By RENATO STECKERT DE OLIVEIRA*
While soybeans and minerals dominate exports, deindustrialization is transforming economies into “factories for the poor.” Mercosur’s challenge is not just to sign agreements, but to reinvent a common technological project that escapes the commodity trap.
Since June 6, Brazil has been holding the Pro Tempore Rotating Presidency of Mercosur. During his recent visit to France, President Lula announced that the signing of a trade agreement with the European Union would be the central objective of this mandate.
This is no small feat. As we know, this agreement has been under negotiation for about twenty years, involving extremely complex issues, from the importance of agricultural commodities in Mercosur's export agenda, which awakens protectionist demons on the part of Europeans, especially France, who are concerned about the stability of their respective agricultural economies, to problems of environmental regulation, of which Europe has become the great defender in recent years.
But President Lula would have another issue to put on the agenda of his presidency of the Bloc. It is technological-industrial development, the basis for the joint economic development of the countries in the region.
Since its establishment, Mercosur has been extremely timid in this sector, treating it as one more problem to be addressed by defining customs tariffs between its countries, especially Brazil and Argentina, which have the largest industrial economies. Economies that, by the way, have been suffering increasing losses, not only in their relative shares in international trade, but, consequently, in the generation of wealth for their respective countries.
The case of Argentina is certainly the most dramatic. If we take the year 1975 as the starting point of a historical series marked by increasing deindustrialization, the demographic growth in that period is equivalent to the increase in the number of poor people in the population, which means, in the words of economist Carlos Leyba of the University of Buenos Aires, that from that moment on the Argentine economy became a “factory of poor people.”
Less dramatic, but no less serious, the decline in the participation of industry in the Brazilian economy to levels seen in the 1940s led to an unprecedented reprimarization of the economy, which became increasingly dependent on agribusiness and mineral extraction. Campaigns to mobilize public opinion in favor of agribusiness, which would be “popular,” instead of warning about the risks that this situation represents, present it as a virtuous situation, as if the country had finally found its “agricultural vocation.”
As a result, accounting for a paltry 1,1% of world trade, the triad of soybeans, oil and iron ore constitutes Mercosur's main export agenda. Even in domestic trade, the share of industrial goods has been decreasing, giving way especially to Chinese products.
Economic policies are part of the exercise of sovereignty by national states, and in times of globalization, each government has the full right to take advantage of what it sees as its country's comparative advantages in the global economic system. However, this understanding and subsequent policies by successive governments in the region have led to the weakening of industrial structures and explain much of the bloc's current economic and social difficulties.
Mercosur was not created to impose choices on its member countries. However, their common purpose, declaring themselves, upon signing the Treaty of Asunción, “convinced of the need to promote the scientific and technological development of the States Parties and to modernize their economies in order to expand the supply and quality of goods and services available, in order to improve the living conditions of their inhabitants”, imposes on them common responsibilities in establishing institutional structures capable of designing a new approach to the challenge of industrial development, failing which the overall objectives of the treaty will be compromised.
Gone are the days when economic and industrial development was projected through import substitution policies. Although the consolidation of a Latin American school of theoretical and political thought in this direction, as well as its practical achievements, constitute an unavoidable legacy of that period, today it is necessary to go further – as, in fact, the States Parties to the Treaty have declared themselves convinced of.
Technology, without which it is impossible to imagine the aggregation of wealth and well-being in a society, has ceased to be a variable that can be exchanged for other goods and commodities. It has become the dynamic center of the social processes involved in economic activity.
More than just machines and material goods, technology is increasingly intertwined with the processes of production, development, control and application of knowledge to economic activity. Technology is, above all, a way of approaching problems based on knowledge, and having technology means having the capacity to project an economy on a global scale, appropriating increasing shares of the value produced in international chains of production and distribution of goods.
By focusing his Pro Tempore mandate at the head of Mercosur on the signing of the trade agreement with the European Union, President Lula has the opportunity to simultaneously take the initiative to provide the Bloc with the necessary instruments for joint planning of the strategic reconversion of its economies. Only in this way will this agreement have virtuous consequences for our countries, placing them at the height of the challenges of instability and competitiveness in a world increasingly based on knowledge, science and ongoing technological and economic innovation.
The proposal for a High-Level Commission, responsible for coordinating studies and proposing regional policies aimed at the joint development of the countries of the Bloc, would be a first step. At this time of international crisis, it is necessary to revive, and relaunch, the tradition that generated independent Latin American thinking at another level.
This will be the path not only to advance Mercosur's objectives, but to advance towards the long-awaited Latin American unity, leaving behind the stage of being held hostage by the interests put in dispute on the international stage.
*Renato Steckert de Oliveira is a retired professor of sociology at UFRGS. Former Secretary of State for Science and Technology of Rio Grande do Sul.
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