U.S.-Southern Cone: Looking at Relations Through a Different Optic

By Noah Rosen*

Top: Display of bottles of Chilean wine/ David Almeida/ Flickr/ Creative Commons License
Bottom: Notebooks from the Plan Ceibal/ Jorge Gobbi/ Flickr/ Creative Commons License

While headlines track the highs and the lows in the United States’ relations with Latin America, a closer look at the broad range of interaction shows that, at least in some sectors in some countries, long-term economic relationships and knowledge exchanges have encouraged mutual benefits that rarely get mentioned in public discourse.

Chile’s wine industry, for example, is a powerhouse that has benefited from U.S. investment, open markets, and research and development work. Chilean wine underwent a sea change beginning in the late 1980s and early 1990s, as liberalization and democratization in the country opened opportunities for massive upgrades in quality and opportunities for export to new markets. Global recognition of the quality of Chilean wine grew throughout the 2000s and 2010s, and today bottled wine is Chile’s third most valuable export after copper and salmon. Exports to the United States in 2019 totaled $238 million, reflecting the vital importance of wine to Chile’s economy.

  • Though Chilean exporters were eventually able to diversify their export markets to include Europe and Asia, the exploding U.S. market in the 1990s and 2000s was key to the industry’s upgrading and expansion. Wines of Chile, a public-private partnership that markets Chilean wines, maintains a permanent U.S. office, runs events throughout the country, and organizes visits by U.S. sommeliers to provide feedback to Chilean producers. Knowledge exchange and technology transfer between experts in California, including the University of California at Davis, and Chilean counterparts has helped Chile’s wine industry stay on the cutting edge of production technologies, spurring advances in genetic identification and sequencing of key Chilean varietals.
  • U.S. foreign direct investment and joint ventures have also promoted innovation, technological advances, and access to international markets. For example, an early partnership allowed Concha y Toro to gain a foothold in the U.S. market and opened the door for other Chilean exporters. California winemakers Robert Mondavi, Kendall Jackson, and Canandaigua have established operations in Chile, bringing with them advanced trellis systems, drip irrigation, and other technology that have led to a marked increase in quality across the sector.

The remarkable success of Uruguay’s technology sector has also been aided by U.S. markets and tech exchanges. Visionary domestic programs such as “Plan Ceibal” in 2007, which promoted nationwide digital literacy and provided a laptop to every public-school student in the country, and investments in some of the fastest internet in the Americas, have helped Uruguay become the largest software exporter per capita in the region and third largest per-capita exporter in the world. However, the importance of the U.S. model and the depth of relationships between the U.S. and Uruguayan sectors have earned it the nickname “Silicon Valley of South America.”

  • The United States accounts for 65 percent of Uruguay’s tech revenue (as of 2019) – the result in part of the marketing and relationship-building by Uruguay XXI, the country’s investment, export, and country brand promotion agency. The agency annually sets up a country pavilion at TechCrunch Disrupt, one of Silicon Valley’s most important tech conferences. U.S. ventures in Uruguay have also played an important role in building the local tech market and providing capital and opportunities for local software developers. Major U.S. software and IT companies, including IBM, Microsoft, Cognizant, New Context, NetSuite, and VeriFone, have established bases in Uruguay and hire Uruguayan developers. In 2017, the Agencia Nacional de Innovación e Investigación (ANII) arranged for the highly recognized U.S. tech incubator 500 Startups to run a six-week accelerator program to build skills for 20 Uruguayan startups focusing on growth, product design, fundraising, and building connections.
  • The opening in 2019 of a Uruguayan Consulate in San Francisco reflects the importance of the relationship with Silicon Valley. The incoming Consul emphasized his mission as “opening doors for Uruguayan businesspeople” and pledged to facilitate connections and provide “softlanding support.” The office will also facilitate two-way knowledge and skills exchanges between Californian and Uruguayan universities and institutions. Last month, Amazon announced that Uruguayan vendors would be eligible to sell products on their platform, thanks to the efforts of the Uruguayan Embassy in the U.S.

These positive relationships — facilitated by governments but driven by private-sector partners — don’t erase all adverse twists and turns in U.S. relations with the region. But relatively quiet successes like U.S. cooperation with Chile’s wine industry and Uruguay’s technology sector provide important ballast. They are lucrative for both sides and provide valued jobs: wine in Chile employs over 100,000 people in direct work and represents 0.5 percent of GDP; the tech sector in Uruguay employs 17,000 people, representing 2 percent of the country’s GDP.

June 25, 2021

* Noah Rosen is a PhD candidate in the School of International Service, specializing in grassroots peace movements in Colombia. This article is adapted from CLALS research on the impacts of U.S. engagement in Chile and Uruguay, funded through a cooperative agreement between the Institute for War & Peace Reporting and the U.S. Department of State.

Will U.S. Aid Address the “Root Causes” of the Crisis in the Northern Triangle?

By Fulton Armstrong*

Women carry home their monthly food aid rations through a USAID-funded program in Guatemala/ USAID/ Flickr/ Creative Commons License

U.S. Vice President Kamala Harris’s statements this month on the need to address the “root causes” – including government corruption – of the ongoing surge of migrants fleeing the Northern Triangle of Central America reflects the strong agreement among analysts that lasting solutions will require deep reform within the region, but the Administration’s kid-gloves treatment of those governments risks repeating the errors of the past. Harris and Ricardo Zúñiga, the U.S. envoy coordinating policy toward the area, have emphasized the difficult task of real reform while also addressing the immediate challenge of the humanitarian crises contributing to migrants’ desperation.

  • While recommitting to a campaign promise to spend $4 billion in the Northern Triangle, the Administration last week announced an additional $310 million in emergency assistance to mitigate suffering from recurrent droughts, food shortages, COVID‑19, and back-to-back hurricanes last November. Even before those calamities, 60 percent of Hondurans lived in extreme poverty, and malnourishment stunted the growth of 23 percent of children nationwide. The World Food Program in June 2020 reported that 2.3 million Guatemalans (14 percent) were suffering from food insecurity, and another 800,000 would soon follow. Malnutrition among Guatemalan children under five has skyrocketed.

Addressing “root causes” will be much tougher than sending aid. Zúñiga argues that success will depend on drastically reducing the corruption that robs citizens of state resources and fuels other crime and violence, particularly senior political and military officials’ cooperation with narcotraffickers. Harris has supposedly mentioned this in several virtual meetings with Guatemalan President Alejandro Giammattei and will stress it during a visit to the region in June. The Administration is also creating an “anti-corruption task force” to enforce the policy, and Zúñiga offered $2 million to El Salvador if it pursues a hybrid anti-corruption effort called CICIES. Corruption is an endemic problem in all three countries, but the Harris initiative seems most sorely tested in Honduras, where President Juan Orlando Hernández has emerged as the poster child of what a U.S. District Judge last month called “state-sponsored” trafficking.

  • The U.S. drug convictions of Hernández’s brother, Tony, in 2019 and of trafficker Geovanny Fuentes Ramírez last month both featured apparently credible testimony about the President’s personal role in protecting the flow of narcotics through Honduras to the United States. These allegations come on the heels of waves of evidence of other corruption, human rights violations, and electoral fraud he has engaged in.
  • Nonetheless, the White House has publicly stated that “we are going to work with [Hernández’s] government and … seek areas of common interest.” While U.S. officials have severely criticized Salvadoran President Nayib Bukele – whose migrant flow is a fraction of Honduras’s – for anti-democratic digressions, they have been relatively silent on Hernández. His efforts to portray himself as an indispensable ally appear to have earned him that latitude. Last year, after U.S. concern about trafficking rose, he won brownie points for supporting legislation deterring private jets from entering the country. Recently, he has mobilized the military several times to stop migrant caravans from leaving the country.

This is not the first U.S. Administration to try to cajole corrupt Central American incumbents to become allies in eliminating their own corruption. The humanitarian crisis requires the Harris team to send aid quickly and to collaborate with the same governments that have aggravated, and sometimes caused, people’s suffering. But the Biden Administration hasn’t given an indication yet that it can avoid being taken to the cleaners as previous administrations have, including President Obama and Vice President Biden when they teamed up with the Inter-American Development Bank for the Alianza para la Prosperidad. That initiative cost hundreds of millions but, as the current migration surge indicates, the “push” factors behind it continue to grow. Obama/Biden also made significant efforts – for example, helping CICIG in Guatemala and MACCIH in Honduras begin important processes – but local officials and their elite allies managed to get out from under both.

  • It’s a long shot that, without threats of sanctions similar to those levied against leaders who are not U.S. “allies,” Washington can get these governments to undertake major reforms that would threaten leaders’ wealth and power. But if the United States and others can break the vicious cycle of corruption, bad governance, poverty, and flight in the Northern Triangle, they will be laying the groundwork for breakthroughs far beyond the migration crisis on the U.S. border.

April 30, 2021

Latin America: Impact of the January 6 Insurrection at the U.S. Capitol

By Ilka Treminio Sánchez, Fábio Kerche, and Esteban De Gori*

Tear gas outside the U.S. Capitol on January 6, 2021/ Tyler Merbler/ Wikimedia Commons/ Creative Commons License

AULABLOG invited three Latin American experts to comment on the impact of the events in Washington, DC, last month on U.S. relations with the region.

Ilka Treminio Sánchez*

During the Trump Administration, the United States revealed regrettable signs of institutional erosion and democratic backsliding. The political engine that allowed and promoted these actions was based on polarizing political discourse that shaped a hostile atmosphere toward Trump’s and his supporters’ opponents. This behavior escalated to the point of attacks on the electoral results and the violent assault on the Capitol by Trump’s followers on January 6, the day Joe Biden’s victory was certified. The insurrection failed as institutions upheld the legitimacy of the electoral process and the popular will of the citizens.

For Latin America, and for Central America specifically, this episode signifies the rupture of the myth of democratic exceptionalism in the United States. It reveals U.S. fissures and defects that are characteristic of the hemisphere’s weakest democracies. Central America has many times experienced authoritarianism, populism, violence against the adversary, social violence against ethnic groups, attacks on Congress, and attempts to alter electoral results. The Trump Administration’s actions have seriously damaged the United States’ image as a country that guarantees democracy – and its future governments could lose moral authority in the region on this matter.

  • The January 6 assault could give new life to undemocratic “zombie ideas” in Central America, undermining progress in political and civil rights made in the last decades. It could further embolden efforts to weaken election processes and increase presidential authoritarianism already present in the region.

Fábio Kerche*

The insurrection at the U.S. Capitol and President Trump’s campaign to overturn the electoral results were a sad scene for more than just the United States. Democracy is the regime in which a government can be defeated in an election and then leaves office peacefully. The events in Washington revealed that, even in a country in which democracy was a consolidated regime, it is vulnerable – with profound implications for younger and more fragile democracies worldwide. This includes Latin America and particularly Brazil.

  • It is important to remember that the Brazilian political crisis started when the runner-up in the 2014 presidential elections challenged the results. Fortunately, the U.S. political institutions were still strong enough to overcome the impasse in Washington. The United States’ most recent crisis gives Latin Americans cause to consider what should and should not be done to protect and consolidate democracy across our continent. In Brazil, where President Jair Bolsonaro is trying to reproduce Trump’s style, the failure of the U.S. Capitol insurrection – and the triumph of the country’s Constitutional order – should discourage any imagining that there is a way out of democracy.

Esteban De Gori*

The insurrection was undoubtedly shocking for South America. No government and no citizenry had imagined that a group of persons could occupy the U.S. Capitol as they did, nor that challenges to U.S. electoral processes could be so intense. Among the most powerful events: persons supported by the President overrunning the building and deepening the runaway polarization; the struggle of the democratic system to overcome the challenges to the electoral competition; and, perhaps most profoundly, the erosion of popular faith in the system. Leaders in most of Latin America, with the exception of Venezuela and perhaps others, showed concern and surprise. A crisis afflicting a great geo-economic player in the context of a pandemic and trade war with China could bring greater uncertainties and risks and, especially now, few opportunities.

  • The insurrection and the singularly belligerent government of Donald Trump are not the only things driving reassessment of the United States as a promoter of democracy and the rule of law. Since 2008, to take the financial crisis as a point of reference, doubts about the effectiveness of the country’s political system have deepened. That discomfort helped bring Trump to power as it eroded faith in the political system and its ability to balance desires and demands. The early statements and actions of the Biden Administration suggest awareness of this discomfort and willingness to begin addressing it.
  • The events (and Biden’s efforts to overcome them) do not appear likely to significantly change the U.S. relationship with Latin America. The pandemic and other challenges to democracy have placed extraordinary pressure on the region’s leaders, for whom the images of U.S. insurrection may have engendered even a certain empathy. They now know that parliaments and democratic institutions can be illegally occupied; that debate can go horribly awry; that polarization can seriously deepen in any country of the hemisphere.
  • More than the turmoil in Washington, the pandemic and its economic consequences appear likely to influence U.S.-Latin America relations. Joe Biden will probably remain focused on the country’s customary interests in the region – no great changes – although with less belligerence than Donald Trump. China, the other great regional power, will continue to promote its position without big conflicts or stridency. Even if the United States retains its economic edge in Latin America, its problems – and China’s gradual expansion in the region – put Washington on the downward path typical of a great power in decline.

February 11, 2021

* Ilka Treminio Sánchez is the director of La Facultad Latinoamericana de Ciencias Sociales (FLACSO) in Costa Rica, and a lecturer and researcher at the University of Costa Rica, specializing in electoral processes, political behavior, presidential reelection, and Latin American comparative politics.
* Fábio Kerche is a professor at UNIRIO and IESP-UERJ in Rio de Janeiro. He was a CLALS Research Fellow in 2016-2017.
* Esteban De Gori teaches sociology at La Universidad de Buenos Aires and is a researcher at Argentina’s Consejo Nacional de Investigaciones Científicas y Técnicas (CONICET).

Regionalism in the Time of Coronavirus: The Only Way Forward?

By Leslie Elliott Armijo*

Coronavirus Latin America

Map of the COVID-19 outbreak in Latin America as of 30 April 2020/ Pharexia/ Wikimedia Commons (modified)

To overcome the multiple challenges of the COVID‑19 crisis, Latin America’s leaders will need to build regional cooperation around pragmatic solutions – an elusive goal for countries with a legacy of disunity and weak collaboration. The coronavirus has hit at a moment of economic vulnerability. Regional growth averaged only 1.9 percent in 2010-19, worse than in the “lost decade” of the debt-crisis 1980s (2.2 percent). Labor productivity, which in 1960 was almost 250 percent of the world average, has fallen steadily in every subsequent decade, and in 2019 sat at a mere 90 percent of the global mean. Persistent squabbling among Latin countries has meant that major global trading states, including the United States and more recently China, could dictate the terms of bilateral trade and investment agreements in ways that favored these larger powers.

  • In negotiating global trade, Latin America and the Caribbean have shown little shared identity or cohesion, whether as a region or as sub-regions. As of late 2018, as global value chains coalesced around three regional hubs – China/East Asia, U.S./North America, and Germany/European Union – Mexico, Central America, and the Caribbean were linked to the U.S. but lacked bargaining power to seize more advantageous positions vis-à-vis the United States. South America has deindustrialized since the turn of the century, returning to its historic role of commodity exporter to all three hubs. Intra-regional trade as of 2017 was only 22 percent of all Latin American trade and had fallen since 2013.
  • This is a shaky foundation from which to face the health and economic challenges of COVID‑19. The IMF’s scenario, which assumes an optimistic return to business mostly-as-usual in the third quarter, predicts a contraction of GDP in 2020 of 5.2 percent in the region, driven by brutal collapses in the two largest economies, Brazil and Mexico, of -5.5 and -6.6 percent respectively. The extra-regional markets for Latin America’s exports certainly will shrink due to both short-term reasons of global depression and longer-term ones of enhanced economic nationalism abroad. Remittances and tourists from the U.S. and elsewhere will not return to their previous numbers for a long time.

A coronavirus-solidarity virtual summit last month showed that some regional leaders realize the need for joint action. Nine of 12 South American presidents participated, although Brazilian President Jair Bolsonaro – who has made intemperate and dismissive remarks about his fellow leaders – gave his seat at the video conference to his foreign minister, Ernesto Araújo.

  • Argentine President Alberto Fernández participated despite Bolsonaro’s snub (including on previous occasions) and his previously chilly relations with the sponsoring body, PROSUR, founded in 2019 by center-right Presidents Iván Duque of Colombia and Sebastián Piñera of Chile as an explicit counter to the pre-existing regional body, UNASUR, which leaned left during the presidency of Bolivia’s Evo Morales (now in exile in Argentina). In so doing, Fernández demonstrated the pragmatism and understanding that Latin American and Caribbean leaders often eschew: if you want to solve policy challenges, you must maintain dialogue with people with whom you disagree.

If there is any light at the end of this tunnel, it could be psychological, as crises tend to focus minds. The disruption in international relations beyond Latin America probably will accelerate the move away from the post-Cold War “unipolar moment” and fuel domestic economic nationalism that will shake up the three major global trading hubs – a reorganization in which the region could redefine its place. In this scenario the best defense for Latin America is a strong offense. As Alicia Bárcena, Executive Secretary of the UN’s Economic Commission on Latin America and the Caribbean (CEPAL), said recently, the region’s resilience likely depends on “investment in strengthening regional production chains” to create “complementarities in production structures and regional integration.”

  • Diplomacy enables states to share knowledge and engage in collective action to meet real cross-border challenges, including those of the current crisis. Regional solidarity does not require headquarters buildings, formal treaties, and summit pageantry, nor even similar domestic political systems. The considerable achievements of the loose, informal clubs known as the G7, the G20, and the BRICS prove the value of cooperative models that need not boast costly institutional scaffolding. The Association of Southeast Asian Nations (ASEAN), formed in 1967 by 10 countries that were at least as mutually suspicious of one another as they were of China, provides another lesson about somewhat effective regional cooperation that Latin America would do well to note.

April 30, 2020

* Leslie Elliott Armijo is an associate professor at the School for International Studies, Simon Fraser University, Vancouver. Her most recent book, coauthored with C. Roberts and S.A. Katada, is The BRICS and Collective Financial Statecraft (Oxford University Press, 2018).

Latin America: The Massive Challenge of COVID-19

By Carlos Malamud and Rogelio Núñez*

Bolsonaro & AMLO

Presidents Bolsonaro of Brazil and López Obrador of Mexico have been criticized for downplaying coronavirus concerns// Left: Palacio del Planalto/ Flickr/ Creative Commons (modified)// Right: PresidenciaMX/ Wikimedia Commons (modified)

Latin America has had several advantages as the COVID-19 virus has moved in – including the chance to learn the lessons of Asia and Europe – but it faces it with fundamentally weaker tools: under-resourced health infrastructures, slowing economies dependent on declining commodity prices, comparatively little ability to increase public spending, and politically weakened governments. The WHO numbers are rising and will grow steadily owing both to accelerating infection rates and more widespread testing.

Most governments have taken strong actions, including closing borders, imposing quarantines, and closing schools, but leaders face huge challenges. In many countries, their inability for years to respond to the growing social demands of the emerging middle classes, especially regarding health care, education, and other social services, have already led to major social unrest and incumbent weakness.

  • They’re going to confront the virus with grave institutional problems, including corruption and lack of financing, and a lack of popular goodwill. The worst are Venezuela, Nicaragua, and Haiti (a failed state), but Brazil and Mexico will be most deeply affected. Brazil already has a high infection rate, and Mexico’s will grow as well.
  • In Latin America’s presidential systems, most presidents have put their personal imprint on national policies. Their measures to slow the spread of the virus have faced little backlash. Brazilian President Jair Bolsonaro and Mexican President Andrés Manuel López Obrador have gone out of their way to appear oblivious to the scientific indicators that their countries could face catastrophe. Especially for politically vulnerable presidents – Chilean President Sebastian Piñera has a 10 percent approval rating – the virus entails great personal political risk.
  • Making things worse, regional organizations such as the South America Defense Council (part of UNASUR), the Pan-American Health Organization (PAHO), and the OAS have not yet provided effective international coordination. PAHO is sending “support teams” with unspecified mandates and no new resources. The Central American presidents have met digitally to coordinate strategies.

Failure of the early control measures could have dire health consequences. Health services are vulnerable and easily overwhelmed. The delayed arrival of the virus has given health officials time to prepare, and the best hospitals are in urban centers with greatest need. But the region has several Achilles’ heels, especially the shortage of facilities and resources.

  • “Universal coverage” is actually only “partial” in all but Costa Rica and Uruguay, according to a London School of Economics study. Some countries improved their preparedness in the wake of outbreaks of chikungunya, zika, dengue, and other contagious diseases, but most still lack the laboratories and field facilities to slow a virus of COVID-19’s scope.
  • Most seriously, many of the health systems lack the infrastructure to identify, treat, and isolate patients enough to slow the spread of such a highly contagious disease. The lack of efficient isolation facilities, coupled with shortages of trained personnel and essential supplies and equipment, leave the region – despite its short-term preparations – vulnerable to an outbreak much larger than in Asia, Europe and the United States.

Market crashes and likely recession in Asia, Europe, and the United States are causing collapse of the prices of Latin American exports and a series of profound pressures on economic growth in the region. Our colleague Federico Steinberg notes that the difference between a “soft-impact” scenario and a catastrophic one will depend on whether the virus is brought under control in the second quarter of the year.

  • Many observers believe the impact will be less severe in Latin America than Asia, but that assumes reasonable success keeping the crisis relatively short. Some decline is inevitable, however, because China, Europe, and the United States’ recovery will take time. Among the sobering predictions is that of the EU’s Director for Economic and Financial Affairs, who on March 13 said the EU and Eurozone will enter a recession this year with growth “considerably below zero,” but his reference to a good chance of a “normal” bounce back next year may be optimistic.
  • Experts expect food exports to suffer more and longer than energy and mineral exports, although the drop in oil prices to 1980s levels will squeeze Venezuela, Ecuador, Mexico, Colombia, Brazil and Argentina hard. New oil exploration in Brazil and fracking in Argentina has halted.

Most Latin American leaders are not oblivious to the trials ahead. On March 15, Colombian President Iván Duque said the virus will be “especially difficult for the Latin American countries” and “can overwhelm us.” The crisis requires the region to bring its principal comparative advantages – time and the ability to analyze the successful (and failed) tactics in Asia, Europe, and the U.S. – to bear to compensate for its structural weaknesses.

  • Latin America does not have the resources or mobilizational capacity that South Korea does to carry out a massive campaign to test and treat the population, but the region can avoid total catastrophe if it expands and maintains its drastic measures, adheres to the scientific evidence, and learns from other countries’ efforts to manage the outbreak.

March 26, 2020

* Carlos Malamud is a 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. Rogelio Núñez is a Senior Fellow at the Elcano Royal Institute and Professor at El Instituto Universitario de Investigación en Estudios Latinoamericanos (IELAT), Universidad de Alcalá de Henares. This article is adapted from their recent analysis published here on the Elcano Institute website.

This post has been updated to correctly identify the President of Chile.

Latin America: The Need to Face the Dire Impact of Climate Change

By Fernanda de Salles Cavedon-Capdeville and Erika Pires Ramos*

Farmer in Nicaragua

A farmer works a field in Nicaragua, one of the Central American countries experiencing increasing drought over the last two decades/ Neil Palmer/ Wikimedia Commons/ Creative Commons License

Latin America – one of the most vulnerable regions to climate change worldwide – is already experiencing dire consequences, including the displacement of millions of people, but the region has been slow to share the information needed for comprehensive strategies.

  • In 1998-2017, among the 10 countries most affected by climate risks in the world, five were in Latin America and the Caribbean, according to the Global Climate Risk Index 2019. Extreme events and disasters are increasing in the region. Out of 335 disasters registered globally in 2017, 93 took place in the Americas. Rapid-onset events, such as hurricanes, have been taking a progressively greater toll. In 2016, 17.3 percent of people affected by disasters lived in the region, far more than the average of 5.1 percent in the previous five years.

Changes in climate variability and in extreme events have severely affected the region. Over 1998-2017, Latin America was the continent with the highest economic losses due to climate-related disasters, representing 53 percent of the global figure, according to studies. The impact on people is aggravated by the high vulnerability and low adaptive capacity caused by poverty and economic inequality. Countries in the tropics and Southern Hemisphere subtropics are also projected to experience the largest impact on economic growth.

  • These economic, political, cultural and social factors – along with extreme-weather events and other effects of climate change, such as desertification and rising sea levels, combine to be a major cause of displacement in Latin America. Colombia, Chile, Haiti and Brazil joined the list of the 20 countries with the highest number of people displaced by disasters from 2008 to 2014.
  • More recently, 4.5 million people in the Americas were displaced by disasters in 2017, representing 23.8 percent of the global total. Three major hurricanes that year displaced over 3 million people, and floods throughout South America also drove many thousands from their homes that year. In 2018, 1.7 million people were displaced by disasters in the Americas. Another 2.5 million people were affected by drought that year in Central America, including migration hotspots Guatemala, Honduras, El Salvador and Nicaragua. Oxfam has highlighted that climate change – and the consequent loss of crops and food security – is increasingly a driver of migration in the Dry Corridor of Central America.

Experts at the World Bank and elsewhere estimate that slow-onset climate change events in Latin America alone could displace 17 million people by 2050. This and similar estimates are sound – and underscore the urgent need for action – but data on the impact of slow-onset events is difficult to get and, in general, data related to climate-induced human mobility has gaps. These information challenges will increasingly complicate efforts to deal with the problems of migration driven by climate change. There is also a lack of specific information about the climate laws, policies. strategies, and measures that governments will need to take to avert, minimize and best address the economic and human ravages the region is likely to experience.

  • The South American Network for Environmental Migration (RESAMA) is a regional independent network of experts and researchers developing and disseminating information on environmental migration and related topics, and promoting ways to enhance its inclusion in regional and national agendas. RESAMA, in partnership with the University for Peace (UPEACE) in Costa Rica, has designed the Latin-American Observatory on Human Mobility, Climate Change and Disasters (MOVE-LAM) to map, understand and address the topic in the region. The observatory intends to evolve into a regional hub to simplify and share information — transforming scientific knowledge into accessible and practical information available to actors and other stakeholders. It’s a huge task, but the challenges the hemisphere faces demand it.

February 10, 2020

*Fernanda de Salles Cavedon-Capdeville is a Postdoctoral Fellow at the Universidade Federal de Santa Catarina (UFSC) in Florianópolis, Brazil, and a RESAMA researcher.

*Erika Pires Ramos has a PhD in International Law from the University of São Paulo (USP) and is founder of RESAMA.

New Western Hemisphere Trade Pacts Push Back Against Big Pharma

By Thomas Andrew O’Keefe*

Money_and_pills_in_three_colors

Attempts to limit competition from generics by pharmaceutical giants were called “TRIPS-plus” provisions in USMCA drafts/ Ragesoss/ Wikimedia Commons

Two major trade agreements affecting the Western Hemisphere have recently struck blows against the pharmaceutical industry’s efforts to keep drug prices high by limiting competition from generic medications. Big Pharma tried, but failed, to include provisions in the United States-Mexico-Canada Agreement (USMCA) and the EU-MERCOSUR Association Agreement that would go beyond those expressly permitted by the World Trade Organization’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

  • Those provisions would have made it extremely difficult for generic manufacturers to enter the market and contain costs. Unaffordable medicines are a large and growing global problem. Many people die of diseases today not because there is no cure, but because they cannot afford the medications.

In the version of USMCA approved by the U.S. Congress and to be signed by U.S. President Trump this week, the Democratic majority in the House of Representatives removed “TRIPS-plus” provisions that would have given “data exclusivity” for new uses of existing pharmaceutical products for up to three years and for so-called “biologics” for ten years. (Biologic drugs are produced from a living organism or contain components of a living organism, including a wide variety of products derived from humans, animals, or microorganisms by using biotechnology.)

  • Data exclusivity would have prevented generic manufacturers from utilizing the original trial results and other test data filed with regulatory health agencies concurrently with the patent application, demonstrating the medication’s safety, quality, and efficacy. Also removed from the USMCA was a provision that would have restricted competition from generic pharmaceutical manufacturers by delaying patent expirations to compensate for “unreasonable” bureaucratic delays in approving the patent. Furthermore, the USMCA now expressly allows generic manufacturers, as per Article 30 of the TRIPS Agreement, to utilize compounds used to make a patented drug in order to develop a generic version in anticipation of that drug’s patent expiration.

Similarly, the IPR chapter in last year’s EU-MERCOSUR agreement does not include TRIPS-plus provisions thanks, in part, to resistance from South American governments concerned about bankrupting their national health care systems because of increasing costs for new medications. The IPR chapter specifically supports World Health Assembly Resolutions on pandemic influenza preparedness and on a global strategy and plan of action on public health, innovation and intellectual property – both of which recognize that “intellectual property rights do not and should not prevent Member States from taking measures to protect public health.”

  • The IPR chapter is consistent with the Doha Declaration on the TRIPS Agreement and Public Health of November 2001. Furthermore, all the signatory states are required to implement articles of the TRIPS Agreement providing the legal basis for WTO members to grant compulsory licenses exclusively for the production and export of affordable generic medicines to other members that cannot domestically produce the needed medicines in sufficient quantities. (The only obligation is for the signatory states to make “best efforts” to adhere to the Patent Cooperation Treaty.)
  • The MERCOSUR countries resisted intense lobbying pressure from European pharmaceutical companies to accept provisions on data exclusivity and to compensate for bureaucratic delays by extending the monopoly on a patented medication beyond the 20-year maximum permitted by TRIPS. The fact that the United Kingdom, home to global pharmaceutical giants such as GlaxoSmithKline and AstraZeneca, was distracted by Brexit undoubtedly contributed to this outcome.

The successful pushback against attempts by the major pharmaceutical multinationals to extend their state-sanctioned monopolies to guarantee a steady flow of profits reflects public outrage over multiple scandals that have ensnared the industry in recent years. This includes not only the massive opioid addiction crisis in the U.S., but firms buying up patents that are about to expire and jacking up their prices in excess of 1000 percent. It makes the traditional industry argument of needing extended monopolies to incentivize innovation and the development of new drugs ring hollow as these speculators incur no research and development costs. As a result of the efforts of MERCOSUR and Democrats in the U.S. House of Representatives, the pharmaceutical industry may be facing a paradigm shift in which it will be forced to develop a new business model for pricing new treatments.

January 28, 2020

Thomas Andrew O’Keefe is the president of Mercosur Consulting Group, Ltd. and a lecturer at Stanford University. He is the author of Bush II, Obama and the Decline of U.S. Hegemony in the Western Hemisphere (Routledge, 2018).

Hurricane Dorian: Silver Lining for Caribbean Unity?

By Wazim Mowla*

Men loading supplies onto a helicopter

CBP AMO agents deliver food and water to severely damaged Fox Town on the Abaco Islands in the Bahamas, in the aftermath of Hurricane Dorian Sept. 6 2019 / Wikimedia / Public domain / https://commons.wikimedia.org/wiki/File:CBP_Food_and_Water_Delivery_to_Bahamas_after_Hurricane_Dorian_(48693139732).jpg

Hurricane Dorian, which lashed the Bahamas for 68 hours in early September, revealed the severe limitations on Caribbean countries’ ability to  respond to increasingly brutal storms – an awareness that appears likely to contribute to greater regional cooperation.  Wind gusts of 220 mph, up to 15 inches of rain, and storm surges 23 feet above sea level caused more than 50 deaths, and 600 people are still missing a month later. Although the Bahamas opened 14 of its main islands for tourism soon after the storm, the economy has suffered major setbacks.  An estimated 80 percent of the fishery infrastructure is damaged in Grand Bahama, and close to 100 percent on Abaco Island. The country also suffered a large oil spill – more than 5 million gallons.

  • Dorian’s destruction is not without precedent in the Caribbean. Hurricanes Maria and Irma two years prior caused a combined total of $140 billion in damages and killed more than 3,000 people. While hurricanes have always afflicted the region, warm ocean temperatures in the Atlantic – raised by greenhouse gases trapped in the water – have made them more likely to develop into a category 4 or 5.

Caribbean countries were quick to respond to the Bahamas’ needs both individually and through the Caribbean Community’s (CARICOM) institutions. Individually, the national governments provided $1.7 million for recovery efforts and medical supplies. Some also sent soldiers, officers, and personnel to the Bahamas, including 100 soldiers from the Trinidad and Tobago Defense Force and 120 members from the Jamaica Defense Force. Others placed police officers on standby Bahamian internal security needed them and sent small teams of technicians to help restore water, medical, and phone systems.

  • As a regional collective, CARICOM also provided assistance. The Regional Security System, based in Barbados, dispatched more than 30 officers to the Bahamas; the Caribbean Development Bank issued $200,000 for relief aid with a $750,000 loan soon to come; and the Caribbean Disaster Emergency Management Agency (CDEMA) coordinated relief updates and logistics. The University of the West Indies has provided psychological, family, and social support and medical assistance to victims and evacuees.

These actions, however, fall far short of the Bahamas’ needs. Karen Clark & Company’s risk modeler estimates that the country will face close to $7 billion in damages alongside the already high volume of missing persons. On its own, the region does not have the capacity or the financial capabilities to assist more than it currently has. For example, the Caribbean Development Bank’s total of $1 million is already matched or dwarfed by countries outside the Caribbean. India provided $1 million to the Bahamas after Dorian (separate from a $150 million line of credit, announced at an India-CARICOM summit Prime Minister Modi held in New York last month, for cooperation programs to combat climate change).  USAID and the Department of Defense have pledged a combined $34 million. Relief efforts are further stunted because countries in the Caribbean have relatively small populations and limited economies, so they cannot expend large sums of resources or personnel to the Bahamas.

Dorian has overall benefited regional unity and cooperation, even though some neighbors have criticized Nassau’s decision to forcibly repatriate Haitian migrants living in camps destroyed by the storm. In addition to expressing solidarity and providing assistance, CARICOM countries appear to be moving toward a consensus about the implications of climate change for their region, possibly creating a new, almost existential area of cooperation among them, including a strengthening of decades-old – and under-utilized – mechanisms such as the Regional Security System (RSS). At the moment, only seven of the fifteen full member-states in CARICOM have signed the RSS agreement. CARICOM alone isn’t going to sway international opinion on the urgency for combatting climate change, but greater unity among its members will certainly help. Hurricane Dorian will not be the last strong storm to devastate the region.

October 21, 2019

* Wazim Mowla is an MA candidate in the School of International Service and Research Assistant at the William J. Perry Center for Hemispheric Defense Studies.

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.

EU-MERCOSUR: Does Their New Association Agreement Mean Much?

By Thomas Andrew O’Keefe*

29/06/2019 Coletiva de Imprensa UE-Mercosul

Press conference about the trade agreement between the Mercosur and the EU / Palácio do Planalto / Creative Commons

After nearly two decades of intermittent negotiations, the European Union and the four core MERCOSUR nations (Argentina, Brazil, Paraguay, and Uruguay) have finally inked a trade agreement, but its real impact won’t be felt for years, if ever. When the negotiations began in the mid-1990s, the EU was the largest trading partner of the MERCOSUR countries, and the United States was number two. Today China is in first place, the European Union is second, and the U.S. is fourth, behind intra-Latin American trade (EU investors, however, continue to have the largest stock of foreign direct investment assets in the MERCOSUR region). When ratified, the EU-MERCOSUR Association Agreement, signed in Brussels on June 28, will exempt a little more than 90 percent of two-way trade from tariffs.

  • About 93 percent of MERCOSUR exports will eventually obtain duty-free access into the EU market, the bulk as soon as the agreement comes into effect. Agricultural commodities such as beef, chicken, corn, eggs, ethanol, honey, pork, rice, and sugar only get reduced duties, with many also subject to quotas. Another 100 MERCOSUR agricultural items are completely excluded from any type of preferential treatment.
  • Some 91 percent of European exports will get duty-free access to MERCOSUR, but gradually as tariffs are reduced over a 10-year period. The phase-out is over 15 years in the case of European automobiles, furniture, and shoes. MERCOSUR tariffs on the remaining 9 percent of primarily EU manufactured goods will remain in place permanently.
  • The agreement offers service providers from any signatory country full access to the markets of all the other signatory states.

MERCOSUR showed greater flexibility with the EU on agricultural subsidies than it had with the United States, a position that contributed to ultimate rejection of the Free Trade Area of the Americas (FTAA). Subsidies in the EU-MERCOSUR agreement are permitted if “necessary to achieve a public policy objective.” The MERCOSUR countries also capitulated on the use of anti-dumping tariffs on intra-hemisphere trade. The new accord, however, does authorize governments to impose a duty that is less than the margin of dumping if it adequately removes injury to the affected domestic industry. It also includes provisions for ensuring that sanitary and phytosanitary (SPS) measures as well as technical norms are not abused and become disguised impediments to free trade, although it permits enforcement of the European “precautionary principle” notion to restrict the importation of genetically modified food, for example, where the risks to health are not scientifically conclusive.

The agreement – now being “legally scrubbed” and translated into the EU’s 23 official languages – faces an elaborate, multi-year ratification process in the EU, where individual countries and the European Parliament must approve it, as well as each MERCOSUR government. Agricultural forces are already lining up in many European countries in opposition. In the meantime, the accord’s greatest impact is a signal by Brazilian President Bolsonaro and Argentine President Macri that they’re making progress on their stated objective to return MERCOSUR to its original trade focus – in contrast to their predecessors – and to claim an economic “victory” when growth in both countries remains stagnant.

  • Despite the flexibility MERCOSUR showed on agricultural subsidies and anti-dumping, its main sticking points with the United States in the FTAA, a free trade agreement with the United States seems remote as the Trump administration – in contrast to the Europeans – is unlikely to offer meaningful concessions based on the lesser developed status of the MERCOSUR countries. Neither will the Association Agreement with the EU reverse or even slow the region’s shift toward trade with China and the rest of Asia.

August 6, 2019

* Thomas Andrew O’Keefe is the President of New York City-based Mercosur Consulting Group, Ltd. and a lecturer at Stanford University. He is the author of Bush II, Obama, and the Decline of U.S. Hegemony in the Western Hemisphere.