.
The great majority of the interviewees agree that there were more strategy studies than any other kind (see Table 3.4). Nonetheless, in Chile the issues addressed in the strategy studies and the approach they take have changed over time. In the 1990s the main concern was macroeconomic equilibrium. Once that was attained, in 2000 interest shifted to the trade impact of the various negotiating scenarios for the economy in general and for certain productive sectors in particular. At present, by contrast, macroeconomic impact studies have given way to analysis of micro matters in which there are two main concerns: the impact of the negotiations on the new issues of the economic agenda (investment and infrastructure); and the social impact of integration in terms of income distribution and the environment. These changes prompt the conclusion that there has been a learning process in which production is linked to the challenges posed by the ever-forward progress of the chosen strategy.
Table 3.4 Type of Publication by Institution in Chile
Source |
Theoretical |
Impact Studies |
Technical |
| |||
University of Chile |
3 |
15 |
2 |
Catholic University |
13 |
31 |
4 |
Others |
1 |
– |
– |
Research Corporation for Latin America |
5 |
43 |
8 |
Center for Development Studies |
– |
6 |
4 |
Latin America Center of International Economics and Politics Internacional |
– |
1 |
– |
Latin American Institute of Transnational Studies |
– |
2 |
4 |
Center of Public Studies |
– |
2 |
– |
Others |
1 |
78 |
15 |
TOTAL |
23 |
183 |
37 |
Source: Prepared by the author.
It is not only public research output that is geared to the strategy, but also private output. Recent studies financed by the business sector focus on the export promotion impact of the preferential agreements. The choice of issue, obviously, depends on the sector and on the interests of its representatives.
Analysis of the publications corroborates the foregoing, and sheds light on other aspects of research output. First, most of the studies are about the impact of the negotiations. These far outstrip the number of policy studies and purely descriptive documents. Second, almost all of the theoretical studies are produced in academia, most particularly in state universities such as the University of Chile and the Catholic University, both of which are public. In the private universities, by contrast, output on these issues is sporadic and limited. Certain individuals stand out in this regard, but teamwork and quality are in short supply.
Only exceptionally does expert knowledge or research findings reach the negotiators in the form of a book or an academic publication. Such media require two things that are in short supply: time and availability. This is why the negotiators prefer personal contacts in formal and/or informal discussions, or the participation of the academic expert in their team of advisers. For the researchers, their main channels for communicating their findings are newspapers and television, where public opinion exerts strong pressure on public officials.
Apart from this characteristic, which is common to all the countries under study here, Chile has two particular features in its researcher–decision maker nexus. The first is the phenomenon of “revolving doors,” whereby there is a constant movement of academics between the private and public spheres. The other is the institutional importance that Chile’s political parties have traditionally had as representatives of different alternatives.
In this respect, during the authoritarian regime and the first democratic administration, the political party opposition included researchers and experts with differing views of the government’s work program. Hence the parties not only became a means of recruiting technical personnel that could be set to work once they won office, but they also nourished expectations of a change in policy. Nonetheless, the alternation of parties in government and the continuance of the negotiating strategy highlighted the parties’ loss of capacity to make proposals on these issues.
While policy understood as management remains a source of income and prestige for academics, once they have finished their time in government they do not return to the political party or to public universities. Generally, they set up their own consultancies and sell their expertise, which now stems not only from academic research but also from experience in public administration. These consultancies join a vast market of supply in which the customers are the national government, the private sector, and international organizations.
The findings of the fieldwork are contradictory in this regard. While researchers think that their work is disregarded by decision makers, negotiators and public officials claim that academic opinion serves as an input to their decisions but, obviously, not the only one. We aim to identify the use made of research and academic expertise, rather than to gauge its impact on decision making.
In that respect we can say that even though academic output and the way it is transferred have changed in terms of form, actors, and intensity, in Chile the use to which research is put has not altered. The government, first, and more recently the private sector, commission and produce impact studies to mediate among different national actors and/or effect change by weakening possible counterarguments.
Thus the main use of research on these matters has been to legitimate the ongoing negotiations and the government’s negotiating position, both within the government and in the eyes of the public, thereby surmounting the obstacles that might hinder implementation.
To a lesser extent, research has served to cover new issues and to identify new scenarios or strategies for the negotiating agenda. Research has also been important in identifying technical instruments and inputs to resolve disputes that arise daily during the negotiations. There was less research in this latter regard, however, and it came mostly from in-house think tanks.
The proliferation of think tanks in Argentina is related to the democratization process and the need to foster a public debate about the benefits of structural reform in general, and trade opening in particular. In this respect, around the mid-1980s a series of think tanks were set up or activated with different kinds of businesses (industrial and/or agricultural). Prominent among these is the Foundation for Latin American Economic Research (FIEL), the Mediterranean Foundation (IIERAL), and the Argentine Center for Macroeconomic Studies (CEMA). Foreign trade, however, is not a research priority for these institutions.10
Most of the studies on trade negotiations are commissioned by the government or are undertaken in the government think tanks of the ministries taking part in the negotiations: Economy and Foreign Relations. These are the Center for Studies of Production (CEP) and the Center for International Economics (CEI), respectively (see Tables 3.5 and 3.6).
In the Economy Ministry, international negotiations on agricultural market access are led by the agriculture secretariat, which lacks a research center of its own but has a team of officials and technical experts who specialize in the issue.
Table 3.5 In-House Think Tanks in Argentina: Center for International Economics (CEI)
|
CEI |
History |
Its background lies in the negotiations for the Economic Integration and Cooperation Program (PICE) between Argentina and Brazil. Its ideologue, Carlos Bruno, adviser to Vice-Minister Romero, proposed forming an ad hoc group to provide input to decision makers working on international negotiations. An academic, Daniel Chudnovsky, was entrusted with putting this into effect. During Cavallo’s time as Foreign Minister, the financial resources were put in the hands of the Mediterranean Foundation. The CEI was institutionalized only in the 1990s under Guadagni, deputy to Foreign Minister Di Tella. |
Structure and organization |
Reports to the Secretariat of Trade and International Economic Relations of the Foreign Ministry. It has a director, two coordinators, nine researchers, and two research assistants. It also has a librarian and an administrative assistant. |
Human and financial resources |
Most of the staff are economists. Its funding comes from the Secretariat to which it belongs, but it also receives funds from international organizations such as the UNDP and the IDB to conduct and commission research. |
Production |
The staff carry out impact analyses of different negotiating scenarios, statistical databases, studies of current conditions, and the design of trade promotion instruments. It uses a quantitative methodology (computable general equilibrium, trade indicators analysis, partial equilibrium). |
Source: Prepared by the author on the basis of interviews with public officials and www.mrecic. gov.ar.
Table 3.6 In-House Think Tanks in Argentina: Center for Studies of Production (CEP)
|
CEP |
History |
Created in 1996 by Alieto Guadagni, then Secretary of Industry, with the aim of reproducing the CEI’s experience in the Economy Ministry. Pablo Goldín was its first director. |
Structure and organization |
Operates within the Economy Ministry’s Secretariat of Industry, Trade, and SMEs. It has a director, a chief economist, six economists, and two assistants |
Human and financial resources |
The staff comprises academics with a background in economics. Most of its financing comes from the UNDP and the IDB, although at present it also receives resources from the ministerial budget. |
Production |
To offer technical support to those acting for the government, it produces studies of current conditions and of economic and trade performance, as well as statistical databases and indicators. Its methodology is similar to that of its counterpart in the Foreign Ministry, though its impact assessments are sector-specific. |
Source: Prepared by the author on the basis of interviews and www.industria.gov.ar/cep.
In addition to the research undertaken in their in-house think tanks, these ministries commission studies and services from private research centers or universities, depending on the issue at hand (see Chapter 6, by Botto and Quiliconi). The main centers consulted have been FIEL, the Studies Center for Technological Innovation (CENIT), the Mediterranean Foundation, the Latin American Faculty of Social Sciences (FLACSO), the Economics Faculty at the University of Buenos Aires, and the International Studies Center of the Torcuato Di Tella University (UTDT).
The way research works are comitted has changed over time. Initially it depended on the assessment and personal feelings of the official in charge; at present, by contrast, there are competitions and public tenders. This takes us back to the issue of financing and the role of international organizations. In Argentina, most of the research commissioned and/or undertaken through the Science and Technology Secretariat (SECyT) is financed with international cooperation funds (UNDP, assistance from developed countries) or with credits from international lending institutions (IDB, World Bank).
The private sector, essentially that represented by the business chambers, does not normally engage in research. It does take part in the process by advising the negotiators of its positions and/or the sector’s demands on one or another negotiation or scenario, but its participation is defensive and it makes few proposals. This level of participation is explained by two of the sector’s characteristics: first, it is markedly fragmented; and second, it lacks human and financial resources in the area of international negotiations, and prefers to prioritize the issues on the domestic agenda.
The exceptions to this rule are some companies—such as Techint, Perez Companc, and others—that have acquired a regional export profile. In recent years, some of the business chambers with noticeably offensive interests have become professionalized. This is true of the Petrochemical Chamber of Argentina and the Institute of International Agricultural Negotiations (INAI). The latter was set up because business associations in the cereals sector wanted to be kept informed and exert reasoned pressure on the negotiators (see Table 3.7).
Civil society, through trade unions and NGOs, has begun to take an interest in trade negotiations as a result of Mercosur’s regional integration process and of participation in transnational networks set up because of the asymmetrical negotiations (the FTAA and talks with the EU) (Botto, 2004). This participation, however, is incipient; civil society’s capacity to make proposals is constrained by a lack of information and the extremely technical nature of the negotiations. In this respect, these organizations’ academic activities are mainly in the areas of training and networks, and most of them are financed by foundations and counterparts abroad, especially in the North.
As regards the research undertaken and studies published on trade policy in Argentina, most are impact studies on current (ex post) or future (ex ante) negotiating scenarios. These are followed by a much smaller number of studies on contingent aspects of the negotiations, covering technical matters such as tariff levels or policy issues such as comparative and legal analysis of the negotiations. Most of this work is carried out by the technical specialists among the negotiating teams, with the participation and/or collaboration of the in-house think tanks. The kind of theoretical studies prepared in academic institutions are virtually nonexistent, and they seldom reach decision makers, remaining confined to academic discussion.
Table 3.7 Sectoral Think Tank in Argentina
|
Institute of International Agricultural Negotiations (INAI) |
History |
Created by the Rosario Chamber of Commerce and the Chambers of Cereals of Bahia Blanca and Buenos Aires. Its current director, Dr. Ernesto Liboreiro, who has a background in international organizations, proposed the idea on the eve of the Millennium Round (2000). Its goal is to strengthen the capacity of the cereals/oil products sector to make proposals in the negotiations. New sectors joined later. |
Structure and organization |
At present it comprises the four founding chambers, the Federation of Business Centers for Cereal Grain Brokers, the Argentine Chamber of the Oil Products Industry (CIARA), the Center for Cereals Exporters, and the Córdoba Chamber of Cereals. These chambers form a council, which determines the research guidelines. |
Resources |
The research staff consists of the director and four researchers, most of whom are economists. It is financed by its member chambers. |
Production |
The studies focus on present and future negotiating scenarios, and seek to identify opportunities for successful market access on the part of the sector. The findings have a twofold objective: to give input to the sector and to promote a public-private linkage with the negotiators. |
Source: Prepared by the author on the basis of interviews and www.inai.org.ar.
As regards impact studies, CEI and CEP are clear leaders, not only in the number of studies but also in terms of their methodological development. The methodology is wholly quantitative, and the focus is exclusively on economic (trade) effects. They use computable general equilibrium methods, trade indicators analysis, and partial equilibrium (Berrettoni, Cicowiez, and Galperín, 2006).11 The main difference in the analyses of CEI and CEP is the focus of study: while the Foreign Ministry carries out impact studies on negotiating scenarios (opportunities and disadvantages of the FTAA relative to the agreement with the EU), the Agriculture Secretariat seeks to identify the opportunities and challenges for a particular sector. For its part, CEP focuses on production and domestic issues (investment), and in some negotiations, such as those within Mercosur, has commissioned impact studies on specific sectors such as meat, SMEs, and so on (see Chapter 6, by Botto and Quiliconi). To a large extent, the studies produced by private centers follow the approaches and methodology used in the government sphere. This is largely explained by the notion of “he who pays the piper calls the tune.”
In the interviews conducted for this study, academics and decision makers agreed that the link between knowledge and decision making is forged not by the commissioning of studies but by personal contacts. The main means of contact chosen by decision makers are meetings (seminars, consultations, training, and so on). In second place is the inclusion of individuals in government structures. Only in third place is a circumstance when a research study requested or commissioned.
As in Chile, academics’ access to the decision-making level is highly permeable. The interviews revealed that there is a “revolving door” in Argentina, whereby a significant number of first- and second-tier officials come from academia. Once their time in government is over, they return to university life or set up their own research centers or consultancies, with the advantage of their new knowledge and experience. In contrast to what happens in Chile, however, academics’ access to the public administration is not a result of their adherence to a political party or ideology; it owes more to personal characteristics, especially professional prestige and/or links with particular interest groups.
To answer this question, we have to distinguish between the different kinds of studies. The technical reports affect decisions in terms of the proposals those reports make, but the scope is limited to contingencies and they do not influence medium- or long-term scenarios. As mentioned earlier, most of the impact studies are produced by in-house and private think tanks, and these too are not used to devise strategies or identify medium- and long-term scenarios. Both the government and private actors use them to legitimate the official negotiating position in the eyes of the public, or to convey the private actors’ opinions to decision makers.
Most of the interviewees maintained that it was hard to use research to make proposals because of institutional factors, such as the lack of linkages between agencies, as well as turnover among decision-making personnel and technical specialists.
The lack of coordination among the ministries and the various government agencies has adverse effects on the decision-making process. As regards the production, communication, and use of the research, the Argentine case shows that similar studies and recurrent scenarios tend to proliferate and overlap, and that the communication process is truncated— with the result that the results reach some decision makers but only within the ministry itself.
With respect to job stability among officials, the long history of political prohibition and the recent reform of the state have spurred turnover in the state bureaucracy. This hampers the accumulation of institutional memory and the medium-term training of technical and political officials. The experience acquired departs with the individual, and thus the time needed to produce and communicate research moves very slowly relative to the length of a presidential term.
These effects are exacerbated by the lack of consensus among government elites regarding a shift toward economic opening and the chosen negotiating strategy. Though it is hard to oppose opening, there are still differences over the strategy. These different outlooks often go beyond the confines of government. The Carlos Menem administration (1989–2000) was emblematic in this respect. The absence of presidential leadership on the issue was aggravated by the opposing positions of an Economy Minister who supported an agreement with the United States and a Foreign Minister who negotiated closer integration with Brazil (see Chapter 6, by Botto and Quiliconi).
Unlike Argentina and Chile, in Brazil the management of international policy and the task of establishing its guidelines have traditionally been concentrated among the highly professional officials of Itamaraty. Their isolation from other ministries, as well as from other centers for debate and knowledge production, has been justified on the grounds of national defense and geopolitical leadership in the region. In a context of increasing globalization, however, when the economy is internationalized and international networks nationalize their activities, it seems that the situation is starting to change.
In the 1990s, the production of trade policy studies and the exchange of ideas on the issue expanded from Itamaraty to new ministries and public agencies. At the same time, production diversified toward private actors, especially entrepreneurs and, to a lesser extent, universities, trade unions, and NGOs. In the public sphere, Itamaraty12 retains its leadership in the production of inputs for negotiations. Those inputs, however, spring from the accumulated experience and training of the negotiators during their career, rather than from research studies produced or commissioned.
The innovation comes from the Ministries of Planning, Budget, and Management, of Development, of Trade and Industry, and of Agriculture. These have gradually been added to the negotiations. Other ministries or state agencies take part to a lesser degree, such as the Justice Ministry and the legislature. Given the lack of trained officials in these new issues, the ministries have hired specialists and consultants to produce the inputs needed to establish a position in the negotiations. Nonetheless, differences persist. In the Planning Ministry, research is carried out by in-house think tanks such as the Institute of Applied Economic Research (IPEA) (see Table 3.8). In the others, private Brazilian or foreign consultants are often used.
Among private actors, the business sector makes the biggest contribution to the negotiations through research and articles. In recent years there has been a proliferation of think tanks linked mainly to the industrial sector, though there are also some in agribusiness and the financial sector. Obviously, not all sectors have set up their own centers, but rather those with the greatest lobbying power, such as CNI, FIESP, and the banking and financial sector. The most important research centers are the Foreign Trade Studies Center Foundation (FUNCEX), the Center for Integration and Development Studies (CINDES), and the Getulio Vargas Foundation. These centers are mostly concerned with research, training their members, and promoting public-private linkages. Although there are more research centers linked to industry, agribusiness has acquired greater access to Itamaraty’s negotiators (see Table 3.9). This is because the sector has a proliberalization position as a result of its interest in the multilateral forum, in which it shares a geopolitical interest with the government.
Public universities, by contrast, with few exceptions, are at the margins of government management of the trade negotiations. Financed with public resources, mainly from the National Council of Scientific and Technological Development (CNPq), their professors lack a particular incentive to link their interests with those of the administration and affect public policies, at least on this issue. The exception is the University of Brasilia. Through its Center for Advanced Multidisciplinary Studies (CEAM), and thanks to its physical proximity and academic background, it is often consulted by policy makers and disseminates its research findings through “Cadernos” (Gomes Saraiva, 2004).
Table 3.8 In-House Think Tank in Brazil
|
Institute of Applied Economic Research (IPEA) |
History |
Created in 1964, it was originally called the Office for Applied Economic Research and comprised highly qualified Brazilian specialists and foreign consultants under the coordination of the Ministry of Planning. In 1990, by means of decree 99.260, it came to be known as the Institute of Applied Economic Research with a mission to provide technical and institutional support to the government. |
Structure and organization |
It is a federal public foundation with organizational links to the Ministry of Planning, Budget, and Management. It has a president and six departments (cooperation and development; macroeconomic studies; social studies; administration and finance; sectoral studies; regional and urban studies). |
Human and financial resources |
It has a total of five hundred researchers, of whom half have postgraduate qualifications in each of the aforementioned areas (economics, social sciences, administration, and finance). It is financed by the public sector but it also cooperates with national and international institutions. At the national level, it has created the IPEA Knowledge Network (RIC). This has twenty-six members, including universities, foundations, and think tanks. Its partners include the Brazilian Institute of Geography and Statistics (IBGE), the Federal Economic Savings Institution (CAIXA), the National Bank for Economic and Social Development (BNDES), the National Council on Scientific and Technological Development (CNPq), and others. At the international level it cooperates with the IDB/IPEA Network Program, ECLAC, UNDP, the Costa Rican National Council of Rectors (CONARE), Japan’s Institute of Developing Economies (IDE), the Korean Development Institute (KDI), China’s Development Research Centre (DRC), and others. |
Production |
Its mission is to produce studies, analysis, and research on economic and social issues. Specifically, in the area of macroeconomics, it produces studies of current conditions, markets and regulatory matters, finance, foreign trade and trade policy, using macroeconomic models, general equilibrium models, and econometric techniques. The other studies focus on analyses of public policies, social policies and living conditions, output, technology, and innovation, among others. |
Source: Prepared by the author on the basis of www.ipea.gov.br.
There is a clear division of labor between what is produced in the public sphere and the output of private research centers. In the former, the negotiators themselves produce more technical studies and analyses of scenarios and strategies. In government centers such as IPEA, the research focuses on macroeconomic impact studies, market analysis, and the construction of statistical and economic databases associated with trade negotiations or integration.
Table 3.9 Private Think Tank in Brazil
|
Institute for Trade and International Negotiations Studies (ICONE) |
History |
Founded in 2003 to support the negotiations on agribusiness. The initiative originated with and was supported by seven private bodies. |
Structure and organization |
The member organizations are export oriented. The founder is the Brazilian Agribusiness Association (ABAG), led by the vegetable oil industry (ABIOVE) and chicken producers (ABEF). Other members are the Brazilian Association of Meat Exporting Industries (ABIEC), the Brazilian Association of Pork Producers and Exporters (ABIPECS), the Federation of Industries of São Paulo State (FIESP), and the São Paulo State Union of the Sugarcane Industry (UNICA). |
Resources |
It has a fixed and multidisciplinary team of researchers and takes part in academic networks. It is financed by its member organizations, private companies, international organizations, and other NGOs. |
Production |
It carries out consultancy work for private firms. These are generally technical, research, and negotiating strategy studies. It also links and mediates the public-private dialogue (business and academia). |
Source: Prepared by the author on the basis of www.iconebrasil.org.br.
The private research centers generally specialize in research and impact studies (ex post or ex ante) of the various scenarios or negotiating fora. The aim is to identify the niche opportunities that such agreements could create for the productive sector in question, or to provide grounds for an argument about costs in discussions with government negotiators and thereby induce a change in strategy. FUNCEX, for example, prepares and distributes sectoral studies on the main aspects of import-export activities. It also engages in support and training activities (technical and administrative) for firms, and publishes and distributes documents and reports.
In many cases these think tanks have broadened their research agendas to cover other academic services, with a view to diversifying their sources of financing and of social legitimacy. These services include collecting information on and analyzing other countries’ negotiating agendas, as well as the development of their trade policies; and facilitating publicprivate dialogue through seminars and workshops. This is the case of ICONE, for example, which seeks to improve the country’s bargaining position in the multilateral agricultural negotiations by acting as a link between entrepreneurs and the government. Another example is the Getulio Vargas Foundation, which brings together civil society actors (environmentalists and unions).
University researchers have recently and incipiently become involved in the debate on trade negotiations. They do so with a more theoretical and comprehensive vision, one that questions how the governments manage these policies, “isolating them from the regional integration process and excluding non-business actors and the citizenry” (see Chapter 2, by Ventura).
As mentioned earlier, the Brazilian model of knowledge production is enclosed and endogamic. Applied research is mainly undertaken in the public sphere, and input from the private sphere faces serious obstacles in reaching decision makers. Of all the ministries, Itamaraty is the most closed. Its officials create their own inputs and seldom link up with the in-house think tanks or private research centers. The other ministries are more permeable and less self-sufficient. To offset the lack of experienced personnel or expertise on these issues, they use their own think tanks for ad hoc research and, very occasionally, they hire external consultants or research centers.
The public-private linkage in Brazil is essentially forged by meetings and personal contacts, through which private actors spontaneously present the findings of their research to negotiators or public decision makers. The success of these channels of consultation largely depends on the predisposition of the officials and the extent to which the arena for consultation has been institutionalized.
In this regard, some important changes were made for the purposes of the asymmetrical negotiations, such as those for the FTAA and the Mercosur EU talks. To improve Brazil’s bargaining position in each of these fora, Itamaraty created two formal channels for dialogue with private actors (SENALCA and SENEUROPA). But they continued only for as long as the negotiations. In these arenas, the participation of the private actors was not equitable: business corporations and labor organizations predominated and expressed their views orally. Only a few chambers of commerce sent research findings along with their requests. This was the case of the Getulio Vargas Foundation’s impact assessment of the FTAA, which was presented in SENALCA in 2001.
In this case too, as in Argentina and Chile, independent researchers ensure that the mass media—television and the press—have become another means for the negotiators to access research.13 In the researchers’ view, this is because of politicians’ growing dependence on the public mood.
Two conclusions can be drawn from the preceding pages. The strategic studies (impacts, scenarios) comprise only one of the elements that nourish the negotiating position, and they are far from the most important.
In terms of proposals, the most influential knowledge is still that produced by the state. Even when the negotiators hire researchers and ask them for information, they carry little weight when it comes to taking decisions (see Chapter 6, by Botto and Quiliconi). Itamaraty’s vision dominates that of the other ministries, the result of different skills: technical information + acquired knowledge + prior experience. Though there is an organization like CAMEX to link up the outlooks and positions of the various ministries, at present the coordination is far from efficient.
As regards validation or legitimation, knowledge has an important place for both the public and private actors. For the negotiators, the potential of academia lies in its capacity to mobilize the various sectors of society, strengthening their bargaining position in the different fora, as in the last stretch of the FTAA discussions. For the private sector, research offers a socially recognized backing that strengthens its position relative to other social actors in the eyes of both the public and the decision makers.
The political and economic contexts facing the first democratic governments differed greatly from each other. In Chile, the Concertación government faced a smooth path. Apart from inflation, the economy was in order and the country had a low level of indebtedness. In trade terms, the opening sustained over three decades had given rise to an economy that accorded priority to primary products and had a very low tariff.
In Brazil, the Collor de Mello administration faced a very different situation: a highly protected economy based on industrial output but with a severe fiscal deficit. Despite these differences, both economies continued to be consolidated over time.
Argentina was at the other extreme in this respect. Since the late 1950s, economic policies have swung between liberalism and heterodox protectionism. The last dictatorship pursued both poles of the fluctuation: In the beginning it undertook an indiscriminate opening that, as in Chile, sought to finish with the last vestige of national industry. In its later years, however, the government discretionally reintroduced protectionist measures that in some cases were stricter than at the start. Thus the first democratic government faced an economy in deficit, as well as a chaotic and irrational tariff structure in which protection was distributed in line with the strength of the lobbying capacity of the sector and/or the criterion of the official in charge.
The three democratic governments reacted differently to this inheritance. In Chile the government opted for opening; in Brazil the early steps were toward indiscriminate opening, which then turned toward a conditional liberalization; and in Argentina, the opening was and largely continues to be meandering.
There may be many and varied reasons for the options chosen in each case, such as external pressure, internal pressure (lobbying), the personal decision of the official in charge, or empirical evidence supplied by research. The literature on policy making, however, indicates that none of these factors appeared in isolation. Rather, they combined with others in various proportions depending on national peculiarities or the issue at hand. Our interest in this final section is to assess the importance of think tanks in these decisions, as producers and transmitters of knowledge.
A comparison of the three case studies seems to reveal a regional pattern in which research and academia remains endogamic on these issues and has a secondary role in decision making. Nonetheless, the analysis also sheds light on the emergence of differences among the three countries. To capture this contrast, we will analyze the similarities and differences at each stage of the process in terms of the production, transfer, and use of research.
As regards similarities, three features stand out. The first concerns the hegemony of in-house arrangements in the production of inputs for the negotiations. Government leadership is evident not only in the number of studies produced or commissioned, but also in the methodology used and the focus of the analysis.
The second common denominator is that the research is mainly government financed, either with national resources or with government-managed funding from international organizations. Private actors, by contrast, produce little and devote scant resources to financing research.
The third similarity concerns the kind of studies produced on external trade policy, especially on trade negotiations. We refer here to impact studies, which identify the advantages and disadvantages of each of the trade talks. While there are different forms and approaches (general or sectoral; ex ante or ex post), in the period under analysis here (1990s–2000), the preferred approach was economic, and no progress was made on other issues in the negotiations (such as social matters).
As regards the main differences between the three countries, in the area of production it is apparent that, in Argentina, most of the financing for these kinds of studies was external and came from the UNDP, the IDB, and international cooperation, especially from the EU. In the Chilean case, for its part, there are differences with the others in terms of the analytical focus of the impact assessments. In effect, the research agenda has been expanding to cover nontariff and nontrade issues as different stages of the opening process have been completed and the country has faced new negotiating challenges.
In this area the differences between the countries are wider, and indeed more pronounced than the similarities. Two patterns of knowledge transfer are evident in the Southern Cone. In one there is a marked rotation of knowledge between the public and private spheres, fostered by the “revolving door” phenomenon. With slight differences, this pattern characterizes the links between researchers and decision makers in Argentina and Chile. The other is a system in which the linkage is weak and mainly evident in the sporadic exchange of knowledge through personal contacts between researchers and negotiators before or after external negotiations. This is the pattern in Brazil, where the linkage is essentially established in meetings arranged by the government or promoted by private actors.
In effect, there are three traditional channels through which the knowledge produced in the private sphere is communicated to the decision makers. The first is by including consultants/experts among staff of the public administration; the second is through the commissioning of ad hoc research; and the third stems from personal contact in meetings, seminars, training courses, and so on.
The “revolving door” system in Argentina and Chile is the first of these channels. Knowledge, the personal assets of the academics and/or consultants, reaches decision makers through their inclusion in government. Strictly speaking there is not a revolving-door system because the academics leave a university or research center to join the public administration, but once their time in government is over it is hard for them to return to academia, which gives primacy to teaching and training. Normally they set up their own consultancies wherein they offer academic and technical services to governments or international organizations.
Nonetheless, there is a difference between Argentina and Chile in this regard as a result of each country’s political tradition. In Chile, the decision to include one or another academic in the administration has traditionally been related to their ideological affinity with and membership in the governing party. In Argentina, the selection criteria are essentially personal and largely depend on the individuals’ prestige or links to particular groups or lobbies.
As to the second channel, the commissioning of research, only Argentina takes this approach, sometimes abusively. In Chile, over time, there has been a learning process. As in Argentina, the Concertación government chose to commission services from think tanks associated with different sectors and parties. The socialist governments, by contrast, have preferred to include the researchers in the government structure so as to help capacity building within the institutions. Brazil’s government uses external consultants only rarely; if it needs studies, it prefers to use government think tanks.
With regard to the last of the channels, meetings and informal dialogue, all three governments prefer this approach and use it continually. In such spheres, private actors spontaneously present their research findings. The main differences lie in the extent to which these fora are institutionalized (Botto, 2004). Apart from the linkages fostered by governments, in all three cases the academics recognize the growing importance of their presence in the mass media as a means of preferential access to decision makers.
Thus we arrive at the end of the process, the stage in which we assess what use is made of knowledge and what influence it has in its different forms (acquired or produced) on trade policy decision making in the three countries. In this respect there are more similarities among the three.
Independently of the kind of analysis (impact study, scenarios, and so on), research is used as one more component of the decision-making process, and it is by no means the most important. Knowledge based on the analysis of data is blended with other forms of learning (training, experience, intuition, interests). This knowledge serves, above all, to confront data with preexisting viewpoints and positions or common sense, but it is far from opening up new horizons.
These constraints are related to the type and scope of the studies themselves. Both the impact assessments and the technical studies confine themselves to providing inputs for a specific negotiation in the context of the immediate needs that arise in the everyday routine of the talks. In this regard there is a significant difference between Chile, on the one hand, and Brazil and Argentina on the other. As mentioned in the section on production, in Chile the issues and approaches of the studies have changed as trade opening has advanced, and in line with the development level of the negotiating partner: the research has gone from impact analyses to sectoraleconomic scenarios, and from the latter to social and environmental issues, which is the kind of work that now characterizes the output of Chilean think tanks. In the other two cases, by contrast, the difficulty of advancing with the agreements and with the model of opening gives rise to the production of multiple studies of the same scenarios and the same problems, using the same approaches and without advancing the research agenda by a single step.
The second reason for the academic studies’ scant value—in terms of making proposals—is exogenous; it is related to the capacity for initiative that the developed and Asian countries enjoy relative to those in Latin America. Production in Argentina, Brazil, and Chile is confined to responding to offers made from outside, and it is in that response that the governments’ energies are depleted. Not even a country like Chile, which has made trade negotiations a priority, invests human and economic resources in the production of medium- and long-term scenarios, an area in which academia could make a greater contribution.
On the contrary, research output in these countries has been reduced to legitimizing role. In Argentina and Brazil, impact assessments are used mainly to reaffirm to the public the importance of continuing with the negotiations. In Chile, by contrast, the way in which the impact studies are used has changed, and they have been geared toward noneconomic variables (environmental and labor related). In Chile too, however, they have helped legitimate the government’s stance on these issues.
Because of this legitimizing function, the production of studies and the hiring of academics has been extended to the private arena. The export sector increasingly commissions studies and consultancies to present its outlook not only to the governments but also to civil society and the general public. This is a new feature, and one that is common to all three countries.
As regards the factors that make the transfer of knowledge possible and encourage its use, academics and policy makers share a perspective, reflected in the surveys, whereby matters of production format and the time frames for research are vitally important. If a study is to have any chance of being used by decision makers, the academic author has to eschew technical jargon, produce short reports, and adapt to the timing of the negotiations. These are all factors that transcend the subject matter of trade. In the case of international trade negotiations, these matters of format and timing are joined by the need for a certain ideological compatibility with the government’s agenda. Research that contradicts or questions the model of economic opening promoted by the government will be rejected out of hand by the negotiators.
Comparison of the three cases nonetheless reveals differences between Argentina and Brazil in terms of the factors that hamper the use of knowledge. While institutional reasons are prominent in both cases, in Argentina it is the lack of interagency coordination and the instability of medium-and long-term economic policies that constrain the influence of research. In Brazil, by contrast, the difficulties emerge in the previous stage of the process: the communication of the knowledge. Research faces grave difficulties in reaching decision makers and penetrating the enclosed outlook of Itamaraty officials.
To return to the original question about the role of academic research in the design and implementation of external trade policy, we can say that the role is minor in terms of making proposals but important in the field of implementing defined policies at the governmental level. Research produced in both the public and private spheres helps implementation by providing the technical inputs needed to effect prior commitments, or by gathering data that serve, in the public debate, to tackle the costs and benefits of the chosen strategy. In the private sphere, the incipient growth in the production of impact studies serves a similar legitimating function, in this case related to the sectoral positions of entrepreneurs.
Overall there is a regional pattern in which the similarities between the countries—in the areas of production and transfer—are greater than the differences. In the area of production, government retains the lead role in terms of the volume of output and in determining the research agenda. As regards knowledge transfer, personal contacts among the “elite” and the mass media are preferentially the indirect means of accessing and influencing decision makers.
With regard to the countries, the main differences are in the area of links between the public and private realms. Chile has the most efficient model: through a long-standing learning process, the country has strengthened public-private dialogue on setting medium- and long-term goals. Moreover, the government’s capacity has been strengthened by the inclusion of academics among its ranks and by the state sector’s training of private actors.
The experience of the three countries and their learning processes prompt the following conclusions:
• There is an urgent need to coordinate the available public resources— different agencies and ministries—around a common agenda that includes both research and proposals.
• There is a need for a research agenda that focuses on medium- and long-term targets, an agenda in which academia can exercise and develop its capacity to make proposals for policy making.
• It is important to strengthen production among the various private actors through policies of transparency and access to information that democratize the decision-making process.
• The private sector should invest in research and should make its own investment and development policies transparent.
Appendix 3.1 Levels of Opening by Year (Chile, Argentina, and Brazil)
|
|
Average Tariff |
|
Year |
CHILE |
ARGENTINA |
BRAZIL |
1987 |
20 |
27 |
51 |
1988 |
15 |
27 |
41 |
1989 |
15 |
25 |
35 |
1990 |
15 |
20.5 |
32.2 |
1991 |
11 |
12.2 |
25.3 |
1992 |
11 |
11.8 |
21.2 |
1993 |
11 |
10.9 |
14.2 |
1994 |
11 |
10.1 |
11.9 |
1995 |
11 |
10.5 |
11.1 |
1996 |
11 |
11.2 |
11.8 |
1997 |
11 |
11.3 |
12 |
1998 |
11 |
13.5 |
14.6 |
1999 |
10 |
13.4 |
14.4 |
2000 |
9 |
12.6 |
14.1 |
2001 |
8 |
11.8 |
13.2 |
2002 |
7 |
11.8 |
13 |
2003 |
6 |
10.8 |
12 |
Source: Prepared by the author on the basis of WTO data.
Appendix 3.2 External Negotiations, Chile (1983–2005)
Year |
Country or Group Countries |
Type of Agreement |
Issues Addressed |
1993 |
Bolivia |
Economic complementarity agreement |
Goods, services, and investment |
1993 |
Colombia |
Economic complementarity agreement |
Goods, services, and investment |
1993 |
Venezuela |
Economic complementarity agreement |
Goods, services, and investment |
1994 |
FTAA (under negotiation) |
Free-trade agreement |
Goods, services, government procurement, investment, and intellectual property |
1994 |
Ecuador |
Economic complementarity agreement |
Goods, services, and investment |
1996 |
Canada |
Free-trade agreement |
Goods, services, and investment |
1996 |
Mercosur |
Economic complementarity agreement |
Goods, services, investment, and infrastructure |
1998 |
Peru |
Economic complementarity agreement |
Goods, services, and investment |
1998 |
Cuba |
Partial-scope agreement |
Goods |
1998 |
Mexico |
Free-trade agreement |
Goods, services, intellectual property, and investment |
1999 |
Central America |
Free-trade agreement |
Goods, services, and investment |
2002 |
European Union |
Economic-partnership agreement |
Goods, services, intellectual property, investment, and government procurement |
2003 |
South Korea |
Free-trade agreement |
Goods, services, intellectual property, and investment |
2003 |
United States |
Free-trade agreement |
Goods, services, intellectual property, investment, government procurement, and environment |
2003 |
EFTA |
Free-trade agreement |
Goods, services, intellectual property, investment, and government procurement |
2005 |
P4 |
Economic-association agreement |
Goods, services, intellectual property, and investment |
Source: www.direcon.cl.
Appendix 3.3 External Negotiations, Argentina (1994–2005)
Year |
Country or Group |
Type of Agreement |
Issues Addressed |
1994 |
FTAA (under negotiation) |
Free-trade agreement |
Goods, services, government procurement, government procurement, investment, and intellectual property |
1995 |
European Union (under negotiation) |
Economic-partnership agreement |
Goods, services, government procurement, government procurement, and intellectual property |
1996 |
Chile |
Economic complementarity agreement* economic, |
Goods, services, investment, and infrastructure |
1996 |
Bolivia |
Economic complementarity agreement* economic, |
Goods, services, and investment |
1999 |
Cuba |
Economic complementarity agreement |
Goods |
2002 |
Mexico |
Economic complementarity agreement** economic, |
Goods, services, and investment |
2004 |
Colombia, Ecuador and Venezuela |
Economic complementarity agreement** economic, |
Goods, services, and investment |
2004 |
India |
Preferential agreement |
Goods |
2004 |
Southern African Customs Union (SACU) |
Preferential agreement |
Goods |
2005 |
Peru |
Economic complementarity agreement** economic, |
Goods, services, and investment |
* The agreement makes provision for the creation of a free-trade area in a maximum of ten years.
** The agreement makes provision for a free-trade area without a deadline.
Source: www.cancilleria.gov.ar/portal/ and www.aladi.org.
Appendix 3.4 External Negotiations, Brazil (1994–2005)
Year |
Country or Group |
Type of Agreement |
Issues Addressed |
1994 |
FTAA |
Free-trade agreement |
Goods, services, government procurement, government procurement, investment, and intellectual property |
1995 |
European Union (under negotiation) |
Economic-partnership agreement |
Goods, services, government procurement, and intellectual property |
1996 |
Chile |
Economic-complementarity agreement* economic, |
Goods, services, investment, and infrastructure |
1996 |
Bolivia |
Economic-complementarity agreement* economic, |
Goods, services, and investment |
1999 |
Cuba |
Economic-complementarity agreement |
Goods |
2001 |
Guyana |
Partial-scope agreement |
Goods |
2001 |
Trinidad and Tobago |
Partial-scope agreement (preferential agreement) |
Goods |
2002 |
Mexico |
Economic-complementarity agreement** economic, |
Goods, services, and investment |
2004 |
Colombia Ecuador and Venezuela |
Economic-complementarity agreement** economic, |
Goods, services, and investment |
2004 |
India |
Preferential agreement |
Goods |
2004 |
Southern African Customs Union South America (SACU) |
Preferential agreement |
Goods |
2005 |
Peru |
Economic-complementarity agreement** economic, |
Goods, services, and investment |
* The agreement makes provision for the creation of a free-trade area in a maximum of ten years.
** The agreement makes provision for a free-trade area without a deadline.
Source: www.desenvolvimento.gov.br and www.aladi.org.
1. The author is grateful for comments by Tullo Vigevani (Julio de Mesquita Filho Paulista State University), Benedicte Bull (Senior Research Fellow in the Centre for Development and the Environment—SUM—University of Oslo), and Bernardo Kosacoff, (Director of the Economic Commission for Latin America and the Caribbean—ECLAC), as well as the assistance of Daniela Perrotta.
2. In that respect, think tanks are normally characterized as intermediaries or brokers that live on and off others (Conford, 1990).
3. The concept of symbolic-analytical services was developed by Robert Reich (1992) to characterize the set of activities that think tanks generally undertake, and that are related to identifying, solving, and mediating material problems by manipulating knowledge.
4. The field research was conducted in 2003 and 2004 and was financed by the Global Development Network (GDN). FLACSO Argentina designed and coordinated the project, and the following researchers took part: Augusto Aninat del Solar (University of Chile), Valeria Iglesias (FLACSO), and Miriam Saraiva (IUPERJ, Brazil).
5. It can be said that the economic opening began before the Collor government because, as of 1988, the Ministries of Foreign Relations and Development and Industry began to produce studies to coincide with the GATT Montreal ministerial meeting. Thereafter, public-service elites were inclined to favor opening in the context of the Uruguay Round.
6. During the negotiations on the common external tariff, some discordant voices were raised among government personnel because of the levels of protection: as a result of the Real Plan, Winston Fritsch and his alternate, Tombini, upheld a tariff reduction position that was backed by Minister Ciro Gomes.
7. This section is based on Aninat and Botto (2005).
8. The subsequent governments were those of Aylwin’s Concertación Democrática (1990–1994), the Christian Democrat Frei (1994–2000), and the Socialists Lagos (2002–2005) and Michelle Bachelet (2006–2012).
9. Prominent among these is the contribution of Chicago professors such as Arnold Harberger, who visited Chile for the first time in 1955 and had a great influence on Sergio de Castro, an economist who later studied in Chile and was Economy Minister (1975) and Treasury Minister (from 1977) (Fontaine Aldunate, 1988).
10. Not even in the case of FIEL, where trade policy is only one subissue among its five work areas: reform of the state; economy, education, labor, poverty, and the environment. In this regard, one of the most influential studies has been the book El fracaso del estatismo (1986).
11. These methods, in fashion worldwide, were developed abroad (Australia), and the matrices began to be applied in Argentina in the late 1990s with UNDP financing.
12. Though Itamaraty has played a centralizing role, the importance of the Finance Ministry should be noted.
13. In recent years the press has had a significant role: the articles published in the print media, as well as televised discussions, have put pressure on the negotiators.
ANINAT, A., and M. BOTTO (2005) “The Influence of Locally Produced Research on Trade Policy Making: The Case of Chile.” Sector Study prepared for the GDN project, “Bridging Research and Policy” (mimeo).
BASUALDO, E. (2001) Sistema político y modelo de acumulación en la Argentina. Universidad Nacional de Quilmes, FLACSO Argentina and IDEP.
BERRETONI, D., M. CICOWIEZ, and C. GALPERIN (2006) “Quantitative Assessment of Trade Policy: Lessons from Argentina.” Paper prepared for the seminar “The Role of Research in Trade Policy in the Developing World,” organized by LATN and IDRC.
BOTELHO, Antônio José Junqueira, DEDRICK, Jason, KRAEMER, K. L. et al. From industry protection to industry promotion: IT policy in Brazil. Irvine: Center for Research on Information Technology and Organizations – University of California, 1999. http://www.crib.uci.edu/publications/pdf-ppt/brazilcase-10-99.pdf
BOTTO, M. (2003) “Mitos y realidades de la participación no gubernamental.” In El ALCA y las Cumbres de las Américas ¿una nueva relación público-privada?, edited by M. Botto and D. Tussie. Buenos Aires: Biblos—FLACSO, 237–60.
——. (2004) “Los nuevos regionalismos y la acción colectiva transnacional.” Perfiles latinoamericanos: Revista de la Facultad Latinoamericana de Ciencias Sociales (Sede México) 25, 9–41.
BOTTO, M., and A. BIANCULLI (2006) “The Impact of Research on Trade Policy Making in the Southern Cone: The Construction of the Capital Goods Protocol and the Common External Tariff within Mercosur.” Paper prepared for the seminar “The Role of Research on Trade Policy in the Developing World,” organized by LATN and IDRC.
BRUNNER, J. L., and G. SUNKEL (1993) Conocimiento, sociedad y política. Santiago, Chile: FLACSO Chile.
BULL, Benedict (2006) Transnational Governance, Free Trade Negotiations and Public-Private Relations: The Case of Chile. Center for Development and the Environment, University of Oslo, FLACSO, Chile.
CARDEN, F. (2004) “Issues in Assessing the Policy Influence of Research.” International Social Science Journal 56 (179), 135–51.
COMFORD, J. (1990) “Performing Fleas: Reflections from a Think Tank.” Policy Studies, 11(4), 22-30.
COURT, J. (2004) Bridging Research and Policy on HIV/AIDS in Developing Countries. RAPID report. London: ODI, available at http://www.odi.org/rapid/.
FONTAINE ALDUNATE, A. (1988) Los economistas y el presidente Pinochet. Santiago, Chile: Zigzag.
FROHMANN, A. (2004) Political and Institutional Context of Trade Policy in Chile (mimeo).
GOMES SARAIVA, M. (2004) “Evaluación del impacto de la academia en la política comercial brasileña – Entrevistas con investigadores y policy-makers - The Brazilian case”. Sector Study prepared for the GDN project, “Bridging Research and Policy” (mimeo).
JORDANA, J., and C. RAMIÓ (2002) “Diseños institucionales y gestión de la política comercial exterior en América Latina.” Documento de Divulgación INTAL 15, 1–51.
MOTTA VEIGA, P. (2000) “As transformações na indústria nos anos 90 e o desempenho das exportações.” In O Brasil e os desafios da globalização, edited by P. Motta Veiga, 21–37. Rio de Janeiro: Ed. Relume-Dumará.
MOTTA VEIGA, P., R. BOUZAS, and P. TORRENT (2002) “In-Depth Analysis of Mercosur Integration, Its Prospects and the Effects Thereof on Market Access for EU Goods and Investments.” Brussels: DG Trade, European Commission.
REGONINI, G. (1992) “Lo studio delle politiche pubbliche.” In L’annalisi della politica, by A. Panebianco, 491–516. Bologna: Il Mulino.
REICH, R. (1992) The Works of Nations. New York: Vintage Books.
SMITH, J. A. (1991) The Idea Brokers: Think Tanks and the Rise of the New Policy Elite. New York: The Free Press.
STONE, D. (2000) “Think Tank Transnationalisation and Non-Profit Analysis, Advice and Advocacy.” Global Society 14 (2), 153–72.
THOMPSON, A. (1994) “Think tanks en la Argentina. Conocimiento, instituciones y política.” Documentos CEDES. Buenos Aires.
VIGUERA, A. (1998) “La política de la apertura comercial en la Argentina, 1987–1996.” Paper presented at the Latin American Studies Association (LASA), Chicago, 24–26 September (mimeo).
WYNIA, G. (1983) La Argentina de posguerra. Buenos Aires: Editorial Universidad de Belgrano.
XIFRA, J. (2005) “Los think tanks como actores de la comunicación política.” Revista Análisis 32: 73–91.
Other chapters of this book have summarized the debate on the links between knowledge and public-policy making. They have also examined the role of “experts” and, in particular, that of academics. Hence it is useful simply to reiterate here that knowledge has gained importance in decision making during the last half century (Torgerson, 1986). It should also be stressed that in order to acquire information and analysis, governments have opted to include experts among their officials—including the establishment of in-house think tanks—and to create committees or commissions. Recently, they have turned increasingly to external experts, including academics, normally through consultancies or by commissioning research. The use of information, advice, analysis, and research in the decision-making process is both formal and informal.
It must be stressed, however, that scholars do not agree on the impact of knowledge or ideas on decision making, nor on the role of academics, in the process. Assessing its impact poses significant difficulties because policy making, which involves value judgments and convictions, is constrained by interests (Goldstein and Keohane, 1993). Moreover, other analysts argue that the nature of the political system markedly conditions the relationship between academia and the government, as well as the influence that the sector has on policy making. Social and economic circumstances also influence the adoption of a particular policy, as do institutional changes and the activities of business people, among other factors (Parsons, 1995). Another issue of extensive debate is whether ideas themselves have an impact or if that impact stems mainly from the institutions that adopt the ideas.
An increasingly accepted proposition is that academics are important for decision makers because they provide information and give legitimacy to decisions (Parsons, 1995). However, without denying the impact of some “great books,” it is argued that academics have more influence when they propagate ideas—that is, through their contribution to the broadening of the terms of the debate, rather than through their participation in committees or formal channels, when they carry out research or offer advice for a particular policy (Sharpe, 1975).
Another polemical issue regarding the links between ideas, academia, and decision making is whether academics threaten or support democratic processes. This debate is related to the view that experts have formed (or could form) a powerful elite within the government, and that those who have greater access to the experts’ information and analysis are powerful interests and not ordinary citizens.
Questions and general propositions about the role of knowledge and academia could be extended to the analysis of other important actors: think tanks, which have grown significantly since the 1970s in response, among other things, to a growing demand for knowledge. By think tanks we mean those research teams that seek to influence policies, beginning with the context in which the debate occurs (Parsons, 1995). It is worth mentioning briefly here some of the main differences between academics and members of think tanks. One is that the chief goal of the former is to contribute to knowledge. Another is their attachment to the research agenda of their specific disciplines.1 Nonetheless, it is possible that, at particular times, groups of academics will act like a think tank.
There is a wide array of think tanks, especially in the developed countries, varying by size, human, and financial resources, and political or ideological affinities. Another clear difference is between those set up within government agencies and those outside them. Their contribution to greater pluralism is a matter of debate, and there is no shortage of people who express concern that the public discussion of ideas and policies might shift to a set of think tanks.
There has been very little research in Mexico on the role of knowledge, academics, and other experts in the trade and investment opening that began in the 1980s.2 Most of the explanations offered by Mexican academia and foreign researchers refer only tangentially to their role. They do, nonetheless, offer useful indications.
In this first exploration, whose guiding thread consists of the questions and propositions mentioned previously, we undertook an extensive review of relevant secondary literature and conducted more than a score of semistructured interviews with academics, consultants, public officials, and negotiators. This allows us to become familiar with the kind of knowledge produced and the ways in which Mexican academics and other experts have contributed to the formulation and implementation of trade and investment policy. It also lets us assess the impact of economic opening on the research agenda of public and private research centers.
The chapter begins with a brief account of the opening and the explanations for it, before discussing the role of academia and the government’s recent use of consultants and a handful of domestic think tanks. It is helpful to start that second part with a brief description of some of the features of the Mexican political system and the functions of the various government agencies working in the field of foreign trade and investment, so as to illustrate the institutional framework within which the various actors operate. The chapter then describes their activities. We emphasize the changes that have happened throughout the period under analysis and, in particular, political party change at the presidential level.
In ten years (1985–1995), Mexico changed from being a very protected economy to being one of the most open in the developing world; it moved from a profound and unilateral liberalization and late entry to the General Agreement on Tariffs and Trade (GATT), to the signing of the first free-trade agreement between two developed countries and a developing country. In the following decade Mexico continued to formalize its trade relations with individual countries or groups of countries, and now has more than four dozen trade and investment agreements. Mexico also has a relatively discreet participation in the World Trade Organization (WTO), wherein it is a member of the G-20.
There has been widespread agreement among academics, both Mexican and foreign (especially scholars of political science and international relations), on why these swift changes happened. This is an issue that the experts soon tackled. Mexico has been seen as one of the clearest examples of the influence of external actors in the process. First, it has been stressed that international financial institutions such as the World Bank and the International Monetary Fund (IMF), as well as the U.S. government, exerted strong pressure for rapid economic liberalization. This pressure was applied in the 1980s when Mexico was highly vulnerable because of the debt crisis and the negotiations to restructure the debt.3 Second, it has been said that these external demands for opening found echo among some young officials in the Mexican government who were hardened advocates of the advantages of economic neoliberalism, including free trade. They were able to use these demands to win political ground from the government “old guard” that, at the time, seemed willing to promote gradual trade liberalization (Heredia, 1996). Finally, the literature has noted a third factor favoring a change in trade policy: the somewhat passive acceptance of the vast majority of entrepreneurs and other important sectors.
Most Mexican and foreign analysts explain this acceptance by underlining certain features of Mexico’s business sector and its relationship with the government.4 They further highlight the impact on businesspeople of the sudden nationalization of the banks in 1982 and the conversion of dollar deposits into pesos. Entrepreneurs saw trade opening as part of a package of measures that would tend to reduce the role of the state.5 The signing of the North American Free Trade Agreement (NAFTA) in 1992, it is said, was also accepted by many people who saw it as a means of anchoring the new economic model (Flores Quiroga, 1996; Tornell and Esquivel, 1998). Nonetheless, analysts admit that many small and medium-size businesses who were potential losers lacked adequate access to decision makers, as well as to proper information, and did not have the capacity to mobilize in opposition to the agreement (Pastor and Wise, 1994).
According to Mexican and foreign academics, the traditional workers’ confederations—such as the Revolutionary Confederation of Workers and Peasants (CROC) and the Confederation of Mexican Workers (CTM)— offered no resistance to trade liberalization because of the corporativist links that they had and still have with the government. Regarding NAFTA, it should be added that those confederations perceived this agreement as a zerosum game in terms of job creation (Torres, 2005b). U.S. trade union campaigns against the agreement stressed the imminent loss of jobs to Mexico and thereby contributed to this perception. A very effective government campaign, according to analysts, mitigated apprehensions and spurred expectations among the rest of the population. The small groups of active opponents to the agreement felt obliged to move swiftly from outright opposition to NAFTA to calling for a model that would gradually lead toward integration following, to some extent, the example of the European Union (EU).
As regards the position of Mexican academics in these years, secondary literature reviewed make only a few isolated references to the participation of some of them in the committees that the government set up, and some allusions to the studies that the government entrusted to them once the decision to negotiate NAFTA had been taken.6 Those analyses also note that, from the early 1980s, a growing number of Mexican academics underlined advantages of free trade, especially in the private universities; these were the people who had taught the young officials who would have to drive the economic opening. However, the general view is that at the beginning of that decade most domestic researchers still advocated protectionism, but following the debt crisis, they realized that it was impossible to continue with import substitution.
In the period under study, the Mexican political system began a transition to democracy after a long period of inclusive authoritarianism. Under that system, the president had a crucial role and was a key player in decisions related to the economic opening and, in particular, the trade and investment opening that took place between 1982 and 2000. The president now faces more constraints on his authority, especially because there is a “divided government,” but he retains influence over the general guidelines of public policies.
Over several decades, authority in the fields of international trade and investment has been shared among various secretariats. In the early 1980s, the authority of the Foreign Relations Secretariat (SRE) in the economic arena was in practice (albeit not formally) quite modest, especially as regards trade policy. Since 1993 its statutes have been modified several times, giving rise to some formal functional overlap with the Secretariat for Trade and Industrial Development (SECOFI) and its post-2001 successor, the Economy Secretariat (SE). The SRE, however, has suffered a clear loss of authority: at least formally, it used to have the authority to decide whether to sign or reject treaties; now, it can only express an opinion or take part in the negotiation of treaties (Schiavon and Ortiz Mena, 2004). It played only a marginal role in the NAFTA negotiations. By contrast, it had a much more active role in the Economic Partnership, Political Coordination, and Cooperation Agreement between Mexico and the EU, given the wide nature of the accord and the distribution of authority within the EU. The trade accord was also negotiated by SECOFI officials.
SECOFI had been in charge of the unilateral opening process in which Mexico engaged under the presidency of Miguel de la Madrid. It coordinated the Intersecretarial Group that led the negotiations for Mexico’s admission to the GATT in 1986. Also taking part in those talks were the Secretariat of Agriculture and Water Resources (SARH), the SRE, the Secretariat of the Treasury and Public Credit (SHCP), and the Secretariat of Energy, Mines, and State-Run Industry (SEMIP), among others (Vidali Carvajal, 1989). Moreover, at the direct designation of President Carlos Salinas de Gortari, SECOFI was in charge of trade negotiations throughout the following six-year presidential term (1988–1994). An Office of NAFTA Negotiations was set up within SECOFI to take charge of negotiating that agreement under the close supervision of the Secretary of Trade. In 1993 that office became an under-secretariat for international negotiations.
Although SECOFI had a leading role in the NAFTA negotiations, overall trade strategy and the negotiations themselves were coordinated by the Office of the Presidency. This was set up when Salinas took office and acted as an in-house think tank. It disappeared in the following presidential term, and the departments that replaced it have never had the same power of coordination.
Other government departments continue to be consulted for the negotiations, including Treasury, Agriculture, Energy, Education, Interior, Communications and Transport, Health, the Secretariat of the Environment and Natural Resources, Social Development, the Federal Electricity Commission, and the Federal Competition Commission. The SHCP in particular has continued to take part in trade issues because of its authority in the tax field. It also deals closely with other issues, such as services, particularly financial ones.
There is a long history of interagency disputes over trade and investment policy. As shown later, these were plainly evident during the discussions about Mexico’s possible admission to the GATT in 1979, were dormant in the 1980s, almost disappeared in the 1990s, and have resurfaced in recent years. The intensity of these disputes has varied in line with the matter at hand.
Mexico has had a “divided government” since the 1990s, but this situation has had more far-reaching implications for trade policy since 2000, when a new party assumed the presidency. None of the three main parties—the National Action Party (PAN), the Institutional Revolutionary Party (PRI), and the Party of the Democratic Revolution (PRD)—had an absolute majority in the Senate or the Chamber of Deputies between September 2000 and August 2006. Neither did they have a majority in either of the two chambers installed in September of this year. During Vicente Fox presidential period, the PAN (the president’s party) had fewer seats than the PRI. The share of seats changed in the Congress installed in 2006. The PAN lacked an absolute majority but it had the largest number of seats in the Senate and the Chamber. The PRD was the second biggest party in both chambers, leaving the PRI in third place.
All the agreements signed since the 1990s have been approved, but party differences have had an impact on trade policy. In 2000 and 2006, as part of its fiscal authority, the Chamber of Deputies took some steps that spurred disputes with the United States. A widely known example is the fiscal stimulus to the soft drinks industry for beverages that use domestic sugar rather than American fructose (Ortiz Mena, 2005).
More importantly, “divided government” has severely hampered approval of the executive’s proposals on structural reforms (fiscal, labor, and energy reforms are prominent in this respect). It is said that the absence of such reforms and of other arrangements that are less subject to discussion (such as greater investment in education and infrastructure) is the main reason why the competitiveness of Mexican exports has declined in recent years.
Some state governments have a long history of promoting international trade and attracting foreign investment, and more of them have devoted themselves to these endeavors in recent years (Schiavon, 2006). But they have only limited authority in the area of foreign relations. The northern border states, which are especially dependent on international trade, have sought greater authority and have used whatever openings they can to expand their role. The richer, more export-oriented states of the border region have also created in-house think tanks.
In the traditional style of Mexican inclusive authoritarianism, the government engaged in some consultations with business organizations in order to implement the unilateral opening of the 1985–1987 period.7 The most radical measures, introduced in 1987, were part of the Solidarity Pact reached with the business and labor leaderships. There were also consultations in 1986 with various sectors of civil society regarding Mexico’s accession to the GATT. Those consultations, organized by the Senate in several cities, were held when the decision to accede had already been taken.
From the outset, the Salinas government embarked on a more systematic consultation with the private sector. The president made maximum use of the remnants of authoritarianism to further NAFTA, but he was aware that the political regime was facing strong pressures (especially internal) for liberalization and that those pressures had to be taken into account. Businesspeople in particular, who until the early 1980 had little interest in further democratization, began to sing its praises and demand greater participation and accountability.8
With a view to expressing a common position on trade policy, the Business Coordinating Council (CCE) set up the Coordinator of Foreign Trade Business Organizations (COECE).9 This was seen as indispensable in light of the large number of business organizations. Since the 1950s, the three traditional confederations—the National Confederation of Chambers of Industry (CONCAMIN), the Confederation of Chambers of Commerce (CONCANACO), and the National Confederation of the Processing Industry (CANACINTRA—had been joined by a variety of other organizations, some of them with close links to foreign trade: the National Association of Importers and Exporters (ANIERM), the Mexican Business Council for International Affairs (CEMAI), and the National Export Council (CONACEX). Some organizations had, and still have, particular influence. Although their membership is not large, they include powerful entrepreneurs. The Mexican Council of Businessmen (CMHN) is a case in point.
Nonetheless, all the indications are that the president took the decision to negotiate NAFTA after a modest level of consultation with a small group of officials, but in the knowledge that some important Mexican businesspeople and several multinationals in the country were in favor. He was also aware of the interest among some sectors in the United States.
It soon became clear that the Mexican government was not pursuing NAFTA solely to ensure market access in the United States and Canada, but that one of its chief aims was to attract investment. The COECE set about convincing entrepreneurs of the advantages of NAFTA by gathering information specific to each sector and, as an organization that aimed to represent the interests of all businesspeople, by generating legitimacy for the accord.10
During NAFTA negotiations, the government created the Advisory Council on the Free Trade Agreement. This comprised representatives of the government and of industrial firms (CCE, CONCAMIN, CONCANACO, and the heads of some large companies in strategic sectors), farmers and peasants (CNPP and CNC), the COECE itself, the traditional labor confederations, and civil society (lawyers from prestigious firms, as well as representatives of NGOs and academia). Academics were represented by the rectors or principals of the country’s leading academic institutions.11 Information was circulated among them by means of monthly meetings with SECOFI officials. The council’s main tasks were to keep civil society informed and to act as a means of communicating civil society’s concerns and interests to the government.
The three governments (Mexico, the United States, and Canada) decided to negotiate by issue and not by sector as was initially planned12. Hence the need for more direct and fluid communications between the negotiators and the private sector. This led to the establishment of the “side room,” an effort to pacify the entrepreneurs annoyed by the change in strategy. The influence of some powerful businesspeople is evident in the modest commitments to open some sectors, such as finance and telecommunications.
The council still exists, but its activities have diminished and in practical terms it is not operational. The COECE remains the government’s main interlocutor in trade negotiations, through prior consultations and through the “side room” mechanism.13 The COECE produced seventy-one sectoral studies for the negotiation of the agreement with the EU, and has held about four hundred meetings with government officials and negotiators (Alba Vega and Vega, 2002: 69).
Nonetheless, during the negotiations for the trade agreement with the EU, the COECE faced the public opposition of some business chambers. Some of the criticism centered on its representativeness, a question that has been raised about the vast majority of business organizations for several years.
The Mexican Council on Foreign Trade, Investment, and Technology (COMCE)14 was set up in 1999 to promote trade and investment and to foster technology transfer. It seems to have become an influential competitor to the COECE. Its governing board includes more than a dozen of the country’s most important entrepreneurs. Another organization of note is the National Council of the Maquiladora Export Industry (CNIME).
Civil society organizations have taken a more defiant attitude since the NAFTA negotiations, though at times they maintain some dialogue with the government. They include the Mexican Free Trade Action Network (RMLAC). Organized along similar lines to the Canada Action Network, it was initially active under the banner of “No to this NAFTA” and took part in one of the antiagreement alliances created in the United States with a similar outlook.
After NAFTA was signed, the RMLAC became an active member of the Continental Social Alliance. In parallel, with a view to the agreement between Mexico and the EU, it lobbied intensely in Europe for the inclusion of a social charter and clauses on environmental protection and human rights. In the end, the agreement did include the issue of democracy and human rights, but not the environment. The National Workers’ Union (UNT), set up by some large unions (including the Mexican Telephonists’ Union and the Social Security Workers’ Union) that left the old labor confederations in 1997, has also transnational links with its counterparts in the other two NAFTA countries. The UNT, however, has not adopted a policy of outright opposition to NAFTA and other trade agreements. Rather, it focuses on securing the best labor conditions and, especially, freedom to organize (Torres, 2005a).
By contrast, the position of businesspeople has shifted in recent years. Initially, a small group was enthusiastic about the opening, and most were resigned to it. Now, the private sector is more critical of the effects of rapid liberalization. Dissatisfaction was shown during the negotiations with the EU for the general agreement signed in 2000, which included a free-trade accord. Recently, some of the large entrepreneurs who supported NAFTA have added their voices to this criticism (Ortiz Mena, 2005).
Businesspeople have also sought a “truce” in the signing of new trade agreements and have argued that some of the existing accords should be revised. Farmers of small and medium-size farms have been the most openly mobilized since the 1990s. This opposition increased in 2002 when changes to U.S. agricultural legislation made provision for raising subsidies exactly a year after the entry into force of significant tariff reduction commitments on Mexico’s part.15
Public criticism had an impact on the Fox administration, though from the outset the president had shown himself to be a firm supporter of the trade policy pursued by his two predecessors. Like them, Fox underlined the positive effects of the policy, and in particular those of NAFTA. He took the view of several of NAFTA’s negotiators that the agreement had met its main goals: to ensure access to the U.S. market, reduce the number of trade disputes with the United States, offer guarantees to investors so as to attract more investment, and generally anchor the new Mexican economic model.16 Time and again he emphasized the marked increase in exports and their recomposition, the long-standing trade surplus with the United States,17 and the sharp increase in annual foreign investment inflows, from US$4 billion to US$18 billion in 2005.
Although the Fox government continued to support free trade during its term, in its final two years its position was a little more hesitant. Despite the signing of the agreement with Japan, the Economy Secretariat was somewhat receptive to the idea that the conclusion of other accords would have to be postponed.
The erosion of NAFTA’s tariff advantages, because of the new U.S. trade strategy of resorting increasingly to bilateral agreements, together with some international trends—such as the lowering of average tariffs and the mounting importance of services—sparked a discussion about the path to take. Many academics, as we will see later, took part in that debate.
During the negotiations for Mexico’s accession to the GATT (1979 and 1986), SECOFI had a General Directorate of Foreign Trade Studies. In view of the scope of its work and recommendations, this directorate can be regarded as an in-house think tank. Among other research, it produced estimates of the level of effective protection in Mexico.18 Its studies were used a basis for Mexico’s entry into the GATT and for the unilateral liberalization of 1987. For several decades the Bank of Mexico has had a General Directorate of Economic Studies, another in-house think tank with significant prestige in the country, which has produced useful research.19 The information held by institutions such as the National Bank of Foreign Trade was also helpful in this process.
SECOFI carried out much of the research needed for the NAFTA negotiations and for later agreements. The directorate responsible and the office of advisers to the under-secretary of trade negotiations conducted its research on the basis of previous studies. It received support in the form of information and analysis from other pertinent secretariats. Given the multiplicity of new negotiating issues, however, it soon became evident that there were gaps. As mentioned earlier, therefore, formal and informal contacts were made with academic institutions and think tanks, both within Mexico and abroad. The private sector was also asked to provide information.
Throughout the 1990s, SECOFI’s senior staff—including the offices created for the negotiations—were very uniform in terms of their background and attitudes to free trade. The vast majority of the staff were young people with graduate degrees—often doctorates—from U.S. and British universities. All were convinced of the advantages of free trade and were willing to uphold that position.20 Some came directly from those universities; others from Mexican academia or elsewhere. Some came from positions in international financial organizations and retained links with officials in those institutions, including a significant number of second-and third-tier officials. They were not necessarily experts in international trade. Many of them had been hired by SECOFI at the start of the presidential term, before the decision to start negotiations with the United States had been announced.21
These economists were very different from the majority of those whose main concern about a possible accession to the GATT in 1979 was potential constraints on “sovereignty” or, more precisely, on the autonomy of the Mexican government’s economic decisions.22 In the words of the secretary for trade in the Salinas administration, “after 30 years of intense political debate (and not so intense at the level of theory),” the world’s decision makers had begun to see trade policy as it should be seen: “as a long-term instrument that affects resource allocation and competitiveness” (Serra, 1995: xvii).
Mexico’s NAFTA negotiators created a school within SECOFI, and this Secretariat depended on NAFTA negotiators and their disciples for subsequent negotiations. That agreement established the basis of the accords later signed by Mexico, with adjustments as necessary in each case. Although the staff is acknowledged to be good negotiators, there is talk of a certain inertia and a disregard for research in SECOFI and, in particular, in its successor, the current SE. This Secretariat no longer has a research section because of cuts in its budget. Finally, it should be said that the Fox government tended to favor private advice.
It is worth talking here about the information produced by government departments, which clearly establishes a crucial link between the government and academic research. Until two decades ago it was very hard to gain access to the information on key economic issues, although some researchers from prestigious institutions did acquire greater access to it through informal contacts with government officials. Only from the 1980s onwards was there greater openness.23 Much has been said about pressure from the World Bank and the IMF in this respect.
Academics not only recognize that access is easier today, especially since the adoption of the Federal Law on Transparency and Access to Public Government Information.24 Academics also see an improvement in the information produced by the National Institute of Statistics, Geography, and Information Technology (INEGI), as well as by various government departments. But they point out that research is still hampered by substantial gaps in the information and the lack of compatibility in some categories.
We said earlier that economists, political scientists, and researchers from some other fields played an important role in the decision not to join the GATT in 1979 (Story, 1982). Their position was based on research but, as mentioned, political issues were to the fore (De Mateo, 1986).
As the opening was reinitiated in the 1980s, SECOFI acquired the habit of using researchers from a handful of academic institutions (universities and research centers) for studies of particular issues, such as services.25 SECOFI also consulted those institutions to discuss possible positions in the negotiations for GATT accession, to examine the commitments entailed by accession, and to clarify pending doubts about the impact on some sectors and on relations with the United States. The seminars organized for these purposes led to the publication of books that featured studies by officials of SECOFI and of the Agriculture Secretariat (SARH), as well as Mexican and U.S. academics (del Castillo, 1986; Vega Cánovas, 1991; Torres and Falk, 1989).
As mentioned earlier, the NAFTA negotiations called for a lot of information on a very wide variety of issues, since they covered not only goods but also services, intellectual property, investment, government procurement, and so on—all matters that had not been studied in detail until then. Negotiation of some of those issues posed particular difficulties, especially given the asymmetry between the three countries. This was the case in the area of intellectual property, a field in which it was hard to establish trade-offs because of the huge disparity in technological development.26
Thus SECOFI, which had undergone significant staff turnover, immediately began to hire academics, think tanks, and consultants not only in Mexico but also in the United States and Canada. These were asked to conduct a series of research projects and build general equilibrium models (Kehoe and Kehoe, 1995; Yuñez, 1992). In some cases multinational teams were set up. The academics from public institutions carrying out these studies included economists and international relations specialists from the College of Mexico, A.C. (COLMEX), and the Center for Economic Research and Teaching (CIDE). Of the private universities, particular use was made of the Autonomous Technological Institute of Mexico (ITAM). In parallel, the World Bank promoted other research on the issue. These projects involved Mexican academics, including some who were starting to work in U.S. universities.
Although the main aim of such studies was to legitimize decisions already taken, they also produced information about the possible effects on each sector and, in some cases, on the policies needed to take greater advantage of the opening. These recommendations, however, were not necessarily taken into account. A research project deemed to have had greater influence on bargaining positions concerned the agricultural sector, particularly corn. The study fostered the adoption of long tariff reduction periods and encouraged a search for the kind of income support for producers that would not breach the commitments made (Levy and Van Wijnbergen, 1992).
Another type of academic support, which the negotiators did use, came from a small group of lawyers working in some universities (UNAM and the Free School of Law). This was because one of the main requirements in the negotiations was juridical information, not only on the other two countries but also on Mexico. Legal issues posed a significant challenge because of the different traditions of the future partners: civil law in Mexico and common law in the other two countries. The government also resorted to a handful of researchers for general studies on the links between trade and the environment.
In short, as two of the interviewed negotiators made plain, “academics did not determine the course of the negotiations or the outcome . . . but they did provide some information that was useful in the negotiations and in justifying them.”
A sizeable number of academics in both public and private institutions have been included in the lists of possible panelists for dispute settlement mechanisms. Several of them took part in the panels created under Chapters 19 and 20 of NAFTA, and professors at ITAM and COLMEX helped train them.
SECOFI has also resorted to academia for studies on the implementation of NAFTA and subsequent agreements, as well as on trade policy in general. In other words, several researchers have been producing consultancy studies on trade and investment issues (even more often), normally through individual contracts with the public sector and with international organizations including the World Bank, the IDB, and FAO. In general, these arrangements are usually made through informal contacts.
Academics in the research centers mentioned earlier have been joined by other public and private institutions in these endeavors. Public institutions include the UNAM’s Center for Research on North America (CISAN) and, to a lesser extent, the economics departments of the Autonomous National University of Mexico and the Metropolitan Autonomous University. Researchers from Chapingo Autonomous University have taken part in the area of agriculture and, on legal matters, academics from UNAM’s Institute of Legal Research.
Some public universities and research centers outside Mexico City have found niches of interest to decision makers. These include two centers in the University of Guadalajara and the University of Colima, which are in states that have shown an interest in the Asia-Pacific region for many years. The SE used one of these for preliminary studies on South Korea (identification of economic complementarities).27 The College of the Northern Border (COLEF), which has offices along the frontier, has studied the impact of NAFTA from the perspective of a variety of disciplines and, more generally, the impact of integration between the two countries.
Public academic institutions basically depend on government resources allocated through the budget, and on support for research projects from the National Council on Science and Technology (CONACYT).28 Some also receive support from foundations, most of them foreign but also including a few Mexican organizations. These institutions are autonomous, and in general their professors choose their lines of research independently. It would be inaccurate to call these research centers “think tanks,” though at times some of them have operated as such. A significant number of researchers prepare studies for the government or international organizations, but normally they give priority to academic work.29
There was practically no relevant research in the private universities before NAFTA, but since then they have set up centers for this purpose. Many of their researchers, in addition to their university duties, undertake consultancies for firms and international organizations, and also increasingly for the government. Prominent among the private institutions is the Autonomous Technological Institute of Mexico (ITAM). Until the late 1980s ITAM was basically concerned with teaching; increasingly it provided the government with officials, as well staff for private firms.30 The opinions of some of its most distinguished professors carried weight in the initial stages of the opening, which they judged to be positive. But their more important role stemmed from informal talks with government officials and their organization of seminars to discuss these issues, rather than from their research. In 1993, ITAM set up four centers to conduct research on foreign trade and investment. One of these is the Center of Applied Economics and Public Policies.31
The Monterrey Technological Institute (TEC), which trains many of the professionals in the private sector, has taken some steps in this regard.32 More recently, research groups have emerged in the Iberoamericana, Anáhuac, and Panamericana Universities, among others. In general, consultancies for the public or private sectors are individually commissioned. These institutions, too, are not really think tanks, although they have sometimes operated as such.
Mexican academics from various disciplines have carried out a significant amount of research to monitor and assess the sectoral and regional impact of economic opening and, in particular, of NAFTA—that is, ex post research. Notable are studies on job creation, convergence with the United States and Canada, and investment attraction. These kinds of assessments grew markedly at the end of the first five years of NAFTA’s entry into force, and most particularly at the end of its first decade.33 The scope and quality of the assessments conducted in Mexico have varied.
For the purpose of this chapter, our interest in these studies does not lie in “the effects of NAFTA on the Mexican economy” in themselves. Rather, it is in the issues that these studies explored and those that were disregarded. We then turn to an assessment of the role of academia. The studies’ conclusions coincide on an important point: the research carried out during NAFTA negotiations did not take account of asymmetries. It is argued that potential costs were minimized and that in some respects they have been high—for example, in terms of the severe inequality in the regional distribution of the benefits. The fact that NAFTA has helped deepen persistent regional inequalities is perhaps one of the most important findings of recent research. In general, the states receiving the fewest benefits from the agreement and from opening are precisely those that have lagged for decades—Chiapas, Guerrero, Oaxaca, and others (Esquivel et al., 2002; Esquivel and Messmacher, 2003a and 2003b). It is argued, however, that this possible effect was not obvious ex ante and thus there were no studies on it.
Critics of the opening have also stressed the significance of maquiladoras in the growth of exports and the scant value added that they create. Others are concerned about the marked and rising concentration of export products and the small number of firms that produce them, many of which are transnationals.34 Criticisms focus on the very high concentration of exports going to the U.S. market, although it is accepted that the proportion has declined on the import side.35 Such analysis underline the absence of positive effects on wages and on the living standards of most of the population.
The modesty of Mexico’s economic growth rate in the past decade, together with the deficient creation of jobs in the formal sector, has led a growing number of researchers to take a new view, one that runs counter to the expectations of a decade ago about the links between trade and economic growth. These days, economists are practically unanimous in their insistence that growth in international trade does not by itself guarantee development. As well as mere agreements, other conditions are needed to boost competitiveness and attract capital, such as the presence of the rule of law, educational levels, and the development of infrastructure (Rubio et al., 2006).
The widest polarization is over agriculture, both as regards assessment of the general equilibrium models—which were used during the NAFTA negotiations—and the effects of the agreement. It is said the none of the models used took account of the diversity of corn grain producers. Hence predictions that economic opening would cause a sharp slump in domestic production went unfulfilled (recall that the opening gathered speed and even went far beyond what was contemplated in NAFTA). Similarly unfulfilled were forecasts that imports of U.S. corn at cheaper prices would bring about a reduction in the price of tortilla in Mexico, which is said to be attributable to the presence of oligopolies.
Other researchers have centered on the academic quality of studies concerned with NAFTA’s impact on the agricultural sector—both those indicating positive effects and those that stressed the negative. Some are criticized because they do not take account of factors deemed more important than the agreement in determining the development of the rural sector. Others are questioned because they focus on subsectors that have suffered negative impacts, not on those that have benefited from crop substitution, or vice versa.
Recently, following the Agreement for the Countryside and after severe demonstrations by producers (under the banner “The Countryside Can Take No More”), the Economy Secretariat asked some academics to produce a new study on the final stage of tariff reduction for agricultural products under NAFTA (Puyana and Romero, 2005). It is unclear to what extent this will be taken into account in the decision that will have to be taken soon.
For its part, in October 2004 the Chamber of Deputies supported the creation of the Study Center for Sustainable Development and Food Sovereignty (CEDRSSA).36 Its functions include pursuing cooperation agreements with study centers and academic institutions in Mexico and abroad, as well as with some consultancy firms, for the exchange of information, studies, and specialists. There is even talk of setting up an academic collaboration network.37 By mid-2006, CEDRSSA had concluded agreements with several public academic institutions; many of these accords made provision for the assessment of public policies toward the countryside. In particular, several ongoing research projects focus on issues related directly to trade policy.38 In other words, one of the main purposes of this research is to identify the best means of dealing with the final tariff cuts set out in NAFTA, which had to be made in 2008. Still unclear is the impact of such research on a revision of the agreement (there is little prospect at the moment) or on measures to mitigate the effects.
As well as the purely economic research, there have also been juridical studies assessing the changes made to Mexican legislation and the creation of institutions that are important in ensuring fulfillment of the new international commitments that Mexico has assumed. Some of these pay particular attention to matters such as financial services, intellectual property, rules of origin, customs procedures, government procurement, the energy sector, and the environment (Witker, 2005). A sizeable number of studies have examined the effects of the opening on employment, as well as on relations between the unions and the government.39
There are also some painstaking studies of how the dispute settlement mechanisms work, sometimes produced in conjunction with researchers from the other two countries (Vega Cánovas et al., 2005). Most coincide as in assessments carried out by Canadian researchers, that the mechanisms have worked well and that, because of them, Mexico and Canada have emerged better from disputes with the United States. This, however, is not the widespread view of entrepreneurs, several academics, or the public.
In short, there is an extensive bibliography on NAFTA and its effects, much of it consisting of economic studies but also including other kinds of work by Mexican researchers. But many issues have still not been explored. Particularly striking is the absence of research on how other agreements work, including the accord with the EU (which has been in force for almost ten years). Overall, there is a solid base of significant contributions from academia that have helped broaden the terms of the debate and spurred proposals on new paths to take.
The main findings of the research have been disseminated fairly broadly, a process facilitated by the frequent appearance of academics in the media (television, radio, and the press) where they repeatedly discuss trade opening or one of the trade agreements, especially NAFTA. Representatives of other sectors sometimes use their arguments to advance their own causes. The government has taken up some of the issues raised, not to seek immediate revision of any of the agreements but to take soundings on alternatives.
As mentioned earlier, when the negotiation of NAFTA was suggested, the government asked the private sector to prepare sectoral studies. The various sectors, through their business chambers, hired external consultancy firms (especially American firms, though also some Mexican) for that purpose.40 About 170 monographs, of varying quality and utility, were produced. Overall, the COECE regards them as “the most complete economic overview ever produced in Mexico” (Alba Vega and Vega, 2002). These served as a basis for how the “side room” operated.
The private sector had and still has a Private Sector Economic Studies Center (CEESP). The research it produces, as with that of the private sector in general, is mostly useful for firms rather than for devising trade policy positions, since it consists of export and import strategies, investment opportunities, and so forth.41 CEESP produces analysis of the firms’ political environment, macroeconomic conditions, Mexican competitiveness, and the global outlook. It publishes daily economic indicators for Mexico and the United States. It also looks at the development of the regulatory environment in Mexico’s states.
CEESP occasionally publishes analysis of Mexico’s trade relations with other countries, such as with the United States and Canada. It is interesting that some state secretariats have asked CEESP for studies in recent years, even though those secretariats are only tangentially related to trade policy.42
Mexico’s large export companies, such as CEMEX, have their own research teams following international developments in the relevant industry. But they also use academics, mainly from private institutions, who are hired as part-time or longer-term consultants. This is the case, for example, of TEC and ITAM researchers.
In the last ten years, there has been a substantial increase in the number of consultancy firms in Mexico offering advice on foreign trade and investment to companies and business associations. In particular they advise companies on fiscal matters (foreign-trade taxes and so on). Some of them provide information on various aspects of the GATT and free-trade agreements, as well as on intellectual property and environmental issues, although several firms specializing in this area have emerged in recent years. A smaller number of consultancy firms offer advice on foreign-trade disputes, either on their own or with the support of lawyers from other countries. Many produce reports for potential investors in Mexico or for Mexicans who want to invest abroad. Some offer to lobby or act as representatives in departments of the executive branch and, more recently, the legislature. The biggest consultancy firms are represented in the COECE, ANIERM, and COMCE.
It is hard to specify how many such firms there are, since a large percentage of the more recent companies, including some that are very important, are not members of the National Chamber of Consultancy Companies.43 We have identified about fifty small and medium-size firms, and a few large ones. Most of these consultancy companies do not normally have more than about twenty experts.
A sizeable number of former midlevel and senior government officials, who negotiated accession to the GATT or one of the trade agreements, have set up their own consultancy firms or a firm linked to a foreign consultancy. Academics have worked for about a dozen of these firms, and much of the service they offer is concerned with trade litigation and arbitration;44 they also advise foreign investors on mergers and acquisitions. Although their services are mostly geared to firms, sometimes they work for government departments, and a handful of them have advised other Latin American governments on their trade negotiations. A large percentage of the consultancy companies are wholly Mexican, though a growing number of U.S. and international firms are setting up offices in the country and hiring Mexican professionals, or using a Mexican consultancy with experience and prestige as a section. Some of these large consultancy companies have offices in various cities in addition to the capital. Deloitte, for example, has ten offices outside Mexico City.
Some consultancies have links, albeit not close, with academic institutions; such links are closer in the area of teaching than research. These experts, however, maintain that they train their staff internally. There is no shortage of consultants, most of whom also worked in the government, who regularly publish articles in specialist journals and take part in seminars and conferences in academic institutions.
Although there are several dozen of the afore-mentioned consultancy firms, only a few can be thought of as a true think tank. Among those that qualify to be termed as such, we could mention the CEESP, the Associate Economists Group (GEA), and the Development Research Centre (CIDAC). The latter is smaller than its counterparts in developed countries. It has links with the Institute for International Economics in Washington, DC, and has jointly published analysis of NAFTA with members of the latter’s staff.45
Many NGOs are mainly concerned with the links between trade and the environment. Thus, rather than undertake their own research or use Mexican consultancies, they have asked the Environmental Cooperation Commission for studies on issues they deem important. Such was the case of research on the possible impact of genetically modified corn on Mexican biodiversity. That project was carried out by a group of experts from the three countries, headed by a Mexican scientist. Its analysis and conclusions have sparked a fierce debate. The commission has also organized two conferences on trade and the environment, in which some Mexican academics have presented their research findings.
The bibliography reviewed and the interviews conducted offer solid evidence that the crucial decisions on the opening to trade and investment in Mexico, including those related to the country’s accession to the GATT in 1986 and the signing of NAFTA in 1994, were taken by the executive branch with the encouragement or consent of a small but powerful group of external and internal political actors. It is true that there were public consultations in these two cases, which included academics, but these were orchestrated by the government for the purpose of disseminating and legitimating decisions already taken.
There were signs of private-sector discontent in the negotiations with the EU, but those talks did not elicit interest or participation on the part of academics, much less among other sectors. Reactions to other agreements were similar, including those with countries of significant economic power, such as Japan. The overwhelming importance of the economic relationship with the United States helps explain this lack of interest.
SECOFI was responsible for devising trade and investment policies, as well as international negotiations, albeit under the supervision of the presidency in the case of NAFTA. They are now the job of its successor, the SE. It is clear that the SRE has lost leadership in this field, though it recently stepped up its efforts to regain its participation as the coordinator of international activities in the economic arena. Congress, especially the Senate, has been demanding greater participation, but it has offered little objection to the agreements signed in the last six years. Congress is also creating arenas for social participation in a manner more consistent with democratic government, but there is a long way to go before this approach is seen as a real alternative to the Los Pinos route.46 Moreover, the new arenas for participation have not guaranteed those affected adversely by the trade opening that their voices will be listened to.
Much of the research needed for decision making on trade and investment has been carried out by in-house government think tanks. The main contribution of private centers has consisted of sectoral studies that were commissioned at the start of the negotiations for NAFTA and the agreement with the EU. Mexican academia has made a relatively marginal contribution except in very specific periods, such as the NAFTA negotiations, which to some extent were unexpected and included many new issues. A fairly small number of academics from fewer than a dozen public and private research centers took part in that endeavor.
There has been little publication of the findings of the research conducted by academics under contracts with the public sector during the early stages of the opening. The studies that are accessible had little influence on the adoption of specific negotiating positions. Of course, some of the commissioned studies or academic research made similar recommendations on a gradual opening; this was the case, for example, of the financial and automotive sectors. But although this was the position taken by the Mexican government in the negotiations, that stance owed more to pressure from powerful business sectors. In other words, there are solid grounds for saying that the main contribution of most of the research carried out in the first half of the 1990s was to legitimate government decisions, including the signing of NAFTA.
Trade opening, and most particularly NAFTA, had significant effects on Mexican academia. In the more than ten years that the agreement has been in force, there has been an increase in the number of academic institutions carrying out pertinent research. Several universities, both public and private, have established new research centers on economics and international relations in Mexico City and beyond. Most of the research on trade and investment opening consists of ex post analyses of unilateral liberalization in the 1980s and of NAFTA. At the same time, academics have taken advantage of their greater access to information (which was very limited up to two decades ago) to carry out their research. This extensive literature, however, seems to have been disregarded for the negotiation of other agreements. Analysis of how these accords work remains to be done.
Many academics from old and new centers continue to do research under contract to the public sector, but it is hard to gauge the impact this has on the corresponding policies because most of them are not made public. Comments by the researchers interviewed suggest that sometimes they have had some influence, though almost all of them point out that the proposals or recommendations were only partly taken up by the state apparatus. Between the periods before and after the political changeover of 2000, there were no substantive differences in the patterns of linkage described, except inasmuch as the legislature, or some of its members, gradually established closer links with researchers.
A rapid review of a significant number of relevant publications prompts the observation that very few of them can be seen as an original contribution to theories of foreign trade. They tend to offer more or less rigorous analysis geared to proving, or sometimes disproving, some underlying theoretical assumptions. Few studies make specific recommendations. Decision makers criticize this, and complain that the researchers are a step behind the pace of the trade negotiations and of changes in international markets.
The Mexican government has turned not only to academia for advice but also to the rapidly rising number of private consultancy firms. Some of these are now like small think tanks. Entrepreneurs also resort to them increasingly, as well as to academics in private universities, as a means of acquiring information on the agreements and their implementation.
Finally, despite the obstacles and mounting criticism in Mexico, there is a general sense that the economic model is here to stay but that some more or less significant changes will have to be made. In other words, one important contribution of academia, and to some extent of other experts, has been to broaden the terms of the debate. Thus it can be said that academic research, and even that produced by the think tanks, has helped democratize the discussion.
The different options suggested by academics range from deepening NAFTA to intensive efforts at diversification that, it is argued, would make the Mexican economy less vulnerable to the U.S. cycle. To that end, better use should be made of the wide range of existing agreements. A few years ago, discussion in academic circles, especially in the United States and Canada, turned to the possibility of moving toward a customs union. This idea, however, is not shared by the great majority. Another proposal being discussed in Mexico, with a view to facing Chinese competition in the U.S. and domestic markets, centers on taking advantage of the existing agreements between Latin American countries, and even the trade agreements between those countries and the United States, to create more competitive productive chains at the national or regional levels.
There is no shortage of those who continue to insist that the domestic structural reforms are the most important factor, and that these could ensure that small and medium-size enterprises are well placed to compete in foreign markets. Even enthusiastic proponents of trade opening, and of economic liberalism in general, have begun to stress the need for an industrial policy that stimulates the growth of industry geared to the domestic market. They also argue for other policies to enhance the competitiveness of the Mexican economy and allow the country to make the most of the opening in a more socially equitable way.47
1. Academics who concentrate on what has been called basic science are concerned about establishing general propositions (Weiss, 1992).
2. Despite this scarcity, there are studies on the role of academia in economic opening in general, and of trade opening (as a part of that) in particular. Since the 1990s the latter has been closely linked to the former in the area of investment (Babb, 2001; Centeno, 1994; Ibarra and Alberro, 1989).
3. Some authors mention the “incentives” of the IMF and the World Bank; others use the notion of conditionality. The letters of intention signed with the IMF, and in particular that of March 1985, included clear commitments in the area of trade liberalization. Loans from the World Bank were also conditional on such opening. U.S. pressure took the form of the rigorous application of new trade laws and regulations following requests from U.S. producers for countervailing duties on Mexican imports. For more information on this latter strategy, which was more efficient, see the article by a former U.S. official (Lyman, 1989). Also see Urzúa (2000) and Milner and Keohane (1996).
4. The first feature is its wide diversity. For example, there are large exporting companies (which already had or managed to establish strategic alliances with foreign companies); entrepreneurs that export and also supply the domestic market; and a broad range of small and medium-size businesses working for the domestic market. The second feature is the nature of their organizations: whether they are more or less close to or dependent on the state. The third is the control that the large, pro-opening entrepreneurs have over most business organizations (Alba Vega, 1993; Hernández, 1991; Puga, 2004).
5. At the time, more attention was paid to the negative aspects or the risks posed by an interventionist state than to the advantages previously conferred by such intervention (Alba Vega, 2005; Torres, 2005a).
6. This is in contrast to the more intense participation in the debate on the first attempt to accede to the GATT in 1979 (Casar and González, 1990).
7. Although those who stress the presence of a corporative pattern of interest representation, in this period underline that the private sector was the least corporatized.
8. For a long time the Mexican regime consulted entrepreneurs on important decisions that affected them. The exceptions to this, which occurred at some points in the previous twelve years, had led many businesspeople to demand new rules.
9. The international departments of the main business associations supported this coordinating mechanism with staff (Alba Vega and Vega, 2002).
10. An effort was made to form working groups by sector. The COECE claims to have arranged 400 meetings with government officials before starting the negotiations, and to have organized about 350 seminars and workshops to inform businesspeople of the goals, risks, and opportunities involved in the negotiation of the agreement (Alba Vega and Vega, 2002: 67).
11. The institutions represented were the Autonomous University of Mexico, the College of Mexico, the College of the Northern Border, the Monterrey Technological Institute, the National Polytechnical Institute, the Autonomous Technological Institute of Mexico, and the National Universities Association.
12. The sectors that were dealt with individually were the automotive, textile, agricultural, and energy sectors.
13. The COECE produced seventy-one sectoral studies for the negotiation of the agreement with the EU and held about 400 meetings with government officials and negotiators (Alba Vega and Vega, 2002: 69).
14. The COMCE describes itself as a representative of its members “and an interlocutor with the agencies on all matters related to foreign trade and investment.” It also refers to its “lobbying through the committees and counterparts in the negotiation of several international agreements,” as well as lobbying public agencies in other countries.
15. The agricultural producers, especially those in the area of grains and oilseed products, face not only growing external competition but also the dismantling of the support that they received for several decades through BANRURAL, CONASUPO, ANAGSA, and FERTIMEX.
16. In line with NAFTA, only maize, beans, and powdered milk were to be protected until 2008.
17. As a share of GDP, exports grew from 12.9 percent in 1993 to 14.4 percent in the first year of NAFTA, to 26.8 percent in 1995, the first year of the financial crisis, and to 26.4 percent in 2005. In the same years, imports accounted for 16.3, 18.7, 24.3, and 27.3 percent of GDP (Romero, 2003; www.inegibi.gob.mx).
18. It offered periodic results reflecting the economic variables affecting protection at the subsector level. A summary of the results is available in articles published by its Director General (Ten Kate and De Mateo Venturini, 1989a and 1989b).
19. Since the 1950s the bank (and sometimes also the Finance Secretariat) had sent some Mexican economists to study abroad, especially to the United States, several of whom were later recruited. In those years the “financial sector” within the government was seen as that of “technical specialists,” in contrast to other secretariats where “politicians” prevailed. In a book first published in 1963, Vernon anticipated the confrontation between the two “groups” (Vernon, 1967).
20. In general, they had received theirf irst degrees in Mexico. Some still came from public universities, but a large number came from prestigious small public institutions (such as the College of Mexico) and private universities (such as ITAM and ITESM).
21. It seems that only one of the negotiators involved in the talks for accession to the GATT remained in SECOFI. There were then partial restaffings.
22. This was not only the position of individual economists but also of the National Council of Economists, which was one of the actors that took a very active part in the debate promoted by President José López Portillo (Casar and González, 1990).
23. Much has been said about pressure from the World Bank and the IMF in this respect.
24. The Federal Institute of Access to Information was created for this purpose.
25. Such was the case of a long-standing research project by researchers at the College of Mexico on the possible effects of opening on the services sector. At the time, the conclusion was that it was not advisable.
26. According to specialists in international law, this would have led to the adoption of “juridical concepts very similar to those of Anglo-Saxon countries, and would even lead to a break with the continental or Romanist tradition.” On several issues, the protectionist tradition toward national researchers and technical specialists was abandoned. As was to be expected, the same thing happened in the area of foreign investment (Berrueco García, 2005).
27. Unlike the background study for the negotiations with Japan, which was prepared by a researcher at the College of Mexico.
28. CONACYT’s priority is to relate academia to the productive sector, and thus foreign trade and investment matters move to a second level. This is reflected in the smaller share of funds allocated to these issues.
29. It is true that the low salaries offered by many of these institutions increasingly push them to accept consultancies, but the criteria governing membership of the National System of Researchers are academic. The system offers scholarships, in line with the academic level of each professional, that are de facto a supplement to the researcher’s salary. Membership of the system makes it easier to secure financial support for research and, of course, bolsters the researcher’s prestige.
30. Its rapid growth from a small teaching institute created in the 1940s by a handful of entrepreneurs was driven by some government agencies and, most particularly, by senior officials of the Bank of Mexico. Most of these sponsors had been part-time professors or students in the institution. The interest of the government’s “financial sector” in this growth, and especially that of the Department of Economics, grew in parallel with the radicalization of UNAM’s School of Economics and, in general, of that of most public universities, especially as of the 1970s (Ibarra and Alberro, 1989).
31. This center’s main task is to provide advisory and consultancy services to government agencies, firms, and international organizations. The Center for Economic Research was set up in 1993 for the purpose of academic research. Some of its researchers, however, sometimes offer consultancy services. For their part, researchers in the International Relations Department and the Law Department have monitored NAFTA. The Center of Inter-American Studies and Programs was recently created to conduct research on economic and social issues. Currently, ITAM is the venue for a European Studies Program financed by the EU.
32. What was initially called the Monterrey Institute of Technology and Advanced Studies (now, the Monterrey Technological Institute) was created—like ITAM—in the 1940s by a group of entrepreneurs in Monterrey with the goal of training personnel for private firms. It has grown rapidly in the past decade and has set up venues throughout the country (including Mexico City), as well as in some countries of Latin America. Its Graduate School of Business Administration and Leadership (EGADE) has devised programs to strengthen the competitive position of companies such as CEMEX, GAMESA, and Grupo FEMSA. It has also created arenas for research on broader issues of the international economic situation, trade, and investment. Several of its professors, on a private basis, are consultants for private firms.
33. As an example of those that analyzed the first five years, see the book coordinated by Beatriz Leycegui and Rafael Fernández de Castro (2000), whose authors included researchers from ITAM, CIDE, and the Free School of Law.
34. This growing concentration was evident after 1990. In that year, 20 percent of exports were made by nine companies, and in 1996 by five. In the same year, 60 percent of the exports came from 182 companies and the others, from about 17,000 firms. In 2000, the maquiladora industry accounted for half of exports. This fell in the following years because of the recession in the United States and has begun to recover. The recovery has been slower than expected, a circumstance attributed to greater competition from China in the U.S. market (Alba, 2005).
35. In 2004, a little more than 86 percent of Mexico’s exports went to the United States, which was the source of 56 percent of its imports. The EU, the LAIA countries, Canada, and Asia, in that order, were the other main export markets; on the import side, the sources were Asia, the EU, the LAIA countries, and Canada (www.inegi.gob.mx).
36. Its mission is to “offer technical support and analytical information to members of the legislature and legislative committees in an objective, impartial and timely manner, in line with the norms of academic research.” It is an “institutional and non-partisan body.”
37. The center has thirty-one officials and twenty-seven researchers. Some 15 percent of the latter have a doctorate and 54 percent have a master’s degree (www.cedrssa.gob.mx).
38. The center also has agreements with Chapingo, the Postgraduate College of Agricultural Sciences, UAM, the Antonio Narro Autonomous Agricultural University, the Northeastern Center for Biological Research, and the Institute of Mayan Rural Development Studies. It is acknowledged that the center can conduct only limited research directly, which is the reason for such agreements.
39. Several researchers of the Metropolitan Autonomous University and FLACSO Mexico have carried out such research.
40. The entrepreneurs have been reluctant to provide the names of these consultancy firms. One of the few that offered a name refered to the Associate Economists Group (GEA).
41. CEESP produces analysis on firms’ political environment, the macroeconomic situation, Mexican competitiveness, and the global outlook. It publishes daily economic indicators for Mexico and the United States. It also looks at the development of the regulatory environment in Mexico’s states.
42. For instance, at the request of the Civil Service Secretariat (Secretaría de la Función Pública), it is preparing a survey on “Governability and Business Development.” It seeks to examine the problem of corruption and its effects on how companies operate.
43. This association brings together, in particular, consultancy firms working for the construction industry, despite efforts for several years to include firms from other branches. It has had most success in inducing membership by environmental consultancies.
44. Especially as regards the provisions of chapters 19 and 11 of NAFTA, procedures on safeguards and unfair trade practices (antidumping and subsidies), as well as on economic competition.
45. Besides economic and other analysis that tends to support Mexican economic liberalization (though recently such analysis has been more critical), worth noting is the CIDAC-Zogby survey, Mexico and the United States. Cómo miramos al vecino in 2006. This, together with another by CIDE/COMEXI, started the trend for studying the two neighbors’ attitudes to each other. Recently, they have published a book that amounts to a proposal consistent with a think tank (Rubio et al., 2006).
46. Los Pinos is the headquarters of the Mexican presidency.
47. There has been a significant shift in the position of many of NAFTA’s main supporters, who insisted that “the best industrial policy is no policy.” In agriculture, too, they recognize the importance of government incentives to facilitate reconversion. Moreover, they accept the need for better regulation of domestic competition and insist that NAFTA is not a “development strategy” but rather one of the instruments that such a strategy can use.
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Web pages consulted:
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http://www.ordenjuridico.gob.mx/Federal/PL/CU/leyes/02092004(2).pdf
In recent decades the international system has undergone significant changes that affect the social, economic, and political circumstances of states, and that therefore oblige countries permanently to adapt their trade policies. The newly emerging structure has created a set of rules that affect not only global trade in goods and services but also national trade and production policies, as well as the current and potential competitive advantages that the different countries could develop. Issues such as the environment, intellectual property, working conditions, investment, services, and science and technology have added new ingredients to trade and competitiveness, in addition to the classical trade negotiations on tariff and nontariff matters of the 1980s, when the Uruguay Round of the GATT began in 1986.
In this context, national states must develop new institutional capacities in the foreign trade area, so that they can act simultaneously in several negotiating forums and respond to an increasingly complex, dynamic, and technical agenda. Institutional strength in these fields arises from a complex combination of bureaucratic-administrative and political capacities. Bureaucratic capacity concerns has an impact on the efficiency of the state apparatus to mobilize its institutional, human, and technological resources in order to pursue official goals. Political capacity means the performance of the bureaucratic apparatus in its broader political context—expressed not only in relation to the legislature and the judiciary matters, but also in the way in which the state receives and prioritizes the demands expressed as public problems through the activities of actors in the political arena or through wider groups.2
This study seeks to analyze the institutional capacities of the Uruguayan state in the field of trade policy and the role of specialist knowledge in decision making. The chapter is organized as follows. First, it examines the importance of knowledge as a central element in strengthening the institutional capacities of national states in the area of foreign trade, and in enabling them to act effectively in a new international and regional context. Second, the chapter identifies the most salient features of Uruguay’s public administration in order to establish the context in which the knowledge available in the state is accessible and can be used to improve decision making. Third, the study maps the public and private organizations that produce information and conduct research on the issue, and examines the links between research output, on the one hand, and the information and training needs of public organizations, on the other. Finally, it identifies the constraints on the use of knowledge in decision-making processes, and analyzes the need to develop strategies that allow those constraints to be surmounted.
The findings are based on fieldwork in Uruguay between 2004 and 2006. The approach centered on analyzing the institutional capacities to manage trade policy during the administrations of Jorge Batlle (2000–2005) and the successor government of Tabaré Vázquez, whose term began on March 1, 2005. Attention was paid to management rather than individual capacities, with a view to understanding the nexus between knowledge and public policy making.3
One of the most examined phenomena of our times is the extraordinary interconnection among local, national, and international processes and institutions, an interconnection that calls for profound changes in the organization and management capacity of national states. Globalization, economic internationalization, and the proliferation of trade agreements have changed the outlook for international trade. The number of regional trade accords in force now exceeds two hundred and has increased sixfold in the past twenty years.4 Today, more than a third of global trade is between countries that have some kind of reciprocal regional agreement, and the main players are the European Union (EU) and the United Status (World Bank, 2006).
The conclusion of new agreements and economic globalization have created new actors, increasing the influence of transnational companies, nongovernmental organizations (NGOs), consumer groups, and others. Increasingly, therefore, the activities of political and economic actors extends beyond national borders and national decision making is ever more permeable to the influence of those actors’ decisions (Messmer, 2002). This pattern further blurs the distinction between external and internal affairs, between international and local policy, and between international and domestic law.
Given this context of ever denser global interdependencies and the creation of structures in the global economy, it is urgent to reconsider how to plan and foster the socioeconomic development of national economies. This does not mean, however, that the state is being eclipsed because it is losing its policy-making autonomy as a result of its greater dependence on the international context, as well as on trade and foreign investment. International indicators reveal that market “credibility” is associated with a stronger state role. The countries that have had most economic success in a globalized economy are those that have most control over it (World Economic Forum, 2005; Kaufmann et al., 2005). Hence, the state’s institutional capacity stems from its ability to independently forge a link between domestic and external policies that serve its interests.
In this new context, foreign trade policy should become a dynamic process of responding to a changing context, improving international insertion, and acting as a bridge for investment and technological innovation. For its part, the state should become a flexible, efficient, professionalized, and transparent organization, one that is connected to society and in which knowledge is central to the formulation and implementation of public policies.
In that process, evidence-based decision making and the use of knowledge are central to public administration in the twenty-first century. Hence, we have the emergence of concepts such as “evidence-based policy” (Davies and Nutley, 2001), which affirm the need to link political decision makers’ personal experience and knowledge with the best available evidence from academic studies.
To that end it is essential to have timely information, use it in decision making, transform it into knowledge, and make it yield high strategic value. In this sense, knowledge is the capacity to relate data and information on a particular issue in a highly structured manner, allowing effective action to be taken on the basis of a given value and context.5 From an epistemological perspective, knowledge’s structure ranges from levels of tacit context found in the cultural environments within which human activity is developed, to the more structured levels that facilitate legitimation of institutional or collective decisions and actions, as is the case of strategic plans (Polanyi, 1966, cited by Nonaka and Takeuchi, 1999). The key in public administration is to make tacit knowledge explicit and ensure that they are effectively linked (Peluffo and Catalán, 2002).
Thus states’ institutional capacity to devise a domestic strategy of international insertion is a central issue to consider in this new and historic context. To analyze these matters, this chapter will first look at the situation in Latin America, with which Uruguay shares some features in common.
The trade reforms undertaken in most Latin American countries in the 1990s sought the strategic integration of the region’s economies into the world economy, making them more open and competitive with the region and the rest of the world, and increasing export capacity. The modest economic and social results, however, have spurred a significant debate about the outcome of the reforms and, in particular, the link between trade opening and economic performance.
Latin America’s overall economic performance has been less satisfactory than that of the Asian countries. The region’s real per capita income growth lags that of Southeast Asia (1.5 percent against 4.8 percent in the period 1965–2004), and the gap widened in the postcrisis period 1997–2004. While Asia’s per capita income has doubled in the past fifteen years, Latin America has had to wait almost half a century for the same outcome. For various internal and external reasons, Latin America’s export performance has been ineffective in developing a diversified supply that goes beyond traditional exports of primary products (CEPAL, 2004).
This has sparked a debate in the specialist literature on whether trade liberalization has made a positive contribution to the region’s economic growth and social development. More skeptical observers point to the weakness of some of the findings, especially as regards the correlation between economic opening and economic growth. The debate has led many theorists and policy makers to consider the central role of a trade policy that is linked to a country’s overall development strategy, and the importance of strengthening political and institutional fundamentals in order to accompany that process (North, 1990; Rodrik, 1999; Subramanian and Trebbi, 2004; Jordana and Ramio, 2002; CEPAL, 2002; Devlin and Estevadeordal, 2003; French-Davis, 2005).
Most studies point to Latin America’s grave political-institutional incapacity to play a strategic part in the new global trading arrangements, even though most countries have undertaken numerous reforms of their public administrations. These weaknesses have also been pointed out by several of the region’s negotiators and foreign ministers, who argue that the recent complexity of the negotiating agenda and the simultaneity of the negotiations are circumstances that have caused Latin America to negotiate “blindfold” and with few human, technical, and financial resources (Nogués, 2003). The concessions negotiated in a wide range of issues, such as investment, government procurement, intellectual property, and the environment, could seriously constrain maneuvering room in the formulation and implementation of national policies, including competitiveness policies. Moreover, there have been no evaluations of the possible economic consequences of the new issues in trade agreements. Hence, there is the importance of overcoming the institutional deficits, so that the countries of the region can take a firmer and more consistent bargaining position in the different negotiating fora, a position that is linked to a clear strategy for the region’s integration into the regional and international context (Nogués, 2003; Opertti, 2002; Amorim, 2003).
In this respect, the following have been identified as weaknesses: (1) scant capacity to strengthen the political influence, as well as the technical and strategic capacity, of the organizations with basic responsibility for trade policy; (2) difficulty in implementing efficient interministerial coordination mechanisms to respond to the diversity of the issues in current trade agreements; (3) weakness in properly overcoming the problems of managing asymmetric information between trade policy decision makers and other governmental and private actors; (4) constraints on linking the sectoral interests of social and business actors, so as to ensure that the national interest prevails (Jordana and Ramió, 2002). In general, and as a result of incomplete institutional reforms, these problems are shared by most of the region’s public administrations. But there are some exceptions. Chile is one of the more prominent examples, and Brazil and Mexico are also worth mentioning in this regard.6
The ideas put forward here lead us to a detailed examination of the institutional capacities that Uruguayan public organizations have developed in order to respond to changes in the environment, as well as to incorporate knowledge into trade policy decision making.
Uruguay is notable in Latin America because of the gradual and moderate way in which it implemented the reforms of the Washington Consensus. Trade opening began gradually in the 1970s and made further progress in the 1990s, when regional opening (Mercosur) took primacy under the presidencies of Luis Lacalle (1990–1995) and Julio María Sanguinetti (1995–2000).
In the late 1990s, however, the integration process underwent a series of crisis. The Brazilian devaluation and the recession in Argentina brought about a deterioration in relations with the Mercosur partners, and various kinds of nontariff barriers were introduced. These circumstances called for a reorientation of Uruguayan trade policy. The Jorge Batlle administration (2000–2005) took a position that was critical of Mercosur and sought closer relations with the United States, as well as bilateral links with other countries. An example is the signing of the free-trade agreement with Mexico in 2003 and the investment agreement with the United States in 2005.
The current administration of Tabaré Vázquez faces a complex negotiating agenda on several fronts. As a member of the Latin American Integration Association (LAIA), the country has concluded several preferential trade agreements.7 Uruguay has an autonomous trade policy, but this has to be compatible with Mercosur membership. Through its participation in Mercosur, Uruguay is a signatory to preferential agreements with Chile (1996) and Bolivia (1997), as well as two frameworks agreements to create free-trade areas with Mexico and the Andean Community (see Table 5.1). Its has several agreements with countries beyond the region, including a framework accord with the Southern African Customs Union (SACU), India, Egypt, and Israel (Vaillant, 2006).
Table 5.1 Trade Agreements Signed by Mercosur(a)
| Date(b) | Characteristics of the Agreement | Tariff Reduction Time Frame(c) |
EU | 1995 | Free-trade area framework agreement |
|
Chile (economic complementarity agreement 35) | 1996 | Common-format free-trade area | 10 years |
Bolivia (economic complementarity agreement 36) | 1997 | Common-format free-trade area | 10 years |
South Africa | 2000 | Free-trade area framework agreement |
|
Cuba-Brazil (economic complementarity agreement 43) | 2000 | Preferential agreement |
|
Cuba-Uruguay (economic complementarity agreement 44) | 2000 | Preferential agreement |
|
Cuba-Argentina (economic complementarity agreement 45) | 2000 | Preferential agreement |
|
Cuba-Paraguay (economic complementarity agreement 52) | 2001 | Preferential agreement |
|
Mexico-Brazil (economic complementarity agreement 53) | 2003 | Rules and disciplines |
|
Mexico (economic complementarity agreement 54) | 2003 | Free-trade area framework agreement |
|
Mexico (economic complementarity agreement 54) | 2003 | Automotive, bilateral format |
|
Mexico-Uruguay (economic complementarity agreement 60) | 2004 | Bilateral free-trade area |
|
Andean Community (economic complementarity agreement 56) | 2003(e) | Free-trade area framework agreement | (d) |
Ecuador, Colombia and Venezuela (economic complementarity agreement 59) | 2005 | Bilateral free-trade area | 15 years |
Peru (economic complementarity agreement 58) | 2005 | Bilateral free trade area | 15 years |
Egypt | 2004 | Framework agreement |
|
Morocco | 2004 | Framework agreement |
|
SACU | 2004 | Preferential agreement |
|
India | 2003/2004 | Framework/preferential agreement |
|
Israel | 2005 | Framework agreement |
|
a. Including bilateral agreements with third countries after 1994.
b. Year of entry into force.
c. Time frame for removing tariffs on 95 percent of all items.
d. Immediate application, though there is a list of exceptions with fixed preferences.
e. Only transposed by Brazil.
Source: Vaillant (2006).
At present, Uruguay has to take part in the more than thirty separate spheres in which Mercosur is involved in trade negotiations.8 This is in addition to the more important negotiating fora such as the talks with the EU and the United States, as well as at the multilateral level. Uruguay is a founding member of the World Trade Organization (WTO) and takes an active part in the multilateral trading system, which it views as vitally important because it is essentially an exporter of agricultural products. Uruguay’s interest, unlike that of the United States and the EU, is to lower the high level of protection on and/or subsidies for agricultural products and raw materials. Consequently, there are several linked, ongoing negotiating processes such as the current talks with the EU for an association and free-trade agreement, on the expansion of offers in the areas of agriculture (EU), industry (Mercosur), and services (Mercosur), taking account of “the co-existence of bilateral and multilateral negotiations” in the WTO.
It is not only the negotiating fronts that have become more complicated; so too have the issues. Although the old issues are priorities for Uruguay (market access, sanitary norms, antidumping measures), the main players— especially the EU and the United States—want to reach agreement on the “Singapore issues” (intellectual property, investment, competition policy, science and technology, government procurement). Hence, the old issues are only some of the matters in the current negotiations, while other issues are increasingly prominent on the agenda of the Northern negotiating partners. These circumstances explain why it is important for Uruguay to take a position on these matters.
In this context, Uruguay faces enormous challenges in its efforts to ensure successful international insertion. Paradoxically, its main export markets are not those countries toward which Uruguay geared its trade agreement strategy. The United States should be noted in this respect: its share of Uruguayan exports rose from 8 percent in 2001 to 20 percent in 2004.
A review of other indicators reveals that there has been no increase in trade’s importance relative to GDP. Uruguay has shown itself to be fairly ineffective in diversifying exports. Its export profile is still marked by a concentration of goods with a high agricultural content (see Table 5.2), giving rise to a model of trade specialization in industries with little value added and only modest technological potential (Bértola et al., 2004).
Table 5.2 Structure of Uruguay’s Exports and Imports
|
Primary Products |
Manufactures |
Goods with Higher |
Fuels | ||||
|
Imp. |
Exp. |
Imp. |
Exp. |
Imp. |
Exp. |
Imp. |
Exp. |
1950–1969 |
43.16 |
88.63 |
12.64 |
10.55 |
28.1 |
0.31 |
16.09 |
0.51 |
1970–1989 |
14.91 |
66.62 |
14.79 |
27.53 |
42.88 |
5.51 |
27.42 |
0.33 |
1990–2000 |
13.43 |
52.65 |
24.56 |
34.49 |
50.69 |
12.2 |
11.32 |
0.57 |
Source: Bértola (2004).
The complex scenario facing the country prompts questions about the state’s institutional capacity to manage trade policy—that is, the institutional, human, and technological resources available to use relevant information and knowledge on the issue and incorporate it into decision making.
Like any other public policy, trade policy contains and needs, explicitly or implicitly, guiding principles, a strategic framework, and a sense of direction. Such principles are central to the development of institutional capacities. Traditionally in Uruguay, however, the strategy behind trade policy has been more implicit than explicit, more informal than strategic in the medium and long term. The country’s leadership9 has had a clear vision of Uruguay as an exporter of agricultural products, and thus there has been a clear interest in and knowledge of the issues on the “old agenda”: sanitary norms, antidumping measures, and so on.
In recent governments the negotiators have had two clear aims in trade negotiations: to secure greater access to agricultural product markets, often expressed as a quota for meat; and to ensure that “basic telephony should be a public monopoly.” The country has not had an official position on the other issues. Moreover, in recent years Uruguay has suffered a deterioration in its strategic outlook that constrains the prospect of forging a unified negotiating position, a process related to Mercosur’s loss of legitimacy as a vehicle for Uruguay’s growth and development. The words of the director of the Industry Unit in the Ministry of Industry, Energy, and Mining summarize the outlook of most members of the government:
I understand that there is a lack of coordination at the level above the national coordinators, the level above the national directors, the ministerial level. There we need a political body in which we set out clear ideas, set out guidelines, listen to the negotiators, interact and decide some things, because sometimes you need more specific political backing on certain issues.
Because the country lacks strategic management in the area of international insertion, what often take primacy are the different perspectives of the ministers or directors of executing units as regards the national position in the various negotiating fora (multilateral, regional, and bilateral), and as regards the new issues on the negotiating agenda. Moreover, because information and knowledge do not circulate among the different agencies or directors, they have only a modest impact on the forging of a common negotiating position. Because of the experience, practice, and dedication of some officials, the gap has narrowed; but the disparities remain significant. This is partly because of the poor allocation of human and material resources to foreign trade, which makes it impossible to cover all the issues. But there is also a lack of vision on the part of the political class, a lack of commitment to help set up institutionalized coordinating bodies, and a dependence on the officials in office at a particular time, their capacities, and political support.
At the state level, responsibility for trade policy is shared between the Ministry of the Economy and Finance (MEF) and the Foreign Ministry. According to article 168 of the constitution, the president is responsible for managing the country’s international relations, acting with the Foreign Ministry or the Council of Ministers. Article 2 of decree 35/96 defines the Foreign Ministry as the administrative political institution of government that is responsible for representing the state in international fora. It is also responsible, together with other ministries, for ensuring that the country complies with its international obligations.10 According to decree 442/997 of 13 November 2007, the MEF is responsible for “the higher management of national economic financial and trade policy.” Both ministries, through the office of Uruguay XXI, are responsible for promoting exports and investment11 (see Appendix).
The most important reform during the current government has been the merging of the Foreign Trade Directorate, responsible for the coordination of and participation in multilateral, regional, and bilateral trade negotiations, and the Trade Policy Office; units that operated under the aegis of the MEF have been merged into one.12 Thus the MEF, through the Trade Policy Office, is responsible for devising and implementing trade policy. The Trade Policy Office provides the MEF with the advice and information needed for the higher management of foreign trade policy, as well as for the implementation of internal policy in coordination with regional and international policies. It is responsible for coordinating trade negotiations, administering customs, and advising the president on trade policy. It also holds the chair of the Uruguayan Tariff Commission, which sets import tariffs.
For its part, the Foreign Ministry is responsible for planning, directing, executing, and implementing Uruguayan foreign policy in all fields, including trade policy.13 Trade negotiations in fora such as the WTO and Mercosur are conducted in coordination with the MEF and with the technical support of other departments. The Foreign Ministry has two departments that are directly involved in international trade and that work in coordination with each other.14
As regards the participation of the sectoral ministries in trade policy, the most significant are the Ministry of Industry, Energy, and Mining, and the Ministry of Livestock, Agriculture, and Fisheries. Within the former, the National Directorate is responsible for analyzing and monitoring national and international industrial conditions, overseeing the issues of investment, unfair international trade practices, and safeguards, and managing the special regimes set out in the prevailing legal and regulatory provisions, among other areas related to international trade. The latter ministry has an International Affairs Unit that monitors and takes part in some negotiating fora of interest to the agricultural sector.
The Office of Planning and Budget is responsible for linking decisions on international and trade policies to national plans, programs, and policies, as well as for advising the executive branch on the issue. The Sectoral Commission for Mercosur (Comisec) was set up in 1991 to advise the executive on regional integration; it comprises representatives of the government and the private sector.
Other significant organizations related to trade policy are the Central Bank, which oversees monetary and financial stability, and the Uruguayan Technological Laboratory, which is responsible for applying metrologyrelated legislation and verifying compliance with technical norms. It also administers and controls the special regimes to support industry and exports, including the temporary admittance regimes.
In the private sector, the Uruguayan Chamber of Industry, the Mercantile Chamber of National Products, the National Chamber of Commerce and Services, the Uruguayan Rural Association, and the Uruguayan Union of Exporters (UEU) are consulted informally on the development of foreign trade.
Finally, Parliament (article 5, section 7 of the 1996 constitution) has to approve international agreements and should play an important role as an overseer of trade policies, though in practice its role has been weak in this regard.
It is clear that there are various and diverse institutions involved in trade issues, and thus coordination is crucial to the management of a successful trade policy. The institutional structure, however, is very weak in this respect. Uruguay lacks strong and institutionalized coordinating mechanisms at the strategic political level in the MEF and the Foreign Ministry, as well as between the sectoral ministries and, fundamentally, with the presidency.
Through the MEF, the current government has put particular emphasis on coordination with other ministries and the private sector. To that end it set up the Interministerial Council on Foreign Trade (decree 101/06) with the basic goal of strengthening the country’s activities in the area of international insertion, negotiations, trade promotion, and investment attraction. This body comprises the Foreign Ministry, the MEF, the Ministry of Livestock, Agriculture, and Fisheries, the Ministry of Industry, Energy, and Mining, and the Ministry of Transport and Public Works (see Table 5.3). It is hard to assess its performance, however, since it was set up only recently.15
For its part, the National Section at the Mercosur level is a midrange political and technical body comprising coordinators and national directors from the various ministries involved in trade policy. Under the current administration it has been weakened as a coordinating mechanism. According to Ambassador Agustín Espinosa:
Table 5.3Trade Policy Coordination Mechanisms
| SPHERE | PARTICIPANTS | LEVEL | COORDINATED BY | COMPOSITION | FREQUENCY |
National section (1995) | MERCOSUR | Involved state organizations. Ad hoc private-sector participation | National coordinators and directors | Foreign Ministry | Plenary session and issue-specific working subgroups | Weekly subgroup meetings |
CIACEX (2006) | Bilateral, regional multilateral | Foreign Ministry, Economy, Industry, Livestock, Tourism Ministries | Ministers and technical experts | Economy Ministry | Ministers | Monthly meetings preceded by an experts meeting |
Source: Prepared by the author.
The quality of this committee’s final product depends on the importance of the coordinator and the links that he or she has with the presidency, as well as with the Ministry of the Economy and the sectoral ministries. If the coordinator has less political and technical prominence, people don’t go, it empties out and the product does not reflect consensus.
Moreover, the former director of the Trade Policy Office, Darío Sarachaga, points out that “currently, the national section has become a place of little discussion, where there are few proposals and many doubts.”
The lower level of activity in these coordinating bodies was partly explained by the actors involved, who were pursuing the distinct visions of the ministries represented. The prospect of successful coordination depends more on the personality of those involved in the process than on formal agreement. This is because, historically, the management of trade policy has been marked by strong personalism, and the formal coordinating mechanisms have been supplanted by informal methods largely based on personal and spontaneous contacts working along the lines of: “Call me, I’ll call you.” “There is always the phone. If something is important, we can meet.”16
Except for when the Foreign Trade Directorate (now the Trade Policy Office) was headed by the director of international economic relations at the Foreign Ministry, which happened with Ambassadors Gustavo Magariños and Miguel Berthet, links between the institutions have depended on the personal relations between their chiefs and on their political party affinities.
Because of these circumstances, the negotiating fora and issues were distributed informally, justified by the leading negotiators on the grounds that:
The country does not have enough people to have a dedicated team for the WTO, another for Mercosur and another for the FTAA. In general they are the same people, wearing different hats, “few and aged”, and whoever negotiates does not get to know the issues in detail.17
Thus there is a certain amount of institutional weakness attendant on the ambiguous division of labor, spheres, and authorities. In other words, there is a gray area in which the will of the most active ministry takes precedence. The institutional arrangements are not optimal, and the changes made have not have positive effects on trade policy management. Some long-standing features continue to hamper the consolidation of an efficient institutional structure.
When the left won the presidency in October 2004 with the support of 50.4 percent of the population,18 there seemed to be a favorable environment in which to reach the consensus needed to devise a clear strategy of international insertion. But the current composition of the new cabinet, divided among various factions of the Frente Amplio, makes the context more complex. Several obstacles remain to be overcome in managing the disagreements among the various public-sector actors that comprise the political left. This is why, in the government’s early days, contradictions have emerged when the economic team, led by the Economy Minister, Danilo Astori, has emphasized matters such as the signing of the free-trade agreement, while the Foreign Minister, Reynaldo Gargano, has expressed his opposition to the accord, along with the other political forces of the Frente.
In this respect, the great challenge facing the present government is to manage the disagreements and oversee decision making, setting out medium- and long-term strategic guidelines on trade policy (political capacity). There is also a need for a far-reaching reform of the state. The new administration has a bureaucracy that will not bring about the flexibility and coordination needed to devise and implement public policies (bureaucratic-administrative capacity). Specifically, there are significant difficulties in adapting the government structure to the new requirements of modern trade policies. Most particularly, there are a number of structural problems in the government units responsible for trade policy. These include the overlapping of functions between the two ministries in the area of negotiating issues; deficient links between institutional, human, and material resources; problems of coordination among state agencies; the scant participation of social actors in the process and its weak institutionalization; and above all, the dominant role of personal leaderships and weak respect for the current institutional structure. Closely related to this, as the next subsection shows, is the problem of Uruguayan trade policy’s management of information.
Historically, the Uruguayan state has not developed adequate tools to respond to demands for knowledge in a systematic and timely way, despite the importance of knowledge for strategic planning and decision making in the area of foreign trade policy. Anyone who wants to know all the economic agreements that Uruguay had negotiated with other countries has to ask each secretariat of state, individually, for the information in its area of competence. For instance, if you wanted to know which exports face the most severe nontariff barriers (phytosanitary, for example), then you have to ask the Ministry of Agriculture, Livestock, and Fisheries. On the other hand, if you want to know where investment is subject to legal disputes, you contact the MEF.
Thus the government is structured in such a way as to provide sectoral information, but without an overall vision. This has serious consequences for knowledge production and the management of trade policy. First, it makes it hard to support strategic planning with solid analytical foundations. Second, it inhibits the emergence of a shared outlook among the actors. Third, it hampers intersectoral coordination.
Although it is common practice to draw up reports in the public administration, these are used more in the intermediate stages than in the postnegotiation phase. And though officials have said it is customary to prepare periodic reports on the negotiating fora, in many cases they have been unable to obtain specific assessment reports on the pre- and postnegotiation stages.
In the words of a Foreign Ministry official, the deputy director general for international affairs:
They do not provide written reports on their activities unless expressly asked to do so by the authorities or unless they have an interest in doing so . . . Who read the reports in the public administration? There is a daily assessment. But they do not give us concrete studies on the results. Perhaps sometimes there is some external source, but we do not do it, we do not have the time or the people. Sometimes we receive material from other organizations, such as the LAIA.
This lack of technical follow-up and assessment of trade policy represents a problem of institutional memory: the accumulation of information and experience is closely related to the individual, and thus that information and experience are affected by every change in personnel. This is perhaps one of Uruguay’s biggest institutional weaknesses; the marked degree of personalism, as well as the individual’s assimilation into the post and the issue, are repeated in all state institutions.
There are two main reasons for this. The first is that certain senior leaders remain in their posts. The second is partly a matter of a shortage of resources. These senior officials become the visible face of the ministries responsible for policies, and are the only ones who take constant part in the pertinent bodies for trade negotiations. They acquire invaluable experience in negotiations and trade policy issues, experience that could be of great use to future staff if it were properly channeled. A disadvantage of such personalism is the concentration of power in the hands of a few, giving officials autonomy in decision-making processes within bureaucracies marked by weak accountability mechanisms.
Thus there is no institutionalized information system (the first step to improving coordination) to facilitate links between the formulation, implementation, and control of trade policies.19 This gap makes it difficult to develop processes for assessment and analysis that are consistent with trade policy. Moreover, these bodies do not involve other branches of the state, such as the legislature. They also exclude other civil society actors, apart from ad hoc consultations with the private sector on specific measures and, to a lesser extent, meetings to discuss strategic guidelines and policy instruments to be adopted.20
Along with the consultation mechanisms, there are informal mechanisms that allow some individuals and organizations to go beyond consultation and acquire prior knowledge of the negotiating texts, and hence to have an influence on bargaining positions. Citizens as a whole, however, have little influence on trade policy. The only institutionalized arena for citizen participation at the national level is Comisec,21 and at the regional level it is the Economic and Social Consultative Forum of Mercosur. Nonetheless, the actors involved in these fora have viewed them as fairly ineffective means of influencing decision making (Quijano, 2002).
The prospect of incorporating knowledge into the management of an organization depends largely on taking advantage of the innovative creativity and the training of staff. The authorities, however, have viewed the shortage of human resources as the main obstacle to working properly. A particular problem is said to be that the negotiating teams are overburdened. They have to deal with different issues simultaneously, with technical specialization, and in different fora.
Conditions have improved somewhat in the Foreign Ministry through the introduction of competitive examinations for public-sector jobs,22 but several weaknesses persist. First, the human resources policy makes diplomatic posts less permanent. A diplomatic officer normally remains in Uruguay for no more than three or four years, not to mention the significant turnover of the mid- and lower-level staff in the Foreign Ministry. Hence, the training of specialist professionals is affected because there is no guarantee that the officer will be dealing with the same issues in a posting overseas; neither is there any assurance that on the officer’s return he or she will be reassigned to the same department or the same issue area. Second, in senior posts there is no link between expertise and the functions that the official really has to perform.23 Third, although there is indeed staff training, only in exceptional cases is it strategically designed. In general, only a modest percentage of diplomats have training in economics and trade, and there is high turnover among these officials because their postings abroad and at home adversely affect the training.
The Economy Ministry’s Trade Policy Office is making significant efforts to professionalize its staff, but it lacks sufficient human and material resources to respond to the challenges posed by a multi-issue agenda that is highly technical and negotiated on several fronts. By contrast, among the staff of the old Foreign Trade Directorate there are 127 officials who are not available.24 The “too much-too little” syndrome of the public administration in the 1970s persists into the twenty-first century.
Consequently, there is an inconsistency between formal authority and the availability of people to perform the corresponding functions. Analyzing just one day in the public administration, the work calls for an army of government experts who divide their time to combat dumping, create official norms, certify the origin of imports, establish requirements for plants and animals, arrange credits with banks and international financial institutions, negotiate all kinds of trade agreements, and take positions on environmental issues, to mention just a few of the common measures. Hence, trade policy calls for ever more human capital and more specialist knowledge, and the government has problems responding to the demand.
Negotiations as complex as those now under way in the various international fora call for the training of good negotiators and for adequate and appropriate information to be made available. Uruguay, however, is marked by a series of failings because it lacks institutionalized mechanisms for the production and analysis of information within the state—information that would be an input to the negotiators, and thus would be conducive to the establishment of a better trained and more professional negotiating staff.
As regards academics, historically the public sector has resisted taking account of their proposals; as shown in the discussion that follows, even efforts to create technical support groups for the trade negotiations have failed. The economist Juan Manuel Quijano, who is linked to the foreigntrade sector, has reflected on this weakness in the following terms:
There is perhaps no other sector that is taken into account, and significantly so, in other parts of the world but not in Uruguay . . . that is the academic sector. There are people who have worked for 20 years on certain issues, and even so it is rare that anyone calls them and asks, “What do you think?” He is not an entrepreneur or a worker, but he has studied this issue . . .
Ambassador Lacarte Muró, although agreeing in broad terms, qualified this assertion by saying that this situation is valid whenever there are efforts to reconcile such divergent approaches as that of the negotiators and that of the academic sector. According to the ambassador:
There is a fundamental difference between the negotiator, a functional and practical person . . . and the academic, who flies . . . The negotiator has a responsibility, a sword of Damocles over his head: the government, telling him “do this, not the other; you made a mistake.” The academic, for his part, says what he wants and doesn’t have to answer to anyone.
In practice, according to Ambassador Espinosa, the Foreign Ministry negotiators make use of official reports, through diplomatic channels, from official bodies. No effort is made to seek out academic information. There is a complete disengagement between negotiators and academics; academic studies are not taken into account; attention is paid only to those reports produced by diplomats and given to the negotiators. When information is lacking, the negotiator asks the diplomat to verify a matter, and the latter collects the information (orally or in writing) through official channels. Although the negotiators receive academic reports, and these are often sent to the ambassadors themselves, they are not part of the material with which the negotiator works.
Input from the business chambers, especially from certain private-sector actors, is very important as sources of information on trade policy. In many negotiating fora, such as the WTO, a small group of businesspeople has historically played a central role in trade negotiations and trade policy in that sphere (Coll and Hodara, 2004).
Think tanks have developed to only a modest degree in Uruguay. The political parties have lacked and still lack think tanks. In the traditional parties, programs are developed intermittently. Experts are generally brought together a few months before elections to take part in drawing up the programs. Once the electoral cycle is complete, the technical teams disband. On the left, it was only in the most recent election that the process was more complex and intense; the program is devised almost exclusively with the parties’ technical specialists. The parties also lack structures that allow them to take full advantage of information, analyses, and theories, as well as of staff-training policies, and in the legislature they lack good advisers. When they finally reach the executive branch, they almost always lack skilled bureaucracies (Garcé, 2005).
In short, there is no stable and institutionalized nexus between the state and the research centers that produce information on the issue. Consequently, there are no channels within which knowledge can circulate, and often the growing demand for trade policy expertise has caused the government to use individual experts. Though ministers have some flexibility about hiring personal advisers, this group of experts enters and leaves the administration as the minister changes, even within the same government, giving rise to a “revolving door.” Since they have no institutionalized roots in the state apparatus, institutional memory is adversely affected.
Efforts have been made in Uruguay’s Foreign Ministry to create a group of technical specialists who would support trade policy decision making. The first experience was in 1985 with the creation of the “Profiles” group, financed by international organizations. This technical group wrote and published research on Uruguay’s main export markets, Argentina, Brazil, the United States, Germany, and others. These were known as “market profiles.” There were also sectoral studies on the country’s main productive chains, such as meat, rice, dairy goods, and citrus products.
This first experience was an important technical tool for the negotiators, as Ambassador Carlos Pérez del Castillo points out:
The “Profiles” group gave some findings . . . In the group we prepared the terms of the negotiations with Taiwan at a time when we still had no relations with China . . . Another experience was the negotiations with Russia. In the end these did not lead to an agreement but they let us engage in a more fruitful dialogue than we had had to that point. And the trade negotiations with China began.
This group was unable to consolidate itself and was disbanded in 1988, partly because of tense relations between the academics and the negotiators. In the words of an academic member of the group:
There was a lot of resistance to the group within the ministry. . . . suddenly there was this group that had done several studies, which to some extent questioned how things had been done. The negotiating strategy was defined without anyone having anything, an idea, a number . . . On the other hand there was great concern that we would come into the middle of their diplomatic career and end up as competitors.25
The second experience of creating such a technical group was in 1995. As a result of the establishment of Mercosur’s customs union, the group worked on the renegotiation of the bilateral LAIA agreements in order to conclude the 4 + 1 Mercosur accords. It also drew up studies to support the negotiations with Chile, producing ex ante assessments of the agreements, as with other South American countries, and gave courses to ministry officials.
The opinion of those involved in this group is more critical than that of the members of the “Profiles” group:
There was everything there, people who did nothing and people who did very valuable work. In general there was a perception that the group’s goals had been distorted and it was not responding to the needs of the negotiations. So the second experience was worse because the group began to be overrun by politicians. There were people that never gave me a report, or they worked on issues that were simply not relevant, like the history of Mercosur.
On the other hand, both sides acknowledge the difficulties of coordinating the researchers and negotiators, and of making them interact:
We had first-class people but there was no dialogue between negotiators and technical specialists, there was no team work. We had very tight schedules and were traveling. And there were still the same tense relations with members of the diplomatic service, in some cases with a delay in providing information and data to do the research.
The group came to an end in 1998 with a renewal of its components and goals. Until the end of the project, work was done on the customs union, agricultural negotiations, the EU, and so on. And finally in 1998, when some of the main promoters of the project had moved abroad, there was no effort to set up a new technical group.
Thus the various efforts to establish a stable technical body to support the official negotiators failed. Relations were difficult and contentious, and there was little propensity to devise a long-term human resources policy or a system of rewards and incentives for joint work.
The negotiators point out that one of the main problems involved in consolidating a group of academics in the Foreign Ministry was the dissociation between the technical inputs that the negotiators needed when they negotiated and the kind of studies produced by the support groups. Ambassador Carlos Pérez del Castillo puts it as follows:
While the technical groups did specific studies on the FTAA or the EU, the negotiations were going in a different direction. The studies did not take account of what was being negotiated . . . There is no point to a technical study that is fantastic and that tells you all that has to be done if it is divorced from the reality of what can and cannot be done . . . So it was very difficult to reconcile the technical and the political.
Another reason is that there was no methodology for continuous analysis and monitoring of foreign-trade issues. According to Ambassador Carlos Pérez del Castillo:
Whoever is going to negotiate intellectual property with the EU must base himself on a source of information and should not be improvising different solutions . . . In general, Uruguay has very good negotiators who know the issues and who, with little instruction, have defended what they considered should be the country’s position. But often we have had to engage in negotiations without instructions . . . The information comes out of the negotiations themselves, and out of concerns—for example, if there are different proposals on tariff reduction, the logical thing would be to go to the specialists and they give you an answer.
For their part, the academics recognize the difficulties of producing information in the time frames required. In this respect, one of the main difficulties in the structure of the ministries is the absence of an updated database that allows new information to be incorporated and processed. In many cases the political decision makers do not give due respect to research. They are disinclined to read the technical reports and to provide information.
One of the lessons learned from these experiences, therefore, is that the institutional strengthening of the technical staff is central to fostering the incorporation of knowledge into decision making. The staff would have to be permanent and work jointly with the official negotiators, which would improve capacity to give a quick response to the foreign-trade agenda.
It is apparent that the great dilemma is a matter of reconciling the demands raised by the tangible and abrupt changes wrought by politics, on the one hand, with specialist knowledge on the other.26 In Mertonian thinking, the production of information and its use in public policy making has been analyzed as two separate processes in which the outlooks, actors, and institutional arenas are different, and the classical rationalist model of analysis prevails (Weiss, 1986). There are two important actors in this process, the decision maker and the researcher. It is crucial that the latter gives the former the necessary information in the right format at the right time, so that the decision is technically robust. This is why most of the academic output on the issue seeks means of making this communication more fluid and of overcoming communications problems, thereby upgrading the levels of communication and using a more apt language to strengthen the channels of interaction. Thus, if the political decision maker does not use technical knowledge in decisions, the causes of the problem lie in the relations between the actors. The decision makers disregard the recommendations that emerge from research, and the researchers cannot devise a language that is geared to the decision maker.
The decision-making process, however, is not exactly as previously described. In general there are no categorical policy prescriptions based on objective research findings. Normally, there are various policy options that research can support and specify. These are chosen in a complex process involving all the actors, who have different interests and are acting and negotiating in a political manner. Hence, we have the criticism of the mythology underlying the linear model of Bush (1990), the ethical and political autonomy of scientific practice, the assumption of the necessary benefit of technical-scientific research and development, and the hope placed in science as an authority for political problem solving (Sarewitz, 1996).
If policies are to be geared to the public interest, therefore, what is needed is not to replace politics by a technical rationale. What is needed is acknowledgment of the essentially political nature of the decision-making process and support for the actions of the various actors, including those normally excluded from the process, with pertinent information and knowledge. The aim is that such information will provide them with a better grounding on which to defend their interests and the decisions to be made about the challenges of the political agenda (Pellegrini Filho, 2003).
It is crucial to go beyond the linear model and recognize that the production of knowledge is a complex and interactive process involving many public and private actors, as well as researchers and politicians. This process calls for a new form of networked public administration that allows for the systemic integration of activities, such that maximum advantage can be taken of the information, knowledge, and experience of all the actors involved in making and implementing public policy. Universities, private research centers, and NGOs are potential sources of important information for trade policy planning. This leads us to ask: Who produces information about and/or knowledge of trade policy? To what end? And who uses the information?
Uruguayan society has many organizations and institutions that produce information on trade policy. A mapping of those that produce knowledge on trade policy reveals four main kinds of institutions: private research centers, universities (public and private), international organizations, and business chambers. Each of these is engaged in different kinds of activities, in line with their own characteristics and interests, and thus the information they produce is for different readerships (see Table 5.4).
The main private universities, such as ORT, Montevideo University, and the Catholic University of Uruguay, mostly devote themselves to training people in foreign-trade matters. In general, these universities share a training profile for work in international business, mostly for the private sector but also for public service. The courses essentially focus on training in how to undertake foreign-trade operations, international contracting, and other aspects of international business; there is also training in diplomatic management and other issues of public service. Only a few reports or studies are produced, and there are no departments or institutes devoted to research.
Research is concentrated in public universities and private centers. The Economics Department of the Faculty of Social Sciences at the University of the Republic (DE/FCS) has a team of researchers who periodically publish both nationally and in international journals on basic economic disciplines related to international trade and trade policy theory. They are also involved in systematic graduate teaching in these disciplines (international trade theory, trade policy, political economy of trade policy, economic integration, computable general equilibrium models).
Table 5.4 Mapping of Research/Information Capacities
| Research | Advice | Training | Consultancy | Seminars | Public Policy | Promotion | Issues | Publications |
Universities |
|
|
|
|
|
|
|
|
|
Decon-FCS | x |
| x | x | x |
|
| Int. trade theory Trade policy |
|
IECON-FCEA | x |
| x |
| x |
|
| Int. trade theory Trade policy | x |
Law (int. rels.) | x |
| x |
| x |
|
| International relations—law |
|
Montevideo University |
|
| x |
| x |
|
| Trade policy and trade negotiations |
|
ORT | x |
| x |
| x |
|
| Trade policy and trade negotiations |
|
Private Centers |
|
|
|
|
|
|
|
|
|
CINVE | x | x | x | x | x | x | x | Integration, foreign trade, economic and social impacts of trade | x |
FBB |
|
| x |
|
|
|
| Foreign trade |
|
CIEDUR | x | x | x | x | x | x | x | Trade and development—gender | x |
REDES | x |
|
|
| x |
|
| Foreign trade and the environment |
|
FESUR | x | x | x | x | x | x | x | Regional integration andunionism | x |
CLAEH |
|
| x | x | x | x |
| Regional integration | x |
Red MERCOSUR | x | x |
| x | x | x | x | Trade policy in Mercosur | x |
International Organizations |
|
|
|
|
|
|
|
|
|
LAIA | x | x |
|
| x | x | x | Latin American trade and integration | x |
IICA | x | x | x | x | x | x | x | Agricultural trade policy | x |
Source: Prepared by the author on the basis of Uña, Cogliandro, and Labaqui (2004).
Of the private institutes that engage in research, mention should be made of the Center for Economic Research (CINVE), which also has a solid research team in the field and whose work is well-known. The two are part of the Mercosur Research Network, which specializes in economic research on trade policy. It comprises twelve institutions that study these issues from all the Mercosur countries, and includes all those that have done the most research in the field. Also worth mentioning is the role of the Law Faculty in international- and community-trade issues, an area in which it has long been active.
Other private research centers with a long history and much prestige in Uruguay are also prominent in trade policy studies, such as the Friedrich Ebert Foundation (FESUR),27 the Latin American Center on Human Economy (CLAEH),28 the Interdisciplinary Center of Development Studies (CIEDUR),29 and others. Many of these organizations undertake consultancy work for public and international organizations in various fields, and are involved in the design and implementation of public policies. Several of them not only produce technical studies but also train human resources, and thus become referents for foreign-trade expertise. CLAEH currently offers a master’s degree in integration and Mercosur, geared to producing human resources in these issues.
Organizations such as FESUR, REDES, and CIEDUR also provide technical support and human resources to trade unions and other political or pressure groups from civil society. FESUR specializes in union issues, offering technical support to trade unions in Uruguay and the region. For its part, CIEDUR engages in research on trade and development with special emphasis on gender issues. REDES concentrates on environmental matters, very often as they relate to the productive sectors. In general, they are highly active and try to put issues into public discussion by organizing seminars and conferences, through publications, or through some other form of public exposition.
Among the international organizations, in 2004 the IICA set up the Trade Policy and Negotiations Unit (TPNU) to provide advice to countries in improving their capacities to analyze and implement sectoral policies and agricultural trade negotiations. The institute has produced analytical documents and created information networks on the negotiations and the agreements; regional mechanisms for consultation and coordination have been devised; several public officials and private-sector specialists have been given information and been trained. Moreover, offices specializing in trade policy and agricultural negotiations have been set up and strengthened in a significant number of the region’s agriculture ministries. Additionally, LAIA undertakes research and statistical surveys of trade in its member countries, and organizes seminars and other gatherings for public leaders to discuss technical matters of foreign trade.
Despite the multiplicity of centers producing information on trade policy, there is no institutionalized arena for linkage between the private institutions that produce information and the centers of public decision making.
It is important to examine the kind of information on foreign trade produced by business associations, since they are preferentially consulted on the matter. In general, the business associations lack technical staff that produce knowledge or engage in detailed monitoring of trade policy. They do produce information on the productive sector to which they belong, but in some cases the production of information is confined to the statistical collection or systematization of data or the prices of export products (see Table 5.5).
Table 5.5 Mapping of the Information/Research Capacities of Business Associations
| Research | Advice | Training | Consultancy | Seminars | Public Policy | Promotion | Issues | Publications |
CNCS | x | x | x |
| x |
| x | Statistics—reports | x |
CIU | x | x | x |
| x |
| x | Statistics—sectoral reports | x |
ARU | x | x |
| x |
|
| x | Statistics—agricultural reports | x |
UEU |
| x |
|
|
|
|
| Statistics—reports |
|
CMPP | x | x |
|
|
|
|
| Statistics—reports | x |
CUTI | x | x | x | x | x | x | x | Statistics—trade information | x |
Source: Prepared by the author.
In this respect, the Mercantile Chamber of National Products (CMPP) historically has offered technical and market information on various agricultural products, which has boosted the decision-making capacities of exporters. Prominent among the main sectors on which information is provided are: hides, wool, cereals, oilseed products, and so on. For its part, the Uruguayan Chamber of Industry has an Economic Studies Department that produces reports on the country’s foreign trade and its various industrial and agroindustrial sectors. It also has an information service for businesspeople. This aims to provide updated information to all firms that need it in the areas of foreign-trade statistics, tariffs, foreign-trade regulations, and other issues.
The Uruguayan Chamber of Information Technologies (CUTI) has become an organization providing significant support to its members, and it undertakes annual surveys to determine the sector’s structure and needs. It also organizes international business events and helps firms to attend international fairs. It takes significant measures related to international affairs or that affect international competitiveness. Most particularly, firms that have internationalized often face regulatory or other difficulties in foreign markets, and CUTI intervenes to remove obstacles. To that end it produces reports on market access problems. Recently, for example, the main difficulties have been with Mexico and Chile.
As regards the Uruguayan Rural Association (ARU), an important change has been the development of a new IDB-MIF program to support opening and integration into international trade. The program’s goal is to prepare the agricultural sector for different negotiating fora, such as the FTAA, Mercosur, the EU, and other third-country agreements that could promote Mercosur. This program is to be executed in conjunction with other Mercosur business groups and national business associations.
The studies produced by the business associations are basically geared to providing advice to their member firms or sector-specific chambers; they do not serve to support public officials or organizations. Although the business associations are central actors in the country’s economic and trade policy, they have not developed a solid basis of specialized knowledge that allows them to forge closer links with trade negotiators on the basis of discussion and technical support to trade policy decision making. There have been some changes in the CIU and the ARU, however, and the afore-mentioned project augurs well for future developments.
In short, there are many public and private centers of information on foreign trade, but there are no channels within which knowledge can circulate. Many of the information services provided by various institutions are very similar in technical terms, and in many cases they are geared to the same business sector and segment. Additionally, the supply of information is part of the institutions’ strategy of differentiation in an effort to find partners or secure financing, especially in the form of international cooperation. Hence, there is some duplication of programs and services, there being no coordination among the different institutions or efforts to make their work complementary. In the public sector, moreover, there is no proper coordination in the upper or strategic levels to guide work among the institutions, since there is scant tradition of public-private coordination and participation.
The multiplicity of institutions and the range of information on offer cause some confusion among recipients, which are unsure as to which institution and which program or service they should use to meet their support needs. Most of the business associations disseminate their support services to firms through the media. They do this sporadically, and there is no systematic policy on dissemination.
It is apparent that the entrepreneurs themselves have only partial and superficial knowledge of the services that the various public and private organizations provide. In all the sectors examined, the bigger the firms, the greater the knowledge of organizations offering services and their specific programs. Consistent with the foregoing, smaller firms have little or no information on the services that are available. They are only tangentially aware of some institutions and have practically no information on specific programs or their scope.
This inability to link social and governmental institutions weakens the capacity to establish criteria that relate the public organizations’ information and training needs to the services provided by private institutions. In this respect, the state lacks a clear political vision and its leaders lack a vision of the possibility of forging institutional links of knowledge between the state and civil society. Whether it be for ideological, cultural, political, or other reasons, in practice knowledge does not flow properly between those who produce it and those who use it. This situation undermines the development of a foreign-trade policy based on knowledge, and prevents the information from becoming an input to decision making.
Increasingly, the complexity of trade policy poses the need to use knowledge in decision making and to move away from decisions based on personal opinion or taken in reaction to immediate national and international pressures. To that end, it is crucial that the state make efforts to create institutions devoted to the production of knowledge. This could come in various formats, including information systems or centers for policy studies in the government or the universities. The aim would be to foster improvements in policy making, facilitate research, or train public officials.
In the case of foreign-trade policy, strengthening the quality of decision making requires instruments that give order and coherence to the activities that systematize, define, and serve a country’s great political, economic, and social questions. In this regard the foreign service must take a comprehensive approach to the various issues in its field of action. Such issues are related directly to international economics and politics, the environment, investment, government procurement, and so on. These are matters of great importance in the international order, and they must become part of a state policy that brings about the country’s stable international insertion, including new strategies in the areas of trade negotiations and cooperation.
That calls, first, for a strengthening of the strategic referent that allows public organizations to be adapted and updated. That in turn calls for urgent efforts to systematize, prioritize, and develop a strategic vision, so as to ensure that trade policy is consistent with the public good. To those ends, the most senior levels need staff who are thinking about the issues and producing inputs to support that vision, such as a forward-thinking unit that produces the necessary information and knowledge to devise trade policy for the twenty-first century.
Second, the transformation should be accompanied by the modernization of the public administration. This involves setting up an appropriate information system so as to forge links between the making, implementation, monitoring, and control of policies. The absence of such a mechanism hampers the development of assessment and analysis processes that are consistent with the country’s positions in each of the fora in which Uruguay takes part and on each of the issues that it negotiates, as well as in all the stages of trade policy. Many analysts argue that it is crucial to create institutionalized means of coordinating knowledge management in order to identify national interests and goals, rationalize decision making, ensure that public policies are parts of a whole, and legitimate those policies.
Many countries have set up an integrated system of economic-trade relations, and this has proven to be an important means of efficiently managing information from many and diverse sources. There have been significant consequences: (1) facilitating understanding of economic relations; (2) strengthening strategic planning for foreign policy; (3) basing decision making on an overall vision; (4) fostering efficient interministerial coordination; and (5) making the use of information within the government more transparent and democratic.
An integrated information system thus makes it possible to set up a multidimensional and multisectoral database. It also helps build the capacity to convey information within the state, as well as to private organizations and the national public.
Hence, it is a substantial challenge to create a hinge connecting technical and political positions, one that simultaneously diminishes informational inequities by distributing knowledge to groups that have less access. Moreover, greater social participation in trade policy making calls for a break with the traditional methods of devisin
Mexican Free Trade Action Network