President George W. Bush decided to tour Latin America in search of alliances that would revive his weakened position in that continent. Bush’s first stop in the week-long trip was in Brazil, followed by stops in Uruguay, Colombia, Guatemala and Mexico. The official goals of his diplomatic campaign were to announce his plan to “promote freedom, prosperity and social justice” in those countries. However, experts say that the political reality was far from what the official announcements from White House advisors.
For Carlos Malamud, chief researcher for Latin America at the Royal Elcano Instituto of International and Strategic Studies, “the chief goals of the trip were to remind Latin America that the United States continues to be interested in the region, as well as to counteract Venezuelan president Hugo Chávez. From that perspective, the main topics of discussion in the visit were energy (bio-ethanol) and immigration.”
According to David Tuesta, professor at the Catholic Pontifical University of Peru, “Apparently, the visit had greater political importance than economic importance. In any case, the economic discussions were an instrument for achieving more political goals.”’ Adds Tuesta, an analyst at the Econolatin network, the main goal of the trip “was to try to have more influence over key countries while continuing to strengthen ties that enable [the U.S.] to counterbalance possible future risks in the region, given what has happened in Ecuador, Venezuela and Bolivia.”
Mauro Guillén, a professor at Wharton and director of the Lauder Institute, believes that the goals of Bush’s trip were “to detract a little of the attention from many domestic problems [in the U.S.] and to try to retake the initiative after the years of neglect that followed 9/11.”
Along the same lines, Hugo Macias, who coordinates the University of Medellín’s research center in economics, accounting and administration in Colombia, says, “At this moment, when his country is unpopular and the influence of the Republican Party has been seriously damaged, President Bush wants to give priority to addressing another failure in his foreign policy — relations with Latin America on both the economic and political fronts.”
Confrontation with Chávez
The five-nation trip brought Bush to a region that America hopes will establish trade relations with its northern neighbor. On the other hand, the region feels the influence of anti-U.S. populism spearheaded by socialist Hugo Chávez, the Venezuelan president, who is financed by his country’s oil wealth.
When Bush became president, he promised to devote careful attention to Latin America. However, that goal was postponed because the terrorist attacks of September 2001 and the invasion of Iraq distracted the attention of the U.S. “During all this time, his concern [within the region] was focused entirely on Colombia, Venezuela and Cuba. Currently, with the arrival of Tom Shannon (Secretary of State for Western Hemisphere Affairs) at the State Department, he is trying to make up ground,” notes Malamud.
The general impression in the region is that Washington has shown little interest in the condition of Latin America, say experts. As a result, the image of the world’s greatest power has deteriorated significantly.
Although the reputation of Venezuelan president Chávez is not much better in some countries and among the region’s leadership, Guillén asserts, “Chávez is popular among specific segments of the population in many countries and in some governments such as Bolivia and Argentina. However, his influence is a bit exaggerated. I don’t think people need to be so alarmed.”
According to Macias, “It is obvious that the democratic left in Latin America has made a lot of progress in recent years. That phenomenon is especially clear in South America but President Chávez, a leading media figure, is less powerful when you look at the internal dynamics of the leftist movements, leaders, and parties in each country.”
In a survey carried out by Latinobarómetro in Santiago de Chile, only 30% of respondents had a “favorable” opinion of Bush in the 18 countries polled. But only 28% had a favorable view of the 52-year old Chávez, according to an article in the December 9 edition of The Economist. Over the course of last year, Chávez called Peruvian President Alan Garcia “a thief,” and he denounced ex-president Vicente Fox of Mexico as a “puppy of imperialism.” Felipe Calderón, Mexico’s current president, warned that Chávez’s recent measures for extending state control over corporations “can revive the disasters of the past.”
Nevertheless, Bush’s administration revealed the U.S. strategy for counteracting Chávez in Latin America. Bush’s first stop was in Brazil, the largest economy in Latin America, where he met with President Luiz Inácio Lula da Silva. Bush also visited Uruguayan president Tabaré Vazquez, reciprocating his visit to Washington in 2006, and with Alvaro Uribe of Colombia, his best ally [in the region], to express his support for the war against terrorism and drug trafficking. Bush then spoke with President Oscar Berger of Guatemala to thank him for his support in Iraq, and with Mexico’s president Felipe Calderón, However, the U.S. found itself dealing with the alternative trip undertaken by Chavez, who tried to eclipse Bush’s visit with his own trip to Argentina, Bolivia, and Nicaragua.
Brazil was the key location for discussing Bush’s energy proposals. Those plans involve extending the production of ethanol throughout Latin America via Brazil, as well as setting up an international system that enables the U.S. to lower its dependence on imported oil from the Middle East and Venezuela, which is the eighth-ranked crude producer [in the world] and fourth-largest exporter of ‘black gold’ to the U.S.
Bush and Lula da Silva signed a cooperation agreement on ethanol. The pact permits the U.S. and Brazil to coordinate their efforts to establish international standards for bio-fuels so they can be commercialized in markets around the world. Both countries will also promote the production of bio-fuel in Central America and the Caribbean to meet the growing global demand for this source of alternative energy. In a joint declaration, the two presidents emphasized that the agreement opens “a new moment for humanity” and that it will convert both countries into “the best guardians of the environment,” according to a report by Reuters.
The big stumbling block to this agreement is protectionism. The pact does not contain any provisions for reducing the tariffs that the U.S. imposes on ethanol imported from Brazil. Those tariffs are 54 cents per gallon, in addition to 2.5% [of the value].
Brazil is the world’s largest producer of bio-fuels, devoting 5.6 million hectares to the cultivation of cane sugar, which produces 18 billion liters of ethanol annually. Brazil and the U.S. jointly produce 70% of the world’s total production of ethanol. However, the U.S. obtains its alcohol-based fuel from corn. The production cost for a liter of Brazilian ethanol is 22 American cents compared with 30 cents in the U.S.
The U.S. is the world’s largest consumer of ethanol, and its production volume is not sufficient to satisfy demand. As a result, the U.S. imports bio-fuel from Central America, where significant investments already made by U.S. companies are growing day by day. While U.S. importers from Central America do not pay any tariffs, those who import from Brazil do have to pay one. When transportation costs are added, Brazil cannot compete in the U.S. market. As a result, a good part of Brazilian ethanol enters the market through Central America, in a triangular system of trade.
Lula’s government wants those taxes to be lowered but the Bush administration argues that this question is something that can only be decided by the U.S. Congress.
Immigration in Guatemala
The immigration issue was another hot area for discussion during Bush’s trip to Guatemala. There, the U.S. president affirmed that he wants to achieve significant progress in his country’s immigration policy by August. However, Bush defended the actions that his government has taken against illegal immigrants, a policy that attracted criticism during his trip to Latin America.
Every year, thousands of Guatemalans enter the U.S. as illegal immigrants in search of a better future. Many of them are deported by the U.S. government, returning to their homeland in hundreds of airplanes. Last year, about 18,000 illegal Guatemalan immigrants were deported by the United States, a 60% increase over 2005. Berger called these deportations “unjustified.”
Berger asked Bush to insist on an immigration reform that would improve living conditions for undocumented Guatemalans who already live in the U.S. Bush answered that, in coming months, he hoped to promote a reform plan in the U.S. Congress that would permit more immigrants to work legally in his country.
Bush defended his country’s plans to seal off parts of his country’s Mexican border with a wall. He argued that the measure would encourage U.S. lawmakers to back a program for providing immigrants with temporary employment.
In Mexico, immigration was also an issue on the table. There, Bush repeated his promise, this time to President Calderón, to try again to convince U.S. legislators to approve his plans for softening immigration laws in the U.S., enabling a program for temporary workers to be established.
Mexicoand Agricultural Trade
Bush and Calderón also addressed several economic topics. One area of discussion concerned a highly controversial provision of the North American Free Trade Agreement that will go into effect in a little less than one year. NAFTA was approved by the U.S., Mexico and Canada in 1993.
Agriculture has always been the most sensitive issue in Mexico’s trade relations with the United States because the U.S. provides enormous subsidies to its farmers. In the 14 years since NAFTA went into effect, more than 1,100 tariffs on agricultural products have been eliminated. This process will be concluded in January 2008, with the total deregulation of corn, beans, sugar and milk.
This topic is important for Mexico because corn, beans, cane sugar and milk all play a fundamental role in Mexican society. The massive entry of U.S. products in these categories could lead to the collapse of the sector in Mexico, which has less technology and is less competitive.
Bilateral U.S.-Mexico trade in agriculture rose to about $21 billion in 2006, enabling Mexico to become the second-largest partner of the U.S. in agribusiness trade. Several voices, including Mexico’s National Confederation of Farmers (CNC), argue that Mexico is not prepared for the impact of NAFTA. They want the treaty to be renegotiated to exclude corn and beans.
On his visit to Mexico, Bush rejected any possible renegotiation of NAFTA’s chapter on agriculture. “It is not necessary to renegotiate the treaty,” Bush told the media. “We don’t need to weaken it, but to understand it.” Bush reiterated that “there are strong protectionist feelings in the United States.” He committed himself to “work against that, because trade is one of the best roads toward prosperity.”
Without Consequences for the Future
Bush’s diplomatic initiative has been greeted by experts with a great deal of disbelief. They say that the visit was well-staged but that it had few practical foundations. As a result, it will have “very few” consequences in the future, notes Guillén. He continues: “As soon as they return to Washington, they will re-immerse themselves in the day-to-day problems they face: The Democratic Congress, the public debt, scandals, Iraq, Afghanistan, North Korea,” and so forth.
Macias agrees with that view. “There won’t be a lot of political and economic consequences because of the lack of concrete agreements achieved during the trip. There were some promises on such topics as the Free Trade Agreement with Colombia as well as immigration policies that especially affect Central America and Mexico. However, they will be really limited because of the narrow margin for maneuvering that the President now has with Congress, which has a Democratic majority.” Macias does not believe that the trip will have any tangible “impact on the political inclinations of the population of Latin America, although Bush is clearly very unpopular among the common people, judging from the many protests in the cities that he visited.”
For his part, Malamud says, “Just as in the case of Iraq, where the decisive thing was not the war itself but the post-war period, when it comes to the Bush administration and Latin America, they will have to pay more attention to what happens after the trip than to the trip itself.” As a result, he recommends paying “attention then to how this story continues; this story has not come to an end, nor have the investments in both tangible and intangible goods that people will continue to make.”
Regarding Bush’s goal of counteracting President Hugo Chávez, Tuesta stresses that “The influence [of the U.S.] and its ties with the governments of the countries that [Bush] visited will continue to be important. So in that sense, the meaning of his visit was something relevant. However, it has not meant that Chávez’s leadership role has been diminished.”
Generally speaking, adds Tuesta, Bush’s visit “has served as a pretext for the Venezuelan president to make some strong statements about Bush. Meanwhile, at the same time, the protests and street demonstrations [against Bush] intensified.”
Malamud believes that it is “still too early” to say if Bush has deprived Chávez of some of his influence in Latin America. “This much is certain: Chávez was very concerned about the visit because he feared that his own role would diminish. Now that Bush is a ‘political corpse,’ as Chavez characterized him, the Venezuelan president has mounted his own counter-trip, producing a great deal of noise on his visit. Among the areas that concern Chávez most, obviously, are the energy question and the development of bio-ethanol. They have inspired Chavez’s angriest and most demagogic reactions,” comments Malamud.
Along those lines, Chávez promised to exhort his counterpart, Brazilian president Lula da Silva, to take another look at the pact that he signed with Bush regarding ethanol production. Chávez argued that dependence on ethanol as a fuel, in place of petroleum, presents many complications, both technical and “ethical.” One of these problems involves reallocating land that is used for producing food for the goal of producing fuel.
