I was privileged to have delivered a paper at that conference, a preliminary version of which I have included below.
ALBA AND FREE TRADE IN THE AMERICAS
Larry Catá Backer 1
Augusto I. Molina 2
Abstract: ALBA (Alternativa Bolivariana para los Pueblos de Nuestra América), the command economy alternative to the free trade model of globalization, is one of the greatest and least understood contributions of Cuba to the current conversation about globalization and economic harmonization. Originally conceived as a means for forging a unified front against the United States by Cuba and Venezuela, the organization now includes Nicaragua, Honduras, Dominica, and Bolivia. ALBA is grounded in the notion that globalization cannot be left to the private sector but must be overseen by the state in order to maximize the welfare of its citizens. The purpose of this paper is to carefully examine ALBA as both a system of free trade and as a nexus point for legal and political resistance to economic globalization and legal internationalism sponsored by developed states. The paper starts with an examination of ALBA’s ideology and institutionalization. It then examines ALBA as both trade organization and as political vehicle for confronting the power of developed states in the trade context within which it operates. ALBA remains embedded in a large web of trade arrangements among its member states that bind them in different ways under different arrangements. That context highlights differences, especially in relation to MERCOSUR and the abandoned FTAA. It also produces both cooperation and challenge. This is most acutely felt in ALBA’s relationships with CARICOM and in the rising network of bilateral investment treaties among regional states. Taken together, for the moment, at least, ALBA’s greatest contribution might well be its ideology. Its mere existence serves as a basis for challenging assumptions in the creation and implementation of methods of integration. It provides a base through which this distinctive ideological voice can be leveraged by its state parties in Hemispheric integration debates. It seeks to balance the tensions between post colonial nationalism, internationalism and state sector dominance by substituting for private markets and private actors, state actors and tightly controlled markets. It is no longer focused on eliminating borders for the production and management of private capital; instead it is focused on using borders as a site for the assertion of public authority to control all aspects of social, political, cultural, and economic activity. It is not focused so much on eliminating borders for the production and management of private capital as it is on using borders as a site for the assertion of public authority to control all aspects of social, political, cultural, and economic activity. Understood as an ideological joint venture among its participants, ALBA represents a space within which a consensus on alternatives to the existing preeminent economic model of globalization might be constructed. As such, it may represent one of Cuba’s greatest triumphs and also its greatest challenge to the normative tenets of the current framework of economic globalization. Those contextualized, ALBA serves as a nexus for six great points of tension and connection within both modern trade theory practice and the construction of state system frameworks in Latin America, tensions which are summarized in the conclusion.
II. What ids ALBA?
1. Modern Bolivarism (From Castro to ALBA)
2. From Internationalism to ALBA.
B. Conceptual and Institutional Basis: Structure and Ideology of ALBA
1. The ideology of ALBA
2. Ideological Praxis
C. Institutionalizing and Implementing ALBA; Ideology in Action
1. The Institutional Organization of ALBA
2. Implementation—Economic Agenda
3. Implementation—Social Agenda
III. ALBA Within the Web of Trade and Investment Arrangements in Latin America.
A. Regional Trade Arrangements.
B. ALBA and Trade Networks in the Caribbean—the CARICOM Connection.
C. ALBA in a Region of Bilateral Investment Treaties (BITS) and Partial Preference Trade Agreements.
D. So What Makes ALBA Different?
1. Differences in Theory.
2. Differences in Organizational Operaiton
3. Do the Differences Matter?
IV. Conclusion: Tensions and Connections
ALBA (Alternativa Bolivariana para los Pueblos de Nuestra América), the command economy alternative to the free trade model of globalization (Garcia 2003), is one of the greatest and least understood contributions of Cuba to the current conversation about globalization and economic harmonization. (Bossi 2004) Originally conceived as a means for forging a unified front against the United States by Cuba and Venezuela (Bossi 2004), ALBA has grown to include Nicaragua, Honduras (ALBA, Declaracion de Adhesion de la Republica de Honduras 2008), and Bolivia. (ALBA, Contribusion, y suscripcion de la Republica de Bolivia 2004). It has also grown to include a number of Caribbean states, including Dominica in 2008 (ALBA, Adhesion del gobierno de la Mancomunidad de Dominica 2008), and St. Vincent and the Grenadines in 2009. (St. Vincent to Join ALBA 2009). It has the support of other states, including Ecuador (ALBA Firma de Convenios 2007; Castañeda 2006), and Haiti. (V Cumbre del ALBA 2007). ALBA is meant to provide an alternative to the conventional trade model of privatization and globalization that are assumed to be bad for people, especially for those who live in developing states. (Backer 2006).
ALBA is critically grounded on the idea that internationalization must be effected through states and public action rather than individuals and private markets. ALBA is not necessarily opposed to all private activity, just those activities that have become liberated from precise control by the state. ALBA is thus founded on the notion that traditional divisions between public and private sectors remains valuable and important, and that certain sectors, traditionally overseen by the state as agent for territorially based communities, are essential for the maximization of the welfare of people organized into states. (Bossi 2004). To this is added a fundamental distrust of private markets—markets that are not strictly controlled and managed by the state. (ALBA Fifth Extraordinary Summit 2009). In a sense ALBA is compelling for those who control the apparatus of states now overwhelmed by new sorts of governance power--private, multinational and governance based. Equally important, ALBA now serves as a means of aggregating and institutionalizing responses to and challenges of American power in the Western Hemisphere. 3 ALBA also institutionalizes opposition to the current framework of economic globalization and attempts to challenge the hegemony of the current framework for constituting trade among states (Backer 2006a)—grounded in private economic activity and a passive state regulatory role. This describes, in general terms, the so called "Washington consensus--a consensus between the IMF, the World Bank and the U.S. Treasury about the 'right' policies for developing countries" on which much current global trading frameworks are based. (Stiglitz 2003, 16). "According to the Washington Consensus, growth occurs through liberalization, 'freeing up' markets. Privatization, liberalization, and macrostability are supposed to create a climate to attract investment, including from abroad. This investment creates growth." (Id., at 67; Mussa 2000).
There is little consensus on the nature and value of ALBA, even within the Western Hemispheric community of public and private actors. Some view ALBA as a great threat to the current economic order and the political order of states. Most prominent among these is the United States.
The gradual consolidation of democracy remained the dominant trend over the last year in Latin America, but a small group of radical populist governments continues to project a competing vision that appeals to many of the region’s poor. Indeed, the persistence of high levels of poverty and striking income inequalities will continue to create a potentially receptive audience for radical populism’s message, especially in the less developed areas of Latin America.Others view ALBA as little more than an ideologically curious variation on the large number of partial preference free trade agreements that have proliferated in Latin America since the 1980s under the Asociación Latinoamericana de Integración (ALADI) framework, described below at Section II. The representative of Venezuela to ALADI, in 2004, emphasized this view of ALADI as a forum within which distinct measures for integration could find a space for debate and incorporation. (ALADI, Incorporación al Comité de Representantes de la señora Embajadora María Lourdes Urbaneja Durant 2004).4 Still others have suggested that there is little, either institutionally or programmatically that distinguishes ALBA from the machinations of the nation states that comprise its various disconnected programs. (Girvan 2008). ALBA member states, of course, view the enterprise as the greatest innovation in hemispheric integration since the Soviet Revolution of 1917 by combining European Marxism, Latin American nationalist anti-colonialism and the vision of integration that has haunted Latin America since the 19th century wars of liberation. “Ricardo Alarcón, president of Cuba’s national assembly, has called ALBA the best guarantee for the consolidation of an anti-imperialist front. Addressing an international forum in Caracas January 25, Alarcón asked, why waste time in looking for answers “in the air,” since ALBA ‘is the answer.’” (Johnson 2006; also Mattei 2005).
Inspired and supported by Venezuela and Cuba, leaders in Bolivia, Nicaragua, and—more tentatively—in Ecuador are pursuing agendas that undercut checks and balances on presidential power, seek lengthy presidential terms, weaken media and civil liberties, and emphasize economic nationalism at the expense of market-based approaches. Moreover, each of these governments, to varying degrees, has engaged in sharply anti-US rhetoric, aligned with Venezuela and Cuba. . . and advocated measures that directly clash with US initiatives. (United States Senate Armed Services Committee 2008).
There is a little bit of truth in each of these views. The purpose of this paper is to carefully examine ALBA as both a system of free trade and as a nexus point for legal and political resistance to economic globalization and legal internationalism sponsored by developed states. Following this Introduction, an examination of ALBA is undertaken, focusing on its history, and its conceptual basis and institutionalization. The essay considers the importance of the evolution of Bolivarism in the globalist ideology of Fidel Castro and its contribution to the governing ideology of ALBA, and its strongly anti-capitalist foundations. It then considers the way in which this governing ideology is institutionalized within ALBA. From the organization of its institutions, the essay turns to implementation, considering the way in which ALBA worked so far, especially in its economic context. The paper then examines the work of ALBA to date, both as trade organization and as political vehicle for confronting the power of developed states, and especially that of the United States.
Part III of the essay then contextualizes ALBA within the dense network of trade and investment treaties that mark the realities of economic relations between Latin American states. The object is twofold, first to examine the extent that ALBA in form represents something new, and second to suggest the extent to which ALBA in fact provides something different in a field with many players. For that purpose, this section first contextualizes ALBA within conventional trade association organization and operation. That examination reveals organizational differences beyond the ideological differences that mark ALBA as distinct from conventional trade associations. However, ALBA’s difference, it heavy emphasis on intergovernmentalism and its avoidance of supra national organization, is only a more extreme form of the tendencies toward intergovernmentalism that mark conventional trade arrangements in Latin America. Yet differences do produce cooperation and challenge. This is most acutely felt in ALBA’s relationships with CARICOM,5 which is examined next. Lastly, ALBA is considered within the networks of bilateral trade agreements and partial preference trade agreements that mark the landscape of Latin American trade relations. (Infra Section I.C).
ALBA presents an ideological and functional alternative and challenge to transnational institutions built on the operating assumptions of economic globalization, and the developing convergence of public and private law. Originally it was viewed as interesting but benign. “ALBA, a proposed alternative to the controversial U.S. sponsored Free Trade Area of the Americas (FTAA), presents a socialist vision for regional commercial cooperation, although at this point its value is largely political, symbolic and somewhat short on economic specifics.” (Council on Hemispheric Affairs 2006). The Free Trade Area of the Americas (FTAA) or the Área de Libre Comercio de las Américas (ALCA) (discussed infra Section III.A) represents a long drawn out and still unsuccessful effort to create a hemisphere wide plan for economic integration in which barriers to trade and investment would be gradually eliminated. Negotiations were formally launched in 1998 and remain incomplete. (Free Trade Area of the Americas, About the FTAA; Free Trade Area of the Americas, Third Draft Agreement 2003).
Today, the institution of a number of programs targeted to aiding particularly poor states and regions has begun to have effects beyond the symbolic. (ALBA Seen as Avenue to Economic Aid for Small CARICOM States, 2009 ((arguing that the accession of Dominica, a CARICOM member, to ALBA as a means of gaining economic aid under conditions less rigorous than available from other sources, including the International Monetary Fund)). And its potential to provide a public sector variant on private sector globalization should not be underestimated. It is no longer focused on eliminating borders for the production and management of private capital; instead it is focused on using borders as a site for the assertion of public authority to control all aspects of social, political, cultural, and economic activity. Yet it is also deeply embedded in the great web of partial economic associations that characterize economic governance in Latin America. ALBA focuses on changing the terms of debate about trade, the role of states, and the place of private economic activity across borders. In this respect, certainly, ALBA may represent one of Cuba’s greatest triumphs and also its greatest challenge to the normative tenets of the current framework of economic globalization. But the framework within which ALBA can grow also sets the limits of its influence. It is not clear that within a deep system of webs of relationships, one variant—a decidedly socialist and state centered one—will change not merely the framework of discussion about trade but also the economic philosophy of more than a few states in Latin America.
II. WHAT IS ALBA?
ALBA is an alternative approach to economic, social, cultural and political integration that aims to foster trade, development and unity among the nations of Latin America and the Caribbean on the basis of a set of principles distinct from those underlying conventional integration efforts. (Venezuela, Ministerio de Comunicación e Información de la Republica Bolivariana de Venezuela, Sobre el ALBA 2006). To the authors of ALBA, traditional agreements, such as the FTAA, have focused on the interests of transnational corporations and capital without taking into account the social and economic needs of the people of Latin America. For example, “At a recent luncheon, outgoing Venezuelan Ambassador Christy Gonzalez stated that she believed the FTAA formula was oppressive for smaller economies, while ALBA or Bolivarian Alternative for Latin America and the Caribbean was a more favourable initiative for countries in the region. “ALBA represents the first attempt at regional integration based on solidarity, non-interference and complementing, instead of competing,” she said.” (FTAA v. ALBA 2009).
In contrast, ALBA focuses its emphasis on eliminating the social and economic disparities that exist among Latin American nations, by creating mechanisms that use cooperative advantage(s) that a nation may possess, as a tool to compensate existing disparities within other nations in the region. (Venezuela, Ministerio de Comunicación e Información de la Republica Bolivariana de Venezuela, Sobre el ALBA 2006). “By employing more effective mechanisms to eradicate poverty, ALBA—as proposed by the Venezuelan government—provides a counterweight to the policies and goals of the FTAA. This alternative model also identifies the most crucial impediments to achieve a genuine regional integration that transcends the prerogatives of the transnational corporations.” (Amigos de Cuba n.d.). ALBA’s primary emphasis is to create a sub-regional bloc built on a number of strategic agreements grounded in the founding ideology of ALBA—socialist and public law oriented—for the betterment of the peoples in the members states and to serve as protection against other states or economic blocs. 6 The challenge is to provide a space for unified action that can help smaller states resist the conventional private enterprise oriented systems represented by conventional trade and integration agreements. 7
This Section first examines the history of ALBA in its regional and ideological context. It starts with the long efforts to find methods of integration in a climate in which nationalism is privileged. It then briefly describes the genesis of ALBA as an organizational reality form out of ideological opposition to market oriented globalization.
The history of ALBA is in essence a continuation of the history of integration in Latin America. This is a history of tensions and interventions. Integration pits the post colonial project of state building against the an internationalist project that aims to reduce the sovereign authority of states, both against each other and in their relations with private power. Integration can also serve as a proxy for strong state interventions under the cover of private markets internationalism and in this way also subvert the post colonial projects of national liberation. But it can also serve to liberate individuals from the oppression of cliques and ideologies that hijack the apparatus of states by posing supra national norms against narrow assertions of state power. This section will begin by exploring in greater detail the conflation of these tendencies, focusing on the role of Cuba generally and Fidel Castro specifically, in the construction of a novel form of sovereign internationalism, producing ALBA. It then briefly explores the efforts that ultimately produced ALBA itself.
1. Modern Bolivarism; From Conventional Integrationo to ALBA). The integration of Latin America and the Caribbean is not a novel idea. This goal, and the ideals guiding it, traces its roots to Simon Bolívar’s vision for the newly freed states that had fought for their independence from Spanish rule in the first quarter of the nineteenth century. The expression of these ideas can be found in his “Letter from Jamaica.” (Bolivar 1978 (1815)). The desire of ALBA, to integrate Latin America independent of colonial or neo-colonial powers, is an attempt to make Simon Bolívar’s dream of a united confederation of American states a reality. (Bossi 2005). This is a sentiment that was also echoed in the writings of Jose Martí. (Martí 1891). It is the antithesis and response to the Monroe Doctrine, and presents an age-old confrontation between the people of Latin American and imperialism. (Venezuela, Ministerio de Comunicación e Información de la Republica Bolivariana de Venezuela, Sobre el ALBA (“…el ALBA responde a una vieja y permanente confrontacion entre los pueblos latinoamericanos caribeños y el imperialismo. Monroismo versus Bolivarianismo, tal vez sea la major manera de plantear los proyectos en pugna.”)). Bolivar’s vision was abandoned in the south but was cemented in the north and led to the strengthening and rise of the union of states that became the United States. (Correa 2005). ALBA, then, is meant to ally like-minded states committed to promoting their sense of the Bolivarian ideals.
Modern regional integration in Latin America is commonly traced to the period immediately after the Second World War and the work of the United Nations Commission for Latin America. (United Nations Economic Commission for Latin Americ 1950). By 1960 the work of integration produced the Latin American Free Trade Association (LAFTA), which had as its objective the elimination of duties between states. (Treaty Establishing a Free Trade Area and Instituting the Latin American Free Trade Association, Feb. 18, 1960). Other efforts followed. The Latin American Parliament (PARLATINO), created in 1964, acknowledged from its inception the need for regional integration as indispensable for ensuring the freedom and development of Latin American nations. (Parlamentao Latinoamericano, El Parlamento Latinoamericano y la Comunidad Latinoamericana de Naciones 1999). This desire for integration was again manifested in 1987, when a new international treaty was signed by eighteen Latin American nations committed to achieving the goals laid out in the original PARLATINO founding document. (Parlamento Latinoamericano, Tratado de Institucionalización del Parlamento Latinoamericano 1987). Its object was the eventual Community of Latin American Nations (CLAN). (Parlamentao Latinoamericano, El Parlamento Latinoamericano y la Comunidad Latinoamericana de Naciones 1999). The PARLATINO has been restructured in its functions and political application, with the hopes of having it play a central role in aiding the creation of a strategy for regional integration. (Celli 1978).
With regional integration very much on the agendas of most Latin American states for much of their modern history, it is no surprise that a number of supra national institutions have been created to attempt to effect integration of one kind or another. But all of them are iterations of the standard model of regional trade association. (Frankel 1997, 1-17; Chase 2005) Chase suggests that private enterprises will seek to encourage trading blocs to maximize their economic interests, from gaining economies of scale to moving stages of production abroad, and consequently regional trading arrangements tend to promote liberalization rather than either state intervention or protectionism. (Chase 2005). There are various Latin American and Caribbean organizations that have sought to promote the solidarity and unity that ALBA wishes to achieve. ALBA, in this manner, can be seen as another mechanism through which the attempts can be solidified into an action plan actively taking steps to make the aspirations of unification a reality.
As noted, the idea of a unified Latin America is not novel. Nor is the institution of integration in Latin America linear. It is a thick process in which many smaller efforts at partial integration are considered parts of what will eventually produce an integrated economic area within Latin America. Complexity and multiplicity of arrangements and institutions, then, are the order of the day. But that complexity and thickness is also marked by a profound sameness. What distinguishes most partial integration efforts have been the details- ALBA attempts to add a very different flavor to the patchwork of arrangements that in the aggregate will define Latin American integration.
Part of the opposition to the traditional trade and investment agreements, like what would become the FTAA proposal of the 1990s, was grounded in a well developed world view that sought to synthesize strong elements of Soviet style Marxist-Leninist theory, post colonial theories, especially those coming out of African liberation movements, nineteenth century ethno nationalism, and 2th century socialist internationalism. Basic to these idea was the positing of the great oppositional forces of the state, as a representative of popular will, and transnational corporations, as representatives of private uncontrolled economic power inimical to the interests individuals, states and society. (Venezuela, Ministerio de Comunicación e Información de la Republica Bolivariana de Venezuela, Sobre el ALBA, at 5). To the promoters of ALBA, the neoliberal view of granting access to markets through the elimination of tariffs or regulation of commerce and foreign investment has predominantly served the interests of large and developed nations. (Venezuela, Ministerio de Comunicación e Información de la Republica Bolivariana de Venezuela, Sobre el ALBA, “E[l] libre comercio entendido en estos terminus solo beneficia a los paises de mayor grado de industrializacion y desarollo.”). Numerous scientific studies can attest to the fact that the application of current globalization practices, such as the FTAA, have not and will not produce a desired level of development that can guarantee a greater quality of life and living for the people of developing nations. (Id. “De hecho, abundan los estudios cientificos en los que se demuestra de manera irrefutable que la aplicacion de las pautas actuales de la globalizacion y sus expresiones hemisfericas o regionales ha dado al traste con las aspiraciones de un verdadero desarollo endogeno en cualquiera de los paises del continente.”).
Agreements like the FTAA would be beneficial to both sides if they brought similar bargaining power to the negotiations. However, when the bargaining power is one sided, as in the case of the FTAA, the negotiations fail to consider the disparity and in some instances even impose a double standard. This is particularly true when it comes to state assistance in the area of agriculture. (Id., at 9-11). In addition to trying to correct the disparities and unfair practices, the governing principles of ALBA place the focus of fighting poverty and social exclusion above those of expanded free trade and commerce. (Id., at 20-21). This is an important step in the greater goal ALBA has of integrating and uniting the people and nations of Latin America. (Id., at 21). To achieve this goal, the root causes preventing this integration must be addressed, they include: a) poverty that affects a majority of the population; b) huge inequalities and asymmetries that exist between the countries; c) unequal exchange and conditions that exists in international relations; d) the burden of an unpayable debt and; e) the imposition of structural adjustment policies by the IMF and WB or the rigid rules imposed by the WTO which erode the social and political bases of support. (Id.).
The burden of an unpayable debt and the imposition of structural policies upon sovereign states as a contributing factor to the poverty that affects Latin America and third world countries in general are not novel. Fidel Castro also publicly denounced these same concepts during his address to the United Nations General assembly in 1979. (Castro 1979). In the speech, Castro laid out critical points that now form central guiding principles in the formation of ALBA. As a precursor to ALBA, Castro cited a need to change the current system of international relations, which he labeled as being plagued with inequality, injustice and oppression. 8 In addition Castro called for mutual respect for the sovereignty of nations, as well as their right to end any form of foreign occupation and their right to decide what their social, political and economic orientation should be. 9 In Castro’s view, peaceful coexistence can only be achieved if this principle of respect for the rights of others is respected. Id.).
Furthermore, only by eliminating the constant threat posed by international financial institutions through economic or financial impositions, or the controlling of their natural resources by foreign companies, will the people truly be able to call themselves independent, sovereign and free. 10 The concepts that Castro made reference to, with regards to the meddling of foreign powers in the domestic affairs of third world countries in general, and Latin American nations in particular, have found a new impetus within the ideological foundations of ALBA.
Castro reiterated similar concerns about the strangling effects the foreign debt has on small, impoverished countries in his address to the IV Congress of the Latin American Journalists’ Federation. (Castro 1985). Castro called for all third-world countries to stand united in calling for an end to the continued demand that the debt be repaid, and for a reordering of the international economic world order to counter what he deems a world filled with avarice, egoism and insatiable desires. (Id.). Castro went on to call for the economic integration of Latin American countries as a necessary step for the development of the region, citing that even England, the birthplace of industrialization, found it necessary to become part of the European Common Market in order to continue its development. (Id.).
Castro, as a precursor to ALBA, believes that Latin American unity can only occur through the education and participation of the masses in the process. (Id.). Castro also attempts to draw parallels between the economic struggles of Latin American and the need to create a more peaceful new world order. (Castro 1985). He emphasizes how the interest generated from the loans of third-world countries, money that could be used to feed, medicate or shelter their people, is instead paid to, and used by, developed nations to invest in weapons and military build-ups. (Id.). Furthermore, the unequal international economic order continues to add to the debt total and, rather than do something to curtail it, international finance organizations and private banks increase their interest rates while decreasing the loan payment periods. (Castro 1985). These actions result in a coercive system that allows these organizations to continue obtaining economic and political advantages at the expense of Latin American nations. (Id.).
2. From Internationalism to ALBA. The idea for ALBA first appeared in 2001 proposals advanced by Hugo Chavez in response to the F.T.A.A. (ALBA, Conceptualizacion de proyecto y empresa grannacional en el marco del ALBA 2008). It was developed in a series of speeches, and dialogues among Cuba and Venezuela. (Id.). The idea was to reconstruct and reapply the ideals represented by Bolivar, as understood by the leaders of Cuba and Venezuela. (Bossi 2005). The original signatory nations, Cuba and Venezuela, also symbolically represent the home nations of José Martí and Simon Bolivar respectively. The ideas and calls for unity in achieving reformation advanced by Castro were given new impetus after the election of Hugo Chavez in Venezuela. During an address given in Venezuela to commemorate the 40th anniversary of the Cuban revolution, Castro again mentioned the need for Latin Americans to work together to achieve cooperation, integration and unity in order to survive in a world where regional and sub-regional blocs have become the norm. (Castro 1999). Castro also points to the disastrous consequences that have resulted when the neo-liberal policies of the IMF are applied to any country, calling their help a “kiss from the devil.” (Id., at 23). For Castro, it is not globalization per se that is the problem, but rather the ideology that is the current driving force behind it. (Id., at 24). Under the current system, countries with varying degrees of development and needs are all treated with the same fix-all formulas that serve to benefit the wealthy and powerful such as the IMF and WTO. (Id., at 25).
Thus, according to Castro, the need for Latin America to join forces in creating a regional entity, with a shared culture and language, is indispensable in order to prevent their division through mechanisms such as the FTAA. (Id., at 33-34). Latin American nations need to unite in order to have enough strength to prevent the loss of their independence and annexation by the U.S. (Id., at 34). Citing statistics provided by the Central Bank of Venezuela, Castro used examples to demonstrate how the economic output and outlook of Venezuela continued to decline despite being the nation with the most natural resources in America. (Id., at 38-40). However, Castro sees a resurgence of hope and opportunity, not only in Venezuela, but in Latin Americans and other people around the world, that the world will move forward towards a globalization for all; there are no alternatives and no way around it. (Id., at 40-41). What was to become ALBA emerged from the notion that something different was needed from the trade associations and trade structuring that had been created before, both as an oppositional force to market based globalization and as a site for aggregating state opposition to the United States. ALBA, in this sense, was to serve as a concrete step toward the elaboration of a public and public economics regime. It was to elaborate a socialist vision of globalization as a successor to the now no longer fashionable socialist internationalism of the fist half of the 20th Century. (Backer 2006a).
The first concrete steps taken to create ALBA as an instrument to achieve the dreams of Bolivar and Marti, as interpreted and refashioned by Caribbean leaders in the late 20th century, occurred after Hugo Chavez’s success in the 2004 Venezuelan referendum. (ALBA, Acuerdo entre el presidente de la Republica Bolivarina de Venezuela y el presidente del consejo de estado de Cuba 2004). After initial meetings ALBA emerged from out of a bilateral agreement between Cuba and Venezuela, entered into December 14, 2004. (Id.). This agreement was to structure the relation between the two states on principles of solidarity and the exchange of goods and services, at the state to state level, in a manner mutually beneficial to the parties. 11 This produced a formal agreement was executed at a ceremony held on December 14, 2004 at Havana, Cuba. (Id.). The original agreement called for solidarity among the nations as well as for the exchange of goods and services in a manner that maximizes the economic and social benefits to each nation. (Id., art. 2). The agreement also called on the parties to develop a strategic plan under which the most beneficial and complimentary production base can be established taking into account existing industrial advantages, the preservation of resources, increase in employment positions, and access to markets. (Id., art. 3). The document committed the parties to make a concerted effort to eliminate illiteracy in third world nations (Id., art. 5), investments that are mutually beneficial (id., art. 6), and the establishment of a reciprocal credit system. (Id., art. 7). The parties also commit to establish joint cultural exchanges that take into account the respective differences between the people of each nation. (Id., art. 10). Of note are articles 11 and 12, in which consideration is given to the asymmetrical social, economic, juridical and political positions of each nation and how, given these asymmetries, steps were to be taken to ensure that integration and mutual cooperation can indeed be achieved. (Id., arts. 11, 12).
The application of the initial steps toward program implementation were described. Cuba, for its part agreed to eliminate all tariffs with respect to Venezuelan goods; to not tax any investments made by the Venezuelan government within Cuba; to grant all Venezuelan marine and air vessels the same treatment as if they were Cuban vessels; to offer 2,000 scholarships for Venezuelan students to study science related careers in Cuba; to offer the services of over 15,000 medical professionals to carry out health related missions within Venezuela; and an educational exchange program. (Id., art. 12 & propuestos). Venezuela, for its part, agreed to exchange technological information in the area of energy production; offered as many scholarships as are needed to Cuban students in the area of energy production; to also agreed not to tax any investments made by the Cuban government within Venezuela; to help finance infrastructure projects within Cuba; to grant all Cuban marine and air vessels the same treatment as if they were Venezuelan vessels; and puts all Venezuelan vessels and infrastructure equipment at the service of Cuba to assist in the social and economic development of Cuba. (Id.).
The first report of the steps toward implementation was described in the Spring of 2005. (ALBA, Declaracion final de la primera reunion Cuba-Venezuela para la aplicacion de la Alternativa Bolivariana para las Americas, 2005). A variety of additional bilateral accords and joint endeavors were concluded and the ideological basis of the organization confirmed. (Id.). The joint declaration made part of that report reiterated the nature of the organization in terms of social and political goals through economic policy:
“coincidimos plenamente en que el ALBA no se hará realidad con criterios mercantilistas ni intereses egoístas de ganancia empresarial o beneficio nacional en perjuicio de otros pueblos. Solo una amplia visión latinoamericanista, que reconozca la imposibilidad de que nuestros países se desarrollen y sean verdaderamente independientes de forma aislada, será capaz de lograr lo que Bolívar llamó "... ver formar en América la más grande nación del mundo, menos por su extensión y riqueza que por su libertad y gloria", y que Martí concibiera como la "América Nuestra", para diferenciarla de la otra América, expansionista y de apetitos imperiales.” (Id.; citing Joint Declaration).These have been followed by a large number of agreements, declarations and actions that have been meant to develop the conceptual framework of ALBA, and to construct a number of projects that are supposed to apply those principles in specific sectors and among a variety of shifting groups of ALBA members. And the organization has grown. The addition of these Members changed the agreement in a number of ways but did not affect the fundamental character of the association. By 2009, an ALBA report listed fifteen projects that were toinvolve the political commission of ALBA states. (ALBA, Acta De La Viii Reunión De La Comisión Política Del ALBA – TCP 2008).
B. Conceptual and Institutional basis: Structure and Ideology of ALBA
At the heart of ALBA is its ideology. ALBA’s framework provides the greatest mark of its distinction from other efforts at integration. And indeed, ideology is the critical first product of this form of integration. Integration requires harmonization of an ideological base for actiopn. That was made clear recently by Raul Castro when he noted:
Los países del ALBA tenemos el privilegio de contar con un modesto esquema integrador, construido sobre bases y principios de igualdad, cuya naturaleza niega las prácticas que originaron esta crisis. Nuestras naciones no tienen la capacidad, por sí solas, de transformar estructuralmente el orden económico internacional, pero sí el poder de sentar nuevas bases y construir sus propias relaciones económicas. (Raúl Castro 2009).
The section starts with a consideration of that ideology in order to extract its underlying substance. It then considers the bases on which it has sought to distinguish itself ideologically from the growth models that gave rise to the United States and European Union, for example. The section concludes by examining the way that ideological distinctions are realized in organizational differences from standard free trade arrangements.
1. The ideology of ALBA. ALBA is built on the idea of the inherent potential for Latin America development independent of the United States and Europe, a development which has thus far failed to materialize. (Bossi 2005; Punto 3). Latin America is a region rich in natural resources, biodiversity, land and culture, and a history that predates the European invasion and conquest. (Id.). Although prior attempts at unity have been unsuccessful, globalization presents a new opportunity for Latin America to join forces in dealing with the challenges and demands associated with this phenomenon. (Correa 2005; “[E]l dilema actual: como afrontar la Globalizacion, es un proceso quizas mas complejo, menos inasible pero igualmente determinante para el futuro del pueblo Latinoamericano.”). The power and advantages of integration, and the resulting economies of scale, which are best observed in the creation and result of the unification of the U.S., serve as an example how economic prosperity is best achieved. (Id. at 7-8. “Las ventajas evidentes de la integracion las observamos en el desarrollo de los Estados Unidos…Este caso nos indica que las economias de escala y la masa critica de una entidad integrada como fueron las colonias norteamericanas, son factores determinantes para el progreso economico.”). Therefore, in the eyes of the founders and members, it has become a necessity to develop integrated regional trade blocs in order to be better positioned to deal with transnational powers that would otherwise swallow small and isolated countries. (Id. at 8. “La integracion en bloques regionales, surge asi como una respuesta apropiada a la globalizacion indiscriminada. Ella puede cohesionar sificiente entidad economica y politica para enfrentar las fuerzas transnacionales que arrollarian a cualquiera de nuestros paises en forma aislada.”).
The development of ALBA, however, is and shall be different from that of the U.S., because the founding members do not seek to follow the same path of warfare, genocide and pillaging that the U.S. took to achieve unity. (Bossi 2005; Punto 2: “De nada nos sirven los ejemplos de la Union Europea, ni mucho menos la forma en que Estados Unidos alcanzo su unidad, a costa de rapiña, genocidio indigena e invasions. La Union Europea tampoco, porque esa union se establece de manera defensiva, bajo los parametros del capitalismo y solo para acumular fuerza en su competencia con Estados Unidos y Japon. La Union Europea.”). The founders of ALBA also do not wish to follow the European Union (EU) model, because in the eyes of ALBA, the unity of the EU was built under capitalistic parameters of amassing strength, and as a defense mechanism to counter and compete versus the strong economies of the U.S. and Japan. (Id.). ALBA instead hopes to build an integration model that is unique and responsive to the needs, hopes, and aspirations of Latin American countries and their people. (Id. “Es por eso que los americanos de Sur tendremos que inventar…nuestra propia obra, para cubrir nuestras necesidades y representar nuestros intereses.”).
ALBA is grounded on an opposition to capitalism as an economic and political ideology. (ABA, Fifth Extraordinary Summit of the ALBA Final Declaration 2009). ALBA member states have taken the position that “Capitalism is exhausting mankind and the planet. The crisis we are experiencing is a global, systemic and structural crisis which cannot be considered just one more cyclic crisis. Those who believe that a fiscal injection and regulatory measures alone will resolve the crisis are mistaken.” (Id.). ALBA member states also believe that “Capitalism has caused an ecological crisis, by subordinating the conditions necessary to support life in the planet to the demands of markets and profitability.” (Id.). Consequently, ALBA bases its actions on four anti-capitalistic values: complementary action (based on the strengths that each country may possess); mutual cooperation; solidarity; and respect for the national sovereignty of each country. (Bossi 2005; Punto 4). These actions stand in stark opposition to the “transnational imperialist and capitalist strategy” that, under the guise of the market, aims to impose the rights of capital above the social, political, cultural and human rights that states have achieved for their citizens through centuries of struggle. 12 Hence the participation and incorporation of the masses in building the framework for integration is vital to the success of ALBA. (Bossi 2005; Punto 5). However, the task is enormous because Latin American unity is not deemed enough, the process of creating a new non-capitalist world-order, in which people and nations can peacefully co-exist with one another, nature and the environment, must also be something the people struggle to achieve. (Bossi 2005; Punto 6. “Y esa unidad de Nuestra America tampoco sera suficiente si no logramos un nuevo orden mundial, no capitalista, que alcance la armonia entre las naciones, la convivencia pacifica entre los seres humanos y una nueva relacion con el ambiente y la naturaleza.”).
ALBA’s first step in achieving the new process of integration embodied in its ideals is to break the capitalist logic of lucrative gains, competition and of viewing the economy as chrematistic. (Bossi 2005; Punto 7). Other steps have taken form through massive programs in literacy, education, health care and vaccinations, labor unions, workshops and other measures that educate and mobilize the masses into becoming informed participants in the democratic process. (Id.). In this context, ALBA then becomes a political tool as well. (Id., Punto 8). If ALBA is successfully carried to fruition, it would embody a reaction to the FTAA (Correa 2005 at 4), and also serve the dual function of preventing the divide et impera of Latin American nations that has traditionally been achieved with the use of bilateral free trade agreements. (Id., at 13).
Opposition to the FTAA was a primary reason for attempting to create an alternative system of commercial trade embodied in the ALBA agreements. (Corrwa 2005, at 4). However, the movement has transformed into a rallying flag and hope for a common and prosperous future for Latin America that is possible through the betterment of the social, political, economic, environmental and cultural areas of the region. (Id.: “El ALBA…se ha transformado en una bandera latinoamericana, una bandera de esperanza que despierta emocion sobre un futuro possible y orgullo de participar en su construccion.”). ALBA thus marks a strategic shift in the actions of Latin American and Caribbean people because it encompasses a proposal created by these nations while simultaneously serving as a protest against the imposing of agreements by external powers. It is an offensive act rather than a defensive response that rests on three major pillars of action (Bossi 2005; Punto 9): education to inform others about the necessity for ALBA; expanding the distribution of informational material among the masses about the benefits of ALBA; and mobilizing and organizing concrete steps that will foster the integration of Latin American people. (Id.: “Debemos dar el salto de la etapa de la protesta, a la etapa de las propuestas. La resistencia es necesaria, pero es hora ya de pasar a la ofensiva.”).
As noted in the founding document for ALBA, both Castro and Chavez were motivated what they saw as foundation events that set the course of Latin America. One was the Peruvian triumphs in Ayacucho in 1824 that effectively ended Spanish power in Latin America. Another was the address given by Simon Bolivar to the Panamanian Anfictionic Congress in 1824 (Bolivar 1824), calling for the creation of a HispanoAmerican country under which all Latin American nations would unite. This goal reiterated over a hundred years later by Augusto Cesar Sandino, a Nicaraguan national, who again called for a united Latin America in his Plan to realize Bolivar’s ultimate dream, and used it as a rallying cry in leading the movement to remove the U.S. Marine occupation of Nicaragua. (Sandino 1929). His writings also serve as a basis for the establishment of ALBA. (Bossi 2005; Punto 1). Concrete steps to attempt to achieve these sentiments were created in the agreement reached between Cuba, Venezuela and Bolivia on how to implement ALBA and the Treaty of Commerce of the People between these nations. (ALBA, Acuerdo para la aplicacion de la Alternativa Bolivariana para los pueblos de nuestra America y el tratado de comercio de los pueblos 2006).
2. Ideological Praxis: The Four Anti-Capitalist Values of ALBA: The general conceptual basis of ALBA outlined above is more specifically elaborated in the development of (1) the four anti-capitalist values of ALBA, (2) the three pillars of ALBA, and (iii) the goals of ALBA. ALBA articulates four so-called anti-capitalist values around which ALBA interventions are built. These include: (1) complementary action based on the strengths that each country may possess; (2) mutual cooperation; (3) solidarity among the member nations; and (4) respect for the national sovereignty of each country. (Bossi 2005; Punto 4). It is not clear whether these are anti-capitalist or anti colonialist values, and more particularly whether the solidarity and action suggested is meant to be reactive—that is deployed against the policies and interests of the United States. Indeed, except for the oppositional stance within which ALBA is situated, it would be difficult to suggest that these values are not as amenable to capitalist systems.
The difference comes in the form of application of these values—targeting not markets and private activities, but mass social movement programs and state action. These are articulated through the development of a theory of stages of development to which ALBA states are committed: (1) Education to inform others about the necessity for an ALBA; (2) Expanding the distribution of informational material among the masses about the benefits of ALBA and; (3) To mobilize and organize concrete steps that will foster the integration of Latin American people. (Bossi 2005; Punto 9). These were elaborated through the announcement of twelve goals to be achieved in the serve of ALBA values and to foster progress through the stages of ALBA socio-political development. 13 The goals are both programmatic and ideological. They are grounded both in the value of political expression and the construction of a framework for implementation of specific activities to be undertaken by the Member States through the ALBA framework. It is not clear, though, that the goals, singly or in the aggregate, are of greater value for their ideological power or their effect on the ground.
In addition to these goals, ALBA also has four major objectives that seek to weave values and implementation. The first is to promote the integration and development of Latin America through cooperation, solidarity and unity in an effort to place the interests of the people above those of transnational capital. (ALBA, ¿Que es ALBA?, n.d.). The second aims to promote integration agreements that develop the industrial and social infrastructures of a nation, and the region, with the goal of eliminating poverty, social exclusion and to assure better living conditions for all the inhabitants of Latin American nations. (Id.). The third is to counter Neo-Liberal policies, particularly the attempt by the U.S. to create a Free Trade of the Americas, that traditionally benefit developed nations at the expense of developing nations. (Bossi 2005). The fourth is to use complementary action based on the strengths that each country may possess, mutual cooperation, solidarity and respect for the national sovereignty of each country. (Id.).
Together these values, objectives and goals present a unified ideological position. It serves as a basis for approaching all issues of transnational arrangements. It privileges the state against private actors. It suggests a tighter control of individuals and their arrangements by the state, and also suggests that those interests must be subordinated to the needs of the state (as understood by those in control of the apparatus of state governance). Private markets are incidental to the development of large sectors of state control. Because neither politics nor economics can be left to the private sector, and because the private sector might well serve as proxy for the interests of those states from where those private activities originate, then state to state arrangements must be the basis of any movement of people, capital, goods or services. Lastly, the ideological position combines a long tradition of anti colonialism, nationalism with at-Americanism to produce an ideological system in which states are essential to combat the direct and indirect interventions of the United States (and to a lesser extent the old European colonial powers) in the development of adhering states. For many states in Latin America this is an intoxicating mix. It serves to legitimate stronger state control over a private sector that had been relying on the development of global markets to liberate itself from local barriers to development. It shifts power to direct markets from the private to the public sector. It provides an avenue for transferring blame to a demonized “other” against which state activity is directed. It provides a basis for the maintenance of control through the form of democratic mass movements by linking state action to the maintenance of the masses, and by so doing, marginalizing the relationship between the masses and other institutional or civil society elements.
Most importantly, this ideology preserves to states control over the nature and extent of actual arrangements with entities beyond its borders. Packaged in this form, the ideology of ALBA has become its most critically successful product. It is to the institutional manifestation of the ALBA ideology and its implementation is turned to next.
C. Institutionalizing and Implementing ALBA; Ideology in Action.
1. The Institutional Organization of ALBA, The Extent of Its Regulatory Authority, and Its Relationship to the Member States. ALBA is comprised of seven Commissions each dealing with a separate area (Political, Social, Economic, Investment and Finance, Energy, Environment and Youth). The Commissions report to the Council of ALBA Ministers and Council of ALBA Social Movements, who in turn must report to the Council of ALBA Presidents. (ALBA, Organizational structure of ALBA, n.d.). The Commissions are headed by the national Ministers of the respective areas of each of the member nations and together form the Council of ALBA Ministers. The Council of ALBA Presidents is made up of the respective presidents of each ALBA member nation. (Id.). Because ALBA seeks to respect the national sovereignty of member nations, by nature the interaction among member states take the form of agreements that must be accepted by the national legislative bodies of the member nations. (Id.). There are calls, however, for the creation of an ALBA Constitution, with supranational authority to coordinate and delegate ALBA policies that can better achieve the social and political integration of Latin American nations. (Acuña Mendoza 2007).
ALBA, then, is organized more as a space through which mutual cooperation on the basis of ALBA principles can be effected, rather than a more conventionally constituted international organization. It has been criticized as such. “When ALBA was conceived, it was not a Treaty organisation and its principles resided in economic cooperation arrangements which appeared to benefit countries that joined it with Venezuela being the principal donor. As Professor Norman Girvan argued in a May 2008 paper, "ALBA does not take the form of an international or intergovernmental organisation, treaty or integration scheme in the normal sense.” (Sanders 2009).
Yet, this institutional organization reflects the objectives of the organization. The first is to promote the integration and development of Latin America through cooperation, solidarity and unity in an effort to place the interests of the people above those of transnational capital. (ALBA, ¿Que es ALBA?, n.d.). The second is to promote integration agreements that develop the industrial and social infrastructures of a nation, and the region, with the goal of eliminating poverty, social exclusion and to assure better living conditions for all the inhabitants of Latin American nations. (Id.). The third is to counter Neo-Liberal policies, particularly the attempt by the U.S. to create a Free Trade of the Americas, that traditionally benefit developed nations at the expense of developing nations. (Bossi 2005). And the last is to use complementary action based on the strengths that each country may possess, mutual cooperation, solidarity and respect for the national sovereignty of each country as the guiding values in making Simon Bolivar's dream of a united confederation of Latin American states a reality. (Bossi 2005). Each of these objectives thus carries with it an institutional component that is reflected in the institutions of the ALBA and their relationships to the Member States of the organization. The result is substantially less autonomy for the institution at the supra-national level, and more control at the member state level. The supra national element of ALBA serves more as a pass through and reflection of Member State consensus than as the locus of an autonomous aggregate power reflecting a ceding of sovereignty up to the supra-national level. It emphasizes the central position of the state in the construction of internationalist frameworks. This state centering integration project critically affects the implementation of the system, a subject which we consider next.
2. Implementation—Economic Agenda. Conception, ideology and organization can only take a supra national organization so far. The real value of an organization beyond its ideological purpose, is measured by its implementation. ALBA is a young organization. Still, it has begun to elaborate a series of programs to provide a basis for understanding how the Member States intend to translate ideology and concept to reality on the ground. The principal effect of ALBA has been an increase in state to state trade, especially among the ALBA founders. Indeed, the volume of commercial trade between Venezuela and Cuba went from $973 million (U.S.) in 2001 to $2.4 billion (U.S.) in 2005. (Lomas Morales 2006).
ALBA’s most important efforts have centered on the establishment of PETROCARIBE, an energy cooperation agreement proposed by Venezuela to Caribbean nations which aims to resolve the asymmetries that said nations have in accessing energy resources. “PetroCaribe es un Acuerdo de Cooperación Energética propuesto por el Gobierno Bolivariano de Venezuela, con el fin de resolver las asimetrías en el acceso a los recursos energéticos, por la vía de un nuevo esquema de intercambio favorable, equitativo y justo entre los países de la región caribeña, la mayoría de ellos sin control estatal del suministro de estos recursos.” (ALBA, PetroCaribe, Energía para la union, n.d.). It aims to create a new order that is more equitable and just. (Id.). Its objective is to contribute to the transformation of Latin American and Caribbean societies into more just, cultured, participatory and solid minded by removing social inequalities, promoting an improved quality of life through the effective participation of the people in the determination of the affairs of their respective states. (Id.). Signatory nations include: Cuba, Venezuela, Antigua and Barbados, Bahamas, Belize, Dominica, Grenada, Guyana, Jamaica, the Dominican Republic, Saint Vincent and the Grenadines, Saint Lucía, Suriname, Saint Kitts and Neves, Haití, and Nicaragua. (Id.). The program has produced a number of trade agreements that represent state to state barter relations centered on the provision of Venezuelan petroleum.
The most interesting development has been the efforts to build the Banco de ALBA. (ALBA, Acta fundacional del Banco del ALBA, 2008). Its founders hope that it will serve as the blueprint for the future financial system through which ALBA’s social, cooperative, and grandnnational projects are to be funded. (ALBA, Declaracion politica de la VI Cumbre de la Alternativa Bolivariana para los pueblos de nuestra America , 2008). The primary purpose of the Banco de ALBA is to provide the economic and financial credit needs of ALBA member countries in financing and completing the thirty-two Grandnational Projects agreed to during the fifth ALBA Summit. (ALBA, Grandnational Projects agreed to during the V ALBA Summit, 2007). The Banco de ALBA, like ALBA itself, is founded on the principles of solidarity and mutual cooperation, and extends those ideals into the banking sector. (ALBA, Memorandum de Entendimineto, 2007). The host country for the bank as well as the operating aspects related to its functioning are currently under negotiation by the four ALBA member states. The framework for the bank’s operation was discussed and approved during a meeting of the Banco de ALBA Commission held on July 30, 2007. To date the details of the arrangement have not been made public. In the area of finance, however, Banco del Sur has emerged as another project that, although not within the framework of ALBA, is also being promoted in an effort to create a wholly South American source of funding and economic solidarity. (Cardona, n.d.). Argentina, Bolivia, Ecuador and Venezuela are founding members of the banking entity. (ALBA, En breve, Banco del Sur, n.d.). It is also likely that Brazil will join. (Id.). In addition, MERCOSUR members have agreed to participate in the creation of the bank.( ALBA Press Release, May 25). To date Argentina, Bolivia, Brazil, Ecuador, Paraguay, Uruguay and Venezuela have agreed to work together in establishing the framework under which this entity will operate. (Id.).
In addition to serving as the financial center for ALBA, the members have also began talks to create a national currency of the south, to be known as the sucre. (ALBA, ALBA Impulsa lanzamiento del sucre como nueva moneda del sur 2009). The object is to aid efforts at integration in a way that avoids the incidental and perceived detrimental effects of national economies bound by connections to the U.S. dollar. 14 This has been taken seriously by other regional organization, including ALADI. (“The global economic and financial crisis is Wednesday on the table at the 15th Meeting of the Council of Foreign Affairs Ministers of the Latin American Integration Association (ALADI). . . . The Council of Ministers will analyze the characteristics and scopes of the Payment System on Local Currencies (SML) of the MERCOSUR and the Unitary System of Regional Compensation (SUCRE), that ALBA member countries plan to activate.” (ALADI Talks Global Economic Crisis 2009). The bank hopes to deliver better financing options for completing the Grandnational Projects by combining the economic forces of each nation to achieve a greater economy of scale that counts on a greater economic base on which to build. (ALBA, Grandnational Projects agreed to during the V ALBA Summit, 2007).
Grandnational projects were newly developed and present one of the most interesting features of ALBA applied ideological work. During the Fifth ALBA summit, the members expanded their programs to include “Grandnational” aspirations in the areas of education, culture, fair trade, finance, nutrition, health, telecommunications, transportation, tourism, mining, industry, and energy. (ALBA, V Cumbre del ALBA, Proyecto Grannaciona 2007). The first is to focus on the production and distribution of certain agricultural products within ALBA. “"La propuesta de Alba es crear una empresa que permita incrementar la productividad de soya en Bolivia, acelerar e impulsar naciente siembra de este rubro en Venezuela y Nicaragua y de esta manera facilitar el mercadeo a través de la propia empresa", agregó.” ALBA, ALBA Impulsa lanzamiento del sucre como nueva moneda del sur 2009). These grandnational enterprises that would work in same manner that a multinational company would, except that it is run by the state in accordance with the goals and objectives of ALBA. (ALBA, Conceptualizacion de proyecto y empresa grannacional en el marco del ALBA 2008).
Grannacional enterprises are structured both to invert traditional private enterprises as well as to ground them in a socialist form of corporate social responsibility regime. Thus, for example, “el concepto de empresas grannacionales surge en oposición al de las empresas transnacionales, por tanto, su dinámica económica se orientará a privilegiar la producción de bienes y servicios para la satisfacción de las necesidades humanas garantizando su continuidad y rompiendo con la lógica de la reproducción y acumulación del capital.” (ALBA, Conceptualizacion de proyecto y empresa grannacional en el marco del ALBA 2008). These enterprises can be state owned or mixed, and may enter into joint ventures with private enterprises. (Id.). They are transnational in the sense that they may be owned and operated by more than one ALBA state (Id., at 7), and are meant to operate across borders, though principally in the the ALBA zone alone. 15 The corporate social responsibility of these enterprises are said to be essentially the same as those that drive ALBA itself. (Id., at 6-7). It is not clear what the model will be for their operation. However, it would not be unreasonable to assume that the model of the enterprises currently run through the Fuerzas Armadas Revolucionarias (FAR) might not provide the prototype. (Mora & Wiktorowicz 2003).
Lastly, since the close of an Extraordinary Summit in April 2008, ALBA has created the ALBA Network of Food Trade and the ALBA Food Security Fund, funded initially with $100 million. (Cumbre residencial de Managua 2008). In February 2009 it was announced that “Venezuela, Nicaragua, Ecuador, Bolivia, Honduras, and Dominica created a joint food production company and laid out plans to guarantee food security in the Caribbean, Central, and South American regions during an extraordinary summit of the regional trade bloc known as the ALBA in Caracas on Monday.” (Suggett 2009). Chavez is quoted as declaring: “‘We are going to create a supranational company, like a transnational company, but in this case with the concept of a great nation, to produce food with the goal of guaranteeing food sovereignty to our people,” declared Venezuelan President Hugo Chávez.” (Id.). It is to be funded from out of the $100 million fund created in April 0f 2008. (Id.).
3. Implementation—Social Agenda. Despite the prominence of the ideological element, ALBA has managed to initiate a number of programs, many initiated in 2005. (ALBA, Declaración Final De La Primera Reunión Cuba-Venezuela 2005). Though all are in the initial stages of development, they suggest the ways in which ALBA may be implemented. One group of programs is focused on education. Mission Robinson was a program to reduce illiteracy with a focus on the illiteracy of indigenous people. (Lomas Morales 2006). Phase II of the project is intended to guarantee at least a sixth grade level education for all. (Id.). Another program, Mission Ribas, extends Robinson’s goal in its attempt to guarantee high school education and diploma to all those who lack this basic education. (Id.). In addition, another program, Mission Sucre, sought to give thousands of Venezuelans access to university education with an emphasis on graduates in much needed specialties.
Implementation has also focused on programs of delivery of medical care. One, Mission Barrio Adentro, brought Cuban health care workers to Venezuela (Lomas Morales 2006, 3). 16 A large number of Venezuelan students were also admitted to Cuba to study health related professions. Thus, in addition to the services and facilities that Venezuela is receiving, there are 3,328 Venezuelan students studying General Medicine in Cuba. There are also 12,940 Venezuelans in Venezuela pursuing a career in Social Health who are being trained by 6,525 Cuban specialists who work as part of Barrio Adentro. (Id.). Another program, Mission Milagro, resulted in the provision of medical care for Venezuela in exchange for Venezuelan goods for Cuba (Id., 4; ALBA, Destacan Desarrollo de Programas del ALBA, July 28, ).17
The implementation of the ideological component of ALBA is also well tended in a series of programs designed to reshape the political and economic culture of the masses. These programs are tied to notions of mass social mobilizations in the service of social justice ideals as conceived by the directing states. One such program, Mission Vuelvan Caracas, seeks to train and educate the Venezuelan people so that they may work alongside the government is transforming the social and economic landscape of the country. (Lomas Morales 2006). In a sense, trade and trade cooperation at the supra national level is meant to transform the ideological basis of society at the grassroots level. Government use the supra national apparatus of the ALBA organization to effect large social changes that might have been impossible if undertaken as a domestic matter.
III. ALBA WITHIN THE WEB OF TRADE AND INVESTMENT ARRANGEMENTS IN LATIN AMERICA.
For all of its purported uniqueness, ALBA operates in a regional context rich with traditional trade arrangements that are layered on each other. (Ayllon 1997) There are five useful examples of other state-to-state organizations that seek to achieve some form of Latin American or South American unity. The first is the Andean Community of Nations, (Comunidad Andina de Naciones -CAN) comprised of Bolivia, Colombia, Ecuador and Peru, was created with the purpose of obtaining a faster, more equitable and autonomous development among the four member nations. (Comunidad Andina de Naciones, Quienes Somos, n.d.). In aims to deepen the process of integral integration of Andean, South American and Latin American nations and to contribute to equitable and sustainable human development that respects the diversity and asymmetries existent in each nation. (Id.).
The second is the Latin American Association for Integration (Asociasión Latinoamericana de Integracion - ALADI), created in 1980 through the Treaty of Montevideo, has, as a primary objective, the creation of a common Latin American market. (Asociación Latinoamericana de Integración, Tratado de Montevideo 1980). ALADI might be usefully understood as a successor to the Latin American Free Trade Association (Treaty Establishing a Free Trade Area and Instituting the Latin American Free Trade Association) (hereafter “LAFTA Treaty”). LAFTA was generally regarded as a failure.(Porrata-Doria 2005, 10-14). The common market is to be created through the use of preferential tariff treatment among member nations, as well as through the signing of regional and bilateral agreements. (Asociasion Latinoamericana de Integracion, Presentacion, n.d.). The scope of proposed agreements can include: financial cooperation, complementary economic action, exchanges of scientific and technological information and preservation of the environment. (Id.). ALADI’s membership currently includes: Argentina, Bolivia, Brazil, Chile, Colombia, Cuba, Ecuador, Mexico, Paraguay, Peru, Uruguay and Venezuela. (Asociacion Latinoamericana de Integracion, Paises Miembros, n.d.). Under ALADI, a large number of partial trade agreements, customs and free trade areas have sprung up among widely varying groupings of ALADI members. “In short, ALADI seems to be primarily a framework within which member states can negotiate and enter into economic integration agreements with each other and a ‘keeper of the flame’ for the ideal of integration in Latin America.” (Porrata-Doria 2005, 16). ALADI has set the conceptual stage for the proliferation of a wide variety of arrangements among its members. It, in a sense, made ALBA possible.
The third is the South American Community of Nations, (Union de Naciones del Sur - UNASUR) formed through the Declaration of Cusco in 2004, aims to promote a South America that approaches the political, social, economic, environmental, and structural sectors, with an integrated approach that promotes the development of South America, Latin America and the Caribbean region in general. (Union de Naciones Suramericanas, Declaración del Cusco sobre la Comunidad Sudamericana de Naciones, III Cumbre Presidencial Sudamericana 2004). UNASUR aims to unite the Andean Community of Nations and the Common Market of the South as part of a single economic, social and developmental trade bloc in accordance with ALADI. (South American Community of Nations 2007). All twelve sovereign nations of South America are members of this community.
The fourth is the Caribbean Common Market—CARICOM. The Caribbean Community was founded in July of 1973 with the purpose of “establishing and utilising institutions designed to enhance the economic, social and cultural development of their peoples.” (Caribbean Community (CARICOM) Secretariat, Treaty Establishing the Caribbean Community 1973, Preamble). The Treaty of Chaguaramas was amended by a Protocol in 2002 by which the Caribbean Community and Common Market were succeeded by the Caribbean Community including the CARICOM Single Market and Economy, which shall assume the rights and obligations of the Caribbean Community and Common Market. (CARICOM, Secretariat, Protocol on the Revision of the Treaty of Chaguaramas 2002, Art. I). The CARICOM agreement (treaty) aimed its efforts at establishing a “Common Market” whose aims it is to: strengthen, coordinate and regulate the economic and trade relations among Member States in order to promote their accelerated harmonious and balanced development; to achieve the sustained expansion and continuing integration of economic activities, the benefits of which shall be equitably shared taking into account the need to provide special opportunities for the Less Developed Countries; and to achieve a greater measure of economic independence and effectiveness of its Member States in dealing with states, groups of states and entities of whatever description. (Caribbean Community (CARICOM) Secretariat, Treaty Establishing the Caribbean Community 1973, Annex, Art. 4). In order to achieve this economic development, the member nations are urged to harmonize their laws in large number of areas, but this is to be achieved by individual action of assenting member states. (Id., at Annex, Art. 42). In addition, under the agreement CARICOM member states also pledge to establish a common external tariff (Id., at Annex Arts. 18 & 31) as well as a common internal customs market in which the good produced by the member states receive preferential treatments because no customs import duties can be placed on goods whose origin lies within the Common Market area. (Id. at Arts. 17 & 19). What constitutes Common Market Origin is defined in Article 14 of the Annex, (Id. at Art. 14). The agreement also restricts a government’s ability to provide aid to certain domestic industries (Id., at Art. 25). Conversely, the agreement also strives to promote the industrial development of the less developed member nations (id., at art. 56) and for the provision of financial assistance by the more developed to the less developed nations. (Id., at Art. 89).
The last, and perhaps most important, is the Common Market of the South (Mercado Comun del Sur - MERCOSUR), discussed in greater detail in the next section, also has as its objective the creation of a common market among its member states. (MERCOSUR 1991). However, it also aims to achieve economic development and social justice through integration in order to secure their members a proper place in the international economy. (Id., at art. 1). In addition, the founding document of MERCOSUR specifies that the organization should serve as a step in the greater process of achieving Latin American integration as envisioned in ALADI. (Id., at arts. 1 & 3).
This section seeks to contextualize the similarities and differences of ALBA, not on its own term—the object of Part I of this essay—but in terms of the construction of traditional trade associations in the Western Hemisphere. For that purpose, ALBA will be compared to MERCOSUR and the Free Trade Area of the Americas. The comparison will show that ALBA is the only agreement that explicitly mentions as a goal the elimination of poverty and social exclusion for all the inhabitants of Latin America. ALBA is also unique in its calling for solidarity and cooperation in order to place the interests of the people above those of transnational capital. The other agreements, focus the bulk of their attention to the establishment or augmentation of markets through the exchange of goods and capital. ALBA and MERCOSUR do, however, make reference to the goal of attaining Latin American unity. Yet ALBA remains embedded in a large web of trade arrangements among its member states that bind them in different ways under different arrangements. That produces both cooperation and challenge. This is most acutely felt in ALBA’s relationships with CARICOM.
Lastly, the ideological framework of trade relations is not merely the subject of customs and trade unions; it is especially telling in the context of bilateral trade agreements. These arrangements suggest the limits of the social justice and state to state focus of ALBA within a trade environment in which even the most committed states, engage with the private markets oriented global economic system on its own terms. And Latin American unity can be as easily expressed in conventional free trade and economic cooperation agreements targeting private markets, as they can be expressed in inter governmental arrangements, like ALBA. It is those similarities, tensions and connections that are explored here.
A. Regional Trade Arrangements.
Regional trade agreements form the basis of much of efforts toward economic integration within Latin America, and between the region and its neighbors in the Hemisphere. There are a number of these arrangements that bind some but not all of the states of the region. The only effort to effect such a unitary arrangement, the FTAA, has stalled. This section examines these regional trade arrangements in terms of their institutional form and their approaches to integration.
MERCOSUR was established in 1990 among Brazil, Argentina, Uruguay and Paraguay to promote trade among its members. Its history is well known. (Porrata-Doria 2005; 7-21). Through MERCOSUR, these states sought to establish a common market that permits more unimpeded movement of goods, services, modes of production through the elimination of customs duties and non-tariff restrictions on goods of the member states. (MERCOSUR 1991). It was also meant to expand the domestic market of each member state, through integration, in order to achieve economic development with social justice, in order to secure the member countries their place in the international economy. (Id.). Additionally, MERCOSUR serves as a site for the co-ordination of the macroeconomic policies of the member states in a way that optimizes the use and mobility of modes of production to achieve greater and more efficient operations. (Id.). Lastly, it serves as a step in the greater process of achieving Latin American integration, as envisioned in the Latin American Integration Association (ALADI). (Id., Ch. 1, art. 8).
MERCOSUR is organized like many organizations of this type, framed around a governing institution composed of representatives of all member states and a secretariat to keep operations running. In the case of MERCOSUR, the following inter-governmental organs have decision making power: Council of the Common Market, the Common Market Group and the Mercosur Trade Commission. (Protocol of Ouro Preto). The Council of the Common Market is the highest organ and responsible for decision-making. It consists of the Ministers of Foreign Affairs and Economy of each of the member states. Its decisions are binding upon the member states. (Id., at Sec. 1). The Common Market Group acts as the executive organ and is coordinated by the Ministries of Foreign Affairs. Its responsibilities include: monitoring compliance, enforce decisions, propose measures for the execution of agreements and to draw up programs of work to ensure progress towards the formation of a common market. (Id., at Sec. II). The Common Market Group must include representatives from the Ministries of Foreign Affairs and of the Economy and the Central Bank of each State and a fourth member. (Id.). Decisions of the Common Market Group take the form of Resolutions that are binding upon the member states. (Id.). The Mercosur Trade Commission assists the Common Market Group in monitoring and ensuring that the common trade policy agreements between the states are being applied. (Id., at Sec. III). Its decisions are given in the form of Directives or Proposals and are also binding on the member states. (Id.). The Joint Parliamentary Commission is another structural organ of MERCOSUR comprised of members of parliament from each of the respective member nations, whose primary purpose is to ensure that decisions made through MERCOSUR are given priority and appropriate legislative approval, at the national level, in their respective legislative bodies. (Id., at Sec. IV). The Secretariat provides support for the operations of MERCOSUR. It is based in Montevideo and has a small permanent staff. It’s mandate is modest, though efforts have been made to broaden its scope by permitting it to provide technical assistance and monitor compliance with regional integration objectives. (Porrata-Doria 2005, 32-33).
MERCOSUR has proven to be more impressive in theory than in practice, at least beyond the most basic level of integration. “notwithstanding the loss of political and economic relevance in recent years, Mercosur is still a mandatory topic of regional discourse, and the presidents of the four countries reinforce, from time to time, their commitment to the development of regional integration.” (Barral 2007, at 131). The focus is on opening trade among private enterprises. The focus is on traditional state barriers to entry in the territory of other state participants. The difficulties arise from tensions between the desire to integrate and the need to protect local enterprises from competition. There is also little appetite for vesting supra national entities with substantial autonomy or direct regulatory power. (Id., at 137-39). Rule by consensus, inter governmentalism and protection against short term or local economic pain has limited the expansion of MERCOSUR as an autonomous regional authority.
A similar model, with similar imitations, was proposed for the now dormant Free Trade Area of the Americas. (Free Trade Area of the Americas, Antecedents of the FTAA n.d.). Like MERCOSUR, the FTAA seeks to establish a free-trade area with a view to generating economic growth and prosperity, through market liberalization and expansion that results in contributing to the expansion of world trade (FTAA, Draft Agreement 2003, Ch. II, art. 2), enhance competition and improve market access conditions for goods and services among the Parties (Id., including the government procurement sector), eliminate the barriers to the movement of capital and business persons among the Parties (Id.), and foster the development of a hemispheric infrastructure. (Id.). This later goal is targeted to the facilitation of the circulation of goods, services, and investment; and to establish mechanisms that guarantee greater access to technology, through economic cooperation and technical assistance. (Id.).
Like MERCOSUR, FTAA is administered through an organizational structure that is essentially inter governmental in character, and grounded in consensus and state party prerogative. To this end, it is to be governed a Council, Executive Committee, Civil Society Consultative Committee, Committee on the Differences in Levels of Development and Sizes of the Economies, a Secretariat, and other content-specific committees. (FTAA Draft Agreement 2003, Ch. XXI). The Council is composed of the ministers in charge of trade for each nation; its duties include: periodically evaluate the implementation and the outcomes of the Agreement; hear any other matter that could adversely affect the functioning of the Agreement; and modify, in pursuance [of the objectives] of this Agreement. (Id. at Ch. XXI, Art. 1). Decisions by the Council shall be implemented by the member nations in accordance with their respective national legislations. (FTAA Draft Ahreement 2003, Ch. XXIV, art. 2). The Executive Committee is composed of the vice ministers, or officials of an equivalent rank of each member nation. Its duties include: ensuring the fulfillment and enforcement of FTAA provisions; act as a forum for negotiations; adopt decisions, establish technical committees, and decide on financial and managerial matters. (Id., at CH. XXI, Art. 2). The Civil Society Consultative Committee is charge of developing information systems for civil society on matters related to the FTAA. It is also in charge of facilitating the formulation of positions, suggestions, contributions, and recommendations by civil society for the consideration of government. (Id, Ch. XXI, art. 4).
Both models, in turn, reflect the inter-governmental, passive and consensus framework that has characterized the creation of supra-national organs to supervise economic integration in Latin America since ALADI. (Treaty of Montevideo 1980). ALADI, itself is institutionalized through a Council of Ministers (Consejo de Ministros de Relaciones Exteriores), a Conference of Evaluation and Convergence (Conferencia de Evaluación y Convergencia), and a Committee of Representatives (Comité de Representantes). (Treaty of Montevideo 1980, at art. 28). Providing limited technical and administrative support is a General Secretariat. (Id., at art 29 (“órgano técnico de la Asociación”)). The inter-governmental nature of ALADI is grounded in the character of its highest institutional body, the Council, which is to be made up of foreign ministers of member states and which has overall authority to direct the work of ALADI. (Id., at arts. 30-31). This intergovernmental body is convoked only at the instance of the Committee of Representatives, that constitutes the permanent body of the ALADI (Id., at art. 35) and is made up of representatives of each of the member states (Id., at art. 36). The consensus aspect of the character of ALADI is assured by the imposition of a high vote requirement. (Id., at art. 37 (requiring a 2/3 vote of all member states)).
ALBA follows a similar decentralized model. It has developed a similar set of institutions—all tightly dependent on the will of and serving the interests of, the member states. Divided on functional bases, ALBA is divided into a series of commissions through which common positions might be taken and agreements among ALBA member states concluded. ALBA is more horizontally constructed than ALADI, but it takes ALADI’s intergovernmentalism one step farther. There is no autonomy in the supra national bodies that constitute ALBA. The focus remains on state sovereign rights, and tight control of integration. There is little in the construction of these organizations that suggest any move toward the development of autonomous supra national governance institutions with any sort of independent regulatory power. These are passive, flow through, organizations. They are more joint venture than integrative body. In that respect, ALBA evidences similarities in its institutionalization to MERCOSUR, ALADI and even its ideological nemesis, the FTAA. That constitution of institutional presence reflects the primitive state of integration in Latin America. It suggests that integration is better understood at the level of state-to-state relations—aggregated—than in the grander organizations.
But there are important differences as well. MERCOSUR has embraced a greater willingness to construct a supra national organizational apparatus under which integration efforts are overseen. These include primitive dispute resolution provisions, that though essentially inter governmental in character, suggest mechanisms beyond the state and mere political consultation. (Barral 2007, at 131). On the other hand, ALBA suggests the possibility of building a framework of sector driven integration through the work of its commissions—producing knowledge and suggestions, but leaving the actual construction and implementation of any recommendations to willing member states. In each case, though, the supra national element of these organizations tend to give way to its inter governmental character. As a consequence there is a weak relationship between the goals of integration and institutional apparatus created to further that goal. Sovereignty concerns, and an unwillingness to trust a supra national apparatus with its exercise, even in tightly controlled delegated form tends to reduce the efficacy of these systems as vehicles for integration. Instead, they serve as portals through which integration efforts can be undertaken directly between willing member states.
B. ALBA and Trade Networks in the Caribbean—the CARICOM Connection.
In addition to its own programs, ALBA, especially through its member states, has also sought to reach out to other trade associations. From these, it appears, that ALBA seeks both to engage globally, at least within the region inhabited by ALBA states, and also to use the connection to influence the way in which other regional trade associations function. This is evident in the development of a relationship between ALBA and CARICOM. This section describes the evolution of that relationship and the current states the partnerships between CARICOM and ALBA member states, especially Cuba.
In December of 1993, Cuba and the members of CARICOM established a joint commission “to promote co-operative relations between the Caribbean Community and Cuba in economic, social, cultural and technological fields.” (Caribbean Community (CARICOM) Secretariat, Agreement Establishing the CARICOM-Cuba Joint Commission 1993, Article III Objectives). In addition the agreement calls on the parties to “seek a greater understanding of each others views and positions on issues which may arise in the various regional and international forums, in an effort to promote closer relations in economic, social, cultural and technological fields.” (Id.). The agreement incorporates the Charter of Economic Rights and Duties of States (United Nations, General Assembly Resolution no. 34/138) which was adopted in 1979 at the Thirty-Fourth Session of the General Assembly of the United Nations. The U.N. charter urges nations to “commit themselves effectively to achieving, through international negotiations and other concerted action, the restructuring of international economic relations on the basis of the principles of justice and equality in order to provide for steady economic development, with due regard to the development potential of developing countries.” (Id.).
In July 2000, CARICOM and Cuba entered into a trade and economic cooperation agreement whose objectives included the promotion of trade in goods and services (CARICOM, Secretariat, Trade and Economic Co-operation Agreement between CARICOM and Cuba 2000, Art. 2), 18 and the cooperation by the parties to become more efficient players in global markets. 19 This agreement also calls on the parties to grant greater and easier market access to each other’s respective markets (Id., art. 5) as well as economic cooperation (Id., art. 10) and trade promotion among the signatory parties. (Id., art 12). The agreement also mentions a need to create a better trade in services and tourism. (Id., arts. 15 & 16). Lastly, the agreement specifies with detail what is exempt and in what manner specific goods and/or services are to be implemented among the respective parties. (Id., Annexes I-IV).
At first glance the Cuba-CARICOM agreement appears to be a precursor to the framework that ALBA would later adopt. For instance, both agreements call for developmental assistance by the more wealth to the less wealthy. Similarly both agreements, at least on paper, seem to focus the bulk of their emphasis in promoting greater welfare for the majority of a member nation’s population. The means by which this is accomplished, however, varies. CARICOM, I would argue, falls more in line with regional trade agreements such as the FTAA or MERCOSUR (see below). To CARICOM’s credit, the emphasis of their agreement is mutual cooperation, growth and prosperity for all members. This, although, spelled out in the text of both the FTAA and MERCOSUR, do not apply in practice as much as is the case with CARICOM. ALBA, in contrast, is based more on a barter system, in which the specialty of one nation (i.e. Cuban doctors) is exchanged for what is abundant in another (i.e. Venezuelan petroleum).
Conversely, an increasing number of CARICOM member states have sought to remain within CARICOM and also join ALBA. Dominica is one state with membership in both organizations. Other states have sought to adhere to the ideological principles of ALBA but not join it. “In February 2007, Antigua and Barbuda, Dominica and St. Vincent and the Grenadines signed a statement expressing support for the ALBA principles and committed to working towards creating collaboration between ALBA and CARICOM.” (St. Vincent Treading Cautiously With Chavez’s ALBA Deal 2008). The agreement was meant to further the anti-capitalist values of ALBA outside the ALBA state zones. “According to the statement signed during a visit to St. Vincent by President Hugo Chavez, the four countries would together "fight the irrational consumption of energy by industrial nations" as they "make happier the lives of the people who have for many centuries dwelt in this region".” (Id.). Others have worried that joining ALBA might somehow impact on their CARICOM obligations. (Id.).
These moves have caused some controversy within CARICOM. The sentiment, in early 2009, appears to favor that ALBA member states enter into agreements with CARICOM similar to that entered into with Cuba, rather than encouraging CARICOM states to join ALBA. (Id.). Still, those CARICOM member states seeking entry into ALBA have done so precisely because they believe that ALBA is “just another avenue for obtaining economic aid which is not available in Caricom.” (ALBA Seen as Avenue to Economic Aid for Small CARICOM States 2009). While there is concern that ALBA might undermine the integration efforts represented by CARICOM, others have suggested that the proliferation of trade powers is a sign of the waning of American power in the region. (Girvan 2008). These suggest coordination rather than competition. (Id.).
But the real lesson in Cuba-ALBA-CARICON relations are the multiple vectors of that framework. The issues arising among the states with connections to both trade groups exist precisely because the web of trade relationships is both complex and dense. But it is denser than suggested merely by looking at trade relationships. Movements of capital as well as goods are key to understanding the nature of economic integration among states. Where those interactions are ideologically tinged, and by groups grounded in incompatible ideological frameworks, then investment practices provides another test of the distinctiveness of trade and investment regimes. For that purpose, it is worth looking briefly at the construction of webs of investment relationships through bilateral investment treaties, a subject taken up in the next section.
C. ALBA in a Region of Bilateral Investment Treaties (BITS) and Partial Preference Trade Agreements.
In some ways more important to regional trade than these multi lateral trade arrangement, bi-lateral trade agreements (BITs) among Latin American States have become more important over the last thirty years. (United Nations Conference on Trade and Development 2000). It is true that BITS do not cover the same ground as many trade agreement—but there is enough of an overlap to suggest an approach to an important sector of trade relations between states, one that focuses on investment and services. For this purpose the article considers several three categories of BITs. The first include those between the United States and ALBA member States. (US-Nicaragua BIT 1996; US-Bolivia BIT 2001). The second group considered is between ALBA member States other than Cuba. (Bolivia-Venezuela BIT 2000). The last group to be considered are BITs between Cuba and ALBA and non-ALBA member states. (Bolivia-Cuba BIT 1995; Cuba-Italy BIT 1993).
All of these BITs share a common set of objectives—to promote economic cooperation, protect investors and safeguard their investment activities, and provide a framework for the regulation of those relations to increase mutual economic activity and prosperity. Beyond this, the similarities and differences among these groups of BITs might better suggest the larger differences in trade philosophy and approaches that fin their way into multilateral arrangements like ALBA, MERCOSUR and FTAA. Indeed, together these arrangements provide a comprehensive window on state to state trade/investment relations that might be overlooked in examining the grander projects of ALBA, MERCOSUR and FTAA.
The American BITs can serve as a benchmark of sorts. They come closest to the private global market ethos of modern economic globalization. (Backer 2006)). These BITs are variations on the standard form of bilateral investment treaty that the United States uses as a basis for its BITs. (United States Department of the Treasury, 2004 Model BIT). The U.S.-Nicaragua BIT and the U.S. – Bolivia BIT conform generally to the model U.S. BIT. In both cases, the respective BITs cover a large class of investments made, owned or controlled directly or indirectly by a national or company of the other state, including intellectual property. (U.S.- Nicaragua BIT, at Art. I, Sec. 1(d); U.S. – Bolivia BIT, at Art. 1, Sec. 1). Provision is made for the equal treatment of investors and investments in the host state, protection against expropriation and compensation therefrom (U.S.-Nicaragua BIT 1996, art. III)), most favored nation treatment (Id., art. II), free movement of capital in and out of host states (Id., art. V), protection of loss from war or other civil disturbances (Id., art. IV), prohibitions from host state enactment a number of provisions affecting the manner in which investments are carried out within their territory (Id., art. VI), movements of investors in and out of the host state (Id., art. VII), and dispute resolution provisions including the provision of arbitration for disputes among the state parties or between a state party and an investor. (U.S.-Nicaragua BIT 1996, art. IX-X; U.S. –Bolivia BIT 2001, arts. IX-X). The U.S. BITs also include provisions peculiar to its embargo against Cuba. (U.S. – Nicaragua BIT 1996, Art XII). This provision declares that the benefits of the BIT not available “if nationals of a third country own or control the company and the denying party does not maintain normal economic relations with the third country.” (Id., at art. XII(a)).
The provisions limiting state power to legislate with respect to in bound investment is important. It serves both as a limit on sovereignty but also an assurance that capital can flow freely between jurisdictions without impediment. The focus is on capital flow and on the preservation of the consistency of the operation of investment entities across borders. For that purpose, national rules and national peculiarities must play a dependent role. In the U.S.-Nicaragua BIT, for example, the treaty prohibits national legislation, applicable to covered investments, prohibitions against host country investments that mandate particular levels of local content, purchases or preferences to local goods or services, limitations on the import of products or services, the export of services, limits on sales in the host state territory, mandatory rules for transfers of technology, and mandatory local investments in research and development. (U.S. – Nicaragua BIT 1996, Art. VI, Secs. A-f). These limits are reproduced, in substantial respect in the U.S. Bolivia BIT. (U.S. – Bolivia BIT 2001, Art. VI, Secs a-f).
One would expect to see the trade philosophy of ALBA reflected to some extent in the way in which BITs between ALBA members, and especially in BITs with Cuba, are structured. Yet, on examination, it is clear that whatever differences exist between these investor arrangements and the U.S. BIT model are subtle. The most prominent difference is with respect to conditions to investment. The U.S. BITs with Nicaragua and Bolivia provisions limiting host state power to legislate rules burdening inbound investment with respect to labor, investment and other factors in operation, are absent in the Bits among ALBA states, including those with Cuba. The effect can be substantial. Moreover, the BITs among ALBA members include a “shut down” clause, permitting a host state to suspend free movement of investments during times of exceptional economic difficulties. (Bolivia-Venezuela BIT art 6 (“En caso de existencia de dificultades exceptionales o graves de desequilibrio de balanzas de pago” Id.)). Indeed, in the Bolivia-Cuba BIT, all investments are made subject to local law without limit. (Bolivia-Cuba BIT, art II.2). The idea is that Cuba and its investment partner will promote and create unspecified conditions favorable to investment in their respective territories and on that basis authorize investment in conformity with its laws. (Bolivia-Cuba BIT, II.1 (“Cada arte Contratante promoverá y creará condiciones favorables en su teritoriopara las inversions y inversionistas de la otra Parte Contratante y autorizará dichas inversions de conformidad con su legislación.” Id.). The Bolivia-Cuba BIT also exempts from its most favored nation provisions the benefits of any arrangements effected through free trade agreements or customs unions. (Bolivia-Cuba BIT 1995, III.3).
This discussion of BITs highlights certain tensions and incongruities. First, ALBA member States have not deepened their trade arrangements with each other through bilateral investment treaties with each other to any great extent. This is curious, given the importance of control and coordination implicit as an ALBA ideal. Thus, for example, Nicaragua has no bilateral investment treaty arrangements with Cuba, Venezuela, Bolivia or Dominica; however, it has entered into such arrangements with the United States, a number of European states, China, Korea, Chile and El Salvador. (SICE: Foreign Trade System, Information on Nicaragua, Bilateral Investment Treaties). (Organization of American States, Sistema de Información sobre Comercio Exterior (SICE): Foreign Trade System, Information on Nicaragua). Likewise, Venezuela, has no bilateral investment arrangements with either the United States, China or other ALBA states. (Organization of American States, Sistema de Información sobre Comercio Exterior (SICE): Foreign Trade System, Information on Vemezuela). It is possible to rationalize that omission by reference to ALBA’s principles privileging trade at the state to state level. But Venezuela is not consistent in this regard, maintaining private sector investment treaties with a number of European and Latin American States. (Id.). Bolivia, on the other hand, has entered into such arrangements with Cuba and Venezuela, but not with Nicaragua or Dominica. (Organization of American States, Sistema de Información sobre Comercio Exterior (SICE): Foreign Trade System, Information on Bolivia). And it has arrangements with the United States, Chile and Argentina, but not Brazil. Second, those BITs entered into by ALBA state parties tend to reflect the same private market orientation one encounters in BITs with the United States. There are notable exceptions—and principally focused on the extent of the application of local law to require local participation in inbound investments.
But otherwise, the form is similar. This is not to suggest that the substantive differences in implementation may not be significant. Because of the conformity with local laws provisions in the Cuba BITs, for example, it may be more difficult to obtain the necessary permits to invest in Cuba than in more private market oriented States. That is the intended result. (Bolivia – Cuba BIT, Art. I.1. That provision defines investment by reference to conformity to the laws of the host state—“siempre que ésta se haya efectuado de conformidad con las leyes y reglamentos vigentes en la Parte Contratante en cuyo teritorio se realizó la inversion” (Id.).
The incongruities become larger when understood in the context of the networks of private sector oriented free trade arrangements in which ALBA member states also participate, in addition to the great organizations like MERCOSUR and the Andean Community. In some respects, these seem to mimic the networks of investment arrangements that are formed by the large number of crisscrossing bilateral investment treaties among these states. Indeed, ALDI describes these arrangements as the instrument most often used to effect steps toward integration, noting both the flexibility of this form of trade arrangement and the variety of forms that they may take, prioducing a grteat dynamism within integration efforts. “Por su flexibilidad, estos acuerdos se han constituido en el instrumento más utilizado en la integración regional, de allí que el comercio negociado en este tipo de Acuerdos ha sido el que ha mostrado mayor dinamismo dentro del conjunto del comercio intrarregional.” (Asociación Latinoamericana de Integración (ALADI), Acuerdos de Alcance Parcial n.d.).
Nicaragua, for example, participates in free trade arrangements with Mexico and the Dominican Republic, and has entered into partial preferential agreements with Venezuela, Columbia and Panama. (Organization of American States, Sistema de Información sobre Comercio Exterior (SICE): Foreign Trade System, Information on Nicaragua). The Nicaragua-Venezuela partial preference agreement is particularly interesting. (Acuerdo de Alcance Parcial entre la República de Nicaragua y la República de Venezuela). It focuses on economic integration of the private sectors of their respective economies through the usual form—reductions to barriers to entry maintained by the state parties. Venezuela maintains similar partial preferential agreements with Argentina, Brazil, Chile, CARICOM, Cuba, Trinidad and Tobago, Costa Rica, El Salvador, Honduras, Guatemala and Guyana. (Organization of American States, Sistema de Información sobre Comercio Exterior (SICE): Foreign Trade System, Information on Venezuela). Though several predate the current Chavez regime’s focus on state control of the economy, it remains in force. And indeed, in light of ALBA, the Venezuela – Cuba partial preference arrangement might raise ideological eyebrows. Though this agreement must be considered in the context of a number of others between Cuban and various Latin American states, each of which (and all together) were designed to attempt Cuba’s reintegration into the ALADI system. (Asociación Latinamericana de Integración, Acuerdos de Alcance Parcial, Acuerdo de preferencias fijas). “En primer lugar, los acuerdos derivados de la incorporación de Cuba a la Asociación: ACE 40 (Cuba – Venezuela), ACE 42 (Cuba – Chile), ACE 46 (Cuba – Ecuador), ACE 47 (Cuba – Bolivia), ACE 49 (Cuba – Colombia), ACE 50 (Cuba – Perú), ACE 51 (Cuba – México) y ACE 62 (Cuba – MERCOSUR).” (Id.).
All of these treaties, perhaps in the aggregate, are meant to advance the project of Latin American economic integration—a project also near to the core of ALBA values. And, indeed, many fall within the free ranging framework of ALADI 20 and article 14 of the Treaty of Montevideo. (Asociación Latinoamericana de Integración, Tratado de Montevideo 1980). ALADI is meant to serve as the umbrella organization through which webs of trade and investment relationships among the members may ultimately produce, in the aggregate, and economically unified Latin America. “Asimismo contempla la cooperación horizontal con otros movimientos de integración del mundo y acciones parciales con terceros países en vías de desarrollo o sus respectivas áreas de integración (Artículo 27). La ALADI da cabida en su estructura jurídica a los más vigorosos acuerdos subregionales, plurilaterales y bilaterales de integración que surgen en forma creciente en el continente (Comunidad Andina de Naciones, MERCOSUR, etc.). En consecuencia, le corresponde a la Asociación –como marco o “paraguas” institucional y normativo de la integración regional- desarrollar acciones tendientes a apoyar y fomentar estos esfuerzos con la finalidad de hacerlos confluir progresivamente en la creación de un espacio económico común.” (ALADI, Iniciao, Acerca de ALADI, ¿Quienes somos?).
The umbrella of partial integration that is ALDI has been infused with a modicum of order. ALALC/CM/Resolution 2 imposes a number of substantive and procedural rules for the creation of these partial scope agreements among ALDI member states. These are designed to help bring a small amount of order and impose a similar direction of what is contemplated to be a thick network of individual and partial arrangements that will vary among different clusters of states over different aspects of economic life. (ALALC/CM Resolution 2). Thus, “Estos acuerdos podrán ser comerciales, de complementación económica, agropecuarios, de promoción del comercio, o adoptar otras modalidades de conformidad con el artículo 14º del Tratado de Montevideo 1980. Las normas básicas y de procedimiento que regulan estos acuerdos, están contenidas en la ALALC/CM/Resolución 2, de 12 de agosto de 1980 del Consejo de Ministros.” (ALADI, Acuerdos de Alcance Parcia). Certainly, from the Cuban perspective, ALBA has been offered as an important form of integration that might be privileged within the ALADI framework. (Necesitamos procesos integradores, afirma Cuba en ALADI 2008). Ricardo Cabrisas, the Cuban minister noted this explicitly: “Cabrisas significó: ‘Compartimos la aspiración de mejorar las condiciones de vida de nuestros pueblos y contamos con un proyecto integrador que es el Tratado de Montevideo de 1980. Dentro del Tratado, y respetando sus principios (.) debemos acercarnos a otros enfoques y experiencias que permitan acelerar un verdadero proceso de integración dentro de ALADI’.” (Id.). Within the context of ALADI, ALBA is both unconventional but simultaneously an integral step toward integration.
D. So, What Makes ALBA Different?
The description of the conventional forms of regional trade and bilateral investment agreements suggest the contours of the differences between the approach of ALBA—in theory and operation—and traditional approaches to these relationships. This section first highlights those differences and then analyses whether those differences matter.
1. Differences in theory. The difference that stands out the most when comparing these two systems is the fundamental focus of these arrangements. Conventional agreements relating to trade and investment are focused on private and market activity. To the extent that states are involved, it is as guarantors of that private activity under sets of identifiable rules. States may participate in these effort, but only as private parties. The essence of these notions is well articulated in efforts directed at states seeking to intervene in private global financial markets as participants rather than as regulators. (International Working Group of Sovereign Wealth Funds, Sovereign Wealth Funds: Generally Accepted Principles and Practices 2008). ALBA represents a significant effort to reorient private markets to public purpose, and to transfer authority from the private to the state sector. But ALBA does not represent the only current attempt through which states have sought to intervene in global private markets. Sovereign wealth funds represent another potent vector of that activity, though in that case, states seek to enter markets as private rather than public actors. (Backer 2009).
The ALBA system, presents almost the inverse proposition: the principal focus is on the public activities of states. Where private activity is an issue, it is deemed to exist to serve the greater interests of public policy represented solely by and through the state. The foundation is socialist, but in the Stalinist tradition rather than in its modern Chinese form. Supra national interaction must be controlled by the state, serve the interests of states, and focus on public policy. Trade and investment are instruments of public policy, as are the economic activities of non state actors within and between ALBA states. Private capital and its creation, exchange and accumulation is viewed as incidental to a primary focus grounded in political assessments of actions constituting advances in the general welfare of all the inhabitants of the nations involved. Venezuela’s Hugo “Chávez spoke increasingly of a transition in Venezuela toward "twenty-first century socialism" and of a Alternativa Bolivariana para los Pueblos de Nuestra América (ALBA) [Bolivarian Alternative for the Peoples of Our America] in which like-minded countries could join Venezuela in refusing to participate in the FTAA process. Chávez asserted that the FTAA was an extension of the U.S. empire in the Americas.” (Blake 2009, 82). Blake notes that as “an alternative to the FTAA, Chávez promoted ALBA as a model centered on social welfare and mutual assistance rather than on free trade.” (Id., at 98). That is not to say that capital is not important or necessary, but rather, that the character of arrangements between states has changed. It is no longer focused on eliminating borders for the production and management of private capital; instead it is focused on using borders as a site for the assertion of public authority to control all aspects of social, political, cultural, and economic activity.
This ideological foundations produce second order effects as well. First, it serves as a vehicle for the transfer of power form non-state to state actors. The object is not to clear a space for private activity, rather it is to enlarge the space for state action and control over the means of the production of economic, political, social and economic power. This is a necessary consequence of ideologies based on mass social movements politics. Furthermore, ALBA calls on its members to mutually cooperate with one another in ensuring that complementary actions are taken in order to improve efficiency and promote the ultimate goal of integration. The BITS and other regional trade agreements discussed, with the exception of MERCOSUR, do not have integration as a goal. Rather, their focus is on establishing a mechanism that facilitates the exchange of goods and capital between nations. In many instances though, the exchange of goods and capital tends to be more one-sided, a complaint that is echoed in ALBA’s calls for a movement away from the status quo Neo-liberal method of market and capital creation and exchange.
2. Differences in organizational operation. ALBA and the F.T.A.A. have much more in common when it comes to the area of operation than one would suspect. Unlike MERFCOSUR, where supranational decisions can be made and enforced through the Common Market Group, ALBA and the F.T.A.A. rely on each respective nation to adopt any policy decisions or changes made at the regional level. This could be interpreted as being a weakness in the ability to enforce said decisions or changes. Conversely though, it could be argued that this method allows a nation, and its people, a greater say in what its country will and will not do. The main difference, ALBA proponents would argue, is that under ALBA it is indeed the people who make the decisions, and not the multinational corporations, as would be the case under the F.T.A.A. Along these lines, another noteworthy operational difference between ALBA and the F.T.A.A. involves the beneficiaries of the policies enacted.
3. Do the Differences Matter? The differences between the ALBA approach and the F.T.A.A. approach are revolutionary in the sense that, under ALBA, the state is attempting to become the main player within the traditional capitalist system. Yet that revolutionary approach is, in a sense, a reaction as well. ALBA seeks to invert the vectors of social and political movements back to framework that privileged the state over all other institutions, and that sought to invest the state, and its apparatus, with a monopoly of authority over politics, society and economics. The now ancient, and from a Chinese perspective, anachronistic, framework is heavily grounded on traditional Marxist Leninist notions from the first half of the twentieth century. (Backer 2004). Rather than continue with the existing process of transnational integration within which private multinational corporations are the main players and main beneficiaries of bilateral and multinational trade agreements, ALBA aims to construct both public markets and public multinational enterprises. ALBA would use the government apparatus as a public leveraging mechanism that can compete with and against these corporations within markets that are grounded in public rather than private incentive structures. Yet this difference is also embedded in larger global systems that remain firmly framed within dominant private and state-less system of global intercourse. That has consequences that remain to be worked through.
Among the more interesting are those attached to the new state multinational enterprise program. The power and ability of ALBA’s grannational enterprises to compete will depend on the size and success of ALBA and its members. But it may also entangle these enterprises within the matrix of global soft regulation of multinational enterprises. (Backer 2009a). Among the more important of these are the OECD´s Guidelines for Multinational Corporations, to the United Nations Global Compact. The Organization for Economic Cooperation and Development (OECD) comprises a number of democratic, market economy governments focused on regulating and harmonizing development around the world. (OECD, About OECD). The Guidelines for Multinational Corporations represent the joint efforts of these countries to provide a normative framework for enterprise operation. (OECD Guidelines 2000). “The MNE Guidelines are the only multilaterally endorsed and comprehensive code that governments are committed to promoting. The MNE Guidelines express the shared values of the governments of those countries that are the source of most of the world’s direct investment flows and home to most multinational enterprises. They are meant to be applied to the worldwide operations of businesses that might be subject to their provisions. They are enforced through organisations called National Contact Points (‘NCPs’), established usually within one of the trade or commerce ministries of the adhering states.” (Backer 2009a). This system has already begun to produce regulatory activity, especially in Europe. One proceeding touched on the behaviour of a multinational corporation operating within a conflict zone. (Statement By The United Kingdom National Contact Point (NCP) For OECD Guidelines For Multinational Enterprises (NCP): Das Air’ (21 July 2008)). The other (‘Final Statement by the UK National Contact Point for the OECD Guidelines for Multinational Enterprises: Afrimex (UK) Ltd.’ (28 August 2008)) touched on similar issues where the entity operated through supply chain relationships. In both cases, the companies were required to conform to international standards through the soft law system in which their home states adhered. Cuban corporations operating within the jurisdictions within which these regulatory regimes are strong would have to reconcile their own ALBA norms with those of the OECD.
Similarly, the Global Compact has been establioshed to provide a substantive framework within which corporate activity might be conducted. (UN Global Compact, UN Global Compact, Overview of the UN Global Compact 2008). The object of the Global Compact is to ‘mainstream’ the principles by encouraging behaviours consistent with the underlying principles. (Ruggie 2008; Clapham 2006). The UN has described its Global Compact as ‘a strategic policy initiative for businesses that are committed to aligning their operations and strategies with ten universally accepted principles in the areas of human rights, labour, environment and anti-corruption.’ (UN Global Compact, UN Global Compact, Overview of the UN Global Compact 2008). The Global Compact project has seen the establishment of a large network of actors charged with producing systems that might enhance the success of this mainstreaming in aid of the overall objectives of the UN. This mainstreaming in turn embraced the idea that ‘international political authority derives not only from rules and procedures, but also from the principles that establish the normative framework for multilateral agreements.’ (Kell & Levin 2002, 4; Ruggie 1996).
It is not clear that ALBA’s grannacional principles are compatible with those of the OECD or the Global Compact. It is possible tat they might overlap, but they are distinct in several respects. Within ALBA that may make no difference. However, outside of ALBA, and especially within Global Compact or OECD adhering jurisdictions, the potential for conflict intensifies. Moreover, operating in the form of grannacional enterprises may also affect the extent and nature of sovereign immunity as these enterprises seek to project their activities beyond ALBA.
The grannacional enterprise, like the ALBA food bank, and like the ALBA emphasis on asymmetrical trade arrangements grounded on public needs as determined by states deepens the conclusion that ALBA represents a substantially distinct conception of regional trade associations. In the place of a model grounded in an active role of private economic actors and a passive regulatory role for states, ALBA posits an active role for states in trade as principals, as well as a regulatory role in that trade. In effect, it suggests that states remain sovereign entities and economic bodies simultaneously. This suggests an amalgamation of the public and private spheres almost the inverse of that developing in the United States and Europe. (Backer 2008). This is effected, however, through an organizational structure that remains heavily dependent on the state, tightly controls the ability of ALBA to evolve into an autonomous organization furthering its own ideological basis, and mimics, in substantial respect the outward forms of traditional approaches to integration in Latin America. That mixes message both helps ALBA—by emphasizing its attachment to conventional forms of organization and implementation. But it also hurts ALBA—by appearing to reduce it to just another variation in traditional approaches to integration well understood within the ALADI umbrella. That mixed message is ultimately confusing, both internally and externally to the construction of the sort of institution implied by its organizing ideology.
Yet the differences between ALBA and conventional free trade arrangements ought not to be completely dismissed. Those differences extend beyond its ideological basis to its implementation. Though the organization is still quite young, it has been active enough to give us a sense of its operation. It commodifies public and well as private goods—from teachers to doctors, along with goods and services the usual subject of trade and trade regulation. In this sense, at least, ALBA represents, in part, a return to a command economy basis of economic organization—and an extension of command economy principles to economic relations among states. Whether plural systems—combinations of command and private economy can co-exist in a way that is efficient or stable, however, has yet to be seen. ALBA well serve as a great experiment in this respect. Its outcome is by no means certain.
For the moment, however, ALBA’s greatest contribution might well be its ideology. Its mere existence serves as a basis for challenging assumptions in the creation and implementation of methods of integration. It provides a base through which this distinctive ideological voice can be leveraged. Understood as an ideological joint venture among its participants, ALBA represents a space within which a consensus on alternatives to the existing preeminent economic model of globalization might be constructed. For that purpose it provides a safe space—not within the territory of any of the state participants, and detached from the governments of each of them. In this aspect, ALBA may make its most potent contribution to current debates about the form and principles of economic integration grounded in trade relations among states and their populations. This is a potent weapon in states with large classes of poor people—people who vote. Even the smallest implementation of the ideological framework of ALBA has the potential to change the political dialog in many states in Latin America. This may represent Cuba’s most imposing challenge to the developed world. If successful, ALBA could reign in a new era of trade and commerce whose primary interest is the welfare of all people, and not merely just profits, as the standard mode of operation. Still, whether Bolivar’s dream can indeed become a reality remains to be seen. In the face of a flexible and resourceful opponent, one that can embrace ALBA’s core ideology without its politics, that challenge will not go unmet.
This article has suggested both the singularity of ALBA and its connection with the now almost ancient tradition of trade integration that has also marked Latin American state to state economic relations. In lieu of a conclusion—for conclusion is premature with respect to an entity that is so young and unformed—this conclusion will suggest the six great points of tension and connection that ALBA represents within traditional models of trade and investment, on the one hand, and among the state system in Latin America.
First, ALBA implicates the tension between integration and nationalism. (Ayllon 1997) This tension implicates the construction of hierarchies between states. It also implicates hierarchy between national and supra national governance organs. ALBA tilts heavily toward the ALADI model of partial integration. The great innovation of ALBA is that partial integration under its model is heavily controlled by states, rather than by individuals acting through private markets that cross state borders. But ALBA is more leery of the use of integration as a doorway for the creation of autonomous supra-national organs. The Model of European Union integration, and even of the much milder form of MERCOSUR integration, is rejected in favor of substantial intergovernmentalism. ALBA provides an ideological space through which states can trade at the public level among each other and with everyone else. Beyond that lies the great unknown.
Second, ALBA implicates the tension between integration that is controlled or directed by or for the private sector and that controlled or directed for the public sector. This tension implicates the understanding of the fundamental nature of trade and investment policy, or at least, of the fundamental driving force of trade. It suggests a tension in the understanding of the understanding of borders—either as the marker of the limits of state economic power to be deployed by with or against other states, or as a porous barrier to certain activities (population movements and the provision of social welfare benefits) by not to others (economic activities) which respect to which borders essentially disappear. It thus also suggests the limits of state power over economic activity both as a physical reality and as a substantive policy value. ALBA tilts heavily toward a public market model. This model appears to manifest a traditional socialist internationalism. It is it hardly that: this is socialist internationalism updated by the incorporation of the symbols and institutions of modern private markets economic globalization but now turned to the use by states as primary economic actors. The grannacional enterprises present a stark model of that updating and the embrace of modern forms of economic activity. But so does the ALBA bank. ALBA suggests that private markets ought to be incidental to and fill in gaps in public market activity. The engine that drives the economy is the state. Integration under ALBA is merely another aspect of sovereign relations. It should be directed to enhance rather than reduce national power over its internal and external economic policies and the production of economic activity. But this presents a fundamental assumption completely incompatible with those on which the last half century of economic integration has been based.
Third, ALBA implicates the connections between the fight against the form of the current international system of economic regulation and the construction of trade frameworks. Ideology matters; fundamentals and grounding assumptions about the operation of state and non state actors, and their powers and prerogatives matter. (The Battle for Latin America’s Soul 2006). Indeed, ideology has been the principal motivator of much of what has been developed by the Cuban state apparatus. Ideology drives implementation. If one can control the ideological basis for the approach to an issue—like trade and investment—one can effectively control the parameters through which the issue is understood and systems constructed. Ideology and ideological education may well be the principal aim of ALBA, at least in its initial stages of development. (Azicri 2008). Ideology may well be its most important product—to the extent that through ALBA, the consensus assumptions about trade and investment might be modified. ALBA represents a practical implementation of the ideological framework for the state system and the relationship of that system to economic regulation that the Cuban state has been developing since the 1970s. (Backer 2006). That framework emphasizes a focus on public commerce, on inter-governmentalism as the basis for integration, on attacking the private markets system and the privileging of private actors as controllers of economic decision-making and on a shift back to public control over the economy at the state level. It suggests that the basis for such activity is public rather than investor welfare, as determined by the state, and that all economic activity is tinged with a primary social rather than a more narrow economic purpose. ALBA expresses these views in its four anti capitalist values, it schedule of objectives, in the corporate social responsibility framework of the grannacional enterprises and in the unequal barter arrangements at the heart of Petro Caribe.
Fourth, ALBA implicates the connections between anti-Americanism and integration. One of the great tragedies of Latin American integration has been its conflation, sometimes more sometimes less powerfully, with a fear or loathing of the United States or its actions and policies. It also reflects a related connection held by many of these states—that private markets based integration is a cover for western and particularly American neo colonialist aggression, the object of which is to subordinate and exploit Latin American states indirectly to the same effect as under the old more direct colonial system. This is the essence of neo-colonialism as understood in Latin America. (Alvarez 2005; Gana 1996). It also speaks to notions of American neo-colonialism and private markets based globalization. (Gassama 2008). And, of course, it has had significant application to Latin American-U.S. relations. (Carrasco 1994).
Challenging the model of private markets based globalization is a way of challenging American power under the cover of the same issues which the Americans have been using to assert that power. The ferocious attack on the FTAA at the heart of the early ALBA efforts reflects this quite starkly. The conflation of the FTAA and the United States provided a vehicle for the conflation of ideological and political opposition a global set of factors tied to perceived American aspirations in the region the United States; the United States itself, private markets based globalization as an indirect challenge to assertions of American national power, and private markets as an attack by the United States on the power of newly decolonized states to direct and protect their internal economic life and set the policies thereof.
Fifth, ALBA implicates the close connection between traditional models of Latin American integration and its challengers. This connection implicates the importance of institutionalization models both for the allocation of power even among state and supra national organizational actors and for the way those allocations of power among supra national endeavors cannot be avoided. The traditional models, from that of the European Union to those of NAFTA and MERCOSUR, represent to varying degrees efforts to institutionalize power within a supra national entity, and consequentially, to remove discretionary power over economic issues from states. Clearly, that extent of that divergence of institutional governance power varies greatly, from the almost negligible shift in MERCOSUR to the substantial divestment of power among the member states of the European Union over those economic affairs set out in their respective organizational instruments. ALADI on the other hand represents a different model—one that sacrifices virtually any framework for consolidating power in a supra national administrative or governance entity in favor of intergovernmentalism that is limited only by the values represented by the parties to the agreement. ALADI’s focus on partial trade agreements among diverse parties (for these agreements need not include all ALADI member states) finds its investment analogue in the growing number of bilateral investment treaties between ALADI member states and others. But each of these is grounded in a consistent set of trade and investment assumptions. ALBA presents a conscious inversion of the dominant private markets model on which contemporary trade and investment agreements are framed.
However, that inversion is grounded precisely in the forms adopted for the implementation of that model and its ultimate integrationist aspirations. Both ALBA and ALADI present trade frameworks that serve as umbrellas for regional integration grounded in sector and nation specific layers of agreement that in the aggregate will achieve the desired integrative result. Indeed, ALADI’s self conception nicely frames ALBA as well: “La ALADI da cabida en su estructura jurídica a los más vigorosos acuerdos subregionales, plurilaterales y bilaterales de integración que surgen en forma creciente en el continente (Comunidad Andina de Naciones, MERCOSUR, etc.). En consecuencia, le corresponde a la Asociación –como marco o “paraguas” institucional y normativo de la integración regional- desarrollar acciones tendientes a apoyar y fomentar estos esfuerzos con la finalidad de hacerlos confluir progresivamente en la creación de un espacio económico común.” (ALADI. Inicio, Acerca de ALADI, ¿Quienes Somos?). The partial trade agreements for which ALADI is famous is nicely mimicked by the current crop of ALBA projects—from the Bank of ALBA to the grannacional enterprises and efforts at monetary union. Likewise, the form of investment treaty finds echoes in PetroCaribe and even in the model of asymmetrical trading between different groups of ALBA states. The intergovernmentalism of ALBA is the hallmark of ALADI.
Sixth, ALBA implicates the tension between internal and external trade and investment frameworks. This tension implicates the goals of solidarity among states, and the consequences of integration grounded in partial arrangements that distinguish among states, and groups of states. This tension also implicates the tensions between mutual advantage and competition among states. Borders, even the borders of trade and investment arrangements include those within it and exclude those outside. Those effects are sharply drawn within traditional private markets oriented trade and investment regimes, but they cannot be avoided under ALBA’s framework of multiple joint venture arrangements. Indeed, the tension is quite acute in the construction of ALBA simultaneously as an internal mechanism for trade among ALBA members and ALBA as an aggregation of trade with non-ALBA states. These tensions are quite visible in relation to CARICOM, where there is ambiguity in ALBA’s position as either partner to or a competitive and a destabilizing force that would threaten CARICOM’s cohesion. As Vaughn Lewis noted in 2008:
I have suggested in this lecture that the region is now due for a more deliberate and open discussion, initiated at the level of Heads of Government, of new purposes of integration in the new environment which has come upon our countries and which I have sought to outline. . . . All this is required to take place at a time when, unlike the period of 1973 and the commitment to the Treaty of Chaguaramas, the national realities are of differing levels of attributes and assets possessed or available to the particular states, and therefore of differing senses of strengths and weaknesses governing the options that they have at their disposal. The muted debate about this or that country’s attraction to Petrocaribe, or to the Bolivarian Alternative (ALBA), to the perceived detriment of existing regional commitments, is simply about that. (Lewis 2008).
Moreover, the relationship of ALBA’s state trade vehicles to outside markets may produce differences in outcome and operation from their internal constitution. This will become particularly evident in coming years with respect to issues of sovereign immunity, conformity to foreign law, disclosure and transparency requirements beyond ALBA states, and the form and implementation of global corporate social responsibility rules that may be different from those developed within ALBA.
Ultimately, the issue around which all of these tensions and connections revolve can be reduced to a single image—the character, effect and purpose of borders. ALBA reminds us that these issues and connections are not limited to political borders—ideological, cultural, economic, class, gender, race, and ethnic borders can be as important, and as immersed in dialogues of integration, solidarity and respect. They all play a critical role in the ways in which integration is understood and practiced. But they also play an equally important role in the construction of hierarchy, subordination and exploitation of all such relationships. ALBA represents another way of advancing the former and resisting the later. But the borders that have confronted other efforts at integration within Latin America will also confront ALBA.
1. Founding Director, Coalition for Peace & Ethics, Washington, D.C., information available at http://www.peaceethics.org, and Professor of Law, Pennsylvania State University, University Park, PA. The author may be contacted at firstname.lastname@example.org.
2. Associate, Robinson & McElwee, PLLC in Charleston, WV; J.D., Pennsylvania State University May 2009.
3. Fidel Castro, for example, has been quite vocal about this since the 1980s. (Castro 1999). These are views refined by the Venezuelan leader, Hugo Chavez:
¡Nadie puede negar eso! Ahora, yo estoy seguro de que esos son intentos del imperialismo norteamericano de ponernos a pelear con los hermanos caribeños; no vamos a pelear con los caribeños, entre otras cosas ya tenemos Petrocaribe y estamos avanzando en la integración con el Caribe. . . . Así que no nos queda sino seguir avanzando, pensando siempre, actuando siempre según nuestros planes estratégicos, geopolíticos, en la integración de Suramérica y de los pueblos suramericanos, y de los gobiernos de la América Latina y el Caribe. ¡Ese es nuestro camino! De allí nadie nos apartará. . . . El ALBA sigue avanzando. El ALBA no es sólo una propuesta, además de propuesta el ALBA ya comenzó a marchar.
4. “La ALADI, como organismo que agrupa los países sudamericanos puede y debe desempeñar un papel fundamental para profundizar y avanzar en este debate en la región. De promover una discusión para refrescar los modelos, para salir del viejo modelo, y hacia un nuevo modelo de integración sobre las bases de propiciar un desarrollo económico que busque dar respuesta a la exclusión social, a la disminución de las brechas de inequidades y que se plantee impulsar el real desarrollo, a fin de fortalecer la presencia de la región en el escenario internacional” (Id.).
5. CARICOM, the Caribbean Community and Common Market “was established by the Treaty of Chaguaramas, which was signed by Barbados, Jamaica, Guyana and Trinidad & Tobago and came into effect on August 1, 1973. Subsequently the other eight Caribbean territories joint CARICOM. The Bahamas became the 13th Member State of the Community on July 4, 1983, but not a member of the Common Market.” (Caribbean Community (CARICOM) Secretariat, History of the Caribbean Community; see also Girvanm 2007).
6. “Por esta razon la propuesta del ALBA le otorga prioridad a la integracion latinoamericana y a la negociacion en bloques subregionales, abriendo nuevo espacios de consulta para profundizar el conocimiento de nuestras posiciones e identificar espacios de interes comun que permitan constituir alianzas estrategicas y presenter posiciones comunes en el proceso de negociacion.” (Venezuela, Ministerio de Comunicación e Información de la Republica Bolivariana de Venezuela, Sobre el ALBA).
7. “El desafio es impeder la dispersion en las negociaciones, evitando que las naciones hermanas se desgajen y sean absorbidas por la voragine con que viene presionandose en funcion de un rapido acuerdo por el ALCA.” Id.
8. Id. at 1. “Aspiramos a un nuevo orden mundial, basado en la justicia, la equidad y la paz, que sustituya al sistema injusto y desigual que hoy prevalence…”
9. Id. at 2. “…esos principios de la coexistencia pacifica incluyen tambien el derecho de los pueblos bajo dominacion foranea y colonial a la libre determinacion, a la independencia, la soberania, la integridad territorial de los Estados, el derecho de cada pais a poner fin a la ocupacion extranjera, a la adquisicion de territories por la fuerza y a escoger su propio sistema social, politico y economico.”
10. Id. at 8. “Porque la independencia, la soberania y la libertad de nuestros pueblos, aparentemente libres, estan de continuo amenazadas por el control externo de sus recursos naturales, por la imposicion financiera de organismos internacionales oficiales y por la precaria situacion de sus economias que les merma la plenitude soberana.”
11. Id. (“se basará a partir de esta fecha no solo en principios de solidaridad, que siempre estarán presentes, sino también, en el mayor grado posible, en el intercambio de bienes y servicios que resulten más beneficiosos para las necesidades económicas y sociales de ambos países.”).
12. “De grito en grito se fue amasando un cuerpo en conflicto con la estrategia contrarrevolucionaria del capitalismo imperial transnacional. Estrategia militarista que busca imponerse ocultandose detras de normas y disciplinas mercantiles, sobreponiendo los derechos del capital por encima de los derechos humanos: culturales, socials, politicos, de los Estados logrados por las luchas centenarias de la humanidad…” (Valencia 2005).
13. In 2003, during an intervention at an ALADI Conference, Hugo Chavez announced twelve goals that ALBA would subscribe to and work diligently to achieve. The goals are as follows: (i) To promote the fight against poverty; (ii) Preserve the identity and autonomy of Latin America; (iii) To provide for the transfer of technology and technical assistance; (iv) To develop the human resources of the people (v) To prevent any agreement from becoming an obstacle to the sharing of scientific and technological advances; (vi) To stop the abuse created by monopolies or oligopolies through the creation of efficient mechanisms that guarantee fair competition; (vii) To prevent foreign investors from making demands to a State that they be given control over state monopolies of public interest (viii) To provide special and differential treatment to States with small economies in order to provide them with opportunities for growth; (ix.) To promote a process of wide social participation that can be described as democratic; (x) To guarantee that the economic, social, cultural and civil rights be treated as interdependent, indivisible and cannot be renounced; (xi) To ensure that commercial interests or the interests of investors are never given supremacy over human rights or the sovereignty of a State; (xii) To subject the Free Trade of the Americas Agreement to adhere to the agreements protecting human rights, the environment and existing genres; and (xiii) To promote the creation of Structural Convergence Funds to correct any asymmetries that may exist between States. Id.
14, Id. (“El viceministro Arias Cárdenas explicó "no es fácil pasar de una economía dolarizada, como en algunos de nuestros países, a una moneda común, a una integración total en materia de preservación, frente a las crisis financieras internacionales; pero contrario a lo que se preveía vamos a tener en los próximos días buenas noticias de avance y fortalecimiento tanto del Sucre (moneda común) como del fondo de compensación".” Id.).
15. “Así tenemos que empresas grannacionales serán aquellas empresas de los países del alba integradas productivamente, cuya producción se destinará fundamentalmente al mercado intra-alba (zona de comercio justo), y cuya operación se realizará de forma eficiente.” id., at 8.
16. Under phase I of the program, 23,601 Cuban health workers rendered health related services to a population of over 17 million Venezuelans. Id. Under phase II 133 Integral Diagnostic Centers were built, as were 171 Integral Rehabilitation Wards and 5 High Tech Diagnostic Centers, all distributed throughout Venezuela’s territory. In addition another 300 centers are near completion. In total, 1,235 projects are being carried out that upon successful completion will transform Venezuela’s health care system into a modern and efficient system without social barriers to accessing the services offered. Id.
17. Id. at 4. As of April 2006, in Venezuela 220,571 surgical procedures had been performed, of which 188,389 were done to Venezuelan patients. Id. 15,500 patients have also been flown to Cuba to receive medical care.
18. This provides: “(i) the promotion and expansion of trade in goods and services originating in the territories of the Parties by means of, inter alia, free access to the markets of the Parties, elimination of non-tariff barriers to trade, the establishment of a system of rules of origin, and harmonisation of technical, sanitary and phyto-sanitary measures; (ii) the establishment of financial arrangements to facilitate the progressive development of two-way trade between the Parties; (iii) the progressive liberalization of trade in services.” Id.
19. Id., , Art. 2. This sets out a number of related objectives: “(iv) the encouragement of one Party in the market of the other Party so as to enhance the competitiveness of the Parties in the world market; (v) the provision of facilities for the establishment and operation of joint ventures and other forms of economic co-operation activities; (vi) the development of mechanisms that promote and protect the investments made by nationals of the Parties; (vii) the promotion and development of co-operative activities; (viii) the promotion of an ongoing system of consultation and coordination for the exchange of information and views on economic and social matters of mutual interest and, where feasible, for the adoption of common positions at international forums and vis-a-vis third countries and groups of countries; (ix) the discouragement of anti-competitive business practices between the Parties; (x) the continuity and progress of work initiated within the CARICOM-Cuba Joint Commission (the Joint Commission) established by both Parties for the development of mutual relations.”
20. ALADIwas established by twelve states: Argentina, Bolivia, Brazil, Chile, Colombia, Cuba, Equador, Mexico, Paraguay, Peru, Uruguay and Venezuela. (ALADI, Iniciao, Acerca de ALADI, ¿Quienes somos?).
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