Democratic clauses in Mercosur and the case of Venezuela

The new wave of regionalism (Soderbaum, 2015) in Latin America has in its foundation the re-inauguration of democracy as one of its main features. Re-democratization in Brazil began with the election of Tancredo Neves, a civilian, in 1985. After his death in May of the same year, José Sarney took office. The government of José Sarney was defined by institutional reforms and the adoption of the new Constitution in 1988 (Vigevani, 2016). In Argentina, Leopoldo Galtieri, the last ruler of Argentina's dictatorial period, resigned due to the defeat of the Malvinas War and called for elections, leading to re-democratization in 1983 with the election of Raúl Alfonsín. Paraguay entered a process of re-democratization after a coup d’état in 1989 by Andrés Rodriguez, the former right-hand man of Alfredo Stroessner, the last ruler of the military dictatorship, with Rodriguez being elected three months after the coup. In Uruguay, the armed forces decided to call civil elections in 1984, in which Julio Maria Saguinetti won the presidency in 1985.

In 1991, presidents Luis Alberto Lacalle (Uruguay) and Andrés Rodriguez (Paraguay) joined the integration initiative between Brazil and Argentina, and the Treaty of Asunción was signed, marking the foundation of the Southern Common Market (Mercosur). By that time, all the countries already had their second president under a democratic regime, except for Paraguay, which was in its first term under a democratic regime. Thus, Mercosur's foundation has strong connections with the re-democratization of the region as this compromise composes the Second Presidential Declaration. The first commitment signed by Mercosur regarding democratic values was in the 1992’s Las Leñas Declaration, which states, “the Presidents ratified that the full validity of democratic institutions is an indispensable assumption for the existence and development of Mercosur” (Mercosur, 1992, para. 2).

In Mercosur, norms on democratic stability were developed as political occurrences demanded them. As early as 1996, Wasmosy, the first civilian president of Paraguay, fearing the attempt of a coup, fired Oviedo, a general in the army, thus resulting in a frustrated coup attempt (Dias, 2015¹; Hoffman, 2005). Due to this event and two months after the incident, the Declaration on Democratic Commitment in Mercosur was released on July 25, stating the need and provision for a democratic clause in the organization. Furthermore, it states: “Any alteration of the democratic order constitutes an unacceptable obstacle to the continuity of the integration process underway for the affected member state” (Mercosur, 1996, para. 2).

Thus, a direct connection was established between the events in Paraguay in 1996 and the Protocol of Ushuaia, signed on July 24, 1998. As the first binding norm on the condition of democracy to be a member of the organization, the sanctions can be described as severe: “Such measures shall range from the suspension of the right to participate in the different bodies of the respective integration processes to suspension of the rights and obligations resulting from that process” (Mercosur, 1998, article 5). In other words, the only possible sanction is suspension. In addition, it is noted here that the Protocol is too vague: it does not contain the meaning of “democracy” or “democratic breakdown” (do Monte, 2016) neither states objective points to evaluate this status. The suspension is defined by a unanimous vote in agreement, with the affected state having no voting rights.

The Mercosur members took action in favor of democracy in Paraguay again in 1999 after Vice President Argaña's assassination and President Cubas's resignation. In this case, impeachment predictions were already in place against Cubas, which raised suspicions of Argaña's assassination for political reasons.² At this point, the Democratic Clause could not be invoked because it had not been internalized in all member States and, therefore, was not in force. As noted by Hoffman (2005), ironically, Paraguay was the only country that had ratified the Ushuaia Protocol up to that point. Unable to mobilize the clause, Mercosur's members issued a statement named Declaration of Support for Paraguayan Democracy and its Process of Normalization and Institutional Strengthening. Ushuaia I, the first normative rule regarding democracy as a mandatory requirement for Mercosur membership, came into effect in 2002.

President Fernando Lugo was elected in Paraguay in 2008. With growing tensions between the Executive and the Legislative throughout his government, in December 2011, he signed, together with the other Mercosur presidents, the second normative rule for democracy in Mercosur, named Montevideo Protocol. Also called Ushuaia II (Mercosur, 2011), this tool could be triggered “in case of a rupture or threat of a rupture of the democratic order, a violation of the constitutional order, or any situation that jeopardizes the legitimate exercise of power and the validity of democratic values and principles” (Mercosur, 2011, article 1). This second norm establishes specific sanctions for the suspended member, including “total or partial closure of land borders, suspension or limitation of trade, air and maritime traffic, communications, energy, services, and supplies” (Mercosur, 2011, article 6). This paragraph was the main reason why the Paraguayan Parliament voted and refused to adhere to the Montevideo Protocol, arguing that these sanctions would go against national sovereignty (Cámara de Diputados, 2012; Delegación de Paraguay al Parlamento de Mercosur, 2012), being yet another example of disagreement and tensions between the Paraguayan Executive and Legislative (do Monte, 2016). The disagreement reached a level of crisis on June 22, 2012, when the Paraguayan Parliament started the impeachment process (juicio politico), which ended in less than 24 hours with the deposition of President Lugo. Parliament cites the fact that Lugo signed the Protocol of Ushuaia II as one of the reasons for his impeachment.

At the same time, Venezuela was undergoing the process of adhesion in Mercosur, in which the only veto was Paraguay. Other Member States in Mercosur declared Lugo's impeachment a rupture of democracy in Paraguay, considering 24 hours would not be enough for a fair trial. The Ushuaia clause was mobilized, suspending Paraguay from full membership status. Even with Paraguay's negative vote, Venezuela is incorporated into the organization. Thus, a controversy arose over the strategic use of the Democratic Clause, which would have been mobilized, in this context, as a maneuver to overturn Paraguay's veto. Paraguay remained suspended from Mercosur until the next election cycle, in 2013, when it was recognized again as a full member.

By that time, there were already several critics of the deterioration of the democratic regime in Venezuela, which only got worse following the death of Hugo Chávez in 2013. According to Venezuela's Constitution, the president of the Assembly should hold the position of head of state. However, the Supreme Court declared Maduro, the incumbent president and called for early elections. On April 14, 2013, Maduro won the election with 50.61%.

Throughout his term, Maduro has governed under Enabling Law, which allows the president to transfer powers ordinarily belonging to the National Assembly to himself, allowing him to dictate mainly extraordinary measures in economic and financial matters, something Hugo Chávez had also done. An upsurge of protests organized by the opposition in 2014 calling for Maduro's peaceful resignation led to a high number of arrests. By that time, the government was already going through a severe political and economic crisis involving shortages of essential items. Over the course of the year, the situation deteriorated sharply due to the falling price of oil barrels.

In 2016, the Paraguayan government requested the legal revision of Venezuela's Protocol of Accession, with the deadline for adopting norms rapidly approaching (the 12th of August). Venezuela was unable to internalize all of Mercosur's norms by the due date, leading to the interruption of the organization's rotating presidency, which Venezuela would take for the first time (Arredondo & Godio, 2017). In face of a political crisis, a joint Mercosur presidency was initiated in September 2016 following a meeting between the heads of state (except for Maduro) during the Rio Olympics. A maximum deadline of three months was agreed upon for Venezuela in incorporating these norms, which, unable to meet the deadline, got suspended from the organization in early December 2016.

The combination of factors that led to Venezuela's membership suspension has specific characteristics, including the change of political direction in the two significant Mercosur members—Argentina in 2016 with the inauguration of Macri, and Brazil with Temer, in September 2016, after the impeachment of Dilma—who were not aligned with Maduro's government. This political conjuncture coincides with Venezuela's democratic rupture (considering the annulment of the decisions of Venezuela's National Assembly as a criterion for this statement), along with the natural expiration of the four-year deadline foreseen for the incorporation of norms and regulations for adhesion to Mercosur. Even in this scenario, it is noteworthy that the suspension of Venezuela's membership status was mobilized exclusively for noncompliance with the deadline for incorporation of rules, with no mention of democratic breakdown or the Ushuaia Protocol.

Another possibility to be considered in avoiding the use of the democratic clause at that moment was the impeachment of President Dilma³ (Pereira da Silva, 2018). Outside this context, on August 17, 2017, the Ushuaia Protocol was mobilized against Venezuela after “unsuccessful consultations on the country's condition” since April 1 of the same year (Mercosur, 2017). This second suspension conditions the re-establishment of Venezuela's full membership status to the re-establishment of its democratic order.

Since the second suspension from Mercosur, the Venezuelan situation has deteriorated, with the government now consisting of a National Constituent Assembly, in which all elected members are pro-government, and with Maduro's reelection for another six years being considered not legitimate by several countries and international organizations. Since then, Mercosur has maintained its attempts at dialogue with Maduro about the Venezuelan political regime. In 2019, after the migration crisis of Venezuelans in the region, a new note was issued by Mercosur, “Presidential Declaration on the situation in Venezuela”:

They recognized the severe deterioration of the living conditions of the Venezuelan people and the need to continue coordinating efforts to provide comprehensive responses to address the migratory, humanitarian, and social crisis that this country is experiencing, preserving the dignity and fundamental rights of Venezuelans. (Mercosur, 2019, para. 4)

Currently, the country is still considered a member of Mercosur, with two suspension actions. Expulsion from the organization is not foreseen by the normative. Montevideo Protocol is still not in place.

The rule of law in the European Union and the case of Hungary

By the end of World War II, the European continent grew fearful of the possibility of new confrontations. After a failed strategy to prevent new conflicts post-World War I through sanctions and punishments, which also resulted in new offensives, new plans, of conciliatory features, were developed for the region. Thus, the ECSC (European Coal and Steel Community) was established, focused on seeking conciliation and dialogue instead of sanctions. Over time, the demand for compliance with new agreements arose, creating new treaties. Some of these treaties are also highly connected to the enlargement process, that is, preparation and normative adequacy to receive new members into the organization. This was the case, especially, with the Single European Act, which preceded the entry of Portugal and Spain, and the Treaty of Nice, which prepared the organization for its most considerable enlargement to date, incorporating countries from Eastern Europe (European Union, 2022).

Over time, the rules governing the internal regime of its members have evolved alongside different paths. One of them is democracy as the conditionality of membership, including the Copenhagen Criteria (1993), meaning that all states who wish to become members of the European Union must be democratic regimes that respect human rights and treat minorities well. These standards have changed over time, adapting to the criteria, situation assessment, and monitoring programs in countries during the accession process, extensively related to the inclusion of new members (do Monte, 2018).

As another path, in contrast to Mercosur, the creation and evolution of regulations over the state of democracy of Member States were not correlated to political occurrences in the European Union. On the contrary, it was often pointed out that, although these rules existed, they never had to be mobilized until recently. Although the rule of law is mentioned in the ECSC Treaty, followed by mentions in the Court of Justice in 1986, it was only incorporated into the norm in 1992 with the Maastricht Treaty. In Article 2, it is stated that the values of the European Union are democracy and human rights (Pech, 2020).

Amsterdam Treaty presented Article 7, which created the “corrective option,” establishing sanctions on the members who breached any of the EU common values stated in Article 2, including the rule of law and democracy. With the Nice Treaty, new measures were added, resulting in two options for action in Article 7. One option is called preventive and aims to establish a dialogue with the country accused of breaking the rule of law (or any other EU common value). The other option, called corrective, sets sanctions for the member who presents “serious and persistent breaches.” This option is called “nuclear option”⁴ and is only approved when a unanimous consensus is reached in the Council. In the following step, sanctions that are not pre-determined must be established and approved by a qualified majority of the Council. The corrective measure requires unanimity, which becomes problematic when two states face the same situation opting for mutual protection, drawing attention to the case of Poland and Hungary (Closa, 2021). Some critics object that acting over a breach of the Rule of Law should be a jurisdictional mechanism (i.e., under the responsibility of the European Court) instead of relying on the unanimous or quasi-unanimous political will of the Council (i.e., the EU member states) since it establishes Treaty infringement.

In 2010, Viktor Orbán won the elections in Hungary. In 2012, Orbán's governing decisions were recognized by Barroso as a threat to the rule of law in the European Union, as well as the lack of proper instruments to deal with the situation. From the time of the election until ten years later, Orbán passed a series of constitutional amendments in which only two-thirds of the Parliament was needed to favor the government. One of the amendments approved writing a new constitution, requiring only a two-thirds vote to pass instead of four-fifths. A new Constitution was approved after a public consultation biased to confirm government interests, followed by numerous amendments aimed at censorship (Bárd & Pech, 2019). Similar to what was seen in Venezuela, government advertisements in the media are unlimited and free of charge. Media control by Orbán's government includes closing several newspapers by ending operating licenses, restrained by a media council, among other so-called cardinal laws. Other intercurrences include the shift to a pro-Orbán judiciary, the passing of a retirement law for judges over 70 years of age, and the departure of the Central European University from the country.

Throughout this time, several discussions have taken place in the European Union about surveillance and sanction mechanisms on the rule of law, including the Commission's Rule of Law Framework (European Commission, 2017) and the Rule of Law Mechanism, which generates an annual report (European Commission, 2020). Despite this series of occurrences, the European Parliament only called for Article 7 against Hungary in 2018, alleging that the judiciary and legislative were rigged, thus eliminating checks and balances between institutions, and infringing on the rule of law. As a result, based on the Tavares Report (Tavares, 2012), a series of recommendations were issued, demanding the return of the previous judicial system and a Constitutional Court involving opposition members. The Hungarian government quickly dismissed these recommendations with a strategic response, evoking nationalistic sentiments and accusing the European Union of interfering in internal affairs and wishing to violate Hungarian sovereignty. This reinforced Orbán's narrative and increased Euroscepticism and anti-Europeanism in the country (Bárd & Pech, 2019).

In 2020, as the pandemic began, the Hungarian parliament voted for decrees allowing Orbán to suspend laws and rule by decree indefinitely. This has been called a “self-coup,” and, at least in matters of centralization of power and absence of democratic competition, equalizes the government of Hungary with the Venezuelan regime (Broadview Pictures, 2021). There were intentions to mobilize Article 7 again, which were answered by Orbán with threats to veto the resolution for emergency funds for Italy, which at the time faced severe difficulties due to the effects of the COVID-19 pandemic in the country (Kelemen, 2020).

Currently, the reform of Article 7 has been one of the crucial points debated in the Conferences for the Future of Europe. The main points raised so far have been financial (budgetary) sanctions for offending countries (in this case, cutting off the receipt of funds from the Euro- pean Union) and also the removal of vetoes (Freund, 2022).⁵ While it is important to discuss and reform this tool to optimize it, reduce political costs, uphold the legitimacy of the organization, and maintain institutional balance while safeguarding values, it is relevant to recogize that the existing rules and tools are not being utilized against the offending state currently.

Conclusion

In order to better reflect and propose solutions to the cases reported in this article, this conclusion evaluates the response of regional organizations and their members over non-democratic regimes on three categories: the nature of the events, the design of the norms, and the limitations of political activity.

Regarding the nature of events, the basis for the design of norms is distinct in both organizations. Created within a distinguished framework of democratization of all of its members, the democratic clause in Mercosur was designed based on political events and mutual understanding that ruptures or threats to democracy would not be tolerated. This resulted in a norm that goes directly to suspension as a sanction. On the contrary, Article 7 was not created by past events and was considered something that would not be used. Instead, the origins of the European Union relied on avoiding punitive sanctions and instead opting for cooperation and dialogue, which has been reflected in how its actors choose to deal with offenders. This value precedes even the importance of democracy itself for the organization.

The political developments in Venezuela and Hungary are also of different natures. They have different characteristics and developments: Hungary, for instance, calls itself an “illiberal democracy,” which means that it lacks some of the features usually present in traditionally dictatorial governments, such as the persecution of opponents or political prisoners; but media outlets are often closed and forbidden to operate.

But some issues are common to the cases: the absence of a definition to the terms used and design flaws lead to the hardships in triggering the clause. In both cases, the requirements to be met for regimes to be considered (non) democratic or (non) compliant with the rule of law are not listed. Nor are the terms defined or conceptualized. This will lead to different consequences for each one of the organizations.

In the case of the European Union, rules for the tool mobilization and definition of sanctions have proven restructuring of the norm to be necessary. Financial sanctions seem challenging because they contradict the preference for dialogue and cooperation as an alternative and resolution of political problems. This reflection also leads us to the importance of the organization's legitimacy and respect for its own norms under international law. Having as a basis the aversion to sanctions and simultaneously creating a norm called the “nuclear option,” which option would damage integration more: to act or not to act? While the mobilization of severe sanctions may generate cracks among members and escalate further a political crisis, not acting in the face of a clear breach of the norm and disrespect for a value common to the organization may lead to international discredit and internal weakening by international law. In the case of the European Union, it seems to be a double-edged matter: the costs for a possible suspension (which is not foreseen in Article 7 nor in any European sanctioning mechanism) would be high, but the non- activation of these norms would hurt not only the legitimacy of the European Union in the international system but could also encourage other possible offenders. The reform of the norm should incorporate the maintenance of dialogue and cooperation and, at the same time, assure that the continuity of non-democratic governments will not be tolerated and will be duly punished, showing a balance between sanction and dialogue that the European Union has been struggling to find.

In Mercosur's case, not having a definition has led to its politicized use and non-use. The political costs for the integration organization or even for the relations between members can be high, especially if membership status has a solid strategic value for the sanctioned country. Triggering the democratic clause on Paraguay while other members welcomed Venezuela into the organization damaged the organization's legitimacy and the relationship between its members. The political interests of powerful members also raise concerns about keeping the offenders in the bloc. In the case of Mercosur, Venezuela was accepted and held in the organization when interests were high. Even though the first suspension of Venezuela did not happen by triggering the Ushuaia Protocol, it happened at a critical moment for the country's domestic politics and at a time of sensitive external relation to the other members, when economic interests and political convergence were much lower. What can be done to prevent the democratic clause from being used for political maneuvering or from its use being influenced by political shifts in the political compass of heads of state in the region?

To answer this question, I propose a prevention mechanism based on annual evaluations that both regional organizations lack. Although some reports already exist (in the case of the European Union), as well as missions to observe elections (in the case of Mercosur), there should be documentation directly linked to the integrations organization in criteria previously approved by its members. Based on a mutual agreement on what can be considered a democratic regime (or what would be considered a breach of democratic regimes), these reports should list mandatory requirements in categories to evaluate the quality of democracy, list the gravity of infringements observed, a proposal of solutions and possible sanctions if the state fails to abide/act against them. The elaboration of these reports should be in charge of the organization, taking out the political costs of appointing the disruptor. At the same time, the final list of solutions and sanctions would be voted on and approved by a simple majority. The existence of a prevention mechanism would majorly solve the political tension on triggering the clauses and imposing sanctions, being based on a dialogue that requires acting before the break/breach of democracy has fully developed.