March 2004, Volume I, Issue 2 www.csis.org

U.S. – ARGENTINA MONITOR Leadership

ARGENTINA AND THE UNITED STATES by Jorge Castro

John J. Hamre CSIS President and Chief Executive Officer

Relations between countries cannot be constructed in a vacuum. They develop, by definition, within a regional and global context. Hence, the bilateral relation between Argentina and the United States must be placed within the context of the present situation of Latin America and the world, whose central characteristic is the unceasing advance of economic globalization and political integration.

Sidney Weintraub Director CSIS Americas Program Phillip McLean Senior Associate and Deputy Director Miguel Díaz Director South America Project Carlos M. Regúnaga Director CSIS Argentina Office

The United States is the central axis of the present world power system; the roles played by all countries in the world within the international setting are defined by their relationship with the United States. Therefore, the reformulation of Argentine policy towards Washington is the principal motor of Argentine foreign policy. At the same time, the overwhelming economic, technological and military supremacy enjoyed by the United States, to a degree never before seen in world history, by no means implies that the United States can do everything by itself. In order to be successful in the international field, it must build consensus and maintain allies, and it is within this context that its options for policy toward Argentina exist. The present phase of world integration has two dimensions – economic and political. Economically, free trade agreements, both bilateral and regional, are being negotiated. In the political field, the key issue is building a new global security system, oriented towards fighting new menaces, in particular transnational terrorism and drug trafficking.

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Argentina and the United States/ La Argentina y los Estados Unidos by Jorge Castro, President of the Instituto de Planeamiento Estratégico “Thinking Strategically” Revisited by José María Lladós and Carlos María Regúnaga

U.S. - ARGENTINA MONITOR AMERICAS PROGRAM These two dimensions of world integration are very clearly expressed in the Americas, and have a great impact on the relationship between Argentina and the United States. FTAA negotiations are the preface to the imminent conformation of the most important worldwide continental economic bloc, but they do not exclude other integration initiatives. The bilateral free trade agreement between the United States and Chile is in force as of January 1st, 2004. This is the first treaty to be signed between the United States and a South American country, and Chile is also an associate member of MERCOSUR. The terms of a free trade agreement between the United States and the Central American Common Market have already been agreed upon. This will be the first free trade agreement signed by Washington with a regional bloc as opposed to a single country, and conversations which will eventually lead to a similar agreement with Ecuador have already begun. Bilateral negotiations between the United States and Colombia and Peru are foreseen to start shortly. The final negotiation between the United States and MERCOSUR represents a turning point in the establishment of an FTAA agreement. This is a serious strategic crossroads for Argentina and Brazil; at this stage it is important to recall the spirit present at the time MERCOSUR was created. MERCOSUR was not founded to generate a new protectionist wall against globalized attacks; the idea behind its formation was that of “open regionalism.” The launching of the regional bloc in 1991 coincided with the opening of the economy, in both Brazil and Argentina. MERCOSUR’s strategic goal was, and continues to be, the generation of a new joint launching platform so that member countries (including Uruguay and Paraguay) may improve the conditions for their competitive insertion in an increasingly globalized world economy. To move from the strengthening of MERCOSUR to the launch of the FTAA is a basic strategic priority for Argentina, which is shared by the present administration in Washington. The second dimension of the integration issue, security, has left the United States and Argentina facing the common need to tackle an increasing governance crisis in South America, which is expressed in a particularly virulent manner in most countries of the Andean region. The conflict in Colombia, the situation in Venezuela and the growing confrontations in Peru and Bolivia, which seriously risk the stability of Presidents Alejandro Toledo and Carlos Mesa, highlight a scenario of a strong political uncertainty, marked by a high dose of unpredictability. This scenario has been further aggravated by the reappearance of tensions between Chile and Bolivia. In this context, both Argentina and the United States have a strong common interest in maintaining peace and stability in South America. These coinciding interests require joint diplomatic and political action in order to preserve security and peace in the region. The redefinition of long term strategic ties between Argentina and the United States includes political, economic, commercial and security aspects. In terms of trade, the opening of the North American market implies the opportunity for Argentine exports in an economic space which, in terms of import capacity, is 20 times larger than MERCOSUR. Therefore, in the economic field, a broad new range of possibilities for national and international investment opens for Argentina, reinforced by market enhancement and new trade opportunities. Integration with the United States does not imply, by any means, an ideological shift. A socialist President, the Chilean Ricardo Lagos, was the first South American President to sign a bilateral free trade agreement with the United States. Neither does it imply a weakening of MERCOSUR, which should reformulate its own rules so as to make them compatible with the enforcement of FTAA that is foreseen for January 1st, 2005 – which, in historic terms, means the day after tomorrow. Integration with the United States also does not mean opposing the strengthening of ties with the European Union. On the contrary: Mexico – the Latin American country most fully integrated to the North American economy through NAFTA – and Chile – with its bilateral treaty with the United States – have both entered into free trade agreements with the European Union. MERCOSUR has not been able to achieve such an agreement so far, and it looks as if the quickest way to enter into an agreement with Brussels would be through Washington. It has been historically demonstrated that regional integration processes favor those countries with lower relative development that are capable of intelligently taking advantage of the opportunities resulting from their insertion in large economically integrated markets. Two good examples of this are the cases of Spain and Ireland, which in the last two years have been the fastest growing countries within the European Union.

U.S. - ARGENTINA MONITOR AMERICAS PROGRAM Under the present circumstances, a strategic agreement between Argentina and the United States constitutes a lever of enormous importance. This agreement could create the necessary conditions to strengthen the country’s position before transnational economic leaders and, especially, before the international financial community. It represents an absolutely necessity for the reinsertion of Argentina in the global context. Argentina is bound to build power once again within the international arena and overcome this period of isolation. As it is impossible to build power without considering the main trends of a given period, this power structure, a network of ties and alliances, must be built through active participation in the economic globalization process, the technological revolution and political integration that are characteristic of today’s world. External isolation makes any possibility of overcoming the country’s crisis unfeasible. Argentina is compelled to recover its relevance in the world. And, at this time, power is eminently of an associative nature. It is built through networks. The reinsertion of Argentina in the world setting requires the shaping of a wide network of alliances. At this point, the rebuilding of a strategic agreement with the United States is the key issue.

LA ARGENTINA Y LOS ESTADOS UNIDOS Por Jorge Castro Las relaciones entre los países no se establecen en el vacío. Por definición, están inscriptas en un contexto regional y global. De allí que la relación bilateral entre la Argentina y los Estados Unidos tenga que ubicarse en la actual situación de América Latina y del mundo, cuya característica central es el incesante avance del proceso de globalización económica e integración política. Estados Unidos es el país-eje del actual sistema de poder mundial. Todos los países del mundo definen su inserción en el escenario internacional a partir de su relación con Estados Unidos. Por eso, la reformulación de su vinculación con Washington es la principal definición que tiene que afrontar la política exterior argentina. A su vez, la abrumadora supremacía económica, tecnológica y militar norteamericana, que tiene un grado inédito en la historia universal, no implica de ninguna manera que Estados Unidos sea un país que todo lo puede por si solo. Para actuar exitosamente en el terreno internacional, necesita generar consensos y conseguir aliados. En ese marco, están planteadas sus opciones sobre la Argentina. La actual fase de la integración mundial tiene una doble dimensión. Es económica y política. En el aspecto económico, avanzan los acuerdos de libre comercio, tanto bilaterales como regionales. En el terreno político, el tema central es la edificación de un nuevo sistema de seguridad global, orientado a combatir las nuevas amenazas, en particular el terrorismo transnacional y el narcotráfico. Esta doble dimensión de la integración mundial se expresa nítidamente en el continente americano y determina con precisión la relación entre la Argentina y los Estados Unidos. Las negociaciones para la configuración del ALCA constituyen el prólogo para la inminente conformación del bloque económico continental más importante del mundo. Pero esas tratativas no paralizan otras iniciativas de integración. Desde el 1º de enero de este año, está en vigencia el tratado bilateral de libre comercio entre Estados Unidos y Chile. Es el primero establecido entre Estados Unidos y un país sudamericano, asociado además al MERCOSUR. Ya están acordados los términos de un tratado de libre comercio entre Estados Unidos y el Mercado Común Centroamericano. Es el primer acuerdo de libre comercio suscripto por Washington no ya con un país en particular, sino con todo un bloque regional. Están también en marcha las conversaciones para un acuerdo de similares características con Ecuador. En el corto plazo, está previsto el inicio de negociaciones bilaterales de Estados Unidos con Colombia y con Perú. El punto decisivo para la definición del acuerdo del ALCA es la negociación final entre Estados Unidos y el MERCOSUR. Esto implica una seria encrucijada estratégica para Brasil y la Argentina. Aquí es importante recordar el espíritu fundacional del bloque regional. El MERCOSUR no fue constituido para generar una nueva muralla

U.S. - ARGENTINA MONITOR AMERICAS PROGRAM proteccionista frente a los embates de la globalización. Su óptica fundacional fue la del “regionalismo abierto”. La puesta en marcha del bloque regional, ocurrida en 1991, coincidió con el impulso de la apertura económica, tanto en Brasil como en la Argentina. El objetivo estratégico del MERCOSUR fue y es generar una nueva plataforma de lanzamiento conjunto para que sus países miembros (también Uruguay y Paraguay) puedan mejorar cualitativamente las condiciones para su inserción competitiva en una economía mundial cada vez más globalizada. Avanzar entonces desde el fortalecimiento del MERCOSUR hacia el lanzamiento del ALCA es una prioridad estratégica fundamental para la Argentina, compartida por la actual administración en Washington. La segunda dimensión de la problemática de la integración, que es la cuestión de la seguridad, encuentra a los Estados Unidos y la Argentina frente a la necesidad común de afrontar una creciente crisis de gobernabilidad en América del Sur, que se expresa con particular virulencia en casi todos los países del arco andino. El conflicto en Colombia, la situación imperante en Venezuela y la agudización de los enfrentamientos en Perú y Bolivia, con serio riesgo para la estabilidad de los presidentes Alejandro Toledo y Carlos Mesa, configuran un escenario de fuerte incertidumbre política, signado por una alta dosis de imprevisibilidad, sensiblemente agravada por la reaparición de la tensión chileno-boliviana. En este contexto, tanto la Argentina como los Estados Unidos tienen un fuerte interés común en el mantenimiento de la paz y la estabilidad en América del Sur. Esa coincidencia exige la búsqueda de una acción conjunta en el orden diplomático y político para preservar la seguridad y la paz en la región. De estas dos dimensiones fundamentales surge que la redefinición de los vínculos estratégicos de largo plazo entre la Argentina y los Estados Unidos tiene un contenido político, económico, comercial y de seguridad. En materia estrictamente comercial, la apertura del mercado norteamericano supone la oportunidad para el ingreso de las exportaciones argentinas a un espacio económico que, en términos de capacidad de importación, es veinte veces más grande que el MERCOSUR. Por eso, en el terreno económico, abre para la Argentina nuevas e inmensas posibilidades para la inversión nacional e internacional, arrastradas por la ampliación del mercado y las nuevas posibilidades del comercio. La alternativa de integración con Estados Unidos no supone de ninguna manera una opción ideológica. Un presidente socialista como el chileno Ricardo Lagos, fue el primer mandatario sudamericano en concertar un acuerdo bilateral de libre comercio de su país con Estados Unidos. Tampoco implica de ningún modo un debilitamiento del MERCOSUR, que tendrá que reformular sus propias reglas para compatibilizarlas con la puesta en funcionamiento del ALCA, prevista para el próximo 1º de enero del 2005, es decir, en términos históricos, pasado mañana. La integración con Estados Unidos tampoco constituye un camino opuesto al fortalecimiento de los lazos con la Unión Europea. Todo lo contrario: México, que es el país latinoamericano más plenamente integrado a la economía norteamericana a través del NAFTA, y Chile, paralelamente a su tratado bilateral con los Estados Unidos, han suscripto sendos acuerdos de libre comercio con la Unión Europea, algo que todavía el MERCOSUR no ha podido lograr. Pareciera que el camino más corto para acordar con Bruselas pasa por Washington. Está históricamente demostrado que los procesos de integración regional favorecen a los países de menor desarrollo relativo que son capaces de aprovechar inteligentemente las oportunidades abiertas por su inserción en grandes espacios económicos integrados. Tal, por ejemplo, los casos de España e Irlanda, erigidos en los últimos años en los dos países de mayor crecimiento dentro de la Unión Europea. En las actuales circunstancias, un acuerdo estratégico de la Argentina con los Estados Unidos constituye una palanca de enorme importancia para crear las condiciones necesarias para el fortalecimiento de la posición del país ante los grandes actores económicos transnacionales y, en especial, frente a la comunidad financiera internacional. Representa hoy un requisito absolutamente indispensable para la reinserción de la Argentina en el concierto mundial. La Argentina está obligada a volver a construir poder dentro de la sociedad mundial superando su etapa de aislamiento. Y como es imposible construir poder al margen de las tendencias centrales de una época determinada, esta estructura de poder, que es un sistema de lazos y alianzas, tiene que generarse a través de la activa participación en el proceso de

U.S. - ARGENTINA MONITOR AMERICAS PROGRAM globalización económica, revolución tecnológica e integración política que caracteriza al mundo de hoy. El aislamiento externo torna inviable cualquier posibilidad de superar la crisis del país. La Argentina está obligada a recuperar relevancia en el plano mundial. Y, en esta época, el poder tiene un carácter eminentemente asociativo. Se construye a través de redes. La reinserción de la Argentina en el escenario mundial requiere entonces forjar un amplio tejido de alianzas. En este punto, ocupa un lugar central la recreación de un acuerdo estratégico con Estados Unidos.

“Thinking Strategically” Revisited by José María Lladós and Carlos María Regúnaga On December 15, 1999, the Center for Strategic and International Studies (CSIS) presented the final report of a research program on the interaction of defense policies and continental integration to the United States Congress. “Thinking Strategically About 2005 – The United States and South America” was the result of two years of individual work by many specialists, and of seminars held in Washington, Brasilia, Buenos Aires and Santiago. Written by a CSIS team, it emphasized the “need to redefine the size, structure, missions, organization, budgets, and equipment requirements of the security apparatus (police, as well as armed forces) to meet …” what it called “New Millennium Security issues (NMS issues).”1 Both new threats and threats that had acquired new dimensions were among the NMS issues discussed. Some traditional threats had transformed due to technological developments or changes in the political and economic environment, such as local insurgency; terrorism; drug production and trafficking; criminal behavior, including regional or global organized crime syndicates; border and immigration issues, including smuggling of people and goods; and cyber warfare. The final report stressed the importance of regional confidence-building and conflict-resolution missions, such as arms control and nonproliferation, as well as peacekeeping missions within and beyond the confines of the hemisphere. It also posed one particularly touchy question in Argentina, regarding the armed forces providing logistical support to law enforcement and judicial agencies. An area where the report found “… potential for enhanced forms of positive cooperation … (was) standardization of equipment; the joint development, acquisition, and production of military-related technologies…”2 The authors, who had participated actively throughout the program, included a note on the importance of focusing on the possibilities of Inter-American integration in the production of weapons and other elements required by the defense and security forces. In our view, this is the most effective means to link economic integration with the development of a common security agenda in the Western Hemisphere. We now wish to inquire as to the status of some of the issues posed by “Thinking Strategically” and comment on them as seen from Buenos Aires. Rapid deployment v. territorial presence The Argentine Army has played a major role in the integration of the vast, under-populated, Argentine territory. In large areas of the country the armed forces became a civilizing force, often accompanied solely by Roman Catholic missionaries. For a century the Army was the institution where many poor young men completed their elementary education, had the first medical check up and received vaccines. The Navy made similar contributions on the coast of Patagonia, in Tierra del Fuego and other South Atlantic Islands and in Antarctica.

U.S. - ARGENTINA MONITOR AMERICAS PROGRAM These traditional armed forces were also intended, at that time, to defend national borders against would-be attackers, particularly Brazil and Chile. Such designation determined training, equipment and deployment of forces. In the last two decades, Argentina has moved away from this traditional model. Budgetary cuts and the elimination of the draft led to much smaller personnel numbers, while the potential for conflict with neighbors was reduced dramatically as a consequence of the end of border disputes, much improved diplomatic relations and economic integration. By the end of the twentieth century, the armed forces had become small by historical standards as well as by comparison to those of other South American countries, yet they had been entirely professionalized. The most important role they played in the nineties was participation in peacekeeping assignments under the United Nations flag. Military planners began to foresee a future of small units in central locations rather than large garrisons spread along stretched-out borders; of light weapons and rapid deployment rather than heavy armament; of helicopters instead of tanks. Yet as we write these lines, the basic philosophy behind the changes described above is again under scrutiny, and the premises on which it was founded have come under attack. Some key participants in the current debate have expressed their wish to move again towards the more traditional lines, although it is not in any way clear how far this revision will go. The reassessment is certain to continue and its outcome will determine the shape of the armed forces in the near future. Clear division between “defense” and “security” From 1930 until 1983, the armed forces played a major role in politics, with coup d’états overthrowing six civilian governments in that period. And, in many more instances, military chiefs pressured civilian presidents into changing cabinets, legislation and policies. Excesses committed during the so-called “dirty war” waged by the armed forces against guerrillas in the seventies surpassed society’s tolerance. Economic failure combined with defeat by the British in the war over the Malvinas Islands led to a transition to democracy which left the military weaker than in any other South American country undergoing a similar process, and more vulnerable than at any other time in history. Taking advantage of this weakness, and in an effort to prevent military intervention in politics, civilian leadership moved for legislation that set a very clear divide between international defense and internal security, barring the armed forces from the latter. On the institutional level such a decision was underlined by the separation of the Gendarmería and the Prefectura Naval (Coast Guard) from the Ministry of Defense and their transfer, first to the Ministry of the Interior and later on to the Ministry of Justice. Recent global developments tend to blur the separation between defense and security issues, and “Thinking Strategically” forecasted such a process. Argentina’s recent history, however, has prevented her from following the general trend. We do not see any signs of change in the foreseeable future. Intelligence Intelligence is a major area, increasingly important for confronting NMS issues, in which Argentina has yet to develop an adequate structure. The clear separation between defense and security concerns discussed above was reflected again in the enactment of legislation preventing armed forces intelligence services from gathering information regarding domestic threats. This sphere of operations is left to the Secretaría de Inteligencia (formerly SIDE), an agency generally headed by civilians very close to the President.

U.S. - ARGENTINA MONITOR AMERICAS PROGRAM Armed forces intelligence services are limited to addressing foreign threats and continue to operate independently, although some steps towards their coordination by the Ministry of Defense and the Joint Chiefs of Staff have been taken. Coordination with neighboring countries of policies related to NMS issues A Copernican change took place in the Southern Cone when all border disputes were settled and economic, as well as some embryonic political, integration greatly diminished the possibility of war. In particular, one major accomplishment has been the abandonment of an incipient nuclear arms race. We believe that the elimination of the possibility of military conflicts between Argentina and Brazil, the end of any arms race and even the foundation of MERCOSUR, was made possible by President Alfonsín’s invitation to President Sarney to visit the uranium-enrichment facility at Pilcaniyeu. This gesture was swiftly followed by the development of a joint system of safeguards on the use of nuclear installations and materials, the signing of the Nuclear Nonproliferation Treaty and the ratification of the Tlatelolco Treaty. This achievement consolidated peace in a region characterized by very few international confrontations. It should not, however, lead us to forget the other side of the coin: this region has a history of political violence, military intervention in politics and numerous domestic subversive movements. It also suffers from high levels of criminality. In sum, we again see traditional conflicts replaced by NMS issues. Facing NMS issues requires a more precise definition of such issues, deeper intellectual approaches and greater coordination in the formulation and implementation of policies among regional actors. Argentina, its neighbors and the United States still categorize the same non-state militarized movements operating in South America differently. Reactions in terms of definitions applied, priorities given and remedies proposed by different countries in the subcontinent when facing phenomena such as smuggling, drug trafficking, money laundering and even terrorism do not coincide, to say the least. Conclusion The consolidation of democratic institutions in South American countries, the peaceful solution of border disputes and larger degrees of economic integration have reduced the possibility of traditional international confrontations to negligible levels. At the same time, just as predicted by “Thinking Strategically,” threats posed by NMS issues have continued to multiply and diversify. Effective common action, within the region and in coordination with the United States, to face such NMS challenges requires consensus in the definition of problems, the priority given to their solution, and the remedies to be applied. Such consensus cannot be reached without a debate in the region in general, and in Argentina in particular, about the role of the armed forces in relation to NMS issues. Such debate will not take place in a purely academic setting, free from predetermined conditions. Its outcome will be influenced by historical and present realities. The degree of involvement, the leadership or support nature of the role to be played by the armed forces, and the changes in doctrine, training, equipment and institutional framework required to adapt them to the conclusions reached, will be influenced by the character and intensity of the challenges as well as by political and institutional constraints.