After the return to [] business as usual (Dabne 2012: 53), politici- zation increased again in

the wake of an economic crisis that affected all MERCOSUR member states, especially
Argentina. Dabne traces the beginning of this new phase to the collapse of Argentina in 2001,
but politicization actually started a bit earlier, with the devaluation of Brazils currency in 1999,
which triggered a confidence crisis in MERCOSUR. For the first time, the integration process
was seriously called into question, leading to a period of soul searching (Bouzas 2002). NGOs
and transregional networks such as the Alianza Social Continental (Hemispheric Social Alliance),
which mobilized against globalization and the FTAA negotiations, also targeted MERCOSUR,
accusing it of reinforcing neoliberalism with its free trade orientation (Olivet and Brennan 2010:
70). Private enterprises lost trust in the organization; of the nine trade disputes sent to the regional
dispute settlement mecha- nism, two were sent afterwards to the WTO, undermining
MERCOSURs
highlight [page 345]: credibility (Coutinho et al. 2008: 1078). In 2000, a number of deci- sions
were approved by the Consejo del Mercado Comn (Common Market Council, CMC) in order to
relaunch the process of integration and restore its credibility. These decisions established new
mechanisms to improve the incorporation of MERCOSUR norms into domestic political systems,
the dispute settlement mechanism, as well as coor- dination among member states on
macroeconomic policy and interna- tional negotiations. In 2002, MERCOSUR gained an emblem
and a flag, symbols created with the aim of consolidating its image and identity (Coutinho et al.
2008). These measures contributed to a redefinition of MERCOSURs profile, and despite the
persistence of the economic slowdown and the decrease of intra-regional trade the episode of
politicization faded. The economic crisis and the contestation of neoliberalism led to radical
change in the domestic politics of MERCOSUR member states with the elections of Lula in
Brazil (2003), Kirchner in Argentina (2003) and Tabar Vzquez in Uruguay (2004), a
phenomenon referred to as the left turn (Castaeda 2006). The new governments redefined their
economic policies away from the previous liberal approach at the national and regional levels.
MERCOSUR entered its so-called post-neo- liberal phase. According to Veiga and Rios (2007:
28), the central pillar of post-neoliberal regionalism was no longer the liberalization of trade and
investments, which came to be seen as an obstacle to the imple- mentation of national
development policies. Post-neoliberal regional agreements, instead, were to be used to further
endogenous economic development and to foster agreements on development and equity issues.
In other words, for post-neoliberal regionalism, widening and deepening trade agendas are not
priorities. Instead of trade, MERCOSUR changed its priorities to political and social issues under
the influence of post-neoliberal ideas. Sanahuja (2010) summarizes the main tenets of postneoliberalism: (1) the predominance of the political agenda and the weakening of the economic
and trade dimensions of regional inte- gration; (2) the return of the development agenda, with a
stronger role for state actors and a diminished role of non-state actors, in particular those in the
productive sector; (3) an increasing interest in promoting a positive agenda of integration, centred
on the creation of institutions and common policies, and growing cooperation on non-trade issues
leading to new forms of South-South cooperation and a renewed peace and security agenda; (4) a
commitment to the promotion of a social dimension of regional integration; (5) an interest in
improving regional infrastructure, a better articulation of regional markets and improved
highlight [page 346]: access to non-regional markets; (6) an increasing concern for energy
security and the search for complementarity in this area; (7) a commit- ment to promoting the
participation of social actors in the process of regional integration in order to improve its
legitimacy. At the institu- tional level, an example of how MERCOSUR changed its free tradeori- ented definition of development is the Social Institute, created in 2007. Its main objectives
are to consolidate MERCOSURs social dimension, to reduce MERCOSURs asymmetries and to
advance the elaboration of regional social policies. Despite the normative consensus among
member states on MERCOSURs new model of development, another bone of contention within
member states domestic societies in the mid-2000s led to a new peak of politicization, namely,

the accession process of Venezuela. The Treaty of Accession of Venezuela was signed in July
2006 and ratified in Argentina and Uruguay in 2007. The Brazilian Congress, however, took four
years to ratify it and did so only after a highly polarized debate on the democratic credentials of
the Chvez government in which the opposition took a different position from President Lula.
Saraiva and Briceo Ruiz (2009: 161) argue that the coalition of different axes of Brazilian
foreign policy (pragmatism and autonomy), which had supported MERCOSUR during its first
years, eroded and that Lulas policies regarding the process of integration became the subject of
criticism by private enterprises and the opposition. Bueno and Feij (2014: 170) also show that
the Brazilian Confederao Nacional das Indstrias (National Confederation of Industries) was
against the acces- sion of Venezuela in 2006, even though it changed its position later. As
discussed below, the Paraguayan Congress also did not ratify the treaty until 2013. Two more
questions contributed to the politicization of MERCOSUR in this period. The first was the
dissatisfaction of the smaller member states with the so-called structural asymmetries. This
discussion led to the creation of the Fondo para la Convergencia Estructural del MERCOSUR
(Fund for the Structural Convergence of MERCOSUR) in 2004. Secondly, multiple actors from
the civil society of all member states demanded more participation and transparency in
MERCOSUR decision-making processes. In addition to the Social Institute, the main initiative
created to provide an answer to these groups was the upgrading of the Parliamentary Commission
into a regional parlia- ment PARLASUR (Ventura and Dri 2009). These initiatives seem to have
satisfied the discontents as open contestation and politicization receded.
highlight [page 347]: While Dabne concludes his analysis with the 200208 cycle of politicization, this chapter argues that in 201213 a new phase of politiciza- tion evolved, centred on a
discussion about the meaningg of democracy and development in MERCOSUR
It remains to be seen if the creation of the more free trade-oriented Pacific Alliance between
Chile, Colombia, Costa Rica, Mexico and Peru in 2012 as well as the recent wave of bilateral free
trade agreements with the United States (such as the 2009 United States-Peru agreement and the
2012 agreements with Colombia and Panama) and with the EU (such as the 2013 EU-Peru
agreement and the EU-Colombia agreement, nego- tiations for which were concluded in 2012)
will undermine this fragile consensus. Brazil has also oscillated between a commitment to the
region and a global approach, as indicated by recent partnerships such as BRIC (Brazil, Russia,
India, China and South Africa) and IBAS (India, Brazil and South Africa) and the bilateral
Strategic Partnership with the EU
The peak of 19992000 was triggered by the economic crisis affecting MERCOSUR member
states and especially Argentina; the main driving force was again the disagreement between
governments and opposition, with the opposition blaming the neoliberal bias of MERCOSURs
devel- opment model for the crisis. NGOs shared this criticism, which led to a major political
change at the domestic level with the election of centre- left governments. A new peak of
politicization was reached in 2006 with the conclusion of the accession treaty with Venezuela, the
first enlargement of MERCOSUR. While the leftist governments supported the accession, the
opposition and private enterprises expressed concerns about the models of democracy and
economic development promoted by this country, referred to as 21st Century Socialism. Finally,
in 2012, the same topic caused a new peak of politicization when the acces- sion treaty entered
into force after the suspension of Paraguay, which was itself highly controversial. The main
driving force of politicization was again the disagreement among governments, the opposition
and the private sector regarding the meaning of democracy and the best economic model for
development.