Replicating the U.S. Shale Gas Revolution in Latin America

By Thomas Andrew O’Keefe*

Photo credit: Energy Information Administration / Foter.com / Public domain

World Shale Gas Map / Photo credit: Energy Information Administration / Foter.com / Public domain

The shale gas revolution in the United States promises not only to soon make the country energy self- sufficient but also serve as the catalyst for a major revival of manufacturing.  Similar high hopes have been raised for Latin America, where some of the planet’s largest reserves of shale gas are found.  According to U.S. Energy Information Administration estimates, Argentina is said to have the world’s second largest reserves of technically recoverable shale gas (China is first).  The United States is currently in fourth place, followed by Canada and Mexico.  Brazil is in tenth place, with Chile and Paraguay not far behind.  The possibility that Latin America can pursue a successful shale gas strategy, however, is tempered by a number of important legal and/or geological differences that can serve as important bottlenecks.  In addition, the region’s tumultuous politics often get in the way of implementing policies that boost investment and encourage a highly productive energy sector.

The most important legal difference is that subsoil rights belong to the above ground property owner in the United States, while everywhere else in the Western Hemisphere the government (national, state or provincial) is the owner.  Developers have had an easier time purchasing access to shale gas deposits from individual landowners throughout the United States.  This explains, in great measure, why Canada’s significant shale gas reserves have not been as extensively exploited as in the United States, despite a hydrocarbons regime receptive to private-sector investment.  In addition, environmental protection legislation that impacts the shale gas industry is fractured among Federal, state, and local government authorities in the U.S.  That has facilitated developers extracting waivers and more lenient treatment in the United States that would be harder to obtain in most Latin American nations, where environmental protection is the exclusive or predominant prerogative of the central government.  Furthermore, current technology for extracting natural gas from shale reserves demands huge amounts of water, a resource that is scarce in those regions of Mexico, for example, where most of its extensive shale gas reserves are located.

Political realities are the most crucial (and often overlooked) factor that can easily undermine any effort to develop Latin America’s extensive shale gas reserves.  On paper, Argentina should be a regional energy powerhouse, supplying not only its own energy needs but those of its neighbors. However, the country has for years pursued policies that have scared off private-sector investment, heightened Argentine dependence on foreign energy imports, and led to a steady hemorrhaging of hard currency reserves.  To outsiders these policies appear illogical, but they make perfect sense to Argentine political leaders trying to consolidate their power base.  Mexico is an example of a country constrained by its Constitution from developing its extensive off-shore hydrocarbon resources.  Any political party that tries to make major amendments to those constitutional provisions, however, risks annihilation at the polls.  Brazil’s recent adoption of nationalistic legislation to encourage the domestic manufacturing of hydrocarbon-related technology could well impede exploiting its shale gas reserves if similar mandates are created for the highly specialized and capital-intensive hydrofracking equipment the industry utilizes.  In fact the only Latin American country where the stars seem aligned to repeat the U.S. shale gas success story is investor-friendly, politically-stable, energy-starved, and free-market oriented Chile, whose shale gas reserves are concentrated in the remote, under populated (and very wet) far south of the country that desperately seeks new opportunities to promote local economic development.  

*Thomas Andrew O’Keefe is the President of San Francisco based Mercosur Consulting Group, Ltd. and teaches at Stanford University.

Latin America’s Emerging Burden of Chronic Non-Communicable Diseases

By Fernando De Maio*

Photo credit: FLICKR.com/diapositivasmentales / Foter.com / CC BY

Photo credit: FLICKR.com/diapositivasmentales / Foter.com / CC BY

Despite significant improvements over the past 30 years in some of the most crucial health indicators – including increases in life expectancy and decreases in infant mortality – Latin America faces an impending epidemic of chronic non-communicable diseases such as heart disease, stroke, cancer, chronic respiratory diseases and diabetes.  The region has avoided the worst effects of the HIV/AIDS epidemic.  Brazil, for example, is now widely accepted by health policy analysts as offering the world valuable lessons for combating the spread of HIV and in ensuring access to life-saving antiretroviral medicine.  But chronic non-communicable diseases are now stretching under-funded and fragmented health care systems, revealing deep lines of social inequality.

The World Health Organization (WHO) has warned of an impending epidemic of such ailments, which are already the leading causes of death in all areas of the world except for sub-Saharan Africa.  In Latin America, chronic diseases account for more than 60 percent of deaths, with some variance between countries (more than 70 percent in Uruguay, more than 60 percent in Argentina and Chile, but less than 40 percent in Bolivia and Paraguay).  The latest data indicate that this burden is growing across the region, driven by increases in some of the most important risk factors (physical inactivity and obesity in particular).  Surveys in the region allow us to disaggregate national data, revealing the social inequalities underlying the problem.

In Argentina, we have used the National Risk Factor Surveys from 2005 and 2009 to examine how social gradients are changing:

  • Physical inactivity – an important risk factor for cardiovascular disease – has increased substantially (from 46 to 55 percent).  The further down we go in the socioeconomic hierarchy, the more this important risk factor seems to be increasing.
  • Obesity has also increased in this four-year period (from 14 to 18 percent), with a steepening social gradient for women.
  • Data on diabetes from these surveys are mixed.  The percentage of the adult population told they have diabetes or high blood sugar has risen (8.4 to 9.6 percent), but experts believe the increase reflects both increases in diabetes in the population and an in access to health care resulting in more cases being detected.
  • Some good news may be found in preventive cancer screening: rates of mammograms and pap smears have increased, and social gradients for mammograms are decreasing, raising the hope of diminished inequalities in cancer mortality in the future.

The WHO’s Commission on the Social Determinants of Health recently concluded that “reducing health inequalities is… an ethical imperative.  Social injustice is killing people on a grand scale.”  Among its recommendations is a call for the routine monitoring of health inequalities.  The growing body of data documents the linkage between inequality and the occurrence of chronic non-communicable diseases – demonstrating that, fundamentally, it is a question of social justice.  Social inequalities in physical inactivity, obesity, diabetes – and, crucially, tobacco consumption – are not natural but socially and politically produced.  Empirical research in the coming years will need not only to document the rise of chronic non-communicable diseases in aggregate terms, but also to closely monitor the inequalities embedded in national figures.  Policy analysis will likewise need to examine not just the national-level effects of new initiatives, such as new taxes on tobacco products or new standards for salt consumption, but, at a disaggregated level of analysis, examine how new initiatives affect people across the socioeconomic spectrum.

* Dr. De Maio is a professor in the Department of Sociology at DePaul University.

 

Revitalization of the OAS: More than an act of Congress

By Carlos Portales*

OAS logoU.S. Congressional passage in late September of the “Organization of American States Revitalization and Reform Act of 2013” could either help revitalize the troubled body or contribute to its irrelevance. By directing the U.S. Secretary of State to develop and drive OAS reform options, the bill seeks to give much higher priority in the OAS and Summit of the Americas to promoting and consolidating democracy in the hemisphere – “with due respect for the principle of nonintervention” – while recognizing that “key OAS strengths” are also in strengthening peace and security, assisting and monitoring elections, and fostering economic growth. Reducing “mandates” – ongoing programs that tend to get institutionalized – is another priority. The new law also requires Secretary Kerry to devise a strategy for a new fee structure in which no member state would pay more than 50 percent of OAS’s assessed yearly fees. (The U.S. Library of Congress reports that the United States, the organization’s largest donor, contributed an estimated $67.5 million in fiscal year 2012 – nearly 43 percent of the total 2012 budget.)

The reforms parallel ideas presented by OAS Secretary General Insulza in his “Strategic Vision of the OAS” on December 2011 (updated in March 2013) striving for concentration on four main pillars: democracy and conflict resolution; human rights; development (in association with the Inter-American Development Bank); and security (mainly against drugs and organized crime). He also advocated limiting a single state contribution to 49 percent without reducing the OAS’s total budget. The Secretary General embraced similar reforms when the legislation was first introduced by then-Senator Kerry in the previous Congress.

Agreement that the OAS needs reform is nearly universal, but any strategic transformation will have to take into account important developments among the Latin American international organizations. The OAS handily accommodated the creation of subregional organizations such as SICA and CARICOM in the past.  But new bodies – such as UNASUR, CELAC and ALBA – have posed new challenges to the organization’s relevance and effectiveness. Differences among the organizations have emerged over trade, democracy (different value attributed to the independence of powers and to press freedom, as well as of handling of crises in Venezuela, Honduras, and Paraguay), security (withdrawal of five countries from the Inter-American Treaty of Reciprocal Assistance), the strategy against drugs, and relations with the United States.  The organizations have also created new arenas for leaders to meet, at times taxing governments’ ability to keep up. From 1990 to 2012 there have been 272 Latin American regional and subregional summits, including eight Summits of the Americas.  When Secretary Kerry delivers his plan, it will be difficult for him to strike a balance between bringing the OAS more in line with Washington priorities, as laid out in the legislation, and seeking a bigger tent that addresses some of the concerns that gave rise to the plethora of competing organizations.

*Carlos Portales is the Director of the Program on International Organizations, Law and Diplomacy at WCL, American University. He was Ambassador of Chile to the OAS between 1997 to 2000.”

ALBA’s Future: Continuity or Break Down?

By Marcela Torres

ALBA Emblem | public domain

ALBA Emblem | public domain

The death of Hugo Chávez last March and the increasingly severe economic dislocations inside Venezuela have raised serious questions about the sustainability of the Bolivarian Alliance for the Peoples of the Americas (or ALBA).  Born out of an agreement between the Venezuelan and Cuban governments in 2004, the alliance was intended as a response to the U.S. goal of a Free Trade Area of the Americas (FTAA), as well as a vehicle for Chávez to project his Bolivarian vision for Latin American solidarity around a socialist project.  The regional bloc won its first symbolic battle at the Fourth Summit of the Americas in 2005, where Argentina, Brazil, Uruguay, and Paraguay definitively halted negotiations led by U.S. allies to create a single hemispheric free trade area (excluding Cuba, of course).  Over time, ALBA and its oil-based extension, Petrocaribe, have had a significant impact on economies in the region, providing crucial underpinning for presidents who signed on to Chávez’s vision for ideological or pragmatic reasons.  Among the greatest beneficiaries have been the Castro government in Cuba and the Ortega government in Nicaragua, which have received petroleum in exchange for food, in the case of Nicaragua, and doctors and teachers, in the case of Cuba. Ecuador and Bolivia, along with several states in the greater Caribbean, have also become key players in the ALBA network.

Venezuela’s leadership of ALBA, frequently described as “petro diplomacy,” has repeatedly come under fire from the country’s political opposition and from government critics in other ALBA-friendly nations.  The critiques in Venezuela rarely acknowledge the degree to which petro diplomacy has been a recurring feature of that country’s foreign policy, most notably during the governments of Carlos Andrés Pérez in the 1970s and 1980s.  Critics inside Venezuela and beyond frequently accused Chávez of building dependent clientelistic networks with countries desperate for energy resources. However, ALBA activities have transcended ideological divides, a fact demonstrated by Misión Milagro in Colombia, where Cuban doctors indirectly supported by Venezuela provide medical services in conflict zones.  If Chavez’s oil and charisma initially defined ALBA’s possibilities, the alliance has also fostered economic ties and investments among member countries, independent from Venezuela.

Though the election of Nicolás Maduro as Chávez’s successor might appear to guarantee political continuity, lacking Chávez’s charisma, Maduro might not be able to continue Chávez’s level of oil-fueled investment in ALBA.  Public spending in Venezuela continues to increase dramatically, with the fiscal deficit at 9-12 percent, inflation exceeding 40 percent, and the scarcity of dollars contributing to shortages of basic consumer goods.  To sustain its financial backing for ALBA, Maduro will have to stabilize the economy at home lest he lose the  popular legitimacy — no simple challenge.  Following the Twelfth Presidential Summit of ALBA in July, the presidents of Ecuador, Bolivia and Nicaragua joined Maduro in reaffirming their shared commitment to a socialist project in the region and a desire to maintain the international exchanges initiated by Chávez, suggesting that the alliance will not disappear at least in rhetoric in the medium term.  It is possible, however, that Maduro’s leadership will be challenged.  After the airplane in which Bolivian President Evo Morales was traveling was not allowed to land in France and Portugal this summer,  he proposed creating an ALBA army and convening another anti-imperialist summit.  Recently re-elected Rafael Correa of Ecuador has also hinted he might want to lead ALBA.  Without Venezuelan oil and sweeteners like Petrocaribe, it’s hard to see how ALBA will amount to more than a platform for personalistic agendas.

 

Egypt Policy – Latin America Style

By Fulton Armstrong

U.S. Department of State Headquarters | Wikimedia Commons

U.S. Department of State Headquarters | Wikimedia Commons

We who follow U.S. policy in Latin America shouldn’t be surprised to see Washington’s policy toward Egypt drift from support for democracy to support for the status quo ante.  President Obama’s 2009 speech in Cairo reaching out to Muslims – calling for an end to the “cycle of suspicion and discord” – came just six weeks after he told the Summit of the Americas that he wanted “an equal partnership” with the hemisphere and sought “a new beginning with Cuba.”  When 30-year President Hosni Mubarak stepped down in 2011, the Administration eagerly linked Egypt to the “Arab Spring” and, despite concerns about the Muslim Brotherhood roots of Egypt’s first democratically elected president, tried to make the relationship with Mohamad Morsi work.  Over time, however, Morsi – successor to an undemocratic regime in an undemocratic country with no democratic traditions and no democratic institutions – was accused of being undemocratic.  The estrangement grew so deep that the Obama Administration still cannot bring itself to call the July 3 coup against Morsi a coup, and Secretary of State Kerry saw fit to refer to the military takeover as “restoring democracy” even as the Army was firing on unarmed crowds.

To Latin America watchers, this chronology is reminiscent of U.S. policy in our own hemisphere.  The case of Honduran President Mel Zelaya is clearest.  The Honduran military removed Zelaya– in his pajamas – from his home and country in June 2009 for proposing a referendum that, the putschists claimed, violated the Honduran constitution.  The Obama Administration’s nominee to be Assistant Secretary of State at the time, Arturo Valenzuela, testified that the action was, in his opinion, a coup, but the State Department never categorized it as such and, despite rhetoric committing to restore Zelaya, the Administration let the interim regime consolidate power.  Amidst a state of emergency, media closures, and other irregularities, the State Department also gave its blessing to elections held several months later.  Zelaya’s rhetoric before the coup was caustic, and he squandered political capital in needless confrontations, but he never threatened Honduran “democracy” or violated human rights as the interim regime did.  Nor did he preside over a steady deterioration of security, civil rights, and the economy as the current government has.  Yet, ironically, the Obama Administration has never set the history of the coup straight – just as the Bush Administration never rectified its disastrous support for the 2002 coup against Chávez in Venezuela.

The excesses of some leaders, like Zelaya and Chávez, make supporting or turning a blind eye to a coup very tempting.  But Washington has also shelved its moral outrage when much less provocative presidents – democratically elected but progressive-leaning – have been removed from power, if not with a gun at their head.  The “constitutional coup” against President Lugo in Paraguay last year is the most recent example.  The gap between U.S. rhetoric about democracy, rule of law, and due process on the one hand and its tangible actions on the other has a number of causes. 

  • American “exceptionalism” – the sense that U.S. success gives it a right to judge others and intervene even when national interests are not at stake – sometimes leads Washington to over-extend and make rash decisions.
  • Eagerness to act quickly – to appear decisive – often makes policymakers confuse the symptoms of problems, which seem amenable to quick solutions, and the essence of the problems themselves.  Policies address the short-term while neglecting the strategic.
  • Washington lobbies – the pro-Israel lobby in the case of any matter in the Middle East and the Cuban-American lobby in Latin America – are able to dominate U.S. perceptions of events, pushing administrations into a corner. 
  • Administrations embarrass themselves when they throw around words like “Arab Spring” and “democracy.”  When the inevitable bumps in the road occur, they act betrayed rather than admit they got carried away by wishful thinking. 
  • Double-standards –the expectation that progressives succeeding authoritarians will be perfectly democratic and flawlessly inclusive – make it difficult for Washington to avoid prematurely throwing a potential ally overboard. 
  • Another factor, and potentially the most important, is that the U.S. government builds deeper relationships with elites and the security services that do their bidding than with any other forces.  During the Bush Administration’s “War on Terror,” the U.S. Government entrusted Egypt with extremely sensitive operations, including the interrogation (and alleged torture) of suspected terrorists, and Washington relies on Latin American security services to prosecute the “war on drugs.” 

When U.S. interagency committees discuss how to respond to crises, the departments and agencies with the deepest ties in the country under discussion claim more influence over events there than anyone else – and win most policy debates.  The problem is that their ties are mostly to political and economic elites – or the military and intelligence services that back them – which are rarely agents of change.  Washington winds up allied with forces that suppress the new voices essential for the “springs” and “democracies” that it says it wants.

 

 

Constitutions: End-State or National Dialogue?

By Todd Eisenstadt

Protestor holding the Constitution of Honduras. Photo credit: giggey / Foter.com / CC BY-NC

Protestor holding the Constitution of Honduras. Photo credit: giggey / Foter.com / CC BY-NC

The role of constitutions is evolving as deeply as the countries in which they are being written.  At least since 1787, constitutions have been pacts around which societal expectations converge – the written record of elite agreements on how things should be.  During the “Third Wave” of democratic transitions (since the 1970s), they were viewed as precursor “contracts” to founding elections.  But increasingly, constitutions are way stations rather than destinations.  The content and implementation of constitutions is of course important, but the politics surrounding them can, in some cases, be more important than the clauses and amendments contained therein.

In Bolivia, Ecuador, Venezuela, and perhaps, in the near future in Paraguay, constitutional moments seem to be taking on different meanings.  Optimism about constitutions as core elements of Third Wave democratization pacts is giving way to the 21st century reality of democratic backsliding, semi-authoritarianism, and hybrid regimes – making it all the more important to reconsider how to read constitutions and evaluate governments’ adherence to them.  These are not stale parchments, but living narratives which represent iterations in decades-long intra-elite bargaining efforts to stall Arab Spring-like social movements (regardless of whether they actually seek to create spaces for new political actors).  They represent societal gains – both real and symbolic, even with ephemeral institutional advances.  This may be especially true in new and developing democracies, which need government services, constitutions that improve fairness and equity, and implementation of those commitments.  Developed democracies fall short too, but in developing countries new to the art of promulgating democratic constitutions, these shortcomings are more transparent as they are less proficiently hidden from view.

We need an intellectual space where Madison’s Dilemma – how to empower citizens without overpowering political institutions with the tyranny that unruly majorities can bring – meets Hugo Chávez’ shadow.  Chávez, who was obsessed with linking the Boliviarian Union of nations via new trade agreements and political arrangements, sought to empower himself and his political allies in the guise of solomonic constitutional reform to consolidate democracy.  Observers have long criticized “window dressing institutions” in the electoral arena, as evident in studies of “electoral engineering” and “sham elections.” While “sham constitutions” – a phrase that may ring too loudly – require more subtlety and political craftsmanship, we do need to question the longstanding stylization of constitutions as the “last word” (literally) on a nation’s quality of democracy.  There is much to learn, and a conference held last week at American University by CLALS Affiliate Rob Albro, SIS Researcher Carl LeVan, and I, and sponsored by the Latin American Studies Association and the Mellon Foundation, made some headway in finding new ways to conceive of constitutions not as the “final word,” but only as the most recent one.

Top Five Events of 2012

A poll of contributors to AULABLOG identified the following five events (listed below in no particular order) as the most important in Latin America in 2012.  We welcome you to post your own list using the Leave a Comment link below.

By: Matt Westgate "Mettamatt" | Flickr | Creative Commons

By: Matt Westgate “Mettamatt” | Flickr | Creative Commons

Venezuelan President Hugo Chavez’s third major cancer surgery signaled that change – probably profound – will come to Venezuela much faster than his presidential campaign let on.  We expect growing tensions among his aides, none of whom has his charisma or base, as they jockey in a succession scenario.  We’ll be watching whether the PSUV can become an institutionalized mechanism for channeling Chavismo’s support into a governing project in the post-Chavez era.

The election and inauguration of Mexican President Enrique Peña Nieto signals a natural swing back to PRI leadership after 12 years of PAN governments.  Differences over the approach to counternarcotics might flare up in an overall smooth relationship with the United States, but the new president’s biggest challenge is going to be overcoming the persistent economic backwardness that has kept Mexico from achieving the economic growth of others since the turn of the century.

The ouster of Paraguayan President Fernando Lugo last June – as well as the United States and Latin America’s ambivalent reaction to it – was a dramatic illustration that democracy in the region rests on a tenuous foundation of sometimes contradictory constitutions and weak institutions.  The continuing struggle of Honduran President Pepe Lobo, three-plus years after the coup that removed President Mel Zelaya, shows that failure to bring those whose power grabs violate laws and the spirit of law to account sows the seeds of long-term instability and even greater threats to democracy.

The Colombian peace talks, the first serious attempt in 10 years at resolving the decades-old conflict, could lead to a watershed in that country’s development.  President Juan Manuel Santos has shown strong leadership, despite incessant carping from his predecessor, Alvaro Uribe, and has smartly acknowledged that success in the talks is far from certain.  If the talks are successful, 2013 could be a defining moment for a country already experiencing strong economic growth and an important degree of social progress.

Washington continued to sit on the sidelines on most regional issues.  President Obama got a spanking at the Summit of Americas from even perennially friendly governments for Washington’s approach to counternarcotics (overly militarized) and Cuba (stuck in the Cold War).  He was silent on Latin America during the campaign, and his rhetoric of “partnership” and “neighborhood” remained unfulfilled.  Although the President won kudos for implementing elements of the Dream Act by Presidential Directive, the Administration boasted of deporting more than 400,000 illegal immigrants in 2012, the most of any year in the nation’s history.  The region is likely to remain eager for U.S. leadership on issues of mutual interest in 2013, but most countries’ blossoming dealings with Europe, Asia and even Africa suggest they’re not going to sit around waiting for the U.S. to take up the challenge.

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.

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.