U.S.-Cuba: Rhetoric and Reality

By Fulton Armstrong

Obama speaks to Raul Castro / Official White House Photo by Pete Souza / Public Domain

Obama speaks to Raul Castro / Official White House Photo by Pete Souza / Public Domain

The decision by Presidents Obama and Castro to normalize relations is truly historic – for which they and their advisors deserve enthusiastic applause – even though both leaders’ rhetoric seems intended to suggest that they don’t know how deep the uncharted waters ahead run.  Their statements since last Wednesday sound solicitousness toward their right flanks.  President Obama launched his statement by proclaiming that the United States of America is changing its relationship with “the people of Cuba” and, while conceding that past strategies to “push Cuba toward collapse” have failed, cast his new policy as a better way of helping the Cuban people “enjoy lasting transformation.”  President Castro told the National Assembly this last weekend that he wasn’t jettisoning Cuba’s revolutionary project either.  Cuba is not going to give up, he said, “the ideas for which it has fought for more than a century and for which its people have spilled much blood and gone through the greatest risks.”

It’s true that the nature of the relationship is unlikely to change fast, and that neither President can ignore the legal strictures built up during 54 years of tensions.  Obama can’t lift the embargo and permit, for example, tourist travel without Congressional approval.  Cuba’s “Law 88 for the Protection of National Independence and the Economy of Cuba” remains on the books, and Castro’s not about to welcome the U.S. Government’s “democracy promotion” activities soon.  But normalization will significantly reduce both governments’ ability to restrain nongovernmental contacts and will unleash forces that will make the Presidents’ rhetoric look old-fashioned and unnecessary.  Both countries have to learn how to talk to each other, and time-tested people-to-people contacts show that citizens with shared interests are better than governments at learning the language of cooperation and problem-resolution – without ideological agendas.  It stands to reason that pressure will grow on Obama and Castro to pursue concrete interests, especially trade, and to manage their dreams, respectively, of “lasting transformation” and “updated communism.”

No model for this new bilateral dance is perfect.  China and Vietnam show that trade-driven economic change – even with U.S. most-favored-nation status – doesn’t necessarily drive a country to democracy.  An educated and healthy people with strategic needs, the Cubans are prepared to work hard to build their country, but they’re not going to work in factories with anti-suicide nets under the dormitory windows.  That sort of political awareness argues for change, but the Cuban revolution implanted in the Cuban psyche a certain set of values and expectations – ranging from social programs to an almost obsessive sense of dignity – that won’t always coincide with U.S. values.  The Cubans will want to go a la carte with us on political matters, and they, like every country of Asia and Latin America emerging from difficult times, will almost certainly expect us to give them the space to do change their own way.  The United States worked with Mexico under one-party rule for 70 years last century.  If Washington and Havana approach the challenge of building a healthy relationship with respect and open minds, they should able to find a middle ground and grow together a lot faster than that.

December 22, 2014

U.S. Sanctions on Venezuela: To What End?

By Michael M. McCarthy

Common Cause -Embassy of Venezuela DC / Flickr / CC BY-NC 2.0

President Obama plans to sign the “Venezuela Defense of Democracy and Civil Society Act” into law, but its lack of clear objectives seems likely to muddle Washington’s desired outcome.  The bill, approved last week by voice vote in the Senate and House, calls for punishing Venezuelan government officials involved in human rights abuses, an authority the White House already has.  It includes national security waivers that allow the President final say on which officials will have their visas revoked – denying them entry into the United States – and have any U.S. assets they own frozen.  After initially voicing skepticism about the wisdom of such measures, the Obama administration came around to supporting them.  Senators Robert Menendez and Marco Rubio and Congresswoman Ileana Ros-Lehtinen pushed the bill hard in May after episodes of violent suppression of anti-government street demonstrations painted a grim picture of the human rights situation.  The Venezuelan foreign ministry’s reaction to the legislation has been strident, and President Maduro said, “If the crazy path of sanctions is imposed, President Obama, I think you’re going to come out looking very bad.”

President Obama wasn’t alone in switching positions over the bill.  Senator Bob Corker, who’s expected to become chairman of the Senate Foreign Relations Committee in the new Congress that begins next month, had embraced the State Department’s earlier view that sanctions would undermine international talks engineered by UNASUR and the Vatican.  The Caracas government’s refusal to make concessions in the talks undermined that argument, however, and a three-way diplomatic dustup between the U.S., Aruba, and Venezuela over another issue – Aruba’s refusal to extradite Venezuela’s designated ambassador, a former Venezuelan army official, to the United States on narco-trafficking charges – further frustrated Washington players.  Corker asserted that the incident showed that Venezuela’s “complicity with criminal activity” could not go unchecked since it directly undermined U.S. interests.  Immediately after the extradition episode, the Obama administration imposed unilateral sanctions – travel and visa bans – on a dozen unnamed Venezuelan officials, laying the groundwork for Menendez and Rubio to reintroduce their legislation and drive it home before Congress adjourned for the holidays.  Corker endorsed the bill, although he highlighted that a “regional dialogue” remained the best option for finding a “negotiated, democratic way forward” to address human rights issues.

Other than punishing reported human rights offenders and making an example of them the new bill is unclear on how it could help resolve the deep political crisis that has given rise to the protests and subsequent abuses.  With Maduros popularity plummeting to new lows, strident rhetoric condemning U.S. intervention could give him a modest boost by bolstering his claim that Washington is part of an economic war against Venezuela.  It is far too early to tell whether that nationalistic narrative will work in the governments favor as the countrys dire shortages have become permanent and economic suffering is increasingly blamed on Maduros policies and declining oil prices.  If human rights really are the U.S. top concern, Washington might want to be more sensitive to the positions of PROVEA and other Venezuelan human rights groups, which have denounced the legislation despite its inclusion of funding for Venezuelan civil society groups. If punishing rights abusers is Washingtons way of pressing for sustainable change in Venezuela, then it needs to state the case that penalizing measures imposed since 2008 have made a difference.  Another option, contained in Senator Corker’s observation about a “negotiated, democratic way forward,” could be to renew support for talks sponsored by South American countries, as these are more likely to reduce tensions, improve rights, and give moderates space to promote electoral solutions.

December 18, 2014

Statements by Eric Hershberg and William LeoGrande on Release of Alan Gross – UPDATED

Havana, Cuba
December 17, 2014, 12:30 p.m.

President Obama’s statement pledging to move forward expeditiously toward full normalization of relations between the United States and Cuba constitutes a welcome and long overdue reversal of policies that have long worked to the detriment of both countries.  Initial steps carried out today, including a prisoner exchange and the release of government contractor Alan Gross, imprisoned in Cuba five years ago for clandestinely distributing high technology communications equipment in Cuba under a USAID program intended to destabilize the Cuban government, mark the beginning of a process that must move forward rapidly during the weeks and months ahead. Pledges to re-open embassies in both countries and to curtail restrictions associated with the half century-old U.S. embargo portend an accelerated process which can be facilitated by prompt Congressional action to abolish provisions of the embargo that were codified into law by the Helms-Burton Act.  In the meantime, the administration can take numerous actions unilaterally, as noted today by the White House.  It must remove Cuba from its list of state sponsors of terrorism, lift licensing restrictions on travel to Cuba by U.S. citizens, abolish constraints on U.S. investment in Cuban private enterprises and cooperatives, and cease covert USAID programs aimed at destabilizing the Cuban political system. Washington should also signal its commitment not to block Cuba’s engagement with international financial institutions, which Cuba may wish to engage to facilitate the success of the country’s ongoing economic reforms. Today’s announcements from the White House mark a fresh start for bilateral relations, which will benefit the peoples of the United States and Cuba alike, and they afford an opportunity for the United States to make good on its stated commitment to open a new era of equal partnership and mutual respect in its relations with all countries of Latin America.

Eric Hershberg

This is a historic development in US-Cuban relations, and hopefully a step toward full normalization of relations. Obama’s actions represent the most positive actions to improve relations since President Carter. This will assure that the Summit of the Americas will be a success and this move will be applauded by governments throughout Latin America and beyond.

William LeoGrande

About the American University-Center for Latin American & Latino Studies (CLALS) Cuba Initiative:

CLALS is proud of the contributions of all schools at American University and of our research fellows in promoting normalization of relations between the United States and Cuba.  Faculty at each and every one of AU’s Schools and Colleges as well as its Center for Latin American & Latino Studies have published countless books, articles, op-ed pieces, and blogposts shedding light on the relationship and demonstrating the U.S. national interest in better relations with Cuba.  AU experts have worked tirelessly to underscore the costs of Washington’s anachronistic policies toward Cuba; inform journalists and policy-makers of opportunities for normalizing relations; lead path-breaking student and faculty exchange programs linking the university with counterpart institutions in Cuba; and participated in dozens of high level dialogues connecting leading Cuban researchers and policy advisors with AU faculty and foreign policy experts from the United States.

Executive Under-Reach: Migrants on the Margins of Reform

By Eric Hershberg and Dennis Stinchcomb

UAC SPONSOR PLACEMENT updated post-report-01

Graphic courtesy of the Center for Latin American & Latino Studies (CLALS)

President Obama’s long-awaited executive action on immigration has finally happened – with the anticipated political fireworks – and will benefit more than one third of the country’s undocumented persons. It is premature to offer predictions regarding how the dynamic will play out between a White House wounded by electoral losses last month and an emboldened Congressional opposition.  We can, however, take stock of who the administration’s measures have and have not affected.  Between 4 and 5 million people, a majority of them originally from Mexico, will be able to apply for work permits and secure protection from deportation for three years if they have been in the U.S. for five years or longer and have children who are either U.S. citizens or authorized residents.

The executive action is no modest change in policy, but it contains little good news for large numbers of undocumented persons and no good news for those his administration has already deported.  For the 250,000 U.S. citizen children whose parents have been deported over the past six years, it provides no comfort; there is no provision for the parents to return to raise their kids here.  Nor did the President’s measures offer more permanent relief to the roughly 280,000 Central Americans who have resided in the U.S. with Temporary Protected Status (TPS) following natural disasters in the region during the late 1990s and early 2000s.  Beneficiaries of those provisions will continue to pay roughly $500 every 12-18 months to renew their status. Other populations who have been here for well over a decade as stable members of the community also remain unaffected by the reforms.  No matter how long they have been here nor how good they have been – law-abiding, tax paying, churchgoing or generally nice – they will not be eligible for relief if they do not have children.  The administration’s action was strictly cast as a family-focused initiative, and family, in this instance, means children with authorization to be in the U.S.  Spouses do not count.  An important new population of migrants was also left out of the reform: the unaccompanied children, largely from violence-torn countries of Central America’s Northern Triangle, whose surge across the border received great media attention during the summer of 2014. Indeed, the president’s speech to the nation made no mention of that humanitarian crisis and made clear that those who come across now should expect to be deported.

The 68,000 children who trudged across the border during this fiscal year remain in limbo.  According to data from the Department of Health and Human Services’ Office of Refugee Resettlement, over 55,000 have been placed with immediate or extended-family sponsors in the U.S while their removal cases are pending in immigration court.  Metropolitan areas with long-established Central American communities have witnessed the largest influx of unaccompanied children.  The Baltimore-Washington metropolitan area alone, for example, received approximately 6,500 unaccompanied minors during the past fiscal year.  Once placed in sponsor care, these kids’ prospects for remaining in the U.S. – and their well-being while awaiting a court decision – are largely dependent upon local-level policies.  While the Obama administration has taken limited steps in recent months to provide legal counsel for these minors, funding for direct legal representation and a range of other educational, health, and social services is increasingly coming from those state and local governments that traditionally support immigrant-friendly humanitarian programs. This support is crucial, as demonstrated by a Syracuse University study that found that 85 percent of unaccompanied children appearing in court without an attorney are ordered to leave the U.S.; with an attorney, however, a child’s odds of remaining in the U.S. increase from 15 to 73 percent.   In cities such as New York, local funds are also being channeled through advocacy networks to support access to services beyond the courtroom, from mental health screenings, to vaccinations, to assistance with school enrollment.  Other local communities may not follow suit, particularly in the wake of the newly announced executive action, which in the short-term will strain the already taxed resources of local governments and advocacy groups.

December 11, 2014

Executive Action, Central American Presidents and the Fate of the Unaccompanied Minors

By Eric Hershberg

Image courtesy of Center for Latin American and Latino Studies

Image courtesy of Center for Latin American and Latino Studies

Speculation abounds in Washington as to the content of the long-awaited Executive Actions that the Obama administration has promised to decree amidst the failure of Congress to enact comprehensive immigration reform.  Having resisted pressure from Latino constituents and immigrant rights advocates to act before the mid-term election, in a vain effort to protect vulnerable Democratic incumbent Senators who lost their bids for re-election anyway, the administration now seems poised to announce new measures as early as the end of this week.  Press accounts based on leaks from within the Executive Branch speculate that as many as five or six million undocumented migrants may see their vulnerability to deportation diminish as a result of the impending policy changes.  Barack Obama’s Republican antagonists are fulminating about the consequences if he makes good on his promise, with some pondering ways to shut down the government or impeach the President, and others, fearful that a particularly intemperate response could damage the Republican brand, particularly given the need to attract at least a third of the Latino vote to the candidacy of whomever is chosen as the 2016 GOP presidential candidate, allude to the likelihood of court challenges to what they deem an extreme instance of Executive overreach.

One unanticipated but welcome measure that has been announced publically is that children deemed vulnerable to the violence in the three Northern Triangle countries of Central America will be able to apply to be reunited with parents residing legally in the U.S.  This policy shift, announced during the visit to Washington last week by Presidents Otto Pérez Molina, Salvador Sánchez Ceren and Juan Orlando Hernández, is among the administration’s responses to the surge of unaccompanied minors and families across the U.S.-Mexico border over the past year or so: 68,000 unaccompanied children were detained at the border during Fiscal Year 2014.  For their part, together with Vice President Joseph Biden at the Inter-American Development Bank, on November 14 the three Central American Presidents pledged to launch an Alliance for Prosperity in the Northern Triangle, with the objective of overcoming the conditions of economic misery, social vulnerability and institutional deficiencies that propelled the wave of migration of recent years and that have the potential to motivate a renewed flow of arrivals.  Biden offered an enthusiastic endorsement, but aside from reminding those in attendance that the administration had requested $3.7 billion from the Congress in response to last summer’s “crisis,” he did not offer specific commitments of resources, which of course are unlikely to be forthcoming from the strong Republican majorities in both chambers of Congress.  Nor did the Presidents make tangible commitments to build states capable of protecting the basic rights to life chances and security that are so remarkably absent for many of their countries’ inhabitants.

Assessing the likelihood of continued surges in migration requires understanding the factors that propelled the flow of people across the border in recent years.  A newly released study* by the Center for Latin American and Latino Studies, funded by the Ford Foundation, provides essential data and analysis on the drivers of migration from El Salvador, Guatemala and Honduras and on the fate of children and families who have arrived in the U.S. from those countries over the past year.  A core message of the report is that the absence of fundamental pre-conditions for living their lives with dignity – education, jobs, and most of all protection from violence – compels people to migrate rather than seek to better their lot in their communities of origin.  In the long run, only dramatic reforms undertaken by Central American states will build the institutions needed to address the basic needs of their populations and to provide the minimal levels of security needed for them to live their lives in dignity at home.  Perhaps little that was agreed upon during the Presidents’ visit to Washington gives cause for great optimism, but it is our hope that the CLALS study points the way toward solutions to the region’s crisis and toward ensuring the protection of those who endured the perilous journey to the U.S. border and now find themselves in limbo in the U.S.

 *To download a free copy of the full report, click here.

November 19, 2014

U.S. Elections: Latino Vote Not Decisive

By Eric Hershberg and Fulton Armstrong

Rob Boudon / Flickr / CC BY-NC 2.0

Rob Boudon / Flickr / CC BY-NC 2.0

Preliminary estimates indicate that Latino voter participation and support for Democratic Party candidates on Tuesday were similar to the 2010 mid-terms – but not enough to overcome the Republicans’ gains across the broader population.  Before Tuesday, Latino observers were excited that 1.2 million Latinos had registered to vote since the last mid-term elections (2010) and, with an estimated 66,000 American Latinos turning 18 each day, they would have some new clout.  Latino Decisions, the leading polling organization focused on Latinos, found that two-thirds of Latino voters in Texas supported Democrats in House races on Tuesday, and 74 percent in Georgia supported Democrats.  Their broader impact as a bloc, moreover, is hard to assess because most of the competitive races for the U.S. Senate and House of Representatives were not in states with concentrated Hispanic populations.  Gerrymandering also blunted their impact on House races, and new voter identification laws appear to have discouraged participation as well.  The Dallas Morning News reported last weekend that Texas state officials estimated that the laws would render more than 600,000 registered black and Latino voters unable to cast ballots (without breaking out the size of each group).

Latino Decisions had warned before the elections that enthusiasm for Democratic candidates was 11 percent lower than it was during the general elections two years ago.  Many Latinos were angry that President Obama backed off his plan to use executive authority to begin immigration reform, while at the same time, ironically, they were frustrated that the Democrats saw them as a one-issue constituency and did not include them on other issues.  Indeed, Voto Latino, a voting rights organization, and others have been warning that Latinos care as much or more about the economy, health care, and women’s rights but feel ignored.  (The polls show that Latinos feel even more shut out by the Republicans.)  The great pool of young voting-age Latinos has been “hardest to reach,” according to Voto Latino, because they are busy and turned off by the stereotyping.  The Democrats also seem to have communicated priorities poorly.  Colorado Senator Mark Udall played up his support for comprehensive immigration reform, but Latino Decisions says only 46 percent of Latino voters there knew it.  On the other hand, Nevada Governor-elect Brian Sandoval – a Republican – attracted Latino voters with a platform emphasizing Medicaid expansion, English-learning education initiatives, while downplaying his party’s rhetoric on immigration.

The margin of Republican victory was wide enough that even high Latino turnout wouldn’t have flipped the outcome in places like Colorado, North Carolina, and Georgia.  Tuesday’s results notwithstanding, however, polls by Latino Decisions and other research indicate that the Latino voice at the polls will grow and, when mobilized, be potentially decisive.  Despite strains with the Democrats, it’s hard to see Latinos jumping to the Republican Party unless it significantly shifts policies on immigration, social programs, voter-ID laws, and the economy.  It would be unfair to blame President Obama alone for the lack of a Latino surge this year, but his decision to back off on immigration clearly hurt his party badly.  He wanted to take heat off vulnerable Democratic senators but helped neither the candidates nor his party’s ability to mobilize Latinos.  Latino Decision’s data on low enthusiasm and dismay about the delay of executive action mean that if the administration doesn’t take real action soon – and work to build Latinos’ enthusiasm over the course of the next two years – it will diminish prospects for the Democrats to have a big Latino edge in the presidential race in 2016.  With a Republican-controlled Senate, Obama faces the same dilemma as before – to risk the Senate’s wrath by taking executive action on immigration or continue to alienate a key constituency – but the answer should be clearer in view of Tuesday’s results. 

November 7, 2014

Post-Snowden Challenges for U.S. Information and Communication Technology Firms

By Robert Albro

infocux Technologies / Flickr / CC BY

infocux Technologies / Flickr / CC BY

A year after Edward Snowden’s dramatic disclosures about NSA surveillance in Latin America, U.S. companies hoping to make inroads into the region’s fast-growing information and communication technology market are running into increasing obstacles.  If the political costs were immediately forthcoming, especially in Brazil, the fallout for Silicon Valley’s tech giants has taken longer to assess. The biggest problem is the lingering lack of trust resulting from the revelation that the U.S. companies enabled the NSA’s eavesdropping by giving it direct access to their servers.  A 2014 NTT Communications survey found that, in response to the Snowden affair, 88 percent of information and communication technology decision-makers around the world, including Latin America, have changed their buying behavior around large-scale data storage.  In Brazil, Argentina, Mexico and Chile, “data sovereignty” has become a major issue, in the form of new data privacy and disclosure laws now shaping the direction of the region’s developing market.

According to the Information Technology & Innovation Foundation, U.S. software firms are expected to lose $35 billion in sales overseas through 2016. Forrester Research, an independent technology and market research company, puts potential losses as high as $180 billion.  Latin American investors have been questioning the wisdom of using US data storage companies, and established U.S. dominance in the cloud computing sector has already taken a hit. Cisco’s last quarterly earnings, for example, were down 7 percent – 27 percent in Brazil – even as the cloud computing market in Latin America is predicted to grow at a 26 percent clip through 2018.  The emergence of Miami as a major global tech hub and gateway to Latin America’s fast-growing information technology markets is threatened by a proposed EU-Brazil trans-Atlantic cable to circumvent the city as a key node for Latin American access to the global internet.  As investor e-news service 4-Traders has reported, Chinese tech giants like Baidu, Alibaba and Tencent are establishing and expanding beachheads in Latin America, while China’s government pursues cooperative partnerships with Latin American counterparts to accelerate the development of the region’s information infrastructure.  Meanwhile, US-based data mining and analytics firms like Choicepoint Inc., currently major players in the region’s business intelligence and online security markets, have become the subject of investigation by skeptical governments and privacy advocates in the region.

The U.S.-centric view of the internet as “free and open,” a basic feature of the business model of U.S. tech firms, is being challenged in Latin America, where the regulatory balance between free expression and privacy is increasingly tilting toward the latter.  Despite the fact that the region’s online population is the world’s fastest growing and that it boasts a dynamic tech start-up movement, U.S. internet technology firms should expect more such challenges.  Regional trends in internet governance are largely anti-American, focused on displacing U.S. commercial dominance of the internet, and promoting open-source software as alternatives to U.S. products and services.  As Latin America builds out its cloud computing market, it is doing so in ways poised to compete and not collaborate with U.S. companies.  Privacy controls and requirements to conform to local laws already create new and costly disincentives for U.S. companies, which might opt to pull up stakes.  Meanwhile, business models for Latin American start-ups are not copycatting U.S. models as frequently as in the past.  If Latin American entrepreneurs have maintained close ties with U.S. centers of innovation and investors, they are now more focused on developing their own intellectual property, instead of technology transfer, to meet specific demands of their local and regional markets.  What just yesterday seemed wildly improbable – that U.S. tech giants might lose their edge in Latin America – has become a credible scenario.

October 23, 2014

Who Will Attend the OAS Presidential Summit in Panama?

By Fulton Armstrong and Eric Hershberg

OAE-OAS & tgraham / Flickr / Creative Commons Attribution-NonCommercial-ShareAlike 2.0 Generic (CC BY-NC-SA 2.0)

OAE-OAS & tgraham / Flickr / Creative Commons Attribution-NonCommercial-ShareAlike 2.0 Generic (CC BY-NC-SA 2.0)

The Summit of the Americas isn’t until next April, but interest in how Panama as host handles near-unanimous pressure from Latin America to invite Cuban President Raúl Castro, and how the United States and Cuba will respond, is growing fast.  Speaking to reporters at the United Nations last week, U.S. Assistant Secretary of State Roberta Jacobson answered several questions on the U.S. position.  Key excerpts follow:

  • Asked “if the United States is still opposed to Cuba attending.”  On the Summit of the Americas, I think we’ve been pretty clear in our position on the summit, which is that obviously Panama is the host country for the summit, and as the host country they will make the decisions on invitations to that summit.  …  And the fact of the matter is we have said from the start that we look forward to a summit that can include a democratic Cuba at the table.  We also have said that the summit process, ever since Quebec in 2001, has made a commitment to democracy, and we think that’s an important part of the summit process.  But the decision about invitations is not ours to make, and obviously there’s been no invitations formally issued to the United States and other countries. And so there is no acceptance or rejection yet called for or made. …
  • Asked “is there a chance that the U.S. might refuse going.”  Again, I think you won’t be surprised to hear me say that we’re really not going to answer hypotheticals in the future yet.  Obviously, the Summit of the Americas is in April and that’s not a situation that we can answer, although I think we have made clear that we believe the summit process is committed to democratic governance and we think that the governments that are sitting at that table ought to be committed to the summit principles, which include democratic governance. And therefore that’s our position at this point.  Obviously, we have a position on Cuba which does not at this point see them as upholding those principles.

Panama’s likely invitation to Cuba – reflecting the consensus of 32 hemispheric nations at the last Summit – will draw protests from official quarters in Washington.  But it’s far from certain that the Obama Administration would risk blame for torpedoing the 20-year Summit process.  Obama survived a handshake with Raúl Castro at Nelson Mandela’s funeral last December, and being in the same room with him again as a President in the second half of his second term will have little political consequence.  A workshop in Mexico City in June, in which CLALS researchers participated, and another in Ottawa in September, sponsored by the Center and the University of Ottawa, explored likely outcomes.  Mexican international relations specialists speculated that a reasonable outcome was for the United States to show up like a polite guest, and thus avoid having the anachronism of U.S. antagonism toward Cuba overshadow its broader relations with Latin America.  Canadian experts were deeply concerned that Cuba’s inclusion might undermine the centrality to the OAS of the Inter-American Democratic Charter, but they agreed that failure to convene a Summit would constitute a serious blow to the OAS and to the regular summits that provide Canada a seat at the inter-governmental table.

The reality is that Cuba does not conform to the Democratic Charter or to the broader OAS criteria of democratic rule, but equally real is that Latin America sees Cuba as a full member of the hemisphere and has lost all patience with those in Washington who would deny that.  Either Washington — and Ottawa — set aside their objections to Cuba’s inclusion or they bid farewell to such fora and their constructive impact on regional relationships that ought to matter to them.  Moreover, if they acquiesce to Cuban participation but then try to commandeer the agenda and make the Summit a seminar on democracy and human rights, it will only reinforce the widespread sense in the region that Washington cannot move beyond its obsession with the trivial matter of Cuba and get on with a serious conversation among equal partners.  They would thus sacrifice an opportunity to discuss issues on which significant, substantive advances are possible through dialogue among leaders of countries throughout the hemisphere.  The value of the Summit rests with the capacity of all involved to act like grownups.  President Obama did so at Mandela’s funeral, and it will be telling whether he can do it again in Panama this coming April.

October 2, 2014

Sanctions on Venezuela: Why?

By Eric Hershberg and Fulton Armstrong

Photo credit: NCinDC / Flickr / Creative Commons Attribution-NonCommercial-ShareAlike 2.0 Generic (CC BY-NC-SA 2.0)

Photo credit: NCinDC / Flickr / Creative Commons Attribution-NonCommercial-ShareAlike 2.0 Generic (CC BY-NC-SA 2.0)

 

 

 

 

 

 

 

 

 

 

The sanctions against Venezuela that the Obama Administration announced last week respond to political pressure to punish alleged human rights violators in Caracas, but they have no immediately apparent policy objective.  The State Department announced that it has suspended the U.S. visas of “a number of Venezuelan government officials who have been responsible for or complicit in … human rights abuses” during protests earlier this year, which resulted in the deaths of at least 40 people, injury of hundreds more, and jailing of dozens of activists.  The Department did not release a list of sanctioned individuals nor divulge the information used to compile the list, but press reports indicate that 24 officials have been targeted and include cabinet members, presidential advisers, police, and military officials.  The sanctions do not affect bilateral trade or Venezuela’s place as the United States’ fourth biggest foreign supplier of oil.

U.S. condemnation of the Venezuelan government and the blacklisted officials has been strident, but there has been no public explanation of what Washington expects the sanctions to achieve.  The statements of U.S. Principal Deputy Assistant Secretary of State John Feeley, made to a Colombian radio station and reported by El Universal in Caracas, strongly suggest the sanctions are intended to show solidarity with the Venezuelan opposition and U.S. disapproval of the government of President Nicolás Maduro.  “Social protests have been a genuine war cry from people oppressed by the lack of democracy,” Feeley is reported as saying.  “The [sanctions] were intended to note that the U.S. cannot allow, for the sake of its values, that a supposedly democratic government represses the legitimate expression of the people’s voice.”  The State Department has not demanded, however, any particular action by Caracas to lift the sanctions, such as an investigation into the abuses, re-launching a national dialogue, or compensating victims.  Feeley suggested that the governments of Colombia and Brazil – with which he said the U.S. government had “meditated” about the issue – supported the sanctions, but regional support for them has been muted at best.  Indeed, the Administration had responded to last May’s House of Representatives vote in favor of sanctions by indicating that these would be counterproductive and could undermine efforts at mediation by these same countries.  The one dissenting voice in the House, Congressman Greg Meeks (D-NY), explained his vote as opposing unilateralism, adding that its passage was a message to Latin American governments that we don’t care what they think.

The Venezuelan government has repeatedly and credibly asserted that a significant portion of the violence has been perpetrated by protestors rather than the state or government supporters, and a number of officials have been charged.  Nonetheless, no U.S. sanctions have been brought against opposition members who planned or participated in violent actions.

Some observers have attributed the U.S. action to pique that Aruban and Dutch officials several days earlier rejected its request that they extradite to the U.S. Venezuela’s new consul in Aruba, a former chief of intelligence whom Washington suspects of trafficking in drugs with the Colombian FARC – despite Vienna Convention provisions regarding diplomatic immunity.  More likely, the sanctions are a reaction to a realization that the quixotic “salida” campaign, which many in Washington somehow imagined could bring down the Maduro government only months after it had won an election, had all but petered out, leaving the opposition in disarray and the government in a renewed position of strength.  Sanctions also are a bow to congressional pressure on the Obama Administration to act against Caracas, which has continued to grow even after the salida campaign has run out of gas.  Just hours after the sanctions were announced, Senator Marco Rubio issued a press release taking credit for them, and other conservatives – led by the Cuban-American congressional delegation – called for even tougher measures.  Without clear objectives, however, the sanctions seem to be mostly a moral and political statement – pushing relations into yet another dead end from which neither government is disposed to find a way out.  Indeed, Venezuelan officials, calling the sanctions “a desperate cry from a nation that realizes the world is changing,” are turning the diplomatic adversity to domestic political advantage, just as administration officials had wisely predicted in pushing back against the Congressional saber rattling last spring.

Mexico and NAFTA: Lessons Learned?

By Robert A. Blecker*

Photo credit: Alex Rubystone / Foter / Creative Commons Attribution-NonCommercial-ShareAlike 2.0 Generic (CC BY-NC-SA 2.0)

Photo credit: Alex Rubystone / Foter / Creative Commons Attribution-NonCommercial-ShareAlike 2.0 Generic (CC BY-NC-SA 2.0)

Twenty years after the North American Free Trade Agreement (NAFTA) went into effect, it is clear that the promises made by Mexican President Carlos Salinas and U.S. President Bill Clinton – that the accord would make Mexico “a first-world country” and halt the migration of Mexican workers to the United States – have not been fulfilled.  In Salinas’s famous words, Mexico would “export goods, not people.”  But the number of undocumented Mexican immigrants in the United States rose by a conservatively estimated 3 to 4 million during the first two decades of NAFTA, and millions more were apprehended at the border and deported.  The reasons why immigration flows accelerated post-NAFTA are not hard to discern.

  • NAFTA fostered integration of Mexican industries into global supply chains targeted at the U.S. market, accelerating Mexico’s transformation into a major exporter of manufactured goods.  Nearly one million manufacturing jobs were created there in the first seven years of NAFTA (1994-2000).  But this job growth was offset by similar job losses in agriculture, and manufacturing employment has fallen by about a half million since 2001.  The net increase in manufacturing employment from 1993 to 2013 was only about 400,000, less than half of the annual growth in the Mexican labor force.
  • Real hourly earnings in Mexican manufacturing were no higher in 2013 than in 1994, and Mexico’s per capita income has stagnated relative to that of the United States.  In 2012, typical Mexican manufacturing workers received only 16 percent as much per hour as their U.S. counterparts, down from 18 percent in 1994.  Even adjusted for the lower cost of living, workers without a college degree in Mexico still earn only about one-quarter to one-third of what they can earn by moving to the United States.

The benefits of NAFTA for Mexico have been attenuated by several factors.  First, Mexican export industries still largely follow the maquiladora model of doing assembly work using imported inputs, so their value-added is only a fraction of the gross value of their exports and they have few “backward linkages” to the domestic economy.  Second, the Mexican government has frequently allowed the peso to become overvalued, making Mexico less competitive and driving multinational firms to locate in other countries.  Third, the tremendous penetration of Chinese imports into all of North America (Canada, Mexico and U.S.), especially since China joined the World Trade Organization in 2001, has displaced significant amounts of actual or potential Mexican exports.  A revaluation of China’s currency, rising Chinese wages and increasing global transportation costs have recently led to some “reshoring” of manufacturing to Mexico, but employment in Mexican export industries has grown only modestly as a result.

The increased integration of North American industries through NAFTA has proved to be a mixed blessing for Mexico.  U.S. booms have helped Mexico grow, but only for temporary periods, and being dependent on the U.S. market has held Mexico back since the U.S. financial crisis of 2008-2009 and the ensuing “Great Recession” and sluggish recovery.  Of course, NAFTA is but one of Mexico’s constraints.  The country’s restrictive monetary and fiscal policies, frequent currency overvaluation, monopolization of key domestic markets and inadequate investments in physical and human capital have also held it back.  The Mexican economy still suffers from a profound dualism, in which only about one-fifth of all non-agricultural, private-sector workers are employed in large, highly productive firms, while the vast majority are employed in small- or medium-sized enterprises with low, stagnant or even falling productivity.  Mexico’s experience under NAFTA certainly argues against portrayals of international trade agreements, such as the proposed Trans-Pacific Partnership, as panaceas for the economic ills of Mexico or any other country.  Whatever one thinks of the “reform” agenda of President Enrique Peña Nieto – which is focused on areas such as energy, education, and telecommunications – these reforms are unlikely to help Mexico break out of its slow growth trap if the foundations of the country’s trade and macroeconomic policies remain untouched.

*Dr. Blecker is a professor of economics at American University.