Latin American Integration: No New Ideas

By Carlos Malamud*

Heads of state stand for a picture at the 14th ALBA Summit held in Caracas in 2017

Heads of state at the 14th ALBA Summit held in Caracas in 2017/ EneasMx/ Wikimedia Commons

Several proposals claiming to promote regional integration in Latin America, particularly South America, have received attention in recent months, but proponents’ continued reliance on the same political-ideological alignments as always leaves little hope of bridging the deep splits in the region. Coming in the wake of completion of the EU-Mercosur trade agreement, after arduous and complicated negotiations, the proposals appeared to be good news. But that has not been the case.

  • The new push follows the creation of PROSUR by right-leaning governments in March and, more recently, efforts to relaunch UNASUR by left-leaning groups such as the Grupo de Puebla (Progresivamente) – each claiming commitment to unify the region behind their political visions. Two of the main advocates, Chilean President Sebastián Piñera on the right and Argentine Presidential Candidate Alberto Fernández on the left, have taken the easy path of convoking like-minded supporters while rejecting opponents.
  • These groups appear to have learned nothing from the first decade of the 21st century, when Venezuelan President Hugo Chávez pushed his Bolivarian project. The three efforts emblematic of the period – ALBA, CELAC, and UNASUR – all eventually failed. The rise of neoliberal governments in various countries since then has produced an even more complex situation. The new governments have continued emphasizing ideological conformity, reducing prospects for unity. Last December, a “Conservative Summit of the Americas” inspired by Brazilian President Jair Bolsonaro and his son met in Foz de Iguazú to rally the most extreme elements of the region’s right, conditioning participation on total agreement with its tenets.

There are exceptions.  The Pacific Alliance – a trade accord launched by Chile, Colombia, Peru, and Mexico eight years ago – has remained inclusive despite changes of government in each country. MERCOSUR, with its solid foundation and intense commercial exchanges, has also resisted ideological temptation in its way, although dismissive insults between President Bolsonaro and Argentine candidate Fernández do not bode well (even if both know that they need each other in the long run). But the fear is that extreme ideologies will, once again, trump national interests.

The intense electoral cycle of the past three years, and the pending elections in Argentina, Bolivia, and Uruguay, further complicate the situation. As the “turn to the right” has not turned out as predicted, the results of these three races this month will make regional relations even more unstable. The lack of a new vision for promoting Latin American regional integration is aggravated by the growing sense among both extremes of the political spectrum that they have to dig trenches.

  • The need for a new vision is obvious as the growing attacks on multilateralism and the escalation of the U.S.-China trade war are going to force practically all international actors to take sides. Latin America will suffer potentially grave consequences if its governments and political leaders don’t grasp that inclusion, not exclusion, is the only way to advance unity and integration. Acceptance of differences, dialogue, and negotiation are what’s needed now, as is a creative imagination that can accept reality as it is, with all its problems and imbalances. The question is whether the existing leaders will be able to overcome this sad state of affairs.

October 1, 2019

*Carlos Malamud is Senior Analyst for Latin America at the Elcano Royal Institute, and Professor of Latin American History at the Universidad Nacional de Educación a Distancia (UNED), Madrid. A version of this article originally was published in the Elcano Blog.

South America: Regional Integration or Presidential Posturing?

By Stefano Palestini Céspedes*

47389747662_9be46749b5_z

South American Presidents waving to the cameras in Santiago, Chile / Flickr / Creative Commons

Seven South American presidents’ launch of brand-new regional grouping called PROSUR last week was intended to give a boost to their personal agendas rather than take a serious step toward regional integration. The announcement was made on March 22 at a summit organized by Chilean President Piñera and attended by the presidents of Argentina, Brazil, Colombia, Ecuador, Peru, and Paraguay. The declared goal of the summit was to overcome what Piñera called the “paralysis” of the decade-old UNASUR.  Its final declaration emphasized the need “more than ever to work together to update and strengthen the South American countries’ process of integration” in the face of current and future challenges, including “inserting ourselves in an efficient way into the fourth industrial revolution and society based on knowledge and information.”

  • The creation of the Forum for the Progress of South America (PROSUR), however, delivered very little in terms of regional integration. The Santiago Declaration does not tackle the obstacles that hampered UNASUR, such as its decision-making procedure based on consensus. On the contrary, the declaration envisions PROSUR as a forum exclusively based on presidential diplomacy, in which all decisions by definition must be taken by consensus.
  • The Presidents said the new organization will focus on infrastructure, energy, health, defense, and dealing with natural disasters – the same areas where UNASUR had shown some progress. The declaration did not mention any particular ongoing crisis, such as Venezuela, but it made clear that it would work for full respect for democracy, constitutional order, and human rights. Again, this is not a departure from UNASUR, which also had a democracy clause adopted and ratified by the national parliaments.

The summit promised political gains for several participants. For President Piñera, it was an opportunity to project himself as a regional leader able to convene and coordinate South American heads of states, at a time that his domestic popularity is decreasing. Ecuadorean President Moreno – the only central-left president attending the summit – had yet a new opportunity to signal his willingness to coexist with pro-market governments in the region. For Brazilian President Bolsonaro, a well-known skeptic of South American integration, the summit was a platform to show a more palatable image closer to his liberal peers.

President Piñera and his guests blamed UNASUR’s bureaucracy for its lack of effectiveness, opting instead for a lean mechanism based on presidential diplomacy. Most long-time observers believe, however, that UNASUR’s effectiveness was undermined by its very weak organizational capacity, with a powerless Secretary General and personnel made up of low-ranking national diplomats instead of qualified international civil servants. Presidential diplomacy, unburdened by a bureaucracy of specialists who analyze problems and possible solutions, works well when Presidents get along in ideological terms, but precedent shows it is vulnerable to collapse when governments have divergent preferences or when states must agree on complex transnational issues such as migration, drug-trafficking, or deep economic integration.

  • PROSUR will work exclusively as a forum (not as a regional organization) and its decisions and initiatives will have to be executed and monitored by the national bureaucracies of the member states, which by definition look after national interests rather than regional interests. The Santiago Summit has demonstrated that when it comes to regional integration, leftist and right-wing heads of government look and act alike. No matter which ideology they claim, South American presidents fear collective institutions, cherish presidential diplomacy, and prefer to create new initiatives with pompous names from scratch, rather than make necessary reforms to existing ones. As Uruguayan President Vázquez – who did not attend the summit – put it, South America has a long history of integration initiatives that have not brought about integration. The region would be better served by reinforcing and overhauling existing mechanisms such as MERCOSUR, the Andean Community, or the Pacific Alliance, and try to make them convergent in any possible way, rather than adding yet another acronym.

March 29, 2019

* Stefano Palestini Céspedes is an Assistant Professor at the Institute of Political Science, Catholic University of Chile.

A Right Turn in Latin America?

By Santiago Anria and Kenneth Roberts*

Jair Bolsonaro

Brazilian President Jair Bolsonaro in January 2019. / Marcos Brandão / Agência Senado / Flickr / Creative Commons

After a long winning streak, the left in Latin America has experienced electoral defeats in a number of former strongholds since 2015 – including Argentina, Chile, and Brazil – but the trend is not unidirectional and so far falls short of being a regional “right turn.”

  • Right wing presidents govern today in those three countries as well as Colombia, Guatemala, Paraguay, Honduras, Panama, and Peru – a scenario that is quite different from 2010, when about two-thirds of Latin Americans lived under some form of leftist government. Democratization, financial crises, and market liberalization shaped the 1980s-90s, while mounting social discontent against neoliberal market reforms helped to produce a “left turn” that spread across the region following the election of Hugo Chávez in 1998.  Leftist candidates won 30 presidential elections in 11 different Latin American countries between 1998 and 2014.

The current trend lines are hardly unidirectional across the region.  Mexico, which remained under conservative government when most of the region turned toward the left after 1998, has recently elected long-time leftist leader Andrés Manuel López Obrador to the presidency.  Incumbent leftist parties have been re-elected one or more times in Uruguay, Bolivia, Costa Rica, and El Salvador.  Notably, leftist parties in some countries where they have been historically weak, such as Colombia and Honduras, have strengthened electorally and organizationally, laying the groundwork for further growth.  Leftists’ records elsewhere are mixed.  Rivalries among Ecuadorean leftists make their future uncertain.  Venezuelan President Maduro and Nicaraguan President Ortega have resorted to increasingly repressive and authoritarian measures to maintain their grip on power.

  • With the possible exception of Brazil, the right’s surge is not the result of the sort of social backlash that brought the left to power. In general, the right’s victories appear to be a routine alternation of power rather than a regional wave with common starting points and driving forces.  Argentina and Chile are the two clearest examples of routine electoral alternation of power explained by retrospective, anti-incumbency voting in contexts of economic slow-downs, corruption scandals, and social policy discontent.  In countries like Paraguay and Honduras, on the other hand, the shifts were initiated by non-electoral means – a politically motivated presidential impeachment in the former and a military coup in the latter – and then consolidated through elections after the fact.  In Brazil, the right turn can be traced back to the social protests that broke out against Dilma Rousseff’s leftist PT government in June 2013, but former conservative allies’ opportunistic impeachment of Rousseff, along with their imprisonment of former President and PT founder Lula, seriously weakened her party – paving the way for the election of anti-establishment candidate Jair Bolsonaro.

The left in power is still strong, though probably not unbeatable today, in countries like Bolivia and Uruguay, at least in part because of their roots in and strong connections with social movements.  Unlike the PT, both Bolivia’s MAS and Uruguay’s FA have managed to preserve more of their movement character and to avoid extreme forms of top-down control and professionalization.  The ability of mass popular constituencies and grass-roots activism to hold party leaders accountable and steer public policies in desired directions—a condition largely absent in countries like Brazil, Ecuador, and Venezuela—has helped the left maintain cohesion in Bolivia and Uruguay.  This cohesion, accompanied by significant reductions of inequality, helps to explain the continued vitality of left parties in these countries.  The recent strengthening of leftist alternatives in Mexico and Colombia, moreover, should guard against facile assumptions that a region wide right turn is underway.  Conservative forces’ recent victories are better understood as a reinforcement of the post-neoliberal left-right programmatic structuring of political competition in Latin America than a unidirectional political shift to the right.  That said, Brazil wields significant political and economic influence in the region and, traditionally seen as an “early mover” in the region, may be a bellwether of the future.  The ability of President Bolsonaro and his model of governance to deliver the results that Brazilians want—and to operate within the parameters of democratic institutions—will be key factors in determining the direction and strength of the region’s rightist wave.

January 9, 2019

*Santiago Anria is Assistant Professor of Political Science and Latin American Studies at Dickinson College, and Kenneth Roberts is Professor of Government and Director of Latin American Studies at Cornell University.

Mercosur: Diversifying Partnerships

By Andrés Serbin*

Mercosur Summit

A seminar at the 53rd Mercosur Summit. / Sabrina Pizzinato / UCIM / Creative Commons

Mercosur’s signing of a memorandum to increase economic and commercial cooperation with the Eurasian Economic Commission (EAEU) signals the trading bloc’s interest in diversifying its trade and political relationships beyond the western hemisphere.  The presidents of the Mercosur countries – Brazil, Argentina, Uruguay, and Paraguay –signed the agreement at the 53rd Mercosur Summit, held last month in Montevideo.  At a ceremony at which he accepted the rotating presidency from Uruguay, Argentine President Mauricio Macri emphasized the need for Mercosur to open not just to the Pacific Alliance, but also to Central America, Asia, and Africa.

  • Proposals for closer cooperation with the EAEU have been under study for many years, since Russia first created the Commonwealth of Independent States (CIS) from among the former Soviet republics (except the Baltic countries) after the end of the Soviet Union in 1991. The CIS was intended as a post-Soviet space under Russia’s leadership that would reconnect its members within a “Eurasian” geopolitical region distinct from both Europe and Asia.  The EAEU, formalized in 2015 under the leadership of Russia and Kazakhstan, now also includes Belarus, Kyrgyzstan, and Armenia.  Mercosur ministers agreed to sign the memorandum during meetings immediately before the summit, stating that enhanced cooperation and coordination with the EAEU – with which Mercosur would account for a combined 6.5 percent of world GDP – was consistent with efforts to strike a similar arrangement with the European Union.
  • Mercosur’s decision comes amid international tensions over trade and protectionism, but it cannot be divorced from the ideological, cultural, and geopolitical elements of the vision for “Great Eurasia” of which Russian President Vladimir Putin has spoken (and which Chinese President Xi Jinping has shared). The tensions between Russia and Ukraine, and Western pressures in retaliation, were a key driver of Moscow’s push for formalization of the EAEU as a potential interlocutor with the European Union while at the same time putting a brake on U.S. presence in the region.  Western analysts have debated the power of “neo-Eurasian” identity as a tool of geopolitical projection beyond the creation of a new economic bloc.  China is also a factor in Russia’s calculations.  The “Shanghai Cooperation Organization” (OCS) fostered by both countries and Beijing’s “New Silk Road” project, through Central Asia and to the EU, have also increased the salience of “Great Eurasia.”  Russia and China have increased cooperation in trade, in technology (including military) and against terrorism and extremism.  Through the EAEU and OCS mechanisms, they have extended contacts all the way to India and Pakistan and, potentially in the future, Iran and other countries.

Mercosur’s trade with the EAEU is asymmetrical in favor of the Latin American countries, with the exception of Brazil (with which it is more balanced), according to EAEU officials.  The EAEU has high internal tariffs and limited internal trade – except in bilateral trade between Russia and Belarus – but there are already tariff exemptions for Mercosur members.  Food appears to be the biggest Mercosur export to the region.  Experts believe that trade between the two blocs can be significantly increased, and that a free trade agreement can be signed before the completion of the EU-Mercosur FTA, which has been under negotiation for 20 years.

Although many Western analysts remain doubtful about the success of efforts to form a “Great Eurasia,” Mercosur apparently has determined that engagement with it is low-cost and potentially beneficial.  Beyond the possibility of expanded trade, the memorandum of cooperation signed in Montevideo suggests Mercosur sees a geostrategic interest in signaling openness to such collaboration.  The right-leaning governments of Latin America and the Caribbean are likely to remain generally aligned with the United States, but they have learned the importance of trade diversification over the past two decades.  Setting tradition and ideology aside, most are trying to interact with whomever can bring good deals to their countries in terms of trade, investment, and cooperation.  In the context of Russia and China’s interest in a “Great Eurasia,” Mercosur’s increased outreach to EAEU also reflects an important piece in a strategy to undertake the necessary diversification of its foreign policy in a changing world.

  •  The United States may not appreciate the wisdom of Mercosur’s approach. Eurasia is a blind spot for Washington, which focuses on Russia’s actions in Europe and China’s in Asia – but not in Central Asia itself or as a bridge to India, Pakistan, Iran, Turkey, and the Arab world.

January 7, 2019

* Andrés Serbin is an international analyst and president of the Regional Coordinator of Economic and Social Research (CRIES), a network of more than 70 research centers, think tanks, NGOs, and other organizations focused on Latin America and the Caribbean.  This article is adapted from one published by Perfil.com.

South America: Is UNASUR Dead?

By Stefano Palestini Céspedes*

Three men sit at a table with microphones and two flags behind them.

President pro tempore of UNASUR, Bolivian Foreign Minister Fernando Huanacuni (middle), held a press conference last week to discuss the suspended participation of six member countries. / UNASUR SG / Flickr / Creative Commons

The decision of UNASUR’s six center-right members to suspend their participation in the group underscores the immense challenges the regional organization faces but may also lead to its effective reform.  In a letter last Friday to the Foreign Minister of Bolivia, current President pro tempore of UNASUR, his colleagues from Argentina, Brazil, Chile, Colombia, Paraguay, and Peru communicated their decision to suspend participation and budget support for UNASUR immediately.  In the past, single governments have unilaterally withdrawn from a regional organization when they considered it was not serving their interests, but a collective – albeit temporary – exit is unprecedented for an international organization in Latin America.  UNASUR now has only six fully participating members.

  • Although considered by some a left wing organization, UNASUR grew out of an idea that can be traced back to Brazilian President Fernando Henrique Cardoso’s first South American Summit in 2000. Institutionalized under the leadership of Presidents Lula da Silva and Hugo Chávez in 2008, UNASUR successfully grouped together Bolivarian, center-left, and center-right governments during its first 10 years of existence.  Under the leadership of Chilean President Michelle Bachelet, it helped avert a presidential crisis in Bolivia in 2008 and mediated in a conflict between Colombia and Ecuador.  Two years later, it adopted a democracy clause that has been applied once, in Paraguay in 2012.  UNASUR agencies such as the South American Defense Council, the South American Health Council, and the Council for Planning and Infrastructure have enjoyed broad participation and delivered regional public goods.

The six dissenting foreign ministers explained in their letter that their decision was motivated by the “need to solve the anarchy (acefalia) of the organization.”  They referred explicitly to the vacancy of the post of Secretary General since January 2017.  In fact, the organization’s requirement that decisions be by consensus perennially complicates decision-making.  The candidate with majority support – Argentine José Octavio Bordón – was vetoed by Venezuela, which the six believe is in violation of the organization’s democratic commitment.  Venezuela is currently suspended from Mercosur; was not invited to the Summit of the Americas in Lima; and has been singled out by a Resolution of the OAS.  As the application of UNASUR’s democracy clause against President Maduro is also blocked by the consensus rule, the six seemingly had few courses of action to exercise their voice.

  • Some observers say the six– all center-right governments – seek to destroy UNASUR because it is supposedly leftist or Bolivarian. However, the dissenters have not initiated formal procedures to withdraw from UNASUR, which would have de facto started its dissolution.  Indeed, there are different stances among the six signatories of the letter, with some in favor of the dissolution and others in favor of overhauling UNASUR.  The prevailing position seems to be to press the remaining countries, mainly Bolivia, Ecuador, and Uruguay, to convince Venezuela to lift its veto of Bordón.

The impasse may provide opportunities to transform UNASUR into a more effective organization.  A first positive indicator has been the political leadership of the Bolivian foreign minister; instead of overreacting to the letter, he has convened all foreign ministers (including the six signatories) to a meeting to solve the impasse.  The Chilean foreign minister and others have urged reform, which in theory could be achieved by introducing a majority-voting mechanism to overcome the sort of deadlocks that hamper the organization.  The risk is obvious:  Bolivia could fail to persuade Maduro to drop his veto, in which case at least a couple of the dissenters would probably withdraw from UNASUR.  Some of these governments have never been enamored with South American multilateralism and believe their interests are best served by cultivating relations with the United States and China bilaterally.  But bilateralism cannot provide regional public goods – such as peace, infrastructure, and economic stability – and hardly ever results in a balanced global economic insertion because it benefits the party in the stronger position.  As several South American countries – including some of the six dissenters – are facing domestic turmoil, breaches of the rule of law, and threats to good governance, a strong regional organization in which all South American states sit as members is more necessary than ever.

April 27, 2018

* Stefano Palestini Céspedes is a former CLALS Research Fellow and Postdoctoral Fellow at the Department of Political and Social Sciences at the Freie Universität Berlin, where he specializes in international organizations and regional governance.

A Summit in Search of the Americas

By Carlos Malamud*

A large round table encompasses a room with various heads of state from the Americas

Last week’s Summit of the Americas in Lima, Peru. / U.S. State Department / Public Domain

The Summit of the Americas in Lima last weekend has left its organizers and principal participants with a bittersweet feeling, leaning to the bitter.  The absence of Donald Trump, Raúl Castro, and Nicolás Maduro reflects only the existing difficulties.  The bigger problems relate to the impossibility of achieving general consensus about the big hemispheric issues, such as corruption or Venezuela, and – of even greater concern – the lack of clarity and substance of the Latin America policy of the United States.

  • The Summits initially were linked to Washington’s efforts to create the Free Trade Area of the Americas (FTAA), but since that project’s failure they have represented the United States’ ongoing interest in Latin America and the Caribbean. That explains why, since the Summit process was created in 1994, no resident of the White House has missed a Summit – regardless of how complicated national and international situations have been.  That was until Donald Trump gave priority to the conflict in Syria over his relationship with Latin American counterparts.

The disturbing thing is not just Trump’s conflict with Mexico, or his hostility toward Cuba and Venezuela.  Neither is the deterioration of the image of the United States in Latin America since President Obama’s term ended.  The fundamental problem is the lack of clear indications from the Trump Administration about its intentions and objectives in the region.  This is the case even with the closest countries.  For example, several South American countries’ exports to the United States could be affected by the trade war between Beijing and Washington.  But no one has clear answers about the policies driving these events, and no one is taking steps to reduce the impact of them or of Washington’s lack of policy.

  • Even though the official theme of the Summit was “Democratic Governance against Corruption,” it was impossible for the participants to go beyond good words and advance any global solutions. Without a doubt, this is good evidence of the weakness of regional integration.  In their Final Declaration, the leaders were unable to include either a condemnation of Venezuela or a call to disregard its Presidential elections on May 20.  Instead, what we got was a statement by the Grupo de Lima plus the United States expressing extreme concern for the situation in Venezuela.  Despite the decline of the Bolivarian project and Maduro’s isolation, Bolivia, Cuba and some Caribbean states dependent for oil on Petrocaribe remain capable of blocking hemispheric consensus.

This probably will not be the last Summit of the Americas, but future of these hemispheric meetings depends in great part on the capacity of the governments in the hemisphere, beginning with the United Sates, to redefine continental relations and find anew the essence of the Americas.  This means more than just responding to the growing Chinese role; it means putting on the table the real problems that affect the continent and going beyond mere rhetoric about them.  For now, with hemispheric relations buffeted by the unpredictable slams issuing in the form of Trump’s tweets, it will be difficult to get there.

April 17, 2018

*Carlos Malamud is Senior Analyst for Latin America at the Elcano Royal Institute, and Professor of Latin American History at the Universidad Nacional de Educación a Distancia (UNED), Madrid.  A version of this article was originally published in El Heraldo de México.

U.S.-Latin America: Lack of Vision from Washington Didn’t Start with Trump

By Thomas Andrew O’Keefe*

A group of representatives from Latin America and China stand in a group

The Community of Latin American and Caribbean States (CELAC) hosted representatives from China in late January 2018. / Cancillería del Ecuador / Flickr / Creative Commons

U.S. leadership in the hemisphere has declined significantly over the past two decades – manifested in Washington’s inability to implement a comprehensive environmental and energy strategy for the Americas; conclude a hemispheric trade accord; revitalize the inter-American system; and stem the rising tide of Chinese influence.  In a recently published book, I argue that Washington under Presidents George W. Bush (2001-2009), Barack Obama (2009-2017), and now Donald Trump has lacked vision in Latin America and the Caribbean, and has allowed a narrow security agenda to dominate.  The most noteworthy accomplishment – the assertion of central government control in Colombia – was largely bankrolled by the Colombians themselves who also devised most of the strategy to achieve that goal.

  • President Obama’s rhetoric was the loftiest, and his opening to Cuba in 2014 changed regional perceptions of Washington. But he got off to a slow start, entering office when the United States was engulfed in the worst economic crisis since the Great Depression.  His ability to devise a bold new policy for the Western Hemisphere was further stymied by an intransigent Republican majority in both the Senate and House of Representatives after the 2010 mid-term legislative elections.

Washington’s inability or unwillingness to act is most obvious in four key areas.

  • The Energy and Climate Partnership of the Americas (ECPA) represented an opportunity for leadership on environmental issues. The United States proposed many ECPA initiatives but did not fund them, expecting the private sector or other governments to step up to the plate – which failed to happen in any significant manner.  Failure to ratify the Kyoto Protocol or enact meaningful national climate change legislation also undermined its moral authority on the issue.  Carbon offset programs would have provided an important boost to ECPA.
  • Although the United States played a predominant role in devising the parameters for a Free Trade Area of the Americas, its own positions caused it to fail. It refused to give up the options to re-impose tariffs in response to alleged dumping even if there were alternative means (such as competition policy) to redress the impact of unfair trade practices.  Washington kept discussion of the highly distortive impact of its agricultural subsidies out of the talks.  As a result, the United States was unable to offer meaningful concessions.
  • The Organization of American States (OAS) has also been a victim of U.S. neglect. Washington has pulled back from exerting leadership and, on occasion, has delayed payments of its dues.  The most effective component of the inter-American system relates to the promotion and protection of human rights, but the U.S. Senate has never ratified the American Convention on Human Rights.  The United States also rejects the binding character of decisions from the Inter-American Commission on Human Rights, opening the way for governments with deplorable human rights records to question its work.  Latin American and Caribbean governments have also shown enthusiasm for forming alternative institutions to the OAS, such as the Community of Latin American and Caribbean States (CELAC), which purposefully exclude the United States.
  • China is now the largest trading partner for many South American nations, and it could conceivably replace Washington’s influence and leadership in at least some areas, including models for economic and political reform. The boom in South American commodity exports to China allowed governments to build up their reserves, pay off debts, and liberate themselves from dependence on multilateral lending agencies centered on Washington.  Chinese banks now contribute more money, on an annual basis, to economic development projects in Latin America and the Caribbean than do traditional lenders such as the World Bank and the Inter-American Development Bank.  Moreover, this lending comes free of the conditionalities often attached to capital provided by Washington based multilateral institutions.  China’s role in building ports and telecommunication systems gives it an intelligence advantage, and arms sales have given China military influence as well.

While broad policies and political commitment behind them have been lacking, Washington has run a number of security programs in the region.  This focus, however, has often turned out to be problematic.  The Mérida Initiative, the Central American Regional Security Initiative (CARSI), and the Caribbean Basin Security Initiative (CBSI) did not resolve the myriad root causes of the drug trade and escalating violence in the beneficiary countries.  They were myopically fixated on a narrow, short-term security agenda with precarious and uncertain funding streams.  While Pathways to Prosperity and 100,000 Strong in the Americas exemplify American liberal idealism at its best, the lack of an overarching sense of purpose and political consensus behind them have led to both being woefully underfunded.  A vision for the Americas doesn’t guarantee Washington will have positive influence, but the lack of one will indeed prolong its decline.

March 16, 2018

*Thomas Andrew O’Keefe is the President of Mercosur Consulting Group, Ltd.  This article is based on his new book, Bush II, Obama, and the Decline of U.S. Hegemony in the Western Hemisphere (Routledge, 2018).

China, Latin America, and the New Globalization

By Andrés Serbin*

31128355276_da6ad8d3a0_k

Chinese President Xi Jinping received a medal of honor from the Peruvian Congress during his tour of South America last month, which included the Asian-Pacific Economic Cooperation summit in Lima. / Ministerio de Relaciones Exteriores, Peru / Flickr / Creative Commons

In Latin America and elsewhere, the world is undergoing tectonic movements that indicate the birth of a new world order with new rules of play.  For much of the past decade, dynamism in world commerce and finance has been shifting from the Atlantic basin to the Pacific.  While the international economy has shown fragility and the developed economies – particularly the European Union and the United States – have shown slow growth since the crisis of 2008, China and the emerging economies of the Asian-Pacific region have experienced sustained growth.  China, now the second biggest economy in the world, has been the driver of that growth and, according to most projections, is poised to overtake the United States as the biggest.  After several centuries in which power has been concentrated in the West, the emergence of new powers in a multi-polar world will naturally bring about changes in the norms and rules governing the international agenda.

In Latin America and other regions, there is growing awareness of this process – with China and its own version of globalization at its center.  The region has witnessed the paralysis of the Transatlantic Trade and Investment Partnership (TTIP) between the EU and the United States as well as U.S. President-elect Donald Trump’s declaration that he will withdraw the United States from the Trans-Pacific Partnership (TPP) as part of a broader anti-globalization policy.  Trump’s announcement drew two different reactions from participants from TPP country leaders at the Asian-Pacific Economic Cooperation summit in Lima late last month.  One was the express decision to proceed with TPP even without the United States, and the other was a clear receptivity to Chinese President Xi Jinping’s invitation that they join regional economic groups that he is pushing – the Regional Comprehensive Economic Partnership (RCEP) and the Free Trade Area of the Asia-Pacific (FTAAP).

  • Both agreements explicitly exclude the United States and abandon norms customarily pushed in free trade by the West. They emphasize reducing tariffs and give no consideration to labor and environmental regulations and non-tariff measures.
  • They complement China’s “one belt, one road” initiative, a modern-day revitalization of the Silk Road creating trade links between China’s western regions with Russia, Central Asia, and eventually to Europe, developing land and maritime routes along the way. The Shanghai Cooperation Organization (SCO) – an economic and security pact linking China, Russia, four Central Asian nations, and now welcoming India and Pakistan – is explicitly linked to RCEP.

Washington’s pending rejection of TPP eliminates a central part of President Obama’s “pivot” strategy to counter China’s rapidly expanding influence in Southeast Asia and the South China Sea, but it also has implications for Latin America and the Caribbean as China moves in rapidly to fill the void left by U.S. withdrawal.  While President-elect Trump has pledged to “renegotiate” NAFTA – which he called “probably the worst trade deal ever agreed to in the history of the world” – China last month presented to Latin America a detailed document proposing a new era in relations with “comprehensive cooperation” in all areas and reaffirming a “strategic association” with the region.  In sharp contrast with the new U.S. President’s views of Latin America, Beijing calls Latin America and the Caribbean “a land full of vitality and hope,” praises the region’s “major role in safeguarding world peace and development,” and calls it “a rising force in the global landscape.”  While some analysts suggest that globalization is slowing if not ending, these developments more strongly indicate that it is rather taking on a new form within a new world order that clashes with the visions and values of the West.  We appear to be transitioning into a world that is genuinely multi-polar with globalization under new rules.

December 13, 2016

* Andrés Serbin is the president of the Coordinadora Regional de Investigaciones Económicas y Sociales (CRIES), a Latin American think tank.  This article is adapted from an essay in Perfil, based in Buenos Aires.

UNASUR and the Venezuelan Hot Potato

By Andrés Serbin and Andrei Serbin Pont*

Ernesto Samper UNASUR

Photo Credit: Carlos Rodríguez/ANDES/Flickr/Creative Commons

The Venezuelan crisis, which the hemisphere has turned to UNASUR to resolve, could break the South American organization and overshadow its past successes in regional mediation.  UNASUR was created in 2008, amid the proliferation of regional organizations such as ALBA that excluded the United States and Canada, as an inter-governmental mechanism to promote regional autonomy, conflict prevention and resolution, and the coordination of public policies, particularly regarding social issues, security, infrastructure, and energy.  It has been driven by individual presidents’ leadership and managed by high-ranking officials and, despite rhetoric to the contrary, has not shown deep commitment to greater civil society participation.  Among its important successes have been defusing internal conflicts in Bolivia and Ecuador, as well helping reduce tensions between Ecuador and Colombia, and between Colombia and Venezuela.  In years past, the group’s effectiveness raised questions about the OAS’s comparative ability to deal with regional conflicts.

In recent years, however, UNASUR has suffered decline.  As the commodities boom ended, regional economies were hit hard, and internal political factors started to change the political map, undermining leftist governments and enabling the election of center-right governments less committed to the UNASUR vision.  This coincided with the profound decline of Venezuela as it fell into the abyss of hyperinflation, debt, scarcity, criminality, and debilitating political instability.  The Venezuelan opposition’s achievement of a parliamentary majority last December, after 17 years of Chavista hegemony, brought no relief as the government reacted with an all-out effort to block it.  UNASUR, which first sought to foster a dialogue between the government and the opposition in 2013, has repeatedly failed to broker a solution.  In May 2016 the organization turned to three former heads of state – Spanish Prime Minister José Luis Rodríguez Zapatero, Dominican Lionel Fernández, and Panamanian Martín Torrijos – to attempt mediation again, to no avail so far.  The government continues to resist change, and the opposition, in addition to remaining firm in its demands of a recall vote to remove Maduro and the unconditional release of political prisoners, has shown persistent mistrust of UNASUR and its representatives, whom they perceive as allies of the government. Such suspicions may not be unfounded, considering Zapatero’s objections regarding the participation of some relevant opposition leaders in the dialogue process.

For the first time in its almost 10 years of existence, UNASUR faces potential failure in its attempt to solve a strategically important political crisis in the region.  To hold off an initiative by OAS Secretary General Almagro to enforce the Inter-American Democratic Charter against Venezuela, the OAS Assembly called on UNASUR and the former presidents to renew mediation efforts yet again last month, but neither Maduro nor the opposition has budged from their fundamental positions.  The situation is, again, stalled.  Indeed, in the context of declarations, extraordinary sessions, initiatives and trips, the commitment to end the crisis in Venezuela still appears quite limited among OAS members, including UNASUR.  Governments supporting dialogue seem most eager to avoid risking valuable political capital both in the domestic and the international spheres.  Neither UNASUR nor the OAS is prepared to handle the Venezuelan hot potato, and both stand to lose credibility for this failure.  But UNASUR’s general lack of leadership and direction in recent years suggests that failure in this crisis, with implications beyond Venezuela’s borders, would be potentially fatal to the organization.  UNASUR, with previous achievements in social, political and regional matters, must now prove that it is still a viable regional mechanism, able to deal collectively with the political turbulence of a changing regional landscape.

July 6, 2016

* Andrés Serbin and Andrei Serbin Pont are members of the analysis team of the Coordinadora Regional de Investigaciones Económicas y Sociales (CRIES), a Latin-American think tank.

Caribbean Integration: Necessary but Elusive

By Victor Bulmer-Thomas*

Embed from Getty Images

The dream of Caribbean solidarity has never been in greater peril.  Norman Girvan, who died on April 9, was committed to the cause of Caribbean integration all his adult life, including during his time as Secretary-General of the Association of Caribbean States.  Born and raised in Jamaica, he saw no contradiction between Jamaican nationalism and Caribbean solidarity.  After steady progress from CARIFTA (a free trade area formed in the 1960s by a number of former British colonies) to CARICOM (a customs union formed in 1973 by all British ex-colonies and many colonies) to a commitment starting in 2006 to build a Caribbean Single Market and Economy (CSME), regional integration has gone backwards.  The CSME was never completed; a ‘pause’ in its implementation has been introduced by the Heads of Government and the famous Regional Negotiating Machinery (RNM) – itself formed to promote Caribbean unity in international agreements but then largely dismantled.  Suriname (in 1995) and Haiti (in 2002) have joined CARICOM, but the Dominican Republic is still outside after 25 years of discussions.  Cuban membership is still a distant dream, and the only non-independent state that participates today is the British colony of Montserrat, with a population of 5,000.  CARICOM may in theory represent much of the Caribbean population, but Haiti – its largest member by far – is not in the CSME.

Countries outside the Caribbean have reacted in very different ways to the region since the end of the Cold War.  The European Union (EU), three of whose member states – France, Holland and the United Kingdom – still have territorial ties to the Caribbean, has negotiated an Economic Partnership Agreement (EPA) with CARIFORUM (CARICOM plus the DR) that will in due course give the EU unrestricted access for almost all goods and services.  The agreement has generated very little enthusiasm in the CARIFORUM states despite the improved access for some of their goods and services in the European market.  Venezuela has persuaded most oil-importing countries to join Petrocaribe, but only a handful (Antigua & Barbuda, Cuba, Dominica, St. Lucia and St. Vincent & the Grenadines) have been attracted by the more ambitious ALBA.  The United States, a colonial power itself in the region thanks to Puerto Rico and the Virgin Islands, still offers asymmetrical trade privileges through the Caribbean Basin Initiative (CBI) and its related acts, but some of these provisions will end in 2020, and it is far from clear what will replace them.  Canada, which established CARIBCAN (similar to the CBI) in 1986, is negotiating its own version of the EPA with a broadly similar set of countries, but the negotiations have stalled recently.  Only China appears to have made huge advances in the region through increased exports and major foreign investments despite several of the countries that still recognize Taiwan.

All integration schemes, as Norman Girvan would have been the first to recognize, involve a balance between widening and deepening.  Through its premature commitment to a CSME, the member states of CARICOM took deepening too far.  At the same time, widening – necessary to negotiate with outside powers – has not gone nearly far enough.  It is a scandal that the Dominican Republic remains outside and that so little has been done to embrace Cuba despite the good political relations all states have with the island.  And the non-independent territories, as numerous as the independent states, should not be overlooked.  France and the UK have dropped their objections to closer ties between their territories and CARICOM, and the Dutch territories are largely autonomous already.  Even the U.S. territories would welcome closer links.  And when relations between Cuba and the United States are normalized, as could happen quite soon, it would be in the Caribbean’s interests to have fully embraced Cuba first.  That is an outcome that Norman Girvan would have strongly welcomed.

*Dr. Bulmer-Thomas is a professor at the University College London Institute of the Americas, fellow (and former director) at Chatham House, and author of numerous books, including The Economic History of the Caribbean Since the Napoleonic Wars (2012).