Rodríguez, Techeira, Zas

Homework Test
International Relations and Organizations
November 2021

I.
What do you consider was the possible scenario with regards to the nature
and characteristics of an existing world order after the Cold War (1991) and
before the pandemics of the Covid 19.?

We can define the expression "world order" as reflecting the nature of international relations
at any time (Hass, 2017). It could also be expressed as a set of countries qualified as
superpowers, around which other nations with political and geopolitical affinity align. This
convergence is done through agreements that are mainly informal, which have the objective
of promoting peace and prosperity (although many times they generate the opposite).

The world order during the Cold War was characterized by having two centers of power: the
United States and the Soviet Union. These two superpowers possessed a vast amount of the
resources, both technological and economic. They faced off in a political, military and
ideological war. This conflict culminated when, due to the fallencies of its own system, the
Soviet Union (under Mikhail Gorbachev) failed to implement the reforms efficiently, and on
the same wavelength, the ideology it defended. This lack of coherence between utopia and
practical approach must be considered a key factor that triggered the end of this conflict:. A
new world appeared on the night of November 9, 1989, when the German population
peacefully destroyed the wall that divided West and East Germany. Even more so when the
USSR began a process of disintegration that lasted until 1991.

Once this antagonism ended, the fate of the bipolar world order was clear to many thinkers
and important figures. The United States was considered the victorious power was already
commonplace. A clear example of this statement was Francis Fukuyama's book "The End of
History", But in 2001 society began to give importance to what they so underestimated, the
existence of rivals and possible threats to that power they considered supreme (the United
States). On the morning of September 11, 2001, a series of four suicide bombings took place
in New York City under the command of the terrorist group Al Qaeda. Not only did it tear
down two iconic buildings of capitalism causing an approximate 2977 deaths, but it was also
a direct attack on the heart of liberal democracy. This event was a black swan that marked a
before and after in the history of the West and humanity.

The United States began in that same year the "War on Terror", which included an invasion of
the Taliban government. Two years later, the controversial Iraq War took over Saddam
Hussein´s brutal regime, but based on a flawed premise (the presence of weapons of mass
destruction that never appeared) The Middle East was already a territory of conflict for
decades, but the 21st century increased its importance for the Western world
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The United States and Western Europe, underestimated the skill of the current leader of
Russia, Vladimir Putin, who is characterized by being a great strategist who has an agenda
that threatens liberal democracy. While not preaching communist ideology as in the past, the
current Russian leader has made clear his intentions to expand its sphere of influence,
something that severely worries Western powers. Conflicts such as the one in Crimea and
Belarus are clear examples of Putin's agenda in which the West has not been able to take
advantage. This is partly due to Putin's strategy, which is based on generating unrest within
the heart of liberal democracy in order for the powers to pay more importance in their internal
affairs than to external conflicts. It can be said that the lack of leadership coupled with his
internal conflicts has caused Putin's purposes to be fulfilled.

Since the beginning of the twenty-first century, the United States has witnessed the growth of
what is now its main threat: China. This country has adopted communism as a system and
ideology since 1949, after the "Chinese Communist Revolution" developed, which was a long
civil war that began in 1927. The protagonists at odds were the Kuomintang nationalists, led
by Generalissimo Chiang Kai-shek, and Mao Zedong's CCP communists.

The ascent of China, with a totalitarian regime that bears a resemblance to the Soviet Union,
has put at stake the US and its position. Chinese authorities have managed to “manipulate”
the US by constantly acquiring US treasury bonds, about 4% of the total US treasury debt, a
sum of about a trillion dollars. This can be considered as a wise political strategy to have the
US, and even liberal democracy at their mercy.

China has the power, size, population and productive capacity to compete to be the one who
“calls the shots” of the entire globe. Nevertheless, they rely on a system that historically has
not been able to deal with the problems that appear, especially in the long term. Furthermore,
several analysts have spotted flaws and inconsistencies in their policies (e.g: taxation of the
wealthiest people of the country and the one & one & two-child policy).

For the time being, it would be clever that both nation-states started to “set “guardrails” to
prevent the U.S. - China competition from tipping into outright conflict” (Patricia M. Kim,
2021). Even though there have been efforts to start reconciling negotiations there are still
plenty of matters where these two superpowers do not see eye to eye with each other. The
matters of concern are diverse, but the economic sanctions and restrictions, and the US
policies regarding Taiwan, Hong Kong, Xinjiang and Tibet are the ones that ought to be
treated as soon as possible. On the other hand, the rapid growth of China's military presence
could be the deterrent to this agreement.

Another interesting issue to define the world order is the (de)globalization.i “If globalization
is the progressive opening of more and more state borders to greater flows of money, goods,
services, people, ideas, and so on, then deglobalization is the progressive reclosing of those
state borders, the ongoing reversal of the complex interconnectedness of societies that had
been increasing in recent decades.” (Owen. J, 2021). Both countries analysed are taking a
more conservative approach with regards to international trade. The US with Trump´s
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nationalist measures and the totalitarian government of Xi Yin Ping have been keen to this
new trend.

Donald Trump's campaign, under the slogan of “Make America great again”, has
implemented several measures that are at odds with what the UN is persuading with.
Encouraging companies with incentives to establish their factories in American territory and
fostering consumption of locally-produced goods and services, among other things.

In comparison, the Chinese authorities have been one of the pillars of the rapid growth of
their economy. Most of the enormous multinationals that come from this country are
economically and politically backed by Xi Jinping and his party, a practice that is considered
unfair to competition in terms of global trade. Chinese companies are a step over American
companies from the beginning, and many of them have been sanctioned and accused of, for
example, dumping (in big terms, dumping is selling products below their cost of production
temporarily to increase their market share).

II. Was there any defined form of world order during the current century?

To begin with, we have differentiated the types of world orders; such as multipolar order,
which existed prior to world war I; the bipolar order, an example being the situation that the
world was going through after World War II with respect to the dispute between the United
States and the Soviet Union analyzed above; and the unipolar order, with the United States
after the fall of the Soviet Union being a clear example of this type of order.

The historical period from the end of the Cold War in 1991 to 2001 was a period which is
characterized by a great expansion of world trade and capitalism, with globalization being the
driving factor of the new economic order. It is a period that stands out for the appearance of
the Internet in 1994. Industrial displacements began in Asia and China, and the so-called
"BRICS" also emerged, these are countries that seek to create their own currency in order not
to depend on the dollar and to some extent become independent of American influence, but it
did not have a major impact. The flow of financial capital, knowledge, labor, the valuation of
oil and minerals between countries increased, since these are the materials used in both
production and trade.

We consider that in the first decade of the 2000s the unipolar order predominated over the
other types, since the United States was the largest economic power, with greater political
power and influence and, finally, but being in our opinion the main thing, it had the most
powerful army. Since about 2010, we have noticed the advance of China's role in the world
economy, with exponential growth, which calls into question the magnitude of the American
force against its new Asian rival. We have previously clarified the fact that a communist
ideology predominates in China, although not economically, which aggravates the West's
concern about this opponent. In the previous work (Historia Contemporánea) we also
mentioned the presence of populisms in Europe, which although it is not an antagonistic
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ideology as communism is for the United States, it is important to consider them since they
form a very important role in the framework we are analyzing.

From the year 2001 begins the third millennium, full of mainly technological changes; the
emergence of the internet along with emerging globalization implies the free flow of
information, people and goods and services, but it also allowed countries to connect with
each other with trade agreements, for example, in order to create a global village where
countries focus their production on their competitive advantage and market it to the rest of
the world. This generates great dependence, which implies some discontent for several
opponents of this new modality in force a few decades ago. As a result, protectionism arises,
fearing dependence, many countries choose to adopt protectionist measures in order to
protect domestic production against foreign goods, using high tariffs or taxes to restrict them.

In turn, from 2001 began a dispute for territorial power in certain countries. Clear examples
of this are the situation of Crimea in 2014, the Belt and Road, Belarus among other various
cases that are parts of the current reality. The presence of nationalisms leaders is extremely
dangerous, especially if we consider what happened in the past. It also highlights the presence
of technological and military rivalries, increased tensions and regional conflicts.

To all this historical matrix established in the beginning of the century we must add the
instability of power. It can no longer be considered a unipolar order in itself, since nowadays,
the United States has the presence of rivals, with China being the main one and led many
people to question whether we are facing or will face a new Cold War between both these two
antagonistic powers. Another big reason besides the emergence of new potential rivals is the
significant fact that there is a great lack of leadership on the part of the West, the absence of a
figure of a leader allows rivals to gain power and take advantage of the power vacuum. This
vacuum is not only a consequence of the United States and its policies, but also since
international institutions such as the UN are very absent from the current situation of the
planet.

To a certain extent, “American hegemony was always exaggerated. Critics correctly point out
that the American order after 1945 was neither global nor always very liberal. It left out more
than half the world (the Soviet bloc and China) and included many authoritarian states.”
(JOSEPH S. NYE, JR. 2020).

● Hong Kong Case

In the case of Hong Kong, this region returned to China in 1997 after being a British colony
for 156 years. However, this was under one condition, that "the current social and economic
systems will remain unchanged, as well as their way of life." Under this clause the agreement
between Zhao Ziyang and Margaret Thatcher was signed in 1984, allowing Hong Kong to
enjoy the social and political benefits that every liberal democracy has and creating in turn
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two distinct systems within a country, since the rest of China is managed under the
Communist Party. This condition was respected only for the first decade until China began to
generate influence over Hong Kong. Chief among the problems is the recent criminal
extradition bill to China that could cause Hong Kong to lose sovereignty to China, leaving it
more susceptible to political coercion.

● Taiwan Case

As for Taiwan, we must bear in mind that China always considered it a kind of "rebel
province" and some years ago there was already an allusion to recovering this territory before
it rests in the hands of the West. This problem has been increasing since demonstrations
advocating for Taiwan's formal independence. In addition to this, one of the main interests
that China has on Taiwan is that microchips are manufactured in this country with greater
productivity and China needs that Know-How to make a leap in its production. This is
something very relevant considering the importance of microchips today. From this
instability, everyone is wondering what the United States would do in case China invades
Taiwan. We should also take into consideration the growing Chinese army that is equipped
with modern and powerful weapons, making possible an eventual triumph.

As stated above, these existing tensions do not rise to the level of Cold War tensions, but they
may still become the root of direct conflicts in the future. In these rivalries we can get to see
certain ideological characteristics that exist within this antagonism, by showing us that China
considers these countries "inviolable" territories that have to be governed under its own
regime, which differs totally from the policies of the West. However, we believe that this
conflict is mostly commercial, another characteristic that differs greatly from the Cold War.

● Trump case

The trade tension between these two powers began in 2018, when President Trump
announced the intention to put tariffs on 50,000 million dollars on Chinese products from
unfair trade practices and theft of intellectual property. “China’s hybrid state capitalism
underpinned an unfair mercantilist model that distorted the functioning of the World Trade
Organization.” (JOSEPH S. NYE, JR. 2020). In response to this, the Chinese government
imposed tariffs on approximately 130 American products. As a recent example of this trade
war we can see the attack on the company Huawei. This happened when Google, following
orders from the US administration, was forced to stop providing Android operating system
updates to this company's devices. We must remember that the growth of this company in
recent years has been exponential, surpassing Apple in sales in 2019, which would make
sense for the US to maintain these reprisals.

For years, China has consolidated its economic power by functioning as the main trading
partner and a fundamental link in the value chain of the world's companies. Meanwhile, in the
West we see the consequences of this globalization that has brought the displacement of
companies from the West to China and has generated the loss of employment and deficit due
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to the loss of manufacturing activity. So, the main reason for this trade war is that China is
gradually gaining (if it did not already) the first place as an economic and commercial power,
while at the same time generating greater dependence among the western countries.

China is a power that economically carries out free market policies, facilitating public and
private investments and allowing the free movement of goods with low tariffs. However,
China currently represses itself and controls the population, thus limiting fundamental rights
such as freedom of opinion and the press. In turn, there is only one party (the Communist
Party of China) which controls all aspects of the life of the population, from the various
levels of government to workplaces and educational establishments.

● China case

From 1976, more specifically on November 9 of this same year Mao died in the middle of a
political crisis, this caused the questioning of Maoism and the beginning of a new stage that
was led by Deng Xiaoping. It stood out in the field of international relations and was
characterized by its flexibility with respect to past models, but its performance in these fields
did not keep pace with its political evolution.

Deng Xiaoping promoted modernization and development in China in the 80's through the
liberation of the mechanisms of the functioning of its economy and the opening to the
outside. Agriculture and industry were the main targets. Regarding agriculture, the lands were
distributed among the peasants in order to be worked individually and the occupation of
foreign labor was accepted, the rural communes were closed, etc. This change caused the
sector to grow 11% more. And with respect to industry, greater management autonomy was
offered, central planning was changed to individual incentive mechanisms, and unprofitable
state-owned enterprises were closed. Enterprises were expanded that freed their operation
with respect to state control. The government also stimulated imports of goods that changed
its industrial production systems.

Since the opening of China, this has become the country with the highest economic growth
since the 80's with an average annual growth of about 10%. According to the International
Monetary Fund, China is the second largest economy in terms of nominal gross domestic
product and the first in purchasing power parity. These statements place us in the situation of
the world today, just as in the Cold War we witnessed the confrontation of two antagonistic
powers, which indicates that something that happened once may happen again although in a
somewhat different way. The political scientist Graham Allison raises the concept of
Thucydides' trap, in which he relates the situation we are currently experiencing about how
the United States, considered a hegemonic power, is challenged by the emerging power, in
this case China, as in the Peloponnesian War that occurred in 431 BC.C, where the leading
power Athens was challenged and dethroned by the emerging power Sparta.
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III. How crucial do you think the pandemic could be as an influential factor in
the development of a new world order?

In the year 2020 a Black Swan occurred in the history of humanity, which moved to a second
place all the problems that the leading nations faced to address a greater emergency: the
economic and health crisis caused by the Covid-19 pandemic. We consider it to be a black
swan since it was a sudden event and of very high impact, which showed that countries were
not prepared to face a situation of the magnitude that the pandemic had.

2020 was a hinge year, a period of transition between a before and after marked by the
beginning of the pandemic. The Covid-19 crisis together with the lack of an established
world order caused a world disorder, allowing to question the power of the hegemonic power
and imagine the possibility of various scenarios such as, a conflict between China and the
United States, the resurgence of the strength of liberal democracy now that the American
power has a new leader, or the dethroning of China to the United States. Any of these three
scenarios are possible, as well as many others, will depend on how the powers develop with
reference to the conformation of the possible new world order.

Furthermore, lots of doubts arise about the origins of the covid-19 virus. What we all know
for sure is that it was started in China, but we do not have any clue about the exact way in
which it started to transmit from one to another. Several conspirative theories have been
published on the net and none of them has yet been confirmed. This has put China in the
spotlight and has been accused of throwing spanners at the work in press and scientific
investigations.

“How will Covid-19 change the world? We do not know. But one result is evident: a marked
further deterioration in relations between the two superpowers.Today’s world has powerful
echoes of the early 20th century, when rivalries between established and rising powers led to
war” (Wolf. M, 2021). This obstacle to the truth has also contributed to the deterioration of
the relation between US and China, where the former has been constantly accusing the latter
of different crimes. But, on the whole, it is clear that Americans feel threatened by the rapid
ascension of the oriental country.

Secondly, Coronavirus has accelerated a plethora of problems that appeared to be under

control. Whatsmore, the tendency to opt for more protectionist and nationalist courses of
action evidenced the importance to preserve a world order where trade barriers need to be
petite, just enough to prevent any legal gaps between nation-states. As Wolf wrote in his
article, “...Covid-19 has accelerated these trends. The pandemic is turning countries inward.
The demand for self-sufficiency is rising. Supply chains are being broken. The economic
collapses, stratospheric unemployment and pandemic-constrained recoveries make some
leaders, especially populists and nationalists, happy to blame foreigners”
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The arise of populists candidates among the continents, taking advantage of economical
crisis or recessions and social chaos/nonconformity, emphasized this trend of closing the
countries´ barriers to foreign products, and is has also been seen as a political move against
the different international institutions, such as UN and WTO.

As Dani Rodrick´s clearly highlighted in his Trilemma, there is an impossibility or

improbability of a simultaneous coexistence of three major forces: Economic and
technological hyperglobalization, liberal democracy as the basis of political systems (that
longe for reducing restrictions to the market, such as tariffs, taxes and red tape) and
nation-states sovereignty. Theoretically, only two out of these three forces can be
simultaneously taking place. Nevertheless, on a practical approach, and triggered by the
pandemic, all these three forces are fracturing at once.

Globalisation, which was already stalling and more so now with the global supply chain
chaos; national sovereignty, with the territorial tensions in a range of states and the new
nationalisms; and democracy, with reverses to the rule of law in various places, the crisis of
systems and the rise of populist movements. A choice can no longer be made between the
three sides.

In a nutshell, the COVID-19 pandemic has exposed some problems that nation-states, and the
world itself were suffering. It has deepened the social and economical crisis, which has given
the populists leader territory to place themselves and start to have a voice and vote. These
nationalist´s movements go “against the grain” in terms of the globalization agenda that the
UN prepared. In addition, China has strengthened in comparison to their rival, the United
States of America, mainly due to a strict sanitary plan to avoid Coronavirus propagation. The
US, under the premise of individual liberty that characterizes their policies, has been
enormously affected by the pandemic, and hence, wrecked their development. The upcoming
months will be of paramount importance to evaluate the future of the world (dis)order.

IV. What are your insights with regards to a possible new post Cold War world order,
and which would its key aspects be, in terms of challenges, threats of conflicts and
opportunities?

The current global panorama appears to be chaotic, but there are clear leaders in what
respects to power and influence. However, none of them seems to be completely hegemonic.
For this reason, tensions will appear constantly because of distrust. Despite this, as happened
in the Cold War, nuclear weapons will probably be the reason why an open war will be
avoided. Geopolitical strategic thought means proxy bellic conflicts will remain to be a
common thing.

Political instability and interventionist failures in this century lead some to think that the
United States is in decline, or at least its relative global power. But this has been more
because of the emergence of other competitors that used to be in a weaker position, rather
than because it is itself in decline. There are reasons that might induce public opinion to
believe that the American giant is in decline, and in certain aspects that may be (no one
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would imagine that a President would incentivize a coup d'état and invent voter fraud
allegations), but it is not clear if the United States has dropped down from being number one
in global dominion.

After the fall of communism and a decade of hardships in the 90s, Russia has emerged again
as a global power with the rise of Vladimir Putin. After the resignation of Boris Yeltsin, the
country was in a financial crisis with weak leadership and an ongoing war for control of
Chechnya. The quick rise of his former Prime Minister returned Russia to the spotlight and
became popular among its people. However, the illusions that there would be an integration
with NATO countries vanished, and analysts may argue that the Cold War has returned. A
hardliner domestically, Putin has had a pragmatic approach to geopolitic, supporting both
left-wing governments (such as Maduro´s in Venezuela) and populist rightist movements
(such as Marine Le Pen´s Front National). He is constantly provoking the West, such as when
it spreads fake news that favors anti-establishment candidates, or when it annexes Crimea
unilaterally. But Putin hasn't always got away with its plans, and usually faces sanctions and
alienation from Western countries (with the exception of Trump's Administration).

The European Union, although not a state itself, has not only an internal purpose but acts as
an important political and economic organization abroad. During this century, Germany has
informally led the Union under Angela Merkel´s leadership, while the United Kingdom left.
Several countries in Eastern Europe, formerly in the Warsaw Pact, have joined.
Unfortunately, the rise of populism, Euroscepticism and economic turmoil have slowed down
its ambitions of becoming more of a confederation, with audacious ideas such as a common
army being freezed. The Euro has proved that it is difficult to maintain a common fiscal and
monetary policy with great disparities between countries (Greece has suffered this). However,
despite the rise of anti-establishment parties, there aren't any countries iminent to follow the
UK´s path in the following years.

China, while still embracing authoritarianism, has become more open to the world in
economic issues and is using its huge market as a weapon to gain influence among nations,
particularly developing ones. In the Asia-Pacific region, Japan, South Korea and recently
Australia have shown they are not willing to accept an omnipotent PRC with no
accountability, and China may be testing its rivals (and the US). Supporting North Korea,
vanishing Hong Kong's autonomy, threatening to invade and annex Taiwan, or provoking
with its presence in the South China Sea are some of its ways to show the world that it has a
new big player. Some argue this shows strength, others that it's a sign of weakness. More
about the emergence of this Communist tyranny will be discussed in the next question.

These four superblocks tend to be seen by analysts as those who will define the next decades
in terms of politics. However, other civilizations might work towards integration. Projects
such as the African Union or the several Latin American blocks that have emerged
(Mercosur, CELAC, Aladi, Unasur, Prosur, ALBA) became bureaucratic organisms that
suited certain personal ambitions, based rather on good will than a clear path for regional and
continental consolidation. But previous failures do not mean that these regions could not
eventually join together with a serious proposal. India has a potential to become sooner or
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later a global power due to its immense population. It currently lags behind the PRC because
of its lack of infrastructure, especially technological. Nobody, however, should underestimate
India´s prospect of joining the other major powers, something that both Pakistan and China
fear.

Since the century began, the West has started paying more attention to the Middle East and
northern Africa. Radical Islamic Terrorism conducted several attacs on its ground that,
begining with 9/11, abruptly interrupted the prosperous period where America was seen as
invincible; Europe experienced a wave of terror as well that fortunately has decreased since
2017. But the defining balance of power in that region is the so-called “Cold War of the
Middle East'' between Saudi Arabia and Iran. Religious but mainly political differences have
caused nations and rebel groups in the region (and North Africa as well) to align to one or
other: a devastating example of this is the Yemeni Civil War. It even distorted the decades
long conflict between Israel and the Arab World: their rivalry with the persian nation was a
reason for a wave of peace between the Jewish state and several Gulf countries in 2019-20.

Of the main superpowers, Russia and China appear to be near to Iran, and the United States
has a pragmatically close relation with the Saudis. However, conflicts in this region are
particularly complex and militant or terrorist groups have a major role.

In conclusion, the world presents a scenario full of uncertainties and possibilities.

Nevertheless, this does not necessarily mean that we are heading into another large-scale
clash of civilizations. What could be assured is that the days of a one-power Earth are over,
and won't return soon with any chief.

V. Based on the present context of the relations between the United States (and the West
in general) and China, please develop your analysis and rationale in evaluating a Free
Trade Agreement between your country and China.

The opinions of the members of the group differ, but we agree that the Free Trade Agreement
is neither unanimously good or bad. Uruguay´s foreign trade policy for the past 30 years was
conditioned by its membership in Mercosur. This trading block has been widely seen as
inefficient, and limits Uruguay´s ability to negotiate with other countries. Nevertheless, there
never was in the political system a serious plan to withdraw, and it would not be easy either.

In this context, Uruguay didn't join other South American nations such as Chile, Peru, and
Colombia, that approached FTAs with the rest of the world during the past 20 years. With the
exception of a deal with Mexico signed in 2003, opportunities were missed due to
ideological differences. The country stuck with its neighbours, despite constant tensions with
Argentina´s peronist governments.

The proposal with the PRC is not new. Xi Xinping discussed this possibility with the late
Tabaré Vazquez in 2016, and the new administration that took office last year (more open to
free trade) enthusiastically endorses the idea. So then, what does this implicate for both
countries -and the Mercosur-?
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Uruguay and the PRC are very different in every sense -size, population, culture, politics,
etc-. However, since the establishment of diplomatic treatment in 1987, the relationship has
increasingly consolidated. In the year 2000, the United States was a much bigger trading
partner for our nation than China. Nowadays, the Asian power´s share of both our imports
and exports exceeds those of any other nation. If Uruguay didn't fall into a recession in 2019
it was, up to a point, because China's demand for our soy drastically increased: the same
formula gave us immunity for the 2008-10 global crisis.

It is evident: Uruguay is heavily reliant on China. But so far, it has been a comfortable
dependence, with more positive effects than harm. China's strategy for dominance in Latin
America and Africa has been almost completely based on trade and creating dependence
without focusing much on exporting its authoritarian political model (as it did on the Mao
days). This is the reason why all across the political spectrum, Uruguayan leaders feel that
China is no threat, and that as long as we don't criticize or ignore them, their pragmatism will
be helpful. This is the reason why relations started under the Sanguinetti administration,
notorious for its anti communist rhetoric, and why centre-right president Lacalle Pou praises
Xi openly. That is the reason as well, why the Multicolour Coalition condemns the human
rights abuses in Cuba, Nicaragua and Venezuela but not a word of the totalitarian dictatorship
that the PR China is.

The truth is, this apparent hypocrisy -or just plain realism in our view- is what gave us 2.6
billion dollars in exports (4% of our GDP) in 2018. Plus, a free trade agreement will reduce
tariffs by millions. It is true, some jobs (textiles, plastics, and chemicals) may lose, but
overall economic benefits in the long run will far exceed those losses. Some even argue that
the agreement may open the door for others (the UK for example), and fundamentally, it
would be a wake up call for the United States, which might try again to offer us a deal. A
symbolic approach at least, and more prone to failure if ever intended. It seems like a sure
win for Uruguay, at least from the perspective of an algorithmic open trade enthusiast.

There are, although, reasons to be more skeptical. Some may argue that China has a
consistent formula to increase its economic power, as well as its influence, on a year by year
basis. 30 years of rapid growth combined with a repressive government and the passiveness
of even hardline rightist governments globally seem to prove this. China is overwhelming,
sure. But it won't fail us, won't it?

History shows that countries can not grow fast indefinitely, and China will eventually decline.
Daron Acemoglu and James Robinson argue in Why Nations Fail (2012) that China will not
be able to sustain itself while it keeps its extractive institutions. Politicians underestimate how
damaging it can be to put most of our eggs in one basket. And that was what greatly severed
our last severe crisis back in the early 2000s: at that time, we were at Mercosur´s mercy, and
it was not good for us.

This flashback leads us to the current situation of the Southern Common Market, which is
also an important component of the discussion. Mercosur encourages trading as a block, and
while it doesn't explicitly ban countries from signing FTAs with other countries, this has the
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potential of creating price disparities for certain products. Alberto Fernandez and his cabinet
have consistently criticized Lacalle Pou´s ambitions, and tension rose amid other
provocations. On the other hand, Brazil's Jair Bolosonaro, who is usually at odds with
Argentinas new government, endorsed Uruguay's plan to flexibilize the block. Whether
Uruguay will concrete this deal with China or not, ideological disputes and lack of
determined state policies will continue to make Mercosur a ballast.