High Time for a U.S.-Bolivia Reset

By Rob Albro, CLALS Faculty Affiliate

President Evo Morales in a climate meeting at the University of Oslo | by Utenriksdept | Flickr | Creative Commons

President Evo Morales in a climate meeting at the University of Oslo | by Utenriksdept | Flickr | Creative Commons

Little has changed in the U.S-Bolivia relationship since each expelled the other’s ambassador and suspended full diplomatic ties in 2008.  Last month a Bolivian official accused the United States of trying to sabotage the administration of President Evo Morales, and Morales has not dropped his pugnacious anti-U.S. rhetoric.  Washington, for its part, has persistently criticized Bolivian anti-drug policies, while not acknowledging the failures of its own decades-long “war on drugs.”  As discussions surrounding Secretary of State Kerry’s January 24 confirmation hearing suggested, U.S. policy toward several Latin American countries – including Bolivia – is still on Cold War autopilot, continuing to use code-words like “socialism,” implicitly and incorrectly viewing the recent and historic changes in that country largely through the prisms of Venezuela and Cuba.

Along with many observers outside of Washington, the Bolivian government understands itself to be addressing long-standing demands to correct a historical lack of social inclusion, to institute a more participatory (and “plurinational”) democratic process, and to pursue economic sovereignty.  In notable contrast to Venezuela, with which Bolivia is often lumped together, the country’s long-marginalized indigenous majority is in the national political driver’s seat for the first time.  Despite Morales’s rhetoric to the contrary, Bolivia is far from rejecting the free market. It recently applied for full participation in MERCOSUR, and has welcomed foreign investment in its sizable petroleum and lithium deposits. Along with Peru and Ecuador, Bolivia has also sought ways to maintain economic growth while protecting the environment and avoiding unsustainable extractivist policies.  Bolivia’s is a hybrid approach: mixing an alternative democratic tradition domestically with the promotion of Bolivia Inc. globally.

It is past time for Washington to move on from its one-size-fits-all approach toward Andean countries, and to take more seriously the perspectives and priorities of their peoples and governments.  And Bolivia’s recent history provides ample opportunity for the U.S. to identify common – if not identical – ground.  Morales’s frequent statement that Bolivia is looking for “partners, not bosses” echoes President Obama’s own 2009 speech about “partnership” in our hemispheric “neighborhood.” Obama’s recent inaugural call for more effective “collective action” resonates with the spirit of Bolivia’s ongoing plurinational democratic experiment.  And if climate change is back on the U.S. political agenda, Bolivia continues to be a global catalyst for this important multilateral discussion. Emphasizing these shared problems, experiences, and aspirations, can provide a foundation for closer relations.

Cumbritis and Prospects for Latin American Regionalism

By Carlos Portales
Washington College of Law and Center for Latin American and Latino Studies

UNASUR Cumbre by  Globovisión | Flickr | Creative Commons

UNASUR Cumbre by Globovisión | Flickr | Creative Commons

Latin America has experienced a veritable proliferation of presidential summits (cumbres) in recent years, an indication of how the hemisphere’s complex web of regional ties is shuffling the landscape of multilateral organizations. This trend was manifested in the Nov. 16-17 Iberoamerican Summit in Cadiz, Spain, followed in quick succession by summits for UNASUR on Nov. 30 and MERCOSUR on Dec. 7. The New Year will witness two summits in Santiago, Chile, the first between the European Union and Latin American and Caribbean States, the second among Latin American and Caribbean States (CELAC).  While sometimes useful in isolation, the cumulative impact of these meetings may be less than the sum of its parts. Indeed, the region may be suffering a bout of cumbritis that is as distortive as it is productive.

The Cadiz summit reflected Spanish determination to sustain an Ibero-American bloc amidst its own profound crisis. Spain’s investments in Ibero-America, particularly in banking and telecommunications, are keeping alive important sectors of the Spanish economy. When the VI UNASUR Summit met in Lima two weeks later, the Presidents of Argentina, Brazil, Venezuela and suspended Paraguay were all absent. Still, the meeting reaffirmed UNASUR’s role in political and military matters: UNASUR was active in the crisis in Paraguay, sent its first-ever electoral mission to Venezuela, the South American Defense Council provides coordination in defense industries and natural disaster responses, and aspires to support protection of human rights.

The following week in Brasilia, MERCOSUR formally incorporated Venezuela and signed an adhesion protocol with Bolivia. However, as Tom Long wrote in “Mercosur’s future: Whither economics?” on Dec. 18, MERCOSUR’s expanding breadth masks a lack of depth. The trade bloc has not agreed on a common external tariff, and integration has stalled as Argentina and Brazil adopted unilateral protectionist measures both during and after the global financial crisis. Though its market is growing, MERCOSUR’s ability to negotiate with third parties is limited. The countries most interested in boosting trade have split off on their own under the loose Pacific Alliance (PA), whose Presidents met on the sidelines during the Cadiz summit. Chile, Colombia, Mexico and Peru have set high targets for the reduction of customs duties and plan on reducing visa requirements for their citizens while already having FTAs with the US and Europe.  Chile and Peru have reached similar accords with China and other main Asian countries. However, the Alliance is primarily an informal gathering of free-trade-minded presidents, and so far institutionalization is minimal.

Brazil is leading South America-centered institutions (UNASUR and MERCOSUR) when it perceives that these suit its interests; The Venezuela-led ALBA has lost steam due in part to President Chavez’s illness; the PA process remains low-key and trade centered. Meanwhile, the Organization of American States risks irrelevance. Its robust human rights system has come under attack from ALBA countries and others, while four ranking members of the U.S. Senate Foreign Relations Committee have lambasted its leadership publically. The OAS may not be unsalvageable, and it remains potentially useful, though that potential will only be realized if the United States endeavors to support rather than undermine its efforts.

And Summits alone will not ensure the success of any of these multilateral forums: increasingly ubiquitous conversations among presidents can be effective for defusing immediate crises and for establishing guidelines for cooperation, but their long-term impact on policy coordination will be limited if they are not matched by analogous cross-national dialogue among key government ministries. The symptoms of chronic cumbritis lie in the failure of many presidential declarations to result in concrete advances in cooperation.

Mercosur’s Future: Whither Economics?

By Tom Long

Mercosur’s December 6 meeting in Brasilia might seem to be a watershed. The organization formally integrated Venezuela and signed adhesion agreements with Bolivia. Ecuadorean President Rafael Correa was in attendance, too, along with officials from other South American countries. The bloc was established starting in 1991, with goals of removing internal tariffs, setting a common external tariff, coordinating commercial policies, and harmonizing regulations. An unwritten objective was to spur industrialization and decrease dependence on foreign manufactures. Yet more than twenty years on, Mercosur appears to be further than ever from establishing a common market. The Inter-American Development Bank notes that Brazil and Argentina have traded protectionist measures, and that “Buy Brazil” provisions in government procurement have been a bilateral irritant.

Mercosur

Expanding breadth masks decreasing depth. While both Mercosur’s total trade and trade among its members have grown greatly over the past decade, the former has outpaced the later.  WTO data show that intra-regional trade as a percentage of total trade has declined from 31 percent in 2000 to 25 percent in 2011. Instead of being driven by integration, MERCOSUR’s trade patterns are propelled by skyrocketing trade with Asia, led by Argentine and Brazilian commodity exports. In this light, the failure of late October meetings between Mercosur and the European Union suggest that China has taken the place of Europe.

Evaluated from a strictly economic perspective, Mercosur’s recent expansion represents a step backwards. The inclusion of Bolivia will not add much economic heft to the pact, and with the addition of each new member, reaching consensus will become even more difficult. The full membership of Venezuela increases the bloc’s size, but also its dependence on natural-resource exports. Neither newcomer—nor the two original heavyweights—appear committed to the original common market mission. Is the bloc’s raison d’etre shifting from the economic to the political? If so, what will be Mercosur’s relation to ALBA and UNASUR? Whereas Brazil was never fully comfortable with the Bolivarian Alliance—in part because of the anti-U.S. tone—it has now brought ALBA’s two most committed members to its own table. Inside Mercosur, Brazil has a greater voice than it does in UNASUR, but the hijacking of a potentially important trade alliance masks a lack of economic leadership for South America.

FTA Dreaming: Promises to Expand Free Trade in the Hemisphere

Photo by: Starley Shelton | Flickr | Creative Commons

Although Latin America has not been an issue in the U.S. presidential campaign, Republican presidential contender Mitt Romney has stated multiple times that he would promote hemispheric trade agreements.  In the second debate, he said, “I’m also going to dramatically expand trade in Latin America. … I want to add more free trade agreements so we’ll have more trade.”  Romney did not specify, however, with which partners he would conclude trade agreements.  (A request to the Romney campaign for more information has not been answered.)  President Barack Obama did not comment on Romney’s promise, suggesting the president’s lack of focus on the region or calculus that voters simply don’t care.  Under Obama, the United States ratified pacts with Colombia and Panama, negotiated during the Bush administration.  The U.S. already had FTAs with Central America and the Dominican Republic, Chile, Mexico, and Peru.

While that would seem to leave a number of large economies, nearly all of them are unlikely partners. The most important remaining economies – Brazil, Argentina, Venezuela, Uruguay, and Paraguay – are part of the Mercosur trading bloc.  Washington has refused to negotiate with them as a group, and the group prohibits members from signing bilateral accords.  Meanwhile, Venezuela, Bolivia, Nicaragua, Ecuador, Cuba, and several Caribbean nations have joined together specifically to counter U.S. proposals for free trade in the hemisphere.  The few remaining countries have tiny trading relations with the United States.

The idea of adding FTAs in Latin America looks quixotic.  Nevertheless, that is hardly an excuse for failing to improve trade relations short of comprehensive agreements.  There are important opportunities to deepen the United States’ most important trade relations with Canada and Mexico, as AU Professor Robert A. Pastor has argued.  Moreover, if the United States is willing to use the Andean Trade Preferences Act as a tool for development instead of a cudgel against Latin Americans it considers wayward, it could expand trade in ways that benefit all parties.  Likewise, trade problems have become outsized irritants in U.S. relations with Brazil and Argentina – to say nothing of the broader implications of U.S. “trade policy” with Cuba.  These problems have largely festered under Obama, and Romney’s promises of free trade agreements do not seem a serious proposal to correct them.

Mercosur, Unasur Holding Firm on Democracy in Paraguay

Photo by Christian Van Der Henst S. via Flickr , http://www.flickr.com/photos/cvander/5215442086/

As Paraguay marked the one-month anniversary of the summary removal of President Lugo from office, the distance between South America and the rest of the hemisphere on how to deal with the “constitutional coup” remains great and is perhaps growing.  OAS Secretary General Insulza announced last week that the regional organization’s Permanent Council decided to take no further action, except to send a “support mission” to Asunción.  The Obama Administration’s inaction further indicates that the United States is prepared to allow things to stand unchallenged and even unexamined.

Mercosur, Unasur, Spain and, more predictably, ALBA have all been tougher.  Mercosur last week announced that the new Paraguayan government, led by President Federico Franco, is still barred from participating in the organization’s activities, although the government to be elected in April 2013 will be welcome.  Unasur made clear that Paraguay’s participation will be suspended “until democratic order is reestablished.”  ALBA countries have minced no words in condemning Lugo’s ouster.  Spanish Foreign Minister García-Margallo suggested publicly last week that Paraguay’s participation in the Ibero-American Summit in November may not be appropriate.

This division among hemispheric players is reminiscent of the tensions following the coup that removed democratically elected President Mel Zelaya in Honduras three years ago.  Whereas the United States quickly softened its stance on the value of isolating the golpista government of Roberto Micheletti in 2009 and later became Tegucigalpa’s most ardent advocate for speedy readmission to the OAS – while Brazil and most South Americans remained committed to seeking a more democratic outcome – Washington is now showing patience with the right-wing factions that ousted Lugo.  Mercosur’s formula for welcoming the government to be elected next year helps avoid the sort of crisis for the incoming leadership that hindered Honduran President Lobo’s efforts to push back against his country’s golpistas, who to this day are undermining his administration.

 

Paraguay Coup: Setback to Democracy Even if Technically Constitutional

 

Photo by: Juan Alberto Pérez Doldán, via http://www.flickr.com/photos/38384810@N02/3531158719/

President Fernando Lugo, struggling to consolidate power since taking office in 2008 in Paraguay’s first meaningful transfer of power in 60 years, was removed from office on Friday by the same elites who had resisted him all along.  In a series of lightning actions, the Senate convened an impeachment process – giving him only two hours to prepare a defense – and voted him out of office.  Opposition leaders cited the government’s mishandling of a squatter protest earlier this month, resulting in 17 dead, but they had been undermining him from day one of his administration.  By Friday afternoon, Lugo accepted his removal and left the Presidential residence.  His vice president, Federico Franco, was sworn in and subsequently declared, “The country is calm. … Activity is normal and there is no protest.”

International reaction was slow at first, as the region focused on an environmental summit in Brazil.  But Brazil, Argentina and the ALBA nations condemned Lugo’s ouster and threatened sanctions.  President Dilma Rousseff urged immediate suspension of Paraguay in Mercosur and UNASUR, and Brasilia and others have withdrawn their ambassadors.  The U.S. State Department expressed “concern” at first and then urged “all Paraguayans to act peacefully, with calm and responsibility, in the spirit of Paraguay’s democratic principles.”  The OAS held an extraordinary session of the Permanent Council and sent a fact-finding mission to Asunción.

As President Lugo said, the action was as much against “Paraguay’s history, its democracy” as it was against him.  Like the coup that removed President Mel Zelaya in Honduras three years ago, the action was intended to stop a popular president and influence elections scheduled in coming months, but Zelaya was removed and exiled by the military, and the Congressional documents sanctioning it were fabricated after the fact.  The events in Paraguay pose an important challenge to the democracy clauses of the various regional charters (Mercosur, UNASUR, OAS) as well as the leadership of the region’s biggest democracies, including Brazil and United States.  At this early point, the Paraguayan elites probably judge that they can weather the storm because the U.S. and Brazil – with the diplomatic tensions about the Honduran coup, elections and reaccession to the OAS still fresh – have few options for restoring Lugo to presidency.  Insofar as entrenched elites sense that Washington will react mildly to the removal of democratically elected presidents they can cast as “leftist,” coups like those that have taken place in Honduras and Paraguay will continue.