Economic integration in the American continent

Economic integration in the American continent

By Gustavo Castro Soto

Really existing capitalism has inherent contradictions that provoke cyclical crises and that span all its dimensions. Its intrinsic logic of capital accumulation and the creation of large monopolies leads it to its own destruction.

The process of economic integration in the American continent

The global framework

Trade integration processes around the world must be viewed in light of the evolution of the capitalist system. We understand by capitalist system to that system with dimensions in the field politician, Social, military Y economic where predominates private property and the capital as an element of production and generator of wealth. Among its theoretical elements is self-interest and freedom of Business to seek the greatest accumulation of capital; from the worker to seek the highest salary; and the consumer to find the best price. The competition it occurs between offers, demands and between both. It is in the logic of the market where the prices of goods and services are supposedly regulated. During history this system has had various Models or ways of being prior to processes of model transition. These models have been the economic liberalism, the welfare state, the neoliberalism and now the model corporation-nation. [1]

However, really existing capitalism has inherent contradictions that provoke cyclical crises and that span all its dimensions. Its intrinsic logic of capital accumulation and the creation of large monopolies leads it to its own destruction. Interestingly, such accumulation of wealth in a few hands has not been thanks to the pure forces of the market but to the support of governments, which has generated greater poverty, hunger, migration, unemployment and other effects that we currently see around the world. Governments have facilitated agreements, treaties, laws, subsidies, fiscal supports and other instruments in favor of large financial and commercial capital.

We are currently facing the application of the Corporation-Nation Model (2000-?) Whose immediate antecedent has been the Neoliberal Model applied for more than thirty years. This corporate model is characterized by generating large monopolies and oligopolies that are merging and operating as an independent nation. This is how the commodification of everything that exists on the planet under private ownership by the large Transnational Corporations begins to coalesce from the 21st century. ( See Table No. 1) Among its characteristics are: monopolization, acquisition and merger between sectors. They have their own labor, salary and health policies over and above the national governments; they maintain diplomatic relations with governments; They have their managers in the government structures in the states where they invest and who look after their interests; they develop their own values, identity, culture, clubs, family associations, symbols and hymns that convey their ways of thinking and living. Ford, Chevrolett, Sony, Carrefour, Mistubishi, Suez, Vivendi, Toyota, Endesa, Unión Fenosa, among others, are some examples of this. They move their capital, supplies, technicians and specialists without obstacles across borders. They have their own security, private police, infrastructure, electric power plants and controlled territory. They elaborate the commercial rules in the Free Trade Agreements (FTA) and form their own international tribunals to defend their interests over the interests of the countries. They have more budget than nations on the planet and guarantee insurance for their investments. They have plagiarized the language of human rights to incorporate them in the defense of their economic interests. They call the control of their merchandise by other governments discrimination, and the blockade of the southern ones "protection of their interests"; they call subsidies to others "unfair competition" while they are increased; they call the impediment of ecologically harmful investments a violation of "investment freedom." With this they are taking over the natural resources strategies from other countries such as oil and other mineral resources, water, gas, wood, biodiversity and genetic material, oxygen, the sea, airspace and land. For them, the role of governments is to look after their interests. (See Table No. 2)

The system circuit

The Capitalist system implements a circuit that accelerates the accumulation of capital in large private monopolies. Latin America and the Caribbean are not exempt from it. This circuit has seven fundamental components:

1) Main Subject (Transnational Corporations and large Financial Capital) who benefits and to whom the accumulation of wealth is directed. In the case of the American continent, the trend of this accumulation is clear. But the goal of wealth accumulation necessarily requires ...

2) Main allies that are the most powerful governments (G-7) [2]. This accumulation cannot be understood without the economic and commercial policies that they implement. For this they use a ...

3) Fundamental instrument that are the International Financial Institutions (IFIs). These are global, continental, regional and national; and in turn multilateral, national or private. 3) This is the pressure and coercion key to generate a ...

4) Mechanism of control and dependency (External Debt). Between 1980 and 2000, the entire so-called "Third World" together with the Eastern European countries paid more than US $ 4 trillion in foreign debt. This equates to more than 6 times the original debt, and today they owe an average of 4 times more. Latin America has already paid almost five times the original external debt. This can force poor countries to implement the ...

worldInternational Monetary Fund (IMF) - World Bank (WB)
Inter-American Development Bank (IDB)African Development Bank (B AfD)Asian Development Bank ( BAsD)European Investment Bank (EIB)Arab Monetary Fund (FMA)
subregional (BMD)North American Development Bank (NADB)East African Development Bank (BDAO)European Bank for Reconstruction and Development (EBRD)Arab Bank for Economic Development (BADE)
Central American Bank for Economic Integration (CABEI)West African Development Bank (BOAD)Nordic Investment Bank (BNI)Islamic Development Bank (BIsD)
Caribbean Development Bank (B C D)Development Bank of South Africa (BDAS)
Andean Development Corporation (CAF)Middle East and North Africa Development Bank (BDMOAN)
Multilateral FundsFinancial Fund for the Development of the La Plata Basin (FONPLATA); International Fund for Agricultural Development (IFAD); Nordic Development Fund (FND); OPEC Fund for International Development, etc.
Bilateral (Export Credit Agencies –ACE’s-)
National (National development banks)
Private (commercial banking)

5) Structural Adjustment Policies (PAE) that guarantee accumulation. Since then, in Latin America and the Caribbean the sale of assets and all kinds of privatizations have been implemented; constitutional modifications; elimination of tariff and non-tariff barriers, among other sectoral measures. However, its implementation occurs around various ...

6) Scenarios of taxation that legalize said exploitation under a correlation of forces favorable to transnational companies. The world stage par excellence for this is the World Trade Organization (WTO). At the continental level there are their own regional processes. In the case of America, there is the Free Trade Area of ​​the Americas (FTAA). However, this economic project is accompanied by a ...

7) Military structure that guarantees it and makes it viable in the absence of a global consensus. For this reason, the North American military bases have increased in the Continent. We have the United States military presence in Guatemala, Cuba, Puerto Rico, El Salvador, Honduras, Brazil, Peru, Ecuador, Colombia, Curaçao and Aruba. It also intends to create three military bases in Argentina.


At the beginning of the 1990s, the countries of Latin America and the Caribbean more rigorously implemented the policies known as the “Washington Consensus”, or false neoliberal development indicators in order to facilitate the economic and commercial integration of the region. These policies were strongly promoted and conditioned by the World Bank, the IMF and the other regional IFIs ( see Table No. 3). However, the expected growth occurred in the concentration of capital, goods and resources in very few hands ( see Table No. 1) and in turn increasing poverty in Latin America and the Caribbean. This supposed "consensus" consisted of:

1) Check the fiscal deficit that it should not exceed between 1% and 2% of the Gross Domestic Product (GDP) to avoid inflation, balance of payments deficit and capital flight. However, no country, even the most developed ones, has achieved fiscal balance based on the decrease in public spending, especially in the social sector, with deterioration in the health, education, social security systems, and so on. In Latin America and the Caribbean it has led to greater poverty and migration.

2) Avoid inflation, central parameter of the economy. However, Wal-Mart can do so thanks to cheaper supplies imported from China. Other transnational companies can do so with cheaper, subsidized inputs or once import quotas and tariffs have been eliminated. This has led to the elimination of production chains on the continent and an increase in unemployment.

3) Priorities in public spending. However, this is more focused on the infrastructure needs of big capital and to the detriment of social welfare. Examples of this are the PPP and IIRSA.

4) Tax reform which implies expanding the tax base and / or the marginal tax rate to the population while granting tax havens, tax exemptions or tax incentives to large transnational corporations for their supposed investment that would supposedly generate jobs. This hurts the poor majority.

5) The Interest rates they must be determined by the market, aimed at encouraging savings and discouraging capital flight. However, this has led to a decrease in credits, investments and an increase in the wealth of financial capital.

6) Exchange rate determined by the market to promote export growth, and maintain a sustainable current account deficit. This favors speculation on the banks' profit.

7) Trade policy that frees imports to favor companies. However, this implies indiscriminate imports, unnecessary or with subsidized prices, which cause the bankruptcy and the closure of the apparatus and the productive chain and increase in unemployment.

8) Promote Foreign Direct Investment (FDI) to attract employment, capital, training and production of goods and services for both the domestic market and for export. However, this has led to an increase in unemployment; privatizations, purchases and / or mergers of companies towards monopoly control of economic branches.

9) Privatize since the private industry is more efficient than the state company and less corrupt. However, this is a short-term source of income for the state. The private initiative is as or as corrupt and inefficient as the State.

10) Deregulate by modifying the national laws of state control. However, it is regulated under international corporate legislation within the framework of free trade agreements and the WTO.

Other false indicators of development in Latin America and the Caribbean:

11) Increase of the index Per capita. However, the wealth concentrated in the big billionaires does not mean that it is distributed among the millions of poor people on the continent. 4)

12) Balance of trade favorable. However, the exports are from the transnationals that have taken over the production plant or the natural resources, and do not leave anything in the country of origin.

13) Gross Domestic Product (GDP) favorable. However, the wealth that is produced in the country is from the North American, European, Japanese and other Asian transnationals. What has already disappeared as an indicator of economic development is the Gross National Product (GNP).


During the 20th century, in the span of 26 years (1948-1994), the General Agreement on Tariffs and Trade (GATT) received 124 notifications of Regional Trade Agreements (RTAs) on merchandise trade. In 1994 the GATT became the World Trade Organization (WTO) of which 191 countries are members (2006). Since the inception of the WTO in 1995, more than 130 additional agreements covering trade in goods or services have been notified. The vast majority of WTO members are party to one or more regional trade agreements.

The increase in the number of RTAs has continued since the early 1990s to gradually integrate the poorest economies into the logic of capital accumulation from which the large Transnational Corporations and financial capital have benefited. As of December 2002, approximately 250 RTAs had been notified to the WTO, of which 130 were notified after 1995. By 2005, more than 170 RTAs entered into force. Another 70 are working although they have not been notified yet. At the beginning of 2006, the total number of agreements would be almost 300.

WTO Members have an obligation to notify the RTAs in which they participate. Almost all WTO Members have notified participation in one or more RTAs (some members are party to twenty or more). Notifications can also refer to the accession of new parties to an existing agreement, for example, the notification of Bulgaria's accession to the Central European Free Trade Agreement. Not all RTAs notified in the past 50 years are still in effect today. Most of them have been replaced by new agreements concluded between the same signatories.

Trade agreements in America

With the birth of the International Monetary Fund (IMF) and the World Bank group (WB) in 1944, the economic and monetary structure of the world was shaped. With the GATT the world trade structure was formed, which would later be transformed into the WTO in 1995. At the political level, the United Nations (UN) was founded and at the military level, the North Atlantic Treaty Organization (NATO) was formed. With this scaffolding the new era of capitalism is shaped. However, in each region of the world the same structural levels, both economic and commercial, political, economic and military are formed. In the case of Latin America and the Caribbean, the Organization of American States (OAS) controlled by the interests of the United States was created in the political sphere. At the financial level, the Inter-American Development Bank (IDB) and the subregional multilateral banks (See Table No. 3).

Starting in the 1960s, commercial integration processes began, which would be consolidated 30 years later. In the 1960s, the Central American Common Market (MERCOMUN), the Río de la Plata Basin Treaty, the Andean Development Corporation (CAF) were born and the Andean Pact was signed. In the following decade, the Caribbean Community (CARICOM), the Caribbean Free Trade Agreement (CARIFTA), the Latin American Energy Organization (OLADE) were born and the Amazon Pact was signed. In the 1980s, the Latin American Integration Association (ALADI), the Organization of Eastern Caribbean States (OECS), the Asia Pacific Economic Cooperation (APEC) were born and the “Washington Consensus” was signed.

The 1990s are decisive for commercial integration in Latin America and the Caribbean, subjugated to the interests of Canada and mainly the United States. The application of the policies of the "Washington Consensus" begins. The Andean Community of Nations (CAN), the Southern Common Market (MERCOSUR) and the main trade agreement in the world: the North American Free Trade Agreement or NAFTA are born. But the United States went for everything and goes further. They propose the formation of the Free Trade Area of ​​the Americas (FTAA), which would be the largest commercial bloc in the world and with the greatest impact on the millions of poor people on the continent, aggravating the situation of unemployment, hunger, misery and loss of sovereignty of nations of Latin America and the Caribbean. It is also the decade in which the Uruguay Round came into force and witnessed the birth of the WTO, which expanded its powers to control trade in the world under the hegemony of the richest transnational companies in the world with the alliance of the richest countries from North. For European countries, the competition for robbery that trade integration would generate was necessary to start the European Union (EU) and compete for trade, goods and resources from Latin America and the Caribbean. (See the chronology in Table No. 5)

Achieving economic integration necessarily implied pacifying the countries in conflict. In the 90's, the supposed peace was signed between the Guatemalan National Revolutionary Unit (URNG) and the government of Guatemala; the first and only betrayed San Andrés agreements are signed between the Zapatista Army of National Liberation (EZLN) and the government of Mexico; the alleged peace is signed between the Farabundo Martí National Liberation Front (FMLN) and the government of El Salvador; and the guerrillas in Nicaragua also enter the political-electoral terrain, leaving behind the path of arms as a means of social change with justice for the poor. In the case of the Caribbean and South America, it was pending that the military governments supported by the United States gave certainty to integration by moving towards other types of political dictatorships. Aristid comes to power in Haiti and Pinochet has already given way to so-called democracy in Chile. It is these supposedly democratic countries and governments who are subjected even more to the logic of structural adjustment imposed by the IMF and the World Bank.

During the 1990s, the WTO negotiations encountered a strong obstacle at its III Summit held in Seattle, United States. For many analysts it is the moment when the world social insurgency today called alterworldist. In these years, the Peoples' Summit and the Continental Social Alliance were born as social scenarios for the fight against the FTAA. Many continental and regional social networks are also born along with the consciousness of the global south.

In the present decade, the world crisis of capitalism worsens at the beginning of the XXI century and the world is preparing to move towards another world system. The indicators of this crisis are economic, political, military, social and environmental: crisis of the supposed democracies at the service of big transnational capital; economic stagnation and stagflation; worsening and widening of poverty, hunger and deaths; accumulation of wealth in few hands; increased mobilizations of global protests and repression; environmental impact with an almost irreversible climate change that makes planetary life and capitalism itself unsustainable.

The confrontation between peoples vs. governments begin to move to the confrontation peoples vs. companies as they begin to take ever greater control of economic, political and social life. They are the large transnational corporations that begin to consolidate their power over infrastructure, land, energy, health, education, water, forests, oil, gas, oxygen, among other strategic natural resources. Thus, the Corporation-Nation model begins its consolidation process, the last step of capitalism.

To the extent that transnational corporations fail to cement their interests in the WTO, they transfer their trench of struggle to their trading blocs. The European Union on its side and the Asians on theirs. The United States then launched the acceleration of the FTAA, which was truncated by the resistance of the increasingly organized and conscious peoples, but also by the support of presidents in defending the interests of the majorities. Hugo Chávez, in Argentina Néstor Kirchner and in Brazil Lula Da Silva come to power in Venezuela who oppose the FTAA along with Fidel Castro in Cuba, himself excluded from said commercial integration, but who from Havana every year calls the Meeting Hemispheric of the Fight against the FTAA. The arrival of the left-wing president Tabaré Vázquez in Uruguay and eventually Andrés Manuel López Obrador in Mexico for the 2006 elections, raise hopes for some sectors of a left-wing opposition on the continent against the commercial integration proposed by the North American administration. To this end, Venezuelan President Hugo Chávez calls for the creation of another integration initiative called ‘Bolivarian Alliance of the Americas’ (ALBA) under the logic of a solidary and fair integration of the peoples of the continent.

Opposition to the FTAA and the difficulty of seeing it carried out provokes another strategy on the part of the United States: the formation of trade agreements by subregional blocks. Thus, with the new millennium, the initiative of the Puebla-Panama Plan (PPP) and the Initiative for the Integration of the Regional Infrastructure of South America (IIRSA) were born. Negotiations for the US Free Trade Agreement with Central America (CAFTA), with MERCOSUR and with the Andean Community begin. However, the same popular struggles, the rejection of some national governments in the region, among other causes, have not succeeded in ensuring that these agreements allow the integration of governments to North American economic interests. Therefore, given the difficulty and slowness of the integration of the subregional economies in the continent with the United States, the George Bush administration has promoted another strategy in parallel: putting together the puzzle piece by piece. That is, to achieve trade agreements bilaterally. The United States strengthens and deepens NAFTA with Mexico through the signing of the Alliance for Security and Economic Prosperity. North America (ASPAN). It also strengthens the commercial agreements with El Salvador, the Dominican Republic, Chile, etc.

The eyes of the European Union and Asia are also on Latin America and the Caribbean, which have accelerated their free trade agreements with the region. (See attached Map) The banking system has been bought by the Spanish banks BBVA and Santander; or by the British banks ScotianBank or HSBC. The water by the Swiss francs Vivendi and Suez; the energy by the French EDF or the Spanish Unión Fenosa, Endesa, Iberdrola, among others. Oil by the Spanish Repsol. These are just a few examples of European investments. On the Asian side we have investments from Sony, Mitsubishi, Toyota, among others.

The trade integration process cannot be understood without the aforementioned increase in militarization. The United States has increased the presence of its military bases and, at the same time, the governments of the region have increased their military spending to contain the lack of consensus on the implementation of economic policies. The possibility that the United States supports or intervenes militarily in countries and / or governments that do not submit to its economic and commercial interests is latent. New coup attempts cast a shadow over the region. Cuba, Argentina and Venezuela are an example. Not in vain, the government of Hugo Chávez has also increased its military spending, which makes it possible to foresee future war conflicts in the region.

In the end, those who win in this whole process are the large transnational corporations and those who lose are the millions of increasingly poor poor in Latin America and the Caribbean who, at the same time, see awakening processes of hope, struggle, resistance and awareness of that another world is possible.

1944 The IMF and the World Bank are born
1945 Harry S Truman; End of World War I; Marshall Plan
1946 Organizes assassination of Pte. Gualberto Villarroel (Bolivia);
John Keynes dies
1948 The OAS, the GATT are born and the
Universal Declaration of Human Rights.
1949 NATO is born
1950 Intervenes in Puerto Rico
1953 Dwight D. Eisenhower
1954 CIA supports the fall of President Arbenz (Guatemala) and the military dictatorship
Alfredo Stroessner (-'89) in Paraguay; Suicide of Pte. Getulio Vargas (Brazil)
1955 Collaborates with the fall of President Juan Domingo Perón (Argentina)
1958 Occupies Panama
1959 The IDB and the idea of ​​the European Union are born.
1960 The OECD and CABEI are born

1961 John F. Kennedy; organizes invasion of Cuba

1961 MERCOMUN (Central American Common Market) is born 5:
Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua.

1963 Lyndon B. Johnson; invades Dominican Republic
1964 Kills opponents in Panama; supports fall Pte. Joao
Goulart (Brazil); overthrows Govt. from Guyana

1965 Invades Dominican Republic

1965 The Latin American Parliament is born

1966 Invasion of Guatemala
1967 Treaty of the Río de la Plata Basin
1968 CAF is born

1969 Richard M. Nixon

1969 Signature of the Andean Pact

1970 World External Debt Crisis; Nixon: "now we are all Keynesians
1971 Support in Bolivia: Hugo Banzer's military dictatorship (-'78); Haiti: Jean-Claude Duvalier military dictatorship (-'86)

1973 CIA supports the fall of President Salvador Allende (Chile); Chile
military dictatorship Augusto Pinochet (-'90); Uruguay dictatorship. military (-'84)

1973 CARICOM, CARIFTA and OLADE are born
CARICOM (Caribbean Community) 15: Antigua and Barbuda, Bahamas, Barbados, Belize, Dominica, Grenada, Guyana, Haiti, Jamaica, Montserrat, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Suriname, Trinidad and Tobago.

1974 Gerald R. Ford
1975 organizes the fall of Pte. Juan Velasco (Peru); the G-7 is born
1976 Support in Argentina: Jorge Videla military dictatorship (-'83);
Milton Friedman Nobel Prize in Economics, Chicago School
1977 Jimmy Carter

1978 Terrorism vs. Sandinistas in Nicaragua (-1989); supports in Guatemala:
military dictatorship Fernando Romeo Lucas García (-'82)

1978 Signature of the Amazon Pact

1980 Counterinsurgency war in El Salvador

1980 ALADI ALADI (Latin American Integration Association) is born 12: Argentina, Bolivia, Brazil, Chile, Colombia, Cuba, Ecuador, Mexico, Paraguay, Peru, Uruguay, Venezuela.

1981 Ronald W. Reagan; assassin Gral. Omar Torrijos, Panama

1981 OECS (Organization of Eastern Caribbean States) is born 9: Anguilla, Antigua and Barbuda, British Virgin Islands, Dominica, Grenada, Montserrat, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines.

1982 Support England takes Falkland Islands
1983 Invades Granada; Border troops in Honduras

1989 George Bush; invades Panama

1989 APEC is born and the "Washington Consensus" is signed

1991 MERCOSUR (Southern Common Market) is born 4: Argentina, Brazil, Paraguay, Uruguay.
1993 William J. Clinton

1994 Occupies Haiti

1994 NAPHTHA enters into force; Uruguay Round; the WTO;
I Summit of the Americas ( AUK) in Miami (Free Trade Area of ​​the Americas) 34:

Antigua and Barbuda, Argentina, Bahamas, Barbados, Belize, Bolivia, Brazil, Canada, Chile, Colombia, Costa Rica, Dominica, Ecuador, El Salvador, United States of America, Grenada, Guatemala, Guyana, Haiti, Honduras, Jamaica, Mexico , Nicaragua, Panama, Paraguay, Peru, Dominican Republic, Saint

Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Suriname, Trinidad and Tobago, Uruguay, Venezuela
NAFTA (North American Free Trade Agreement).

1995 WTO and EU enter into force
1996 The CAN (Andean Community of Nations) is born 5: Bolivia, Colombia, Ecuador, Peru, Venezuela; I WTO Singapore; signed by Paz URNG-Gob. Guatemala; Agreements of S. Andrés EZLN-Gob. Mexico.
1998 II WTO Geneva; II Summit of the Americas (FTAA) Santiago and
I of the Peoples; Continental Social Alliance

1999 Plan Colombia

1999 III WTO Seattle; I Enc. COMPA (n.); Global Action of the Peoples; Hugo Chavez President Venezuela

2000 Signature of the TLCUE

2001 George W. Bush

2001 IV WTO Doha; III Summit of the Americas (FTAA) Québec and II of the Peoples; the PPP is born.

2003 V WTO Cancun; Luiz Inacio Lula Da Silva Pte. Brazil; Nestor Kirchner Pte. Argentina

2004 Occupies Haiti

2004 ALBA (Hugo Chávez) is born; Tabaré Vazquez Pte. Uruguay

2005 VI Hong Kong WTO; CAFTA (negotiations);

IV Summit of the Americas (FTAA) Mar de Plata and III of the Peoples; ASPAN ASPAN (Alliance for Security and Economic Prosperity of North America 3: Canada, Mexico, United States of North America) is signed


[1] For an analysis of the model transitions, see Bulletin “Chiapas al Día” No. 463, “Proyecto Corporación-Nación vs. Nation-State Project, April 27, 2005,

[2] The Group of Seven was founded in 1975, a context in which the neoliberal model application began. It is made up of the countries of the United States, England, France, Germany, Japan, Canada and Italy. They are defined as the most industrialized countries in the world. In turn, they jointly contribute the highest percentage of investments in the IFIs and therefore control the vote and the economic policies of the borrowing countries.

* Gustavo Castro Soto

Video: Regional Economic Intergration (May 2021).