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Federations: States Punching Above Their Weight - Is South America Next?

By Thomas Muirhead

The days of international relations being conducted on the basis of states are over - or have at least been dramatically modified. The world is moving towards a balance of regional federations. The dramatic difference in economic and political power wielded by a few larger states in comparison to the many smaller states is to be challenged by the creation of economic and political entities that can match the largest states. These federations will bring the world to a stage where there are fewer, more equal, political and economic entities. Test

Some states, such as the USA, China, India and Russia, might be able to stand alone, but could find themselves also integrating with other states into federations, or at least, as the USA has done with NAFTA, into trading agreements that tie countries together in economic, if not political integration. States are still necessary as they make up the federations, and have legislative and sovereign power up to a point. The state is also being eaten away from the bottom, with devolved power creating a complex hierarchy of political entities, each with their particular role, answerable to a different sized constituency.

The federation

The clearest example of a federation is the European Union. It is a grouping of states, each endowed with an equal position within the federation. Believed by some to be an anomaly created by a century of devastating conflict, it in fact represents a model the rest of the world’s smaller states are beginning regard with envy. In the face of the overpowering state dominance of the USA, the EU was originally formed to try to create a balance in economic weight. Only later were the advantages of political weight understood, and a political integration took place.

The state in Europe has already taken on the complex, watered down position in the political system that will follow in federations around the world. It is a pyramid of interests. Political institutions are there to best represent and further the interests of its constituents. Within the EU the role of the state has come to sit a little further down the pyramid of interests than it does elsewhere in the world. It has also forgone its total state control with the increasing spread of devolved authority across the EU. The UK, Spain, Germany, Austria, Belgium, Italy, and Portugal all have devolved legislative authorities in parts of their countries.

The pyramid of interests can be understood best by example. Take the Basque people in Spain. Locally they hold the teaching of Basque in their schools as an important issue. This is an issue that is best resolved locally, so it is decided locally. Spain is a Catholic country, whereas many in the EU aren’t, so the issue of whether it should retain Catholic education in schools is one that should be decided at state level. However, on an international stage, Spain cannot compete in economic or political stakes with the largest states in the world. A united EU weighs in much closer to the larger state’s class, so in interstate (or interfederational) economic or political discussions the benefits for the people in the Basque country are best resolved at a regional federation level.

South America integrates

At the moment, the EU stands alone as the sole regional federation. However there are others at different stages of development. South America provides us with the clearest example of a region undergoing the process of federalisation. Trading blocs, such as MERCOSUR and CAN already exist in South America. Recently CSN and ALBA are other indications of a movement towards the creation of an economic and political federation integrating most, if not all, of the countries in South America.

The process in South America highlights the reasons for creating an integrated federation. MERCOSUR is a customs trading bloc including Brazil, Argentina, Uruguay and Paraguay. It also has Chile, Bolivia and Peru as ‘associated states’. So far the integration has been an economic one, the benefits of which are quite clear. The group punch in a different weight category than they would as individual states. The intentions of the group, led by Lula of Brazil are clearly for increasing both political and economic integration across the continent. The first week of December saw the 1st of January 2007 was decided as the date for the start of the MERCOSUR parliament. Negotiations with Venezuela to join as a full member are intended to be concluded by the time that happens.

In concurrence with the expansion of MERCOSUR is the development of The South American Community of Nations, CSN, which was signed by twelve of the continent’s 13 countries on the 8th December 2004. The Declaration of Cuzco stated clearly that the intent was a political integration as well as economic, upholding, “democracy, solidarity, human rights, freedom, social justice, respect for territorial integrity, diversity, non-discrimination, and the assertion of autonomy, equality among sovereign states, and peaceful conflict resolution.” The intention is to draw both MERCOSUR and CAN into one integrated federation.

The benefits on an interstate/federation stage are clear. In the words of Andean Community Secretary General, Allan Wagner, “The South American Community of Nations will become the fifth ranking world power, with a GDP of one trillion dollars; and the fourth in population, with 361 million inhabitants; and will cover an area of over 17 million km2.” It will also be the world’s largest food producer, and would contain a comfortable supply of oil.

The importance of the integration of South America can be seen through the reaction to developments by other states. The USA has been aware of the region’s intentions and clearly views such a federation as a threat, both economically and politically. Since the countries, led by Brazil and Venezuela, under Lula and Chavez respectively have been championing such integration, the USA has thrown themselves behind free trade agreements with the Andean Community of Nations, CAN, and with Chile. These have been developed only to stall and damage the integration process. When dealing with the individual states the possibility of a free trade agreement with the US was too tempting due to the overwhelming weight of the USA in comparison to the smaller states. However the regions’ rejection of the US-proposed Free Trade for the America’s Agreement shows that when punching as a region it can stand up to the USA politically. The rejection indicated that the region would prefer to create a federation of its own rather than be bound into one dominated by US policy.

The Association of South East Asian Nations, ASEAN, is another region that has begun to move beyond the solely economic trade agreements towards political integration. 2005 was meant to be the year when Myanmar (Burma) hosted the ASEAN summit. However, under pressure from the other members over its human rights record, it relinquished the role. Whilst it is at a slightly less overt stage of development, the region does seem to be moving in the same direction. A recent agreement with China to create a pan-Asian trade agreement suggests the creation of an even wider federation down the line.

These federations will bring the world into a political and economic situation unseen before, built on 7 or 8 large entities, made up of federations and states. How the complex internal politics of the federations will match up to the relatively simple internal politics of large states remains to be seen. Whether this period will return to the warring period of entities at war, as seen in Europe when the balance of states left anarchy, or whether it will create a situation where mutually assured destruction between all the major players, which brings about total stability, it will certainly remove the dominance of one state over all others.

The role of the state then is a changed one. For the largest countries, the role will not have changed much, but for the vast majority of the world’s states, the role will have become one stage within a more complex political hierarchy. This new, more subtle breakdown of political power allows issues to be decided at a level that suits the issue. This should theoretically bring the greatest benefit to the constituents.

Thomas Muirhead has been published in Urban Latino, Buenos Aires Herald and dogmanet.com. In addition to English, he also speaks Spanish and French, as well as some Russian. Mr. Muirhead currently resides in London, but in the past he lived in Argentina, Ecuador, Australia and China. He also traveled throughout Europe, Tunisia, Thailand, Laos and India. Mr. Muirhead also writes for www.describedthoughts.com. He may be reached at thomasmuirhead@hotmail.com . Petroleumworld not necessarily share these views.

Editor's Note: This commentary was first published by Global Politician, an independent journal of politics, economics and world affairs, on January 2, 2006
( http://globalpolitician.com). Petroleumworld reprint this article in the interest of the readers.

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Petroleumworld 01/15/ 05

Copyright©2005 Thomas Muirhead/Global Politician, All rights reserved

 

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