Conclusion

$16 an hour by 2023 thus positively affecting Mexico’s labor laws and standards; 3- US farmers get more access to the Canadian dairy market; 4- Intellectual property and digital trade in which the new deal would extend the terms of copyright up to 70 years from 50; and 5- Sunset clause meaning that the terms of the agreement would be expired or “sunset” after 16 years during which it can be reviewed after 6 years. USMCA has been ratified so far by Mexico and the US (Trump signed it to become law on Jan. 29, 2020) expecting to be finalized by Canada’s parliament ratification that is likely to endorse it.³²¹

ability to inhabit political-military conflict between Member States³²³ (Mansfield, Pevehouse, and Bearce,³²⁴ 1999; Mansfield and Pevehouse,³²⁵ 2000).

MERCOSUR has proved to be exemplary in this regard making as such important contributions to peace and stability in the region particularly during the 1990s. MERCOSUR was a key factor for enhancing the bargaining power of Member States in their negotiations with the EU and the USA, a key objective for integration. Such examples can be taken as constructive lessons for other regional integration schemes and possibly for the MENA region.

Through NAFTA, the three countries of Canada, Mexico, and the USA have overall formed a fruitful regional integration (FTA), yet the association faces some ongoing problems in respect to illegal immigration as well as illegal drug trafficking. Security and border control are other concerns particularly on issues related to terrorism. Environmental challenges also exist for these countries including water allocation issues between US and Mexico as well as some problems associated with deforestation, soil erosion, and the water supply in Mexico. There are also logging and energy issues in the USA and Canada and above all from an economic standpoint, agriculture is considered as the looming problem facing NAFTA.

Within NAFTA all remaining barriers on farm products have been eliminated on January 1, 2008. As the result, Mexican farmers seriously are concerned about the effect of such development affecting the price of bean and corn, the two staples of Mexican diet. The overall removal of trade barriers on agricultural products would be a threat which can place a greater pressure on Mexican farmers. The dispute over sugar is a plus and such issues could be a source of considerable stress on the arrangement. Barack Obama had promised to renegotiate with Canada and Mexico on the key features of NAFTA during 2008 presidential campaign but soon after he backed away from that position. Nevertheless, Trump administration renewed the agreement in 2018 calling it USMCA adding some new features into it concerning the above issues.

USMCA has somewhat brought a new spirit of hope to NAFTA with an updated version by introducing new rules and regulations including the country of origin rules affecting automobile industries (75%

manufacturing condition), labor provisions ($16 minimum wage per hour), further US access to the Canadian fairy market, as well as some updates on Intellectual Property Rights (IP) and digital trade, plus

323 Mansfield, P. 14.

324 Mansfield, Edward D.; Jon C. Pevehouse; and David H. Bearce. “Preferential Trading Arrangements and Military Disputes.” Security Studies, 1999-2000, 9 (1-2): pp. 92-118.

325 Mansfield, Edward D., and Jon C. Pevehouse. “Trade Blocs, Trade Flows, and International Conflict.”

International Organization, Vol. 54, No. 4 (Autumn, 2000), pp. 775-808.

a sunset clause which deals with the terms of the agreement and possibility of reviewing and updating it within 6 years.

Moreover on the southern cone, MERCOSUR has been trying to expand. This includes Bolivia and Venezuela that have applied for full membership. However, the undemocratic and nationalistic systems of these two states particularly Venezuela has been the source of concern creating the fear that their policy positions would diverge from the original PTA so as to damage the arrangement. On the other hand, if the attempt towards such expansion fails, it will undermine MERCOSUR’s position in the global economy.

Overall, institutional structure is a concern in MERCOSUR, and under the current arrangement it would be difficult to envisage an effective customs union. In other words, for such a thin and weak set of institutions, the arrangement is considered something much less than a common market.

Finally, as mentioned earlier in this chapter, the dynamics of international relations in the past decades has been affected by globalization and interdependence and in this process regional integration has played a key role while demanding for deeper integration in different parts of the world. Such demand goes beyond merely trade issues encompassing social cohesion and development strategies.³²⁶ Therefore, there are some major challenges facing MERCOSUR for deepening integration which can be shortly numerated as follows:

1- The role and functioning of the MERCOSUR Parliament;

2- The enlargement process beginning with the accession of Venezuela; and 3- The creation of the Union of South American States (UNASUR).

The first challenge concerns the reorientation of MERCOSUR by the Parliament (PARLASUR) where direct election is anticipated at regional level for such Parliament. This aims at bridging the “democratic deficit” in MERCOSUR by reconciling the bloc and its policy or law-making with that of the national policies. The challenge would be on representation as currently the Parliament is composed of 81 MPs, 18 from each member states of the bloc plus 9 from applying member, Venezuela. Associate members – Bolivia, Chile, Colombia, Ecuador and Peru – may also hold seats on the Parliament, but with no voting powers. Currently Mexico and New Zealand are also two observing states of MERCOSUR.

The second challenge concerns the Venezuela’s accession as an important step for the expansion of the

326 Lixinski, Lucas; and DE Andrade Correa, Fabiano. “The Legal Future of MERCOSUR.” in: The Law of MERCOSUR, HART Publishing, 2010, pp. 413-414.

bloc from geo-political point of view as well as strategic benefit to the development of MERCOSUR due to the vast wealth of energy resources in that country. This challenge, however, seems to involve a great degree of political conflict that might affect the decision-making agenda of the bloc. A recent update confirms that MERCOSUR has in fact suspended Venezuela from the group for “rupture of the democratic order.” Accordingly the members of MERCOSUR met on the 5^th of August 2017 in Sao Paulo to make the decision in accordance with the Ushuaia Protocol which had been signed in 1998 that included a democratic clause leading to the political suspension.³²⁷

And finally, the third challenge is about the creation of UNASUR. The way it can be perceived; the idea is looking for a pattern similar to that of the African Union (AU) trying to create some regional communities alongside. However, the UNASUR is not meant to replace MERCOSUR but rather bringing more dimensions into the southern integration including political integration which would of course create some new challenges for the future of the bloc. Even achieving such integration ideal in a wider spectrum requires the progress of the current MERCOSUR which seems to dictate the preconditions for any further regional development beyond economic prosperity by taking political factors into account.

Such progressive strategy in the integration processes of MERCOSUR seems necessary which can consolidate its role as an important international player.³²⁸

327 Mercosur suspends Venezuela for “rupture of the democratic order.” Available at:

http://www.brazil.gov.br/about-brazil/news/2017/08/mercosur-suspends-venezuela-for-rupture-of-the-democratic-order

328 Lixinski, Lucas; and DE Andrade Correa, Fabiano. “The Legal Future of MERCOSUR.” in: The Law of MERCOSUR, HART Publishing, 2010, p. 423.