The New Federalist August 25, 1988 Pages 5 & 8

American Almanac
The Century-Long Fight for
Ibero-American Integration
Excerpts from the Schiller Institute book that is changing the course of
hemispheric history.
As background to New Federalist news reports on the Aug 9!11 con"erence,
held in Pana#a, to establish a new $%atin A#erican &on"ederation,$ Ameri-
can Almanac reprints here the 'nglish!language (ersion o" chapter one o"
the )chiller *nstitute+s book, Ibero-American Integration: 100 Million New
Jobs By the Year 2000 The book was released in 198, &hapter -ne is
headlined $.istor/ o" the 0attle "or *ntegration$
*n August o" 1982, in the heat o" the debt crisis in 1e2ico, then President
3os4 %5pe6 Portillo held secret consultations with the presidents o" Argen!
tina and 0ra6il .e proposed to the# a 7oint declaration o" #oratoriu# on
pa/#ent o" their "oreign debts, with the intention o" thus "orcing the creation
o" a new and #ore 7ust international econo#ic order
%5pe6 Portillo+s argu#ent was si#ple )ince the second tri#ester o" 1982,
1e2ico had been the (icti# o" a (iolent ca#paign o" econo#ic and "inancial
war"are, including billions o" dollars o" capital "light, and a bra6en destabil!
i6ation o""ensi(e on the part o" the international news #edia The inter!
national banks sought to dis#e#ber 1e2ico+s a#bitious industriali6ation
progra#s, and sought that countr/+s sub#ission to the *nternational
1onetar/ Fund, which8as the 1e2ican head o" state well understood8
would ha(e #eant loss o" econo#ic so(ereignt/ and an/ chance o"
de(elop#ent "or the countr/
%5pe6 Portillo reasoned that Argentina and 0ra6il "aced co#parable situa!
tions regarding the creditor banks and the *1F 'ach o" the three #a7or
debtor nations8Argentina, 0ra6il, and 1e2ico8were bound to lose i" the/
continued bilateral negotiations with the banks9 b/ this path the/ had no
"uture 0ut together, allied, with a collecti(e debt o" nearl/ :25; billion,
the/ would be a political and econo#ic power capable o" de#anding and
obtaining a reasonable renegotiation o" the "oreign debt The 1al(inas <ar
had "orged an *bero!A#erican unit/ which, howe(er partial and insu""icient
"or winning the war, nonetheless succeeded in trans"or#ing the continent
Another ele#ent8e""ecti(el/ unknown to the 1e2ican president hi#sel"8
co#pleted the strategic picture o" the Third <orld "oreign debt =)
President >onald >eagan was then considering two dia#etricall/ opposed
policies According to the "irst, that o" .enr/ ?issinger, the debtors would
ne(er dare to "or# a $debtors+ club,$ and there"ore the =nited )tates should
support the unrestrained and #erciless collection o" the "oreign debt The
other was that o" %/ndon . %a>ouche, who in his work !"eration J#$re%
o" August 1982, proposed the "or#ation o" a debtors+ club and an *bero!
A#erican &o##on 1arket, and argued that the =nited )tates would bene"it
"ro# supporting the de(elop#ent o" *bero!A#erica o(er collection o" the
debt
*n the still undecided #ind o" >onald >eagan, a 7oint *bero!A#erican action
could well ha(e altered the balance in "a(or o" %a>ouche, and against
?issinger At the sa#e ti#e, %5pe6 Portillo recogni6ed that the (er/
sur(i(al o" *bero!A#erica de#anded a dra#atic 7oint action and that was
what he proposed Argentina and 0ra6il responded e2actl/ as the bankers
would ha(e wanted the# to The Argentine President told %5pe6 Portillo
that he would not support such a strateg/, because the/ had better $negotia!
tion conditions$ than the 1e2icans 0ra6il went e(en "urther@ the/ sent
word that not onl/ would the/ not 7oin the 1e2ican initiati(e, but would all/
with the banks and would acti(el/ participate in the political and econo#ic
isolation o" 1e2ico *n the "ace o" these two negati(e responses, the 1e2i!
can President was "orced to adopt de"ensi(e national #easures to counteract
the econo#ic war"are@ the banks were nationali6ed, and strict e2change
controls were i#posed
As a result o" this lack o" unit/, "ro# 1982 to the present ti#e *bero!A#erica
has su""ered a worse de"eat than that o" the 1al(inas All the nations o"
*bero!A#erica8e#phaticall/ including Argentina and 0ra6il8ha(e been
looted and destro/ed b/ the usur/ o" the banks and the austerit/ progra#s
i#posed b/ the *1F *n one bilateral negotiation a"ter another, a "raudulent
and illegiti#ate debt has been i#posed9 all the de(elop#ent progra#s that
e2isted ha(e been destro/ed9 the li(ing standards o" the population ha(e
been strangled9 national business#en ha(e been dri(en into bankruptc/9
national currencies ha(e been de(alued to the lowest possible le(els9 in"la!
tion has soared out o" control And, what is worse, so(ereignt/ has been
co#pro#ised
Nonetheless, that battle was not the last Toda/ *bero!A#erica "aces another
challenge8and another chance8si#ilar to that o" 1982 Peru(ian President
Alan Aarcia has hoisted anew the "lag o" continental unit/, and has called "or
breaking with the *1F and creating a co##on #arket $*" we acco#plish
the #iracle o" %atin A#erican integration,$ said Aarcia in )epte#ber o"
1985, $we would ha(e an i##ense continental #arket to increase the
production o" our "actories9 we would ha(e the capacit/ to unite in de"ense
o" the price o" our labor and o" our raw #aterials *t is not possible that
we would ha(e to use a#ong oursel(es the currenc/ o" the #ost power"ul
countr/ on 'arth, being brother countries$
.a(e the political leaders o" *bero!A#erican learned the lesson o" August
1982B
Argentina's President Juan Pern in his study.
The ineteenth Century
The integrationist thinking o" Aarcia and o" %5pe6 Portillo is neither new
nor uniCue )ince the period o" the *ndependence and e(en earlier, thinkers
in the republican tradition ha(e constantl/ spoken o" the $Patria Arande,$
DAreater FatherlandE that is *bero!A#erica This subcontinent8e#phati!
call/ including 0ra6il8has a co##on legac/ o" language and culture which
is based, in its highest "or#s, on the $Augustinian tradition o" &hristianit/$
For o(er a centur/, it has been the 0ritish and their colonialist con"ederates
who ha(e insisted on the strateg/ o" "rag#enting the Areater Fatherland, to
i#pose their will through $bilateral$ negotiations
The histor/ o" nation!building shows us that there are se(eral uni(ersal
guidelines to "ollow to achie(e a region+s unit/ and de(elop#ent These
guidelines were alread/ "ull/ worked out a hundred /ears ago, but continue
to be (alid "or the current *bero!A#erican situation *n addition to the
alread/ identi"ied cultural situation which is the "oundation o" all else, these
guidelines include@
1 The region+s ph/sical integration through construction o" great in"rastruc!
tural works which, in turn, increase the econo#/+s o(erall producti(it/
2 >ein(est#ent o" wealth generated b/ the econo#ic process in order to
#a2i#i6e e#plo/#ent o" labor power with the best possible technolog/ and
producti(it/
F 'stablishing a protecti(e tari"" s/ste# which guarantees the de(elop#ent
o" regional industr/ to suppl/ the #a2i#u# o" the region+s necessities
G The application o" state dirigis# to create a currenc/ and a credit s/ste#
subordinate to the so(ereign interests o" the nations9 that is, to "acilitate the
"irst three reCuisites and to punish usur/ and other "or#s o" econo#ic
i##oralit/
<ho would pro#ote the adoption o" these "our strategies in *bero!A#ericaB
The Aer#an Ale2ander (on .u#boldt, in his scienti"ic (o/age through the
*bero!A#erican countries at the end o" the 18th centur/, proposed connect!
ing the three great watersheds o" the subcontinent8the -rinoco, the A#a!
6on, and the Plata basins8to "acilitate the region+s ph/sical unit/ Dpoint H1E
.u#boldt also proposed setting up a network o" biological and geographical
scienti"ic institutes across *bero!A#erica, in order to accelerate scienti"ic
and technological progress in the region Dpoint H2E
The 1I9;s also saw the creation in 1e2ico o" the 1ining 0ank, e2plicitl/
based on Ale2ander .a#ilton+s concept o" credit *ts purpose was to
guarantee a "low o" cheap credit "or #ining acti(ities e#plo/ing the #ost
ad(anced technologies Dpoint HGE The &ollege o" 1ines was "ounded in
1e2ico "or the sa#e ob7ecti(e in 1I92, with the )panish scientist Fausto
'lhu/ar as its "irst director As %uis JasCue6 showed in his book, Me&ican
Mercantilism 's (nglish )iberalism* the &ollege o" 1ines@
"ro# the beginning "unctioned as part o" a continental plan, since
1e2ico+s &ollege o" 1ines was to radiate its bene"its to all )panish
A#erica *t was designed as the educational center "or the educators
o" the rest o" the continent <hen it graduated its "irst class, a >o/al
-rder #andated that the alu#ni o" the &ollege o" 1ines should
conduct their pro"essional practice not onl/ in New )pain K1e2icoL,
but also in the (ice!ro/alties o" Peru and 0uenos Aires and in the
pro(inces o" Auate#ala, Muito, and &hile
To!" Pern during a #$%$ s!eech to trade unionists in &uenos Aires. 'iddle"
Pernist youth grou! demonstrates (ith the C)T labor union *left+" against
the International 'onetary Fund in #$,-.
*n the #iddle o" the 19th centur/, 1e2ican President 0enito 3uNre6 attracted
around hi# a group o" econo#ists who applied and de(eloped the
protectionist ideas o" the great Aer#an econo#ist Friedrich %ist, the
architect o" the Ooll(erein, or custo#s union, the Aer#an/ o" the 18F;s *n
the A#ericas, econo#ists such as the 1e2ican &arlos de -laguibel and
&hilean 3osel 1anuel 0al#aceda spread these protectionist ideas during the
#iddle and end o" the centur/ Their use resulted in the econo#ic
de(elop#ent achie(ed in those /ears b/ their respecti(e nations Dpoint HFE
-ne o" the #ost i#portant integrationist initiati(es which surged "orth in the
18I;s and 188;s was the idea o" building a continental railroad network
which would link the continent "ro# Tierra del Fuego to 1e2ico, and which
would connect there with the great railroad s/ste# alread/ e2isting in the
=nited )tates Dpoint H1E At the Februar/ 189; Pana#erican &on"erence in
<ashington, P&, 1e2ico+s representati(e 1atias >o#ero8who had been
0enito 3uNre6+s a#bassador to Abraha# %incoln three decades be"ore8
achie(ed the passage o" a resolution "a(oring building an intercontinental or
Pana#erican railroad using the railroad polic/ o" his old "riend %incoln as a
#odel A co##ission was "or#ed to stud/ the pro7ect, and a "ew /ears later,
the &o##ission on the Pana#erican >ailroad, chaired b/ 3os4 %5pe6
Portillo / >o7as Dgrand"ather o" the "or#er 1e2ican PresidentE released the
"inal report and #ade the "ollowing obser(ation@
'2perience has e(er/where shown that the de(elop#ent o" a countr/+s
natural resources "ollows the establish#ent o" rail co##unica!
tions &o##unications between the nations o" the he#isphere
would bring nothing other than the de(elop#ent o" the republics o"
the )outh, especiall/ their interiors )tatistics "ro# the #a7orit/ o"
these countries show that until now onl/ the regions contiguous to the
seas ha(e been de(eloped )uch a railroad would help to e2ploit
territor/ now practicall/ inaccessible and would contribute to the
general wealth o" the countries it passes through
*t is worth noting that this e2cellent centur/!old pro7ect has still not been
carried out, and in general none o" the "our principles #entioned abo(e has
been adeCuatel/ applied in *bero!A#erica The Areater Fatherland re#ains
balkani6ed and underde(eloped, unprotected and o(er!dollari6ed
The Pernist ./!eriment
The reader interrupts us i#patientl/@ $All this is "ine and good, and * agree
that with ti#e we #ust unite the continent 0ut let us keep our "eet on the
ground and be practical To unite to break with the *1F now would be an
irresponsible ad(enture9 the creditor banks and their allies would destro/ us
with econo#ic and trade reprisals And in regard to a &o##on 1arket, we
ha(e alread/ tried this se(eral ti#es, and we ha(e alwa/s "ailed There are
the e""orts o" '&%A, o" all the #oribund organi6ations@ A%A%&, A%AP*,
&A>*&-1, etc And what the/ tried was #uch #ore #odest than what
/our are proposing$
The interruption #erits a response To the "irst doubt8i" it would cost #ore
to break with the *1F or to continue appl/ing its prescriptions8the entiret/
o" this book is an undeniable response To "or# a $debtors+ club$ and an
*bero!A#erican &o##on 1arket has its costs, without doubt, and also its
dangers 0ut we will pro(e that, e(en in the worst o" cases, a united *bero!
A#erica would sur(i(e econo#ic and trade war, i" it reorients its production
and its trade toward an internal *bero!A#erican 1arket 0ut i" it continues
with the present polic/ o" the *nternational 1onetar/ Fund, star(ation and
genocide, and the political dis#e#bering o" each and e(er/ one o" our
nations, is guaranteed
To the second doubt, it #ust be #ade clear that the o"t!cited e2a#ples o"
'&%A o" the 195;s and 19,;s, were neither serious nor honest atte#pts to
achie(e *bero!A#erican integration >ather, the/ were operations intended
to co(er up and di(ert attention "ro# the genuine integrationist e""ort on the
continent launched "ro# Argentina a decade earlier b/ Aeneral 3uan Po#in!
go Per5n Further, we will pro(e that the entiret/ o" '&%A+s acti(ities, as
well as the entiret/ o" the $de(elop#entalist$ +desarrollista, theor/ o" >aQl
Prebisch, was no #ore than an anti!Per5nist and anti!integrationist "actional
operation launched b/ the Anglo!A#erican oligarch/
The true histor/ o" what Per5n did, both in Argentina and on a continental
scale, is (irtuall/ unknown, thanks in large part to the '&%A publications
that ha(e co(ered it up *n the national sphere, Per5n achie(ed a dra#atic
leap in the industriali6ation o" the countr/9 he i#posed protectionist tari""s
and nationali6ed "oreign trade9 he established a national bank based on the
ideas o" Ale2ander .a#ilton9 and he i#posed ad(anced technolog/, such as
nuclear
0ut Per5n knew that this national e""ort could not win in the long ter#
without continental integration, and there"ore he undertook this task o"
uni"ication "ro# the #o#ent he assu#ed the presidenc/, in Februar/ o"
19G,
0/ the end o" that /ear, a con"erence on the alread/ #entioned Pana#erican
>ailroad was held, to take up anew the task o" integration launched 5; /ears
earlier b/ >o#ero and the others Two Argentine engineers, Pedro 3 &rista
and Jicente F -ttado, presented the con"erence with a detailed stud/
de#onstrating both the "easibilit/ and desirabilit/ o" the pro7ect, a stud/
which8in its #ost salient points8retains its appropriateness to the present
da/
The proposal o" the Pana#erican >ailroad e2e#pli"ies the attitude with
which the nationalists o" Argentina, and o" all o" *bero!A#erica, e#erged
"ro# the )econd <orld <ar The/ had econo#icall/ and politicall/ sup!
ported the de"ense o" de#ocrac/ in the <est, and sought the creation o" a
post!war world "ree o" colonialis# and underde(elop#ent The/ insisted on
the industriali6ation o" their countries, and to achie(e it the/ proposed
i#porting capital goods "ro# the =nited )tates At the end o" the war, the/
de#anded that the =nited )tates "ul"ill the pro#ises o" econo#ic aid that it
had #ade during the war
For e2a#ple, in the &on"erence on Trade, held in .a(ana, &uba in Pece#!
ber 19GI, the #a7orit/ o" the *bero!A#erican delegations de#anded capital
trans"er "ro# the =nited )tates, and the right to appl/ protectionis# and
"or# regional econo#ic and trade pacts to de"end their industriali6ation
The Argentine representati(e, 1olinari, e(en suggested a $Per5n Plan$ o"
econo#ic aid "or *bero!A#erica si#ilar to the 1arshall Plan "or 'urope
The =nited )tates responded with t/pical "ree!trade argu#ents that the/ had
learned "ro# the 0ritish9 their ob7ecti(e at the con"erence was to establish
AATT The Peput/ )ecretar/ o" )tate, <illia# &la/ton, re7ected an/ =)
obligation to e2port capital and pro#ote de(elop#ent DThis would occur,
argued &la/ton, to the e2tent that *bero!A#erica attracted pri(ate capitalE
.e de"initi(el/ opposed the idea o" an/ regional pact whatsoe(er, and
insisted on a drastic worldwide reduction o" custo#s tari""s The 19G9
/earbook published b/ the &ouncil on Foreign >elations o" New Rork, -he
./ in 0orld A11airs* reported what happened
The =nited )tates was not prepared "or the onslaught it encoun!
tered The strongest (oices were the delegations o" the industriall/
underde(eloped countries, particularl/ the %atin A#ericans Aeneral
Per5n had alread/ "oreseen se(eral #onths pre(iousl/ the possibilit/
that the (ictors o" <orld <ar ** would not accept a new world order in
which the Third <orld could achie(e its industriali6ation The in!
transigence o" the superpowers, he e2plained, #eant that the underde!
(eloped countries, and particularl/ the *bero!A#ericans, should be
united and adopt a $third position$ in their "oreign polic/
-n 3ul/ ,, 19GI, Per5n sent a note to all the *bero!A#erican go(ern#ents, in
which he called "or continental unit/ and suggested that the "irst steps in that
direction could be taken with the help and #ediation o" the Jatican Per5n+s
Argentina, "or its part, re"used to a""iliate with international institutions
against de(elop#ent, such as the *nternational 1onetar/ Fund
Per5n+s integrationisn initiati(e took precise shape and "or# in one o" his
state#ents #ade 1arch 2G, 19G8@
* belie(e that the ti#e "or con"erences, speeches, and dinners at
Foreign 1inistries is o(er, "or that path leads nowhere <e ha(e
alwa/s li(ed in conte#pt "or those interests which are not conte#pt!
ible in "act To "ound a true co##unit/ o" the A#ericas * belie(e we
#ust intertwine our interests -ur polic/ is to reach bilateral agree!
#ents with all the %atin A#erican countries, o""ering what we ha(e
Three /ears later, in an article published on Pec 2;, 1951, Per5n e2plained
that his strateg/ was to consolidate an alliance a#ong Argentina, 0ra6il and
&hile8the "a#ous $A0&$ proposal8and to use this alliance as the basis "or
constructing a $)outh A#erican &on"ederation$ "or the /ear 2;;; As he
"reCuentl/ stated, $The /ear 2;;; will "ind us united or sub7ugated$
The opti#is# and historic (oluntaris# that can be seen in the "ollowing
article e2cerpt b/ Per5n, pre"igures toda/+s speeches b/ Alan Aarcia@
=nit/ begins with union, which in turn is achie(ed through the
uni"ication o" a pri#ar/ nucleus o" agglutination
The i##ediate and #ediu#!ter# "uture, in a world highl/ in"luenced
b/ the econo#ic "actor, "orces pre"erential consideration o" this "actor
No one nation or group o" nations can "ace the task such a destin/
i#poses without economic #nity
The sign o" the )outhern &ross can be the s/#bol o" triu#ph o" the
nu#ina o" the A#erica o" the southern he#isphere Neither
Argentina, nor 0ra6il, nor &hile can, b/ the#sel(es, drea# o" the
econo#ic unit/ indispensable to "ace a destin/ o" greatness =nited,
howe(er, the/ "or# a #ost "or#idable unit, astride the two oceans o"
#odern ci(ili6ation Thus %atin!A#erican unit/ could be atte#pted
"ro# here, with a #ulti!"aceted operati(e base and unstoppable initial
dri(e
-n this basis, the )outh A#erican &on"ederation can be built north!
ward, 7oining in that union all the peoples o" %atin roots .owB *t
will co#e easil/, i" we are reall/ set to do it
*" this &on"ederation is e2pected "or the /ear 2;;;, what better than to
7u#p ahead, thinking it pre"erable to wait "ro# within, than to keep
ti#e waiting "or usB
<e know that these ideas will not please the i#perialists who $di(ide
to conCuer$ 0ut "or us, the #o#ent <orld <ar Three ends the danger
will be so great, that not to do it will trul/ be suicide
=nited we will be unconCuerable9 separate, de"enseless *" we are not
eCual to our #ission, #en and nations will su""er the "ate o" the
#ediocre Fortune shall o""er us her hand 1a/ Aod wish we know
to take hold o" it '(er/ #an and e(er/ nation has its hour o" destin/
This is the hour o" the %atin people
<e Argentines are prepared, read/, and waiting *" we throw the "irst
stone, it is because we are bla#eless
-(er the ne2t "our /ears, Per5n $threw the "irst stone$ and carried "orward
this strateg/ o" uni"ication, achie(ing successes that terrori6ed the oligarch/
and the international banks, who "inall/ succeeded in o(erthrowing hi# in
1955
<ith the election o" Aetulio Jargas to the 0ra6ilian presidenc/ in -ctober
195;, and that o" &arlos *bNSe6 in &hile at the end o" 1952, the chance to
carr/ out this unit/ polic/ was in the o""ing
Jargas was an old nationalist who had alread/ go(erned in the 19F;s .e
returned to power in 195; with the slogan o" creating a $New )tate$ to
achie(e the $directed industriali6ation$ o" 0ra6il *n 3une 195F, he na#ed
3oao Aoulart as his #inister o" labor, and Aoulart, un#istakabl/ appl/ing
the Per5nist strateg/ "ro# neighboring Argentina, began to organi6e a strong
labor base around $Aetulis#o$ Aoulart and Jargas de"ended the right to
strike, doubled the #ini#u# wage, and organi6ed a 0ra6ilian Aeneral
&on"ederation o" <orkers D&ATE, taking the Per5nist &AT o" Argentina as
the #odel Puring this period, Aoulart tra(eled se(eral ti#es to Argentina,
where he #et with Per5n
Jargas also launched a ca#paign to nationali6e oil, under the slogan $the oil
is ours,$ and in -ctober 195F he succeeded with the establish#ent o" the
state co#pan/ Petrobras Per5n praised it, sa/ing that $Aetulio Jargas,
authentic representati(e o" the 0ra6ilian people, triu#phed against the
pressures o" the North and the dollars o" )tandard -il$
*n &hile, &arlos *bNSe6 was elected to the presidenc/ at the end o" 1952
*bNSe6 had li(ed "or #an/ /ears in e2ile in 0uenos Aires, and there had
culti(ated a strong "riendship with Per5n *t was no surprise, then, that the
Argentine leader saw the election o" *bNSe6 as a golden opportunit/ *n
Februar/ 195F, da/s be"ore going to &hile on a state (isit, Per5n stated
de"initi(el/ to a &hilean newspaper@
* belie(e that &hilean!Argentine unit/, a total unit/ and not hal"!wa/,
should be co#plete and i##ediate )i#ple econo#ic unit/ will not
be strong enough *n this situation, one #ust be bold
$0oldness$ "or Per5n #eant a (irtual union o" the two countries, which "or
centuries had been #anipulated b/ the 0ritish to consider each other
ene#ies *n his historic (isit to &hile8despite the (irulent protests and
de#onstrations organi6ed b/ the socialist leader o" the opposition, )al(ador
Allende8Per5n succeeded in signing an agree#ent on the principles o"
econo#ic unit/
Fi(e #onths later, *bNSe6 (isited 0uenos Aires, where he signed a treat/
with Per5n speci"/ing the "irst concrete steps o" that unit/@ #utual reduction
o" custo#s tari""s, increase in bilateral trade, and establish#ent o" a 7oint
council to deter#ine the ne2t #easures to be taken These steps were not as
re(olutionar/ as Per5n would ha(e liked, but the/ were an ad(ance in the
right direction
EIRNS/Bertha Farfan
Abo0e" 'e/ican children bring (ater from the 0illage (ell. To!" the slums of
12o Paulo" &ra3il.
Per5n i##ediatel/ #o(ed to do the sa#e with Paragua/ *n -ctober 195F,
he tra(eled to that countr/, where he signed an agree#ent "or closer
relations 0ut a second trip, planned "or the #iddle o" 195G, had to be
postponed because o" the coup d+4tat carried out b/ Al"redo )troessner in
1a/ o" that /ear
At the end o" 195F, Argentina also signed bilateral econo#ic pacts with
'cuador and Nicaragua, but in both cases political pressures on the di""erent
go(ern#ents blocked the ad(ance that Per5n sought *n an atte#pt to
out"lank this proble#, Per5n in 1952 urged the &AT to "or# a continent!
wide trade union organi6ation@ AT%A) DAgrupaci5n de Traba7adores
%atinoa#ericanos )indicalistasE *n No(e#ber 195F, Per5n e2plained his
initiati(e@
<e+(e a (er/ sad e2perience o" unions co#e b/ through go(ern#ents9
at least, in 15; /ears none ha(e #anaged to cr/stalli6e with so#e
de"initi(eness %et+s tr/ the other path, which has ne(er been tried, to
see i", "ro# below, we could graduall/ attain a deter#ining in"luence
in the reali6ation o" such unions
<hile Per5n pro#oted AT%A), the great Cuestion both "or hi#sel" and "or
his oligarchic ene#ies, continued to be@ <hat will happen with 0ra6ilB *n
195G, as in 198,, the realit/ was si#ple@ *" 0ra6il enters, there will be
integration and a co##on #arket9 i" not, not As 3oseph Page, Per5n+s
biographer, e2plained@
*t would ha(e taken a .erculean e""ort to o(erco#e the antagonis# between
Argentina and 0ra6il, a deepl/ entrenched realit/ which "irst Areat 0ritain
and later the =nited )tates e2ploited as the cornerstone o" their diplo#atic
polic/ toward )outh A#erica Nonetheless, Aetulio Jargas+s surprise
election (ictor/ in 195; brought to the 0ra6ilian presidenc/ the onl/
politician who could ha(e reached an agree#ent with the Argentines
Jargas was "riendl/ with Per5n, and was open to the idea o" continental
unit/ According to Per5n, when Jargas took the presidenc/ again, he
pro#ised that the/ would #eet in >io de 3aneiro or in 0uenos Aires to sign
the kind o" agree#ent that Per5n would later seal with *bNSe6
0ut that #eeting ne(er took place =nder Anglo!A#erican pressure, in
Februar/ 195G, ele#ents o" the 0ra6ilian #ilitar/ "orced the $Per5nist$
%abor 1inister 3oao Aoulart to resign And in August o" that /ear, a #ilitar/
#ani"esto de#anded the sa#e o" President Jargas .e acceded, and then
$co##itted suicide$ under suspicious conditions that still re#ain to be
clari"ied
<ith Aetulio died the i##ediate possibilit/ o" the drea#ed!about A0&
alliance -ne /ear later, in the #iddle o" 1955, a #ilitar/ coup also
organi6ed b/ the Anglo!A#erican oligarch/, o(erthrew President Per5n
Argentina's Atucha II nuclear !o(er !lant *right+" before construction (as
halted by the International 'onetary Fund. At left" 4a5l Prebisch.
Prebisch and .CLA
Per5n was out o" power in Argentina 0ut, how to contain the power o" his
ideas "or integration on the continentB The Anglo!A#erican oligarch/ had
alread/ decided se(eral /ears earlier that, i" it encouraged direct opposition
to the idea o" integration and de(elop#ent, the/ would be shooting the#!
sel(es in the "oot The/ pre"erred, rather, to co#e up with their own
theories, institutions, and #o(e#ents in "a(or o" $unit/$ and $de(elop#ent,$
to thereb/ sub(ert the strong nationalist "er#ent on the continent The #ain
institution created in 19G8 towards this end was '&%A D'cono#ic &o##is!
sion "or %atin A#ericaE And the #an the/ chose to head up that operation
was one who en7o/ed their absolute con"idence@ >aQl Prebisch
<h/ don >aQlB 0ecause Prebisch, "ro# his "irst political acts in the 19F;s
to his o(erdue death in 198,, was a sha#eless agent o" 0ritish neo!colonial!
is#
Prebisch was trained at &olu#bia =ni(ersit/ and the %ondon )chool o"
'cono#ics *n 19F;, with the coup d+4tat o" Aeneral =riburu, Prebisch
succeeded in occup/ing his "irst post o" so#e i#portance@ that o" deput/
#inister o" econo#ics *n 19FF he was na#ed special ad(iser to the
'cono#ics 1inistr/, and took an acti(e part in the negotiations o" the
in"a#ous >oca!>unci#an Treat/ that sa#e /ear That treat/ turned
Argentina into a (irtual econo#ic colon/ o" the 0ritish &rown throughout
the period o" the 19F;s depression@ *t was the onl/ *bero!A#erican countr/
which did not suspend its debt pa/#ents during the depression
*n 19FG Prebisch pla/ed a ke/ role in the creation o" the Argentine &entral
0ank, as a substitute "or the old 0anco de la Naci5n )o bra6en was the
0ritish role in this deal that the &rown sent )ir -tto Nie#e/er, o""icial
representati(e o" the 0ank o" 'ngland, to Argentina with a detailed plan o"
the kind o" bank the/ wanted =n"ortunatel/, )ir -tto could not "ind an
econo#ics #inister read/ to do what he wanted -ne #inister a"ter another
was "ired, until one Pinedo was "inall/ na#ed Although Pinedo too o""ered
so#e resistance, Peput/ 1inister Prebisch ca#e to the rescue and, in his
own words@ $* was able to con(ince hi#, and later * was put in charge o"
carr/ing out the de"initi(e pro7ect o" the central bank$
The resulting institution, directed b/ Prebisch "ro# 19FG to 19G5, was a
#aster"ul work o" sub#ission to 0ritish #onetaris# The Argentine "oreign
debt was paid punctuall/, e#phasis was placed on agricultural e2ports, and
industr/ was s/ste#aticall/ strangled
<hen the Anglo!A#ericans o(erthrew Per5n in 1955, the/ i##ediatel/
called on don >aul to $"i2 up$ the Argentine econo#/ .e returned "ro#
e2ile in the co#pan/ o" a tea# o" '&%A technicians, and prepared the
notorious $Prebisch Plan,$ in which he proposed #easures identical to those
reco##ended toda/ b/ the *1F@
T >educe the si6e o" the state sector o" the econo#/, which would i#pl/
"iring at least 2;,;;; $unproducti(e$ state e#plo/ees
T &hannel the econo#/ toward agricultural production "or e2port, awa/
"ro# industrial production, and raising internal prices o" agricultural
products
T No wage increases "or workers to co#pensate "or the increase in "ood
prices
T .alt the issuance o" credit "or the national econo#/, especiall/ "or the
industrial sector
T &ontract new international loans
T 'stablish $"loating parities$ Dthat is, de(alue the Argentine pesoE and "ree
repatriation o" all pro"its o" "oreign co#panies
T '2port e(er/thing possible to pa/ recentl/ contracted debts
These acts tell #uch #ore about Prebisch than his sugar!coated words about
2desarrollismo2
And what o" the '&%A (ersion o" $integration$B
)ince its "ounding in 19G8 with Prebisch at its head, '&%A has pro#oted a
sort o" $slow$ integration, li#ited in its ob7ecti(es to reducing custo#s
tari""s a#ong *bero!A#erican countries o(er a period o" 1; /ears, and that
within the "ree!trade global "ra#ework o" Aeneral Agree#ent on Tari""s and
Trade DAATTE *t ne(er accepted the idea o" Friedrich %ist8 the 19th!
centur/ Aer#an econo#ist o" the A#erican )/ste# school8o" i#posing
ta2 barriers against products "ro# outside the co##on #arket9 ne(er did it
conte#plate 7oint pro7ects or e(en 7oint de(elop#ent strategies9 it absolutel/
ne(er thought o" establishing a co##on currenc/
'&%A+s "irst work on the sub7ect was published in 3anuar/ 195G, with the
title /t#dy o1 the 3ros"ects o1 Inter-)atin American -rade <hat was aston!
ishing about the stud/ was that, although it ca#e out within 7ust a "ew
#onths o" Per5n+s dra#atic and re(olutionar/ 195F initiati(es "or continental
unit/, not once in its 1FG pages o" te2t did it dare to #ention Per5n8 not
e(en to critici6e hi# *nstead, it presented the idea o" integration as i" it was
an original disco(er/ o" '&%A, that had ne(er occurred pre(iousl/ to an/!
one else
Nearl/ three /ears later, in No(e#ber 195,, '&%A organi6ed a #eeting o"
its Trade &o##ittee, "ro# which it issued its "irst call "or a %atin A#erican
&o##on 1arket as such 0ut, this done, it stressed that $e(olution towards
a regional #arket will be slow and gradual,$ and argued that $the best path
would be to seek the ser(ices o" AATT$ *ts clear intention was to capture
the integrationist "er#ent that still e2isted in *bero!A#erica, and channel it
in a ti#id and innocuous #anner "or the oligarch/
*n the "ollowing /ears, the '&%A bo/s o" Prebisch continued to insist on
$their$ (ersion o" integration, such that in Februar/ 1959 the/ were able to
hold a second <orking )ession, where discussion centered on the $di""er!
ences$ a#ong the attending nations and the need to gi(e $pre"erential$
treat#ent to certain countries and certain products '&%A had succeeded in
turning all discussion on the co##on #arket into a debate on what should
be $e2cluded$ "ro# such an agree#ent, e(en be"ore it e2istedU And alwa/s
the ad#onition against taking an/ concrete steps@ $*n a "ield in which %atin
A#erica lacks all e2perience, to #ake a total co##it#ent "ro# the (er/
beginning could be a (eritable leap into the (oid$
The "or#ation o" A%A%& D%atin A#erican Association o" Free TradeE the
"ollowing /ear could de"initel/ not be accused o" the sin o" $total co##it!
#ent$ to integration >ather, it was a sad parod/ o" the serious e""orts
atte#pted one decade earlier The onl/ thing that A%A%& did was establish
a "ra#ework within which negotiations to reduce custo#s tari""s a#ong the
continent+s nations could be carried out, product b/ product *t did not
conte#plate an/ coordination o" trade, in(est#ent, credit, or other policies
A"ter 2; /ears o" acti(it/ increasingl/ irrele(ant to the terrible econo#ic
realit/ o" the continent, A%A%& was disbanded and replaced b/ the eCuall/
useless A%AP* D%atin A#erican Association o" *ntegrationE )ubregional
e""orts such as &arico# and the &entral A#erican &o##on 1arket
essentiall/ su""er the sa#e proble# as A%A%&
-" all the regional and subregional organi6ations that e#erged in the post!
war period, the onl/ institution that di(erged "ro# the '&%A guidelines was
the Andean Pact, "or#ed in 19,9, and )'%A D%atin A#erican 'cono#ic
)/ste#E, "or#ed one decade later on the initiati(e o" %uis 'che(erria and
&arlos Andr4s Per46, then Presidents o" 1e2ico and Jene6uela respecti(el/
=nlike A%A%&, the Andean Pact did not ha(e its origins in '&%A, but in the
social doctrine o" the Jatican, and particularl/ in the deliberations that
"ollowed the enc/clical 3o"#lor#m 3rogressio* o" Paul J* This #eans that
the Andean Pact in e""ect grew "ro# the sa#e tree that /ielded Per5nis#
The "unda#ental di""erence between the Andean Pact and the '&%A theor/
can be seen in the progra##atic proposals o" the Pact *t proposed not onl/
the reduction o" tari""s a#ong #e#ber nations, but also@
T establish a co##on protectionist tari"" toward the e2terior9
T carr/ out regional pro7ects and in(est#ent9
T coordinate di""erent national econo#ic policies9 and
T unite criteria in regard to "oreign in(est#ent, which resulted in the "a#ous
Pecision 2G o" the Andean Pact
*" the Andean Pact has also "ailed and has not brought about a true &o##on
1arket, it is not "or the "ailure o" its original concept, but because that
concept was applied on too li#ited a scale, and also because the Pact has
been the (icti# o" operations b/ the Anglo!A#erican oligarch/ to destro/ it
6!eration Ju7re3
The 1al(inas <ar, in 1982, #ade clear "or #an/ *bero!A#ericans what was
alread/ e(ident to 3uan Po#ingo Per5n F5 /ears earlier@ that the disastrous
world order established in the post!war era #eans that *bero!A#erica #ust
de(elop its own independent power!econo#icall/, #ilitaril/, and politicall/
8i" it is to #aintain its so(ereignt/ and (er/ e2istence under crisis condi!
tions like the current ones And onl/ a united *bero!A#erica can achie(e
this9 there is no nation on the continent able to do this b/ itsel"
Puring the 1al(inas <ar, in 1a/ 1982, =) econo#ist %/ndon .
%a>ouche, 3r tra(eled to 1e2ico to #eet with President 3os4 %5pe6 Portillo
and other i#portant political leaders )o#e o" the# asked hi# to write out
his proposal "or dealing with the proble# o" the "oreign debt Three #onths
later, the historic essa/ !"eration J#$re% was published, in which %a>ouche
takes up the old integrationist idea, and poses the necessit/ o" i##ediatel/
"or#ing a Pebtors+ &lub and an *bero!A#erican &o##on 1arket .e
de#onstrated the necessit/ o" creating such institutions to stop the *1F+s
genocide9 he e2plained conceptuall/ how these institutions could "unction,
technicall/, and politicall/9 and argued that the onl/ real obstacle to achie(!
ing this was the political proble# o" #obili6ing the leadership o" the conti!
nent to undertake this di""icult task
The #onths and /ears to co#e will pro(e the (eracit/ o" %a>ouche+s
e(aluation
Toda/, *bero!A#erica "inds itsel" with a new8and possibl/ its last8chance
to achie(e genuine integration )ince 3ul/ 1985, when Alan Aarcia assu#ed
the Peru(ian presidenc/, the continent has again had a clear (oice around
which to #obili6e "or unit/
This book intends as its pri#ar/ purpose to contribute to the reali6ation o"
that longed!"or integration, de#onstrating both the "easibilit/ and the
conceptual grounding "or the *bero!A#erican &o##on 1arket *ts #ore
detailed elaboration will be the task o" that success"ul integrationist
#o(e#ent that we also seek to awaken and consolidate