National University of Political Studies and Public Administration [604823]

National University of Political Studies and Public Administration

Latin American Studies

2016
The European integration model vs. the
North American integration model for
Latin America

Tilincă Alina Alexandra
Development, International Cooperation and Humanitarian Aid
1st semester , 2nd year

The European integration model vs. North American integration model for Latin America

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Contents
Introduction ………………………….. ………………………….. ………………………….. ……………………….. 4
Overview on the Latin American and Caribbean integration model ………………………….. …… 4
MERCOSUR ………………………….. ………………………….. ………………………….. …………………… 5
The Association of Caribbean States ………………………….. ………………………….. ……………… 7
The Union of South American Nations ………………………….. ………………………….. ……………. 7
European Uni on and Latin America and the Caribbean ………………………….. ……………………. 8
The European Union integration model for Latin America and the Caribbean …………….. 9
The North American integration model for Latin America ………………………….. ……………… 11
North American Free Trade Agreement (NAFTA) ………………………….. ………………………. 11
Free Trade Area of the Ame ricas (FTAA) ………………………….. ………………………….. ……… 12
Comparison between the European and the North American integration model for Latin
America ………………………….. ………………………….. ………………………….. ………………………….. ………. 13
Conclusions ………………………….. ………………………….. ………………………….. ……………………… 15
Bibliography ………………………….. ………………………….. ………………………….. ……………………. 17

The European integration model vs. North American integration model for Latin America

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Abbreviations
ASC – The Association of Caribbean States
FTAA – Free Trade Area of the Americas
EEC – European Economic Community
EU – European Union
LAC – Latin America and the Caribbean
NAFTA – North American Free Trade Agreement
UNASUR – The Union of South American Nations

The European integration model vs. North American integration model for Latin America

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Introduction
Throughout the last decades, the Latin American and Caribbean countries tried to integrate
in multiple ways in order to achieve various benefits. However, their integration process wasn’t a
very successful one due to different regional objectives, weak ins titutionalization or the
personalization of politics. That’s why important actors, such as USA, Canada and European
Union stepped in and presented their own vision about how Latin America and Caribbean
countries should act in order to obtain a fruitful int egration and become an important regional and
international power.
This paper focuses on both the European and the North American integration model for
Latin America and aims at determining which one of the two models was more appropriate to the
needs of Latin America and to which one it was easier for LAC countries to commit to, in terms
of objectives, accessibility and addressing necessities.
The paper is split in four parts as it follows: the first part exposes an overview on the
integration model in Latin America and the Caribbean countries so that we can better analyze the
need (if there was a real need) for a new model for integration. It also presents some of the many
blocs from LAC , for a clearer and more r elevant imagine of the situation; the second part
provides a short comparison between the European and the Lati n American integration process ,
as well as EU’s interest in LAC and how the European model worked for LAC countries; the
third part shows what the North American model implied and how it functioned for Mexico ; and
the last part consists in a comparison between the objectives and outcomes of the two models for
Latin America.
Overview on the Latin American and Caribbean integration model
The integrat ion model in Latin America and the Caribbean is characterized by the creation
of different regional and sub -regional organizations/ blocs, which aimed at forging cooperation
both between LAC countries with external actors. However, all those bloc s had diffe rent interests
so integration became a problem because of the way LAC countries wanted to do it.
I will further continue by presenting some of those blocs , in a random order, so tha t one
may better understand the integration of the Latin America and the C aribbean.

The European integration model vs. North American integration model for Latin America

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MERCOSUR
MERCOSUR is an economic and political bloc which was created in 1991 when Argentina,
Brazil, Paraguay, and Uruguay signed the Treaty of Asunción . In 2012, Venezuela joined the
group as well and is now one of the five full members of the bloc. Nowadays, MERCOSUR
consists of the five full members , 6 associate members ( Chile, Colombia, Ecuador, Guyana, Peru,
and Suriname ) and Bolivia, who’s under the process of negotiation to becoming a full member.1
The accord aimed to improve the diplomatic and economic relations between the signing
countries and called for the “free movement of goods, services, and factors of production
between countries ”2. Moreover, it sought to “ eliminate customs duties, implement a common
external tariff (CET) of 35 percent on certain imports from outside the bloc, and adopt a common
trade policy toward outside countries and blocs ”3, while MERCOSUR residents are able to live
and work anywhere within the bloc.
The bloc had very ambitious objectives and wanted to develop a common market and to
introduce a single currency, very much alike to the EU.4 Furthermore, MERCOSUR ’s central
component is the external tariff imposed on certain goods that are coming from countries outside
the bloc , similar to the EU.5
Another resemblance between MERCOSUR and the EU rests in the institutions.
MERCOSUR has an administrative Secretariat, located in Montevideo, with a six -month rotating
presidency6, exactly like the Council of the European Union . It has a Council, which is gatherin g
the Minister for Foreign Affairs and the Ministers of Economy7, similar to Ecofin and the
Foreign Affairs Council that are within the Council of the European Union . There is also the
Group, which is the executive body of MERCOSUR , and is coordinated by t he Ministries of
Forei gn Affairs of the member states ; the Commission of Commerce, which is supervising the

1 Países del MERCOSUR , MERCOSUR, available at:
http://www.mercosur.int/innovaportal/v/7823/2/innova.front/paises -del-mercosur , accessed on 15.12.2016
2 Mercosur: South America's Fractious Trade Bloc , Council on Foreign Relations, 2016, available at:
http://www.cfr.org/trade/mercosur -south -americas -fractious -trade -bloc/p12762 , accessed on 15.12.2016
3 Idem
4 How About a S ingle Currency for Mercosur? , The Wall Street Journal, 1998, available at:
http://www.wsj.com/articles/SB904256933492399000 , accessed on 15.12.2016
5 Mercosur: South America's Fractious Trade Bloc, Council on Foreign Relations, 2016, available at:
http://www.cfr.org/trade/mercosur -south -americas -fractious -trade -bloc/p12762 , accessed on 15.12.2016
6 The European Union as an integration model for Latin America and the Caribbean reality or wishful
thinking? , Bianca Mina, Institutul de Studii Latino -Americane, European Journal of Latin American Studies, Volume
2:2, Bucharest, 2014, p. 98
7 Idem, p. 98

The European integration model vs. North American integration model for Latin America

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functioning of the customs union while assist ing the executive organism , and is always seeking to
apply the common trade policy agreed to by the member states , alike the attributions of the
European Commission; and the Parliament, also known as Parlasur , which is the parliamentary
institution of the bloc, having an advisory and decision -making powe r, and is gathering
representatives from the national Parliament of each member state , just like the European
Parliament, however, not as powerful as the latter. 8
In 1995, the EU and MERCOSUR signed the Interregional Framework Cooperation
Agreement , which objective was to “ strengthen existing relations between the Parties and to
prepare the conditions enabling the creation of an interregional association which will cover trade
and economic matters, cooperation regarding integration and other fields of mutu al interest in
order to bring about closer relations between the Parties an d their respective institutions”9. Prior
to this agreement, the European Community already had bilateral agreements with Brazil,
Paraguay, Uruguay and Argentina . The Agreement with MERCOSUR came to strengthen those
existing relations and not to modify and engagements made before in the bilateral agreements
that were already in force.
At the moment, the EU is negotiating with MERCOSUR for an Association Agreement
which cover s also a political and a cooperation pillar. The negotiations were re -launched in May
2010 , after previously being suspended in 2004. The Association Agreement’s goals are
to establish a comprehensive trade agreement, that will cover not only trade in industrial an d
agricultural goods , but also “services and establishment and government procurement, and the
improvement of rules inter alia on government procurement, intellectual property, customs and
trade facilitation, technical barriers to trade ”.10
For MERCOSUR, th e EU is the first trading partner, accounting for 20% (equivalent to
€110 billion ) of MERCOSUR 's total trade in 2013. MERCOSUR also has great importance for
EU, being the 6th most important export market . The EU is a major exporter of commercial

8 The European Union as an integration model for Latin America and the Caribbean reality or wishful
thinking? , Bianca Mina, Institutul de Studii Latino -Americane, European Journal of Latin American Studies, Volume
2:2, Bucharest, 2014 , p. 98
9 Interregional Framework Cooperation Agreement , Council of the European Union, available at:
http://ec.eu ropa.eu/world/agreements/prepareCreateTreatiesWorkspace/treatiesGeneralData.do?step=0&redirect=true
&treatyId=405 , accessed on 15.12.2016
10 Idem , accessed on 15.12.2016

The European integration model vs. North American integration model for Latin America

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services t o MERCOSUR , as well as the biggest foreign investor in the region, with a stock of
foreign direct investment that has steadily increased over the past years .11
The Assoc iation of Caribbean States
ASC was created in 1994 through the signing of the Convention Establishing the
Association of Caribbean States (ACS) by the 25 Member States12 and th e Associate Members13.
The organization aimed for “ consultation, cooperation and concerted action, whose purpose is to
identify and promote the implementation of policies and programmes designed to: […] develop
the potential of the Caribbean Sea through interaction among Member States and with third
partie s; promote an enhanced economic space for trade and investment with opportunities for
cooperation and concerted action […] and establish, consolidate and augment, as appropriate,
institutional structures and cooperative arrangements responsive to the vario us cultural
identities, developmental needs and normative systems within the region. ”14 Its institutions are
the Ministerial Council and the Secretariat .
The Union of South American Nations
UNASUR was born when the UNASUR Constitutive Treaty was signed in 2008, in
Brasilia. UNASUR is a regional organization, an intergovernmental union of two regional blocs,
the MERCOSUR and the CAN15,16 which functions following the EU model.
The Union of South American Nations constitut es in all countries in the South Ameri can
region: Argentina, Bolivia, Brazil, Colombia, Chile, Ecuador, Guyana, Paraguay, Peru, Suriname,

11 Interregional Framework Cooperation Agreement , Council of the European Union, available at:
http://ec.eu ropa.eu/world/agreements/prepareCreateTreatiesWorkspace/treatiesGeneralData.do?step=0&redirect=true
&treatyId=405 , accessed on 15.12.2016
12 Antigua and Barbuda, Bahamas, Barbados, Belize, Colombia, Costa Rica, Cuba, Dominica, Dominican
Republic, El Salvador, Grenada,Guatemala, Guyana, Haiti, Honduras, Jamaica, Mexico, Nicaragua, Panama, St Kitts
and Ne vis, St Lucia, St Vincent and the Grenadines,Suriname, Trinidad and Tobago, Venezuela according to the
Convention Establishing the Association of Caribbean States (ACS), Association of Caribbean States, 24 July 1994,
Annex I
13 Anguilla, Bermuda, British Virgin Islands, Cayman Islands, Montserrat, Puerto Rico, Turks and Caicos
Islands , United States Virgin Islands, The French Republic in respect of: Guadeloupe, Guyane, Martinique; The
Kingdom of the Netherlands (Aruba and the N etherlands Antilles), according to the Convention Establishing the
Association of Caribbean States (ACS), Association of Caribbean States, 24 July 1994, Annex I I
14 The Convention Establishing the Association of Caribbean States (ACS), Association of Caribbean States,
24 July 1994, Article III
15 The Andean Community (CAN), established in 1996 by Bolivia, Colombia, Ecuador, Peru and Venezuela,
having as main objective to achieve economic integration by creating a common market.
16 The European Union as a n integration model for Latin America and the Caribbean reality or wishful
thinking? , Bianca Mina, Institutul de Studii Latino -Americane, European Journal of Latin American Studies, Volume
2:2, Bucharest, 2014, p. 99

The European integration model vs. North American integration model for Latin America

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Uruguay and Venezuela; which goal is “ to build integration in the cultural, economic, social and
political areas while respecting the current situation of e ach of our member nations ”17 while
eliminating the socio -economic inequality, achiev ing social inclusion, increas ing citizen
participation, strengthen ing democracy and reduc ing existing asymmetries, all by taking into
account the sovereignty and independence of each of their States.18
UNASUR is composed of four organisms in charge of making decisions : the Council of
Heads of State and Government, the Council of Ministers of Foreign Affairs, the Council of
Delegates and the Secretary General.19
Some other examples of organizations/blocs from LAC are: The Central American
Integration System (SICA), The Bolivarian Alliance for the Peoples of Our America (ALBA),
The Community of Latin American and Caribbean States (CELAC), The Pacific Alliance, etc.
European Union and Latin America and the Caribbean
Today, the European Union is seen as a complex and refined model of integration when
discussing about cooperation between different states. It cannot be said that the E uropean model
is an ideal example of integration, but for sure it’s an integrated and cohesive structure.
The reasons why the European integration is working and the Latin American and
Caribbean failed stay in the concept and the historical context. The i ntegration, in the case of the
EEC/ EU, started after the destruction caused by WW II. Europe’s target was the fight against a
common enemy in order to survive and the commitment for peace , while t he base of the
European construction stayed in the common values , that everyone needs to ful fill and in which
they believe, in the common institutions and in the common policies.
Unlike EU, the integration process for Latin American and Caribbean was determined by
friendship and go od relations between countries, mostly presidents, and it didn’t have a core
value as common ground , but economic objectives and the goal of a better life. Moreover, they
didn’t have real commitments, but rather just a declaration of intention, a promise, when joining a
bloc. The LAC sta tes weren’t giving up real sovereignty powers, like in the case of the UE,
because they did not have a transfer of power from national to supranational institutions. In the

17 Who are we? , UNASUR, available at: http://www.unasursg.org/en/node/177 , accessed on 27.12.2016
18 Idem, accessed on 27.12.2016
19 Idem, accessed on 27.12.2016

The European integration model vs. North American integration model for Latin America

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case of LAC we are talking about an economic integration and not integration as set in the
theories of regional integration that were developed from the European case20.
The European Union integration model for Latin America and the Caribbean
The relations between EU and LAC go back a long way , to the 15th and 16th centuries, as
they sha re history, p olitical culture, languages and also religion in most areas. This is why “there
are no two regions in the world with a deeper mutual affi nity than the one that exists between
Europe and the conglomerate comprised of Latin America and the Caribbean ”21. As a result,
LAC were the “ ideal candidates for receiving the highest attention from Europe and its
institutions ”22, so they tried to copy the European model in order to integrate regionally .
However, the results weren’t as good as expected and the exchange between the two actors was
uneven.
Nevertheless, the lineament of the bloc composed by the two actors is exceptional,
including 61 sovereign states, with a population of over one billion people, that together
constitute over a quarter of the world’s GDP . But as I mentioned before, the relation is unequal,
since the EU seems to stand on higher ground. Europe was the first foreign investor in the Latin
America n region , and it is the second most important trade partner. Moreover, it is the leadi ng
donor to the area and offers a series of horizontal programs that focus on guiding the small and
medium -sized companies , promoting higher education as a means of social and economic
development and struggle against social inequality , such as the Erasmus + programme, offering
support in information technologies and co -operating in social policies, health, education,
administration of justice, employment and taxation policies .23
What was Europe’s interest in Latin America? Well, first of all it wanted a regionalized
market that was easy to access, which will boost their exports, but from where they could also
import the necessary materials, especially raw materials and services. Secondly, by cooperating
and helping Latin America integrate it promoted a positive imagine and its soft power on the
international arena, by showing that dialogue is the best way to deepen relations between 2

20 Theoretical and developmental challenges to contemporary South American integration , Ingrid Sarti, The
European Consortium for Political Research (ECPR), 2014, p. 1
21 The European Union and Latin America: Relations and Model , Joaquín Roy, Núcleo de Estudos Jurídicos,
Volume 14:1, 2009, p. 147
22 Idem , p. 148
23 Idem , p. 148

The European integration model vs. North American integration model for Latin America

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different actors. And lastly, Europe wanted to show that cooperation is an instrument to support
and to promote a broad liberalization of trade and investments.24
Europe sought integration in terms of “open regionalism”, meaning that the integration
policies could be compatible with trade liberali zation and with policies that tend to increase
international competition, and the insertion of regional markets into the global market.25 The
European Union integration model for Latin America and the Caribbean followed three major
dimensions: a political dimensi on, an economic one and a social dimension .26 The political
dimension refers to the development of common political interests, such as institutionalized
political dialogue , common institutions and common policies. But this also mea nt giving up
sovereignty and transferring attributions from national to supranational level. And, as I said
above, the LAC states weren’t ready to take this step. The economic dimension mainly meant
economic co -operation and trade relations in order to increase the competitiveness of Latin
Americ an enterprises in international markets . And the social dimension made reference to
common policies and national strategies that would favor the development of the civil society and
also create a deeper connection b etween the two parties, which would eventually lead to a better
co-operation. The Erasmus+ programme was one of the actions undertaken for this purpose .
It seems like in the recent years the process of Latin American integration had been
proceeding at a f aster speed than that of Europe, but this is also because of the challenges that
Europe had to confront in the recent years. Nowadays, the EU-Latin American relations are based
on regular summits every two years, which take place in a designated city , alternating between
the two continents. “ Mindful of the subdivision of the Latin American/Caribbean sub -regions, the
EU has been organizing its framework of activities with individual trading blocs and sub -regional
integration schemes ”.27

24 The European Union: promoter of regional integration in Latin America? Rhetoric and Reality , Alberto
Arroyo Picard, Graciela Rodríguez, Norma Castañeda Bustamante, Red Mexicana de Acción frente al Libre
Comercio, 2009, p. 14
25 Idem , p. 15
26 The European Union as an integration model for Latin America and the Caribbean reality or wishful
thinking? , Bianca Mina, Institutul de Studii Latino -Americane, European Journal of Latin American Studies, Volume
2:2, Bucharest, 2014, p. 103
27 The European Union and Latin America: Relations and Model , Joaquín Roy, N úcleo de Estudos Jurídicos,
Volume 14:1, 2009, pp. 148 -149

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The North American int egration model for Latin America
After the European model, a North American integration model was seen as an alternative
that could function better. That’s why the North American Free Trade Agreement was conceived.
However, this was more of a purely econom ic integration, rather than an integration from
multiple points of view, such as in the case of the European Union.
North American Free Trade Agreement (NAFTA)
The North American Free Trade Agreement was signed in December 1992 between the
United States, Canada, and Mexico, and was implemented on January 1, 1994. The agreement
focused on direct capital investments and t he liberalization of trade in goods and services in the
next 10 years, through the elimination of tariff and non -tariff barriers intra -regional investment . It
also included other non-trade related provisions that were meant to influence investment flows,
financial and other services, certain aspects related to environmental protection , government
procurement, and the protection of intellectua l property rights. It also established variou s dispute
settlement mechanisms dealing with foreign investment and trade -related disagreements .28 The
Treaty gained a lot of popularity because it became one of the most comprehensive trade
agreements in history because “ it seemed to be a breakthrough that wo uld lead to free trade in
goods and services among industrialized countries and a developing country ”29. The agreement
was conceived in order to help Mexico reach the economic and institutional integration level of
USA and Canada and therefore contained substantial trade reforms by Mexico .30
In the next 10 years after the implementation, most import tariffs and other restrictions to
trade among the three parties were eliminated . The average Mexican tarif f fell from about 12
percent in 1993 to 1.3 percent by 2001 , on the other hand, the U.S. tariffs on Mexican imports fell
from 2.0 to 0.2 percent. But there were some issues with some Mexican products that were
restricted and/or constrained by the rules of the duty -free access to the NAFTA markets , as they
hinge on the fulfillment of produ ct- or sector -specific rules of origin, which determine the criteria
for products to be considered as originating in one of the three member countries.31

28 Lessons from NAFTA for Latin America and the Caribbean , Daniel Lederman, William F. Maloney, Luis
Servén, The International Bank for Reconstruction and Development / The World Bank, 2005, pp. 4
29 Idem, pp. 27 -28
30 Idem, 2005, p. 27
31 Idem, p.3

The European integration model vs. North American integration model for Latin America

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Even though NAFTA d idn’t fulfill all its clauses, important changes were made. For
example, there were offered some subsidies for agriculture, such as decoupled income transfers to
producer s or subsidies that affect ed domestic producer prices.32
NAFTA did manage to go well b eyond traditional trade issues established measures which
resulted in consequential trade reforms33. However, for Mexico the big picture isn’t so positive
because it the treaty made Mexico more dependent on US economy. The most negative impact
from the thre e countries was felt by Mexico. The growth of income (GDP) per person still
remains under 1% and the national poverty rate is almost the same (52,4% in 2000 vs. 52,3 in
20012), t he housing bubble collapse d and the country went through the Great Recession (1008 –
2009) which had a big impact of the Mexican economy.34 After the implementation of NAFTA
Mexico experienced a lot economic shocks, which make it very hard to evaluate the treaty’s
impact35.
Free Trade Area of the Americas (FTAA)
For a better understan ding of the North American integration model for Latin America I
will continue by shorty presenting the Free Trade Area of the Americas agreement.
The Free T rade Area of the Americas was like a second (and possibly improved) version of
NAFTA which extends to all the countries from Latin America and the Caribbean , with the
exception of Cuba. The goal was to eliminate and/or reduce tariff and non -tariffs barriers among
the countries mentioned above and followed the chapters described in NAFTA (such as
agricul ture, investment, market access, etc.).
The negotiations on FTAA started shortly after the implementation on NAFTA in 1994 and
were set to be finished in 2005. However, the negotiations that were held throughout the years
experienced massive protests from activists from different sectors.
The l ast meeting was held in 2005, but FTAA failed to reach an agreement and is currently
in a stagnation status. The member countries of the Agreement proceeded to sign bilateral trade
agreements and no further discussions about the FTAA are planned.

32 Lessons from NAFTA for Latin America and the Caribbean , Daniel Lederman, William F. Maloney, Luis
Servén, The International Bank for Reconstruction and Development / The World Bank, 2005 , p.3
33 Idem, p.4
34 NAFTA: 20 years of regret for Mexico , Mark Weisbrot, 2014, available at:
https:/ /www.theguardian.com/commentisfree/2014/jan/04/nafta -20-years -mexico -regret , accessed on 21.12.2016
35 Lessons from NAFTA for Latin America and the Caribbean , Daniel Lederman, William F. Maloney, Luis
Servén, The International Bank for Reconstruction and Development / The World Bank, 2005, p.4

The European integration model vs. North American integration model for Latin America

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Compariso n between t he European and the North American integration
model for Latin America
With a clearer view regarding what the Latin America and Caribbean integration was and
how the European and North American integration models worked for it, I will continue b y
making a more structured comparison between the two models , while keeping in mind the
already presented facts.
First of all, NAFTA/FTAA are both an intergovernmental liberal model, which does not
cover thoroughly the social dimension. On the other hand, EU is both an intergovernmental and
supranational model on political level, characterized by interventionist economic policies and
with strong social commitment. Regarding Latin America, USA acted more like a hegemo n in its
relations with Canada and Mexico, while EU sought to be a partner. However, none of the two
exchanges was even, because it was clearer that both USA (and Canada) and EU were standing
on higher grounds from all points of view in comparison to LAC c ountries.
On political level, in the relation between sovereignty and integration, NAFTA/FTAA
aimed for competitive sovereignty and excluded any mechanism of “shared” sovereignty . In the
case of EU, the Union focused on “shared” sovereignty, on the transfe r of power from national to
supranational level.36 An attempt to do so happened in LAC, but in their case the supranational
institutions are very weak and don’t have a lot of power. The states didn’t give up real
sovereignty and there is no transfer of powe r from national to supranational level.
Regarding the relations with other countries, EU tried to goad and support LAC to create an
organization that acts a single voice of Latin America in the relations with other parties, similar to
how EU is functionin g. CELAC37 was the bloc which came the closest to this European idea,
however, it was acting different than EU. In contrast, countries from NAFTA/FTAA were
represented individually in relations between third parties.
Finally, at a political level, EU follo wed the development of common political interests,
such as institutionalized political dialogue, common i nstitutions and common policies, for LAC,
while NAFTA sought economic and political institutions meant to boost development .

36 The FTAA and the EU: models for Latin American integration? , Josè Briceño Ruiz, Jean Monnet/Robert
Schuman Paper Series, Volume 6:2, 2006, pp. 9 -10
37 The Community of Latin American and Caribbean States

The European integration model vs. North American integration model for Latin America

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Moving on to the economic level, NAFTA/FTAA were chasing a single market for trade of
goods38 that could benefit all parties and EU pursued for a regionalized market that was easy to
access, which would increase their exports, but from where they could also import certain goods.
Europe was the first foreign investor in the Latin American region, w hile in the situation of
NAFTA, US substantially increased foreign direct investment in Me xico. That’s why some
experts say that NAFTA has been highly successful in bringing Mexico more closely into the
economies of the USA and Canada39.
However, in both cases , direct effects were hard to track down, but, as I explained before in
this paper, both NAFTA and EU produced cons iderable changes in this aspect and total trade has
increased signif icantly in most LAC countr ies during the last two decades as a result to unilateral
trade opening, bilateral trade agreements, regional agreements, and accession to free trade with
the US and the EU40.
MERCOSUR (but also other blocs) seemed to follow very w ell the European model, since
it wanted to develop a common market, to introduce a single currency and to impose an external
tariff on certain goods that are coming from countries outside the bloc41. Of course, in the case of
NAFTA/FTAA there was no such th ing as the idea of a common currency, each country keeping
their national currency. However, no one can blame USA or Canada form not bringing up in the
discussions the concept of a common currency, since it was highly unlikely that all the parties of
the a greement could reach , in such a short time , similar levels of development in order to adopt a
common currency and this also implied h uge costs . Even in the case of EU, not all 28 Member
States have euro. Regarding MRCOSUR, it was not about the bloc adopting the euro, but about it
creating its own common currency, similar to how EU did it.
Lastly, one must also taking into consideration the soci al dimension. At the beginning of its
existence, NAFTA produced an explosion of factories for low-skill workers in Mexico. By
creating jobs, this generated a growth of industry and increased per capita gross domestic product

38 The FTAA and the EU: models for Latin American integration? , Josè Briceño Ruiz, Jean Monnet/Robert
Schuman Paper Series, Volume 6:2, 2006 , p. 11
39 Monetary Union: European Lessons, Latin American Prospects , Eduard Hochreiter, Klaus Schmidt –
Hebbel, Georg Winckler , Paper prepared for the conference "Monetary Union: Theory, EMU Experience, and
Prospects for Latin America" organized by the Oesterreichische Nationalbank, the University of Vienna and the
Banco Central de Chile, April 15 –16 , Wien, 2002, pp. 17 -18
40 Idem, p. 18
41 Mercosur: South America's Fractious Trade Bloc , Council on Foreign Relations, 2016, available at:
http://www.cfr.org/trade/mercosur -south -americas -fractious-trade -bloc/p12762 , accessed on 04.01.2017

The European integration model vs. North American integration model for Latin America

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that eventually lead a booming middle class,42 thus producing not only economic effects, but also
social changes that improved people’s lives. NAFTA also stipulated environmental cooperation
to better understand and improve the protection of environment and to enforce environmental
laws. Some of the initiatives included: toxic chemicals management, bird conservation programs
and linkages between the environment, the economy, and trade. 43
UE provided as well multiple agreements and programs regarding different social aspects.
Some of them are focusing on environmental sustainability and climate change , meant to promote
sustainable management of natural resources and to increase the capacity to co ntend with climate
change and disasters. Other s presuppos e reinforcing the accountability and ca pacity of
institutions and public administrations to provide high quality public services44. Furthermore,
some programs aim for inclusive and sustainable growth for human development , for promoting
higher education and exchange programs (such as Erasmus +) and for gender equality policies in
Latin America.
As one can see, both the European model and North American model stand out in different
aspects, according to the objectives they set out in the beginning.
Conclusions
The integration process for Latin America and the Caribbean was a very difficult one
because of the way the countries tried to achieve it. Different regional objectives, which were
mainly economic objectives, corruption, weak institutionalization and an integration mechanism
done for the most part between presidents, lead to the creation of numerous regional
organizations with no real core values.
While following their own interests, t he three international actors, USA and Canada, on one
side, and the European Union, on the other, t ried to obtain a fruitful form of integration for Latin
America, but did not manage to have a consolidated result that could work on the long term.

42 NAFTA key to economic, social growth in Mexico , Guy Taylor, The Washington Times, 2012, available at:
http://www.washingtontimes.com/news/2012/may/14/nafta -key-to-economic -social -growth -in-mexico/ , accessed on
05.01.2017
43 About NAFTA, NAFTA , 2012, available at: http://www.naftanow.org/myths/default_en.asp , accessed on
05.01.2017
44 Good governance, accountability and social equity , European Commission, available at:
http://ec.europa.eu/europeaid/regions/latin -america/good -governance -accountability -and-social -equity_en , accessed
on 05.01.2017

The European integration model vs. North American integration model for Latin America

16
US principally militated for an economic integration, slightly focused on en vironment.
However , the eliminat ion of tariff barriers and intra-regional investment do not assure a suitable
and efficient insertion of the region in the international economy. Trade is a valuable factor for a
country’s existence, but in order to ensure prosperity and a full integration , one must also take
into consideration administrative reforms, technological progress and the well -being of the
people. Furthermore, North America , through NAFTA, initially focused only on Mexico, and
excluded the other LAC countries.
This is why I believ e that the European model was better suited for the needs of Latin
America , because it focused on multiple dimensions and it tried to pursue most of the necessities
required to provide a better life quality. By concentrating on its “cooperation policy”, th e Union
managed to support and to promote a broad liberalization of trade and investments. Additionally,
it focused on common political policies and interests , as well as on national strategies that could
favor the development of the civil society and that could improve higher education and gender
equality.
All in all, one must admit that b oth integration models had a great impact on Latin America
and helped the countries to reshape in a way that was hard for them to achieve by their own.

The European integration model vs. North American integration model for Latin America

17
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