U.S.-Latinx: Might Trump Prompt “Statistical Disobedience”?

By Stephan Lefebvre*

Eric Garcetti at a press conference

Los Angeles Mayor Eric Garcetti gives a press conference on the 2020 Census. Garcetti leads a coalition of over 160 U.S. mayors that oppose adding a question about citizenship on the census. / Office of Eric Garcetti / Flickr / Creative Commons

The Trump administration’s plans to add a citizenship question to the 2020 U.S. Census have set the stage for confrontation between Latino/a/x individuals and the U.S. government.  Community groups, civil rights organizations, a group of 18 U.S. states, and others are challenging the administration in court – oral arguments for the first of six legal challenges began last Friday.  Grassroots organizing around Latinx statistical disobedience is also under way, urging individuals to respond to the citizenship question randomly, without regard to their own status, to make the results unusable.

  • The legal challenges have yielded documents revealing the discriminatory intent of the citizenship question. Kris Kobach, the Secretary of State of Kansas known for his anti-immigrant views and inaccurate claims about voter fraud, wrote to Commerce Secretary Wilbur Ross in July 2017 advocating the citizenship question.  Kobach said – falsely – it was necessary to deal with the “problem that aliens who do not actually ‘reside’ in the United States are still counted for congressional apportionment purposes.”  Several months later, the U.S. Justice Department issued a “formal request” to the acting director of the Census Bureau to include the citizenship question to attain data “critical to the Department’s enforcement of Section 2 of the Voting Rights Act and its important protections against racial discrimination in voting.”  Claiming the measure is necessary to prevent “vote dilution” among minority groups, it is very different from the alleged problem Kobach identified.  Representation in the U.S. Congress is based on total population, not total voting population, as confirmed in 2016 unanimously by the Supreme Court in Evenwel v. Abbott.
  • It is still not clear where the idea for a citizenship question on the 2020 Census came from, but its purpose – to weaponize the census to be used against Latina/o/x and other undocumented communities – has been clear from the start. Kobach has said that his advocacy was informed by conversations with Steve Bannon, the far-right activist and former senior advisor to President Trump.  Secretary Ross initially testified to Congress that the proposal for a citizenship question was initiated by the Justice Department, but he later issued a memo contradicting this when documents came to light showing his earlier involvement.

Census Bureau testing of the 2020 Census questionnaire indicates that there is deep concern among the undocumented and Latinx communities.  Field staff conducting interviews report many red flags.  In presentations made during a meeting of the National Advisory Committee on Racial, Ethnic and Other Populations, Census Bureau documents quote one interviewer saying, “There was a cluster of mobile homes, all Hispanic. I went to one and I left the information on the door.  I could hear them inside.  I did two more interviews, and when I came back, they were moving. … It’s because they were afraid of being deported.”  In another case, a Spanish-speaking respondent said, “The possibility that the census could give my information to [U.S. government] internal security, and immigration could come and arrest me for not having documents terrifies me.”  In response, community-engaged scholars like Angelo Falcón of the National Institute for Latino Policy are calling for “statistical disobedience,” the willful misrepresentation of one’s legal status.

If the six legal challenges to the citizenship question fail, the prospects of statistical disobedience will be high.  Falsifying responses on the census is a punishable offense, but some community leaders have argued that if the Latinx statistical disobedience is widespread, enforcement will be highly unlikely.  This is not unlike other acts of historical civil disobedience.  The grassroots campaign behind statistical disobedience not only helps prevent the citizenship question from being used to target undocumented and Latinx communities; it can also drive up participation and awareness of the 2020 Census by Latinx communities who have been historically under counted.  Community leaders want to be ready.

August 21, 2018

* Stephan Lefebvre is a Ph.D. student in Economics at American University studying stratification economics.  His forthcoming article in the journal Diálogo is titled “Bold Policies for Puerto Rico: A Blueprint for Transformative, Justice-Centered Recovery.”

U.S. Immigration Policy: New Obstacles to Asylum

By Jayesh Rathod*

U.S. Attorney General Jeff Sessions

U.S. Attorney General Jeff Sessions. / Glenn Fawcett / U.S. Customs and Border Patrol / Flickr / Creative Commons

The Trump administration’s decision to reverse established U.S. policy to grant asylum to certain victims of domestic violence increases the importance of – and challenges to – experts called on to demonstrate the credible threat applicants face if denied asylum and deported.  U.S. Attorney General Jeff Sessions on June 11 issued the opinion, which rescinded precedent that had paved the way for survivors of such violence to receive asylum.  More generally, the case – known as Matter of A-B- – creates additional legal roadblocks for asylum applicants who fear harm at the hands of private (non-state) actors, such as gangs and intimate partners.

  • Federal regulations permit the Attorney General to refer immigration cases to himself for decision, in order to revisit a decision of the Board of Immigration Appeals (BIA) and issue a new opinion that creates binding nationwide precedent. Sessions has made frequent use of this special procedure, certifying four cases to himself since the beginning of the year.  Each of these cases is poised to limit the rights and protections afforded to asylum seekers and others facing removal proceedings.  For example, Sessions vacated the BIA’s decision in Matter of E-F-H-L-, which had held that asylum applicants are entitled to a full merits hearing, including the opportunity to present oral testimony. The vacatur opens the door to summary denials by Immigration Judges.

In Matter of A-B-, Sessions explicitly overruled the BIA’s 2014 decision in Matter of A-R-C-G-, which provided a legal road map for asylum-seekers fleeing domestic and gang violence.  Under applicable case law, an applicant – such as a domestic violence survivor or target of gang violence – who fears persecution by a private actor may qualify for asylum, provided they can prove that their home country government is “unable or unwilling” to control the private actor.

  • Courts had previously expressed distinct views on how to interpret this standard, yet most embraced a plain-language reading of “unable or unwilling.” In Matter of A-B-, however, Sessions – in language that many legal scholars judge to be meandering and slightly inconsistent – suggests applicants must meet a higher standard and show “that the government condoned the private actions,” that those actions “can be attributed to the government,” or that the government “demonstrated a complete helplessness to protect the victims.”  Sessions opines that “[n]o country provides its citizens with complete security from private criminal activity,” implying that deficiencies in law enforcement efforts will not necessarily translate into a successful asylum claim.

The unclear language in Matter of A-B- has left some wondering about the precise legal standard that is now in place.  What is certain, however, is that Matter of A-B- presents a smorgasbord of reasons for skeptical immigration judges to deny asylum claims from the Northern Triangle of Central America.  While a CLALS-hosted workshop underscored that country conditions evidence has always been critical to these cases, adjudicators will now pay even closer attention to country experts, and will demand more evidence regarding efforts by home country governments to control private violence, and of the relationship between those governments and private actors.

  • The new requirements stack the deck against asylum-seekers. The governments in the Northern Triangle of Central America – with Washington’s strong financial and political support – have long argued they’re making efforts to curb gang violence.  Before Matter of A-B-, the “unable or unwilling” standard allowed asylum claims to succeed while permitting these governments to save face under the theory that they were trying, albeit imperfectly, to control violent private actors.  By demanding even more unfavorable evidence regarding these home country governments, Matter of A-B- sets up a likely conflict between the legal standard for asylum and the preferred messaging of those governments and the Trump administration.  Facing an array of entrenched interests, it will be difficult for country experts to show that governments commit or condone the violence against asylum-seekers or that authorities are “completely helpless” to protect victims.

July 10, 2018

* Jayesh Rathod is a professor at the Washington College of Law and founding director of the school’s Immigrant Justice Clinic.

U.S.-Latin America: “Zero Tolerance” Makes Zero Progress

By Ernesto Castañeda *

Children and adults stand in a line

Central American migrant children and their parents. / Pride Immigration Law Firm PLLC / Wikimedia

U.S. President Donald Trump’s family separation policies, despite his June 20 executive action ending them, will have long-term negative consequences and will do nothing to stem the flow of migrants into the United States.

  • Hundreds of families remain separated. Families are detained indefinitely for applying for asylum or crossing into the United States.  Political outrage in the United States may be new, but these policies are not.  Millions of families have been separated across U.S. borders for many years.  After growing up without their parents, children who did not originally accompany migrating parents often attempt to reunify with them in the United States, resulting in the increase of unaccompanied minors that we have seen since 2014 and the surge in violence in Central America.
  • The Trump Administration’s policies fail to address the underlying causes of migration – violence, impunity, corruption, and poverty in sending countries and high U.S. demand for low-cost workers – which show no sign of abating. Many Mexicans and Central Americans are fleeing kidnappings, extortions, and death threats as they explain during credible-threat interviews that give them valid claims for asylum.  U.S.-backed militarized responses to drug trafficking have produced much of the violence and corruption in Mexico and Central America, generating asylum-seekers.  Beyond the traditional economic and social reasons, many recent immigrants are escaping violence, as they did during the Mexican Revolution and the political violence in Central America in the 1980s.

Family separation and the detention of unaccompanied minors in shelters are not new practices either.  What was new in recent months was the separation of families that come to the United States seeking asylum.

  • These forced separations cause the children lifelong trauma. The American Psychiatric Association recently stated that “the evidence is clear that this level of trauma also results in serious medical and health consequences for these children and their caregivers.”  Separation inflicts trauma on adults too; parents suffer from being away from their children due to their decision to migrate.

The logic behind “zero tolerance” is to discourage migration by making conditions as miserable as possible for intending migrants – building psychological walls as well as the physical wall that Trump has pledged to build along the border with Mexico.  By ignoring the underlying causes of these movements of people, this approach is not only cruel but unlikely to be successful.  The concern is also misplaced, despite the increasing visibility of refugees and asylum-seekers in the media, as border apprehensions show a steep downward trend.

  •  The U.S. Congress has so far rejected solutions to the issue of family separation, such as creating larger guest worker programs, strengthening asylum courts, passing the DREAM Act, and demilitarizing responses to drug trafficking. Until the underlying causes of migration are addressed, Washington will be squandering its money prosecuting and causing lasting trauma for innocent children and parents.  Contrary to Trump’s claim that immigrants hurt U.S. culture, my research shows that immigrants are skillful at integrating into American life.  New pathways for legal immigration are the only way ahead to reduce undocumented migration.

 July 3, 2018

 * Ernesto Castañeda is an Assistant Professor of Sociology at American University and author of A Place to Call Home: Immigrant Exclusion and Urban Belonging in New York, Paris, and Barcelona (Stanford, 2018).

Canada and Mexico Face Uncertainty of NAFTA Renegotiation

By Daniela Stevens*

Two men stand at podiums with Mexican and Canadian flags behind them

Canadian Prime Minister Justin Trudeau gives a presentation with Mexican President Enrique Peña Nieto during an official visit to Mexico in October 2017. / Presidencia de la República Mexicana / Flickr / Creative Commons

Facing the growing possibility that the Trump Administration is walking away from the North America Free Trade Agreement (NAFTA), Mexico and Canada are beginning to look for trading partners beyond the United States.  The interdependencies binding the three are strong.  Both Mexico and Canada have deep commercial ties with the United States, which imports about 80 percent of Mexico’s exports and about 70 percent of Canada’s.  Both have significant leverage vis-à-vis the United States as well.  U.S. auto and agriculture industries have a major stake in free trade with Mexico, which also provides important cooperation on security issues and controlling Central American migration.  Liberalization measures within the energy sector by the current Mexican administration make Mexico a strategic partner in terms of energy security.  Canada buys about 19 percent of U.S. exports.

But these ties are fraying as conversations drag on.  Trump Administration proposals are hurting the talks; especially contentious are changes in the “rules of origin” (since the United States proposed increasing the U.S. content of autos to 85 percent from the current 62.5 percent) as well as the inclusion of a “sunset clause” that would make NAFTA expire unless it is renegotiated every five years.  NAFTA’s Article 2205 lets either of the three member countries announce its withdrawal from the accord with six months’ notice.  Canadian and Mexican trade officials have not given such notice yet, but they show signs of heading in that direction.  Both have held high-level meetings with counterparts from South America and Europe, according to official and non-government sources.

  • Mexican President Peña Nieto’s administration has expressed a preference for leaving the negotiations over accepting “a free trade agreement that ceases to promote free trade.” President Trump has said that his administration would be willing to negotiate a free trade agreement with Canada alone if the NAFTA talks fail.  However, Canadian Prime Minister Trudeau’s government has stated a preference for keeping the trilateral alive rather than resorting to bilateral agreement, since the terms of the U.S.-Canada deal were more outdated than the NAFTA’s.  The two presidents have been reluctant to take these actions because they apparently believe, as do many experts, that dismantling NAFTA would inevitably create uncertainty and inefficiencies for the three economies.  For example, the auto sector relies on three-way product flows that move several times across borders to be assembled into finished products.  Canadian and Mexican auto parts makers have a direct stake in each other’s dealings with the United States.  Even small duties would add up.
  • Nonetheless, some increased trade and a bilateral free trade agreement between just Mexico and Canada is possible. The two countries originally joined NAFTA to protect their access to the U.S. market, not to obtain access to each other’s.  Canadian public opinion and media reflect continued disinterest in Mexico, which is viewed as unstable due to drug-related criminality and corruption.  However, as the completion of a satisfactory NAFTA renegotiation is unlikely, Canadians are exploring deepening the bilateral link.  Mexican interest in Canada is also growing, according to some specialists.  Beyond North America, moreover, Canadians and Mexicans are exploring trade and investment diversification.  Canada is looking for increased cooperation with Latin America, in particular within the Pacific Alliance, a free trade partnership that includes Mexico, Chile, Peru and Colombia, and of which Canada is already Associate Member.  Mexico started a renegotiation last January of its free trade agreement with the European Union, which parties hope to finalize in the next few days.  It has begun warming up neglected ties with the Southern Cone and has already pledged to deepen ties with China.

Trade experts convened recently within the framework of American University’s Robert A. Pastor North America Research Initiative (NARI) were unanimous that that a trilateral agreement that protects the interests of all three partners would be the optimal outcome, but few observers of the NAFTA talks are confident that the Trump Administration will soften its position.  Canada’s commitment to a trilateral renegotiation should exert more pressure on the U.S. to compromise while strengthening both Canada and Mexico’s negotiating positions.  In the event of U.S. withdrawal from NAFTA, however, the two can expand their trade and investment relationship by lowering barriers further through modernization and e-commerce.  In addition, trade can potentially expand between the two since they have similar approaches to achieving various commitments of the Paris Accord involving energy projects and greenhouse gas emissions reductions.  Pastor Scholars concluded that both countries will have to carry out public campaigns to explain to their constituencies the benefits of continued cooperation, either trilateral or bilateral, if the United States significantly alters or abandons NAFTA.  Mexico and Canada have options outside North America in the quest for trade and investment diversification – even though their preferred scenario is a stronger NAFTA.  China, South America, and the European Union arise as the most readily available partners.

December 21, 2017

*Daniela Stevens is a Ph.D. Candidate in the American University School of Public Affairs and a Pastor Scholar.  Her research focuses on national and subnational policies that put a price on carbon emissions.

U.S. Immigration Policy Propels an Invigorated Sanctuary Movement

By Alexandra Délano Alonso*

SANCTUARY_SYMBOL+SSS_BLACK

A new logo for the sanctuary movement. / Public Domain

The Trump administration’s expansion of an already enlarged deportation apparatus and its attempt to establish a ban against immigrants from targeted countries has intensified the Sanctuary Movement and driven it to explore new ways of protecting undocumented migrants and other groups that are under attack.  The new policies have generated a wave of protests and institutional responses from activists, lawyers, and immigrant-serving organizations as well as in higher education across the country.  Just days after the November election, hundreds of thousands of students, faculty, and staff at over 190 schools, colleges, and universities supported petitions calling on their respective administrations to declare their campuses sanctuaries.  The campaigns want schools to commit to withhold information from immigration enforcement authorities and disallow the presence of those authorities on campus without a court order or warrant, as well as establish institutional support to ensure that students with precarious migration status have access to the resources they need.  At the same time, there are almost three hundred sanctuary cities, counties, and states, which are at the center of Trump’s promises to cut federal funding to any local or state government that adopts this stance of defiance.  Republican Members of Congress in January introduced a bill (HR 483) to cut funding to universities that declare sanctuary.

  • The Sanctuary Movement has historical roots. In the 1980s, 400 religious congregations around the United States helped refugees from Central American wars enter the country.  In addition to challenging discriminatory U.S. immigration practices, the movement condemned U.S. support for the governments prosecuting those wars.  Years of effort led to legislation granting Temporary Protected Status (TPS) to Central American refugees.
  • More recently, a New Sanctuary Movement emerged in 2007 in response to mass deportations of undocumented immigrants. It emphasized raising public awareness about the individual lives at stake and pressing for legislative reform.  Today’s resistance is an outgrowth of the George W.  Bush and Barack Obama Administrations’ raids, deporting almost 3 million individuals, and the massive immigrant detention system that they expanded.

Many cities, universities, and NGOs have backed away from the concept of sanctuary in response to Trump’s threats, arguing that the risk of losing federal funding or of putting themselves in the spotlight is too high, or that the sanctuary concept promises more than it can really offer.  As Lewis and Clark College Professor Elliot Young has written, “Sanctuary is an aspiration, a statement of values rather than a statement of fact.”  Indeed, one of the arguments against the proclamation of sanctuary by universities is the misunderstanding of the term:  The undocumented community and its defenders have varied interpretations of what it means in practice, whereas the legal limitations on what can be done in the face of a court order are very clear.  Yet, the ambiguity of the term leaves a space for creative interpretation and should be seen as an opportunity rather than a limitation.

  • Most universities, including my own, The New School, have issued a standard statement that they will not share information or cooperate with immigration authorities without a court order, but they have shied away from using the term sanctuary – even though the term is a significant form of resistance to unjust policies, a moral stance, and a message of solidarity to the larger university community.

Reviving the concept of sanctuary in this political context provides an opportunity to open a debate about the rights and protections that marginalized groups need, and how universities and other institutions that have joined the sanctuary movement in the last months (restaurants, art spaces, among others) can support and extend it.  The time we are living in requires us to reexamine existing frameworks and concepts and mobilize them in effective ways when the principles and values we stand for are under attack.  Declarations of sanctuary campus send a clear message of support to vulnerable individuals within the community.  They also nurture transnational networks of solidarity – not just through churches, shelters, and civil society groups – but also including universities in Mexico, Central America, and other countries, to help individuals returning to their origin countries (deported or voluntarily) live better lives, including overcoming significant barriers to continuing their education. Migrants’ need and right to protection and education does not end when they cross the border, and universities’ ability to help them begins by taking a stance and making our campuses accessible, safe and open; in other words, making them sanctuary.

April 18, 2017

* Alexandra Délano Alonso is an Assistant Professor of Global Studies at The New School.  She is the author of Mexico and Its Diaspora in the United States: Policies of Emigration since 1848 (Cambridge University Press, 2011) and co-editor of Borders and the Politics of Mourning (Social Research, 2016) with Benjamin Nienass. She is also a participant in the Robert A. Pastor North America Research Initiative.

U.S. Immigration Policy: Not Just Getting Rid of “Bad Hombres”

By Eric Hershberg, Dennis Stinchcomb, and Fulton Armstrong

ice-xcheckii-artsyarrestshot

An agent from U.S. Immigration and Customs Enforcement (ICE)./ Department of Homeland Security / Wikimedia / Creative Commons

The immigrant deportation policy that the Trump Administration announced last week is among the most aggressive in U.S. history and promises to create tensions between Washington and Latin America and disrupt communities across the United States.  Homeland Security (DHS) Secretary John Kelly has told agencies under his aegis to “use all authorities to the greatest extent practicable” to remove undocumented immigrants from the country.  President Trump called his new initiative a “military operation” – which an embarrassed Kelly denied during meetings in Mexico City intended to control damage from other Trump statements.  The White House said the measures will “take the shackles off” the enforcers, and U.S. media reported enforcement officers’ celebratory comments that they “can finally do their job.”  The Administration will also ask Congress to authorize a large expansion – another 15,000 – of enforcement positions.

  • The rationale repeatedly refers to deporting “criminals” – whom Trump calls “bad hombres” and “bad dudes” – but the new policy will exempt no classes or categories of “removal aliens,” including non-criminals. U.S. press already report roundups of individuals with no criminal records who are being expelled from the country within 72 hours.  Fear among immigrants is pervasive, and there are many reports (such as here and here) of families hunkering down in their homes, withdrawing children from school, and setting up contingency plans for protecting U.S. citizen kids should their undocumented parents be grabbed by the authorities and sent abroad.
  • The policy weakens protections from “expedited removal” that the Obama Administration put in place, which allowed immigrants caught after they had been in the country for 14 days or more to be released pending proceedings to determine their eligibility to remain in the United States. (Details remain murky but supposedly will be announced soon.)  Individuals facing expedited removal are not entitled to appear before a judge.
  • It increases efforts to press local police to help federal agencies find and deport undocumented immigrants, blurring the line between local and federal forces. Legal experts say this commingling of forces violates the Constitution, and many local police chiefs lament that it reduces the willingness of immigrant communities to help them fight crime.
  • It removes privacy protections for people who are not U.S. citizens or permanent residents, putting their personal information in the hands of vigilantes, blackmailers, and others who have no need to know it. Trump previously threatened to withhold federal assistance from “sanctuary cities” in the United States, which he accuses of causing “immeasurable harm to the American people and to the very fabric of our republic” because they are reluctant to implement his deportation policies.

Two new measures suggest a long political campaign against undocumented immigrants.  DHS will create an office – with the acronym VOICE – to collect information from victims of alleged crimes.  It will be funded with “any and all resources that are currently used to advocate on behalf of illegal aliens” (most of whom have never committed a crime).  The Administration will also “identify and quantify all sources of direct and indirect” assistance to Mexico, obviously to evaluate U.S. leverage against the Mexican Government if the Administration is not pleased with compliance with Washington’s wishes.

Deporting all 11 million undocumented immigrants estimated to be in the United States will be impossible, but the new measures will push unprecedented numbers of Mexicans and Central Americans back into societies that have no jobs and no security for them.  That burden and the loss of immigrants’ remittances will cause those countries incalculable harm.  The Administration’s rhetoric hammering on “criminal immigrants” is deceptive:  DHS admitted in 2014 that most of the “criminals” it deported were guilty only of their undocumented presence (31.3 percent) and traffic violations (15 percent), and it would be foolish to expect that the Trump government will be more judicious.  The insinuation that immigrants commit more crimes than do native-born citizens, moreover, has been debunked; they are incarcerated at a rate half that of native-born.  These polices may enjoy the support of Trump’s political base, but the attacks on the defenseless; subversion of traditional values such as the right to legal counsel and the right to privacy; coercion of local police and civilian authorities; and the deportation of countless friends and neighbors whose everyday contributions enrich community life in the United States will have a profound impact extending far beyond its immediate victims.

 February 27, 2017

What Will Trump Do About NAFTA?

By Malcolm Fairbrother*

trump-nafta

U.S. President-elect Donald Trump and the flag of the North American Free Trade Agreement (NAFTA). / Flickr and Wikimedia / Creative Commons / Modified

Despite his campaign rhetoric repeatedly attacking the North American Free Trade Agreement, U.S. President-elect Donald Trump probably won’t touch it, except in superficial ways.  He has called NAFTA the “worst trade deal ever,” and promised to pull the U.S. out unless Mexico and Canada agree to renegotiate it.  Last week, he suggested renegotiation of NAFTA will include provisions for Mexico to repay the U.S. government for the wall he wants to build along the border.

Dismantling or even significantly rewriting the accord is unlikely for a couple reasons:

  • First, the billionaires, chief executives, and friends he is choosing for his cabinet are hardly people inclined to dismantle an agreement whose contents largely reflect what American business wanted from the U.S.-Mexico relationship when NAFTA was being negotiated in the early 1990s. Corporate preferences weighed heavily against any big deviation from the status quo after the last political transition in Washington, in 2008.  Barack Obama too said that “NAFTA was a mistake,” though his criticisms were a little different.  He railed against lobbyists’ disproportionate influence over trade policy, and promised big changes to international trade agreements, including better protections for workers and the environment.  Even so, he didn’t touch NAFTA, and the Transatlantic Trade and Investment Partnership (TTIP) and the Trans-Pacific Partnership (TPP) he negotiated included – like NAFTA – shady provisions for investor-state dispute settlement.
  • It would be near-impossible, or least massively expensive, to get what Trump seems to want most: a big drop in imports from Mexico. In his eyes this would make NAFTA a better deal for America, though of course serious economists disagree.  Realistically, reopening the agreement would be very messy, and if he tried to throw up massive new trade barriers business leaders would strongly object.  NAFTA could include some additional measures to make it easier for goods and/or people to get around among the NAFTA countries, but that’s not what Trump has promised.

His economic nationalism makes the Republican Party establishment squirm, but it’s clear it also helped Trump win several Midwestern states, tipping the electoral college in his favor.  Insofar as agreements like NAFTA entrench rules friendly to business, and generate market efficiencies and economies whose benefits accumulate in the hands of the few, voter hostility is no mystery.  But economics is only part of the reason.  The bigger issue is what the backlash against globalization – embodied also by Brexit and the rise of neo-nationalist parties in Europe – means more broadly.  The average Democratic voter has a lower income than the average Republican voter, but Democrats are more supportive of trade agreements because they are more internationalist, more open to other cultures, younger, more educated, and more urban.  Throughout his presidency, Trump will therefore be squeezed between his working class rhetoric – appealing to the distrustful – and his business class milieu.  He is an extreme case of the politicians’ mercantilist thinking on trade, wherein exports are good and imports are bad, and “trade deals” like NAFTA are somehow like deals in the business world, where it’s possible to out-negotiate someone.  The reality is that this thinking – which flies in the face of basic economics – doesn’t point to any clear course of action.  This is why Trump won’t actually do much about NAFTA.

January 10, 2017

* Malcolm Fairbrother is social science researcher and teacher/mentor in the School of Geographical Sciences at the University of Bristol (UK).  This article is adapted from a recent blog post for the American Sociological Association.

The Impact of Falling Oil Prices on the Western Hemisphere

By Thomas Andrew O’Keefe*

L.C. Nøttaasen / Flickr / CC BY-NC 2.0

L.C. Nøttaasen / Flickr / CC BY-NC 2.0

The sharp drop in the benchmark Brent crude price of oil from just under US$115 per barrel in June 2014 to its current perch around US$50 has important ramifications for the Western Hemisphere.  For Venezuela, which earns some 95 percent of its foreign exchange from petroleum exports, it is a potential disaster.  Underlying political tensions will be exacerbated if there is no money to continue funding social welfare programs or heavily subsidizing gasoline.  It probably also spells the end of PetroCaribe’s generous repayment holidays and what are in essence below-market interest loans for Caribbean and Central American nations.  Sharply lower oil prices also put at risk major energy projects such as the development of Brazil’s pre-salt reserves, which require a minimum price of $50 to $55 to be economically viable.  Equally tenuous are Argentine efforts to regain energy self-sufficiency by exploiting its vast shale oil and gas reserves and Mexican plans to attract foreign investors to participate in deep-water oil exploration and drilling.  The minimum price for a barrel of oil below which new investment projects in Canada’s oil sands are no longer attractive is around $65.  Shale oil producers in the United States are also being squeezed by low petroleum prices.

On the other hand, net energy importers such as Chile, Paraguay and Uruguay benefit from sharply lower oil prices.  Although being weaned off  PetroCaribe will be painful for the Caribbean and Central America in the short term, they will be able to seek oil at the lower prices elsewhere.  The pressure on the Obama administration to lift the ban on U.S. crude oil exports, in response to a glut of domestic shale oil production, could also redound in favor of the Caribbean and Central America by lowering international oil prices further through increased global supply.  Already, 2015 began with U.S. companies authorized to export an ultralight crude called condensate.

In hopes of rallying OPEC to stabilize oil prices, Venezuelan President Maduro last weekend rushed off to lobby Saudi Arabia, which just two months ago refused to decrease production in order to raise prices, but oil industry sources say there’s little chance of a policy change.  Meanwhile, the environment may turn out to be among the biggest beneficiaries of lower oil prices.  Less investment in shale oil production reduces the risk of leaks of methane, a potent greenhouse gas, as well as decreases flaring.  Similarly, slowing down oil sands production in Alberta and Saskatchewan means that the very high levels of greenhouse gas emissions associated with extracting crude oil from bitumen (not to mention the negative impact on water resources) is diminished.  Although lower fossil fuel prices traditionally have undermined incentives to move to greater reliance on renewable and non-traditional energy resources, this may no longer be true.  For one thing many governments around the world are now embarked on ambitious efforts to reduce carbon emissions by, among other things, raising the costs associated with petroleum usage through cap and trade regimes that force companies to buy government-issued pollution permits.  Still others have enacted outright carbon taxes on utilities and large factories per metric ton of carbon dioxide emissions.  In addition, the heavy initial capital investment that was previously associated with things like wind, solar and geothermal power are falling.  For example, a combination of technological advances and Chinese overproduction have resulted in much lower prices for solar panels so that the cost of generation from a large photovoltaic solar plant is now almost 80 percent less than five years ago.  Geothermal energy may be the renewable that most benefits as drilling rigs idled by lower oil prices are now available at a lower cost for geothermal projects.  

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

January 13, 2015

Drug Dealing in Costa Rica: A Perverse Path toward Social Inclusion

By Rodolfo Calderón Umaña*

Antonio / Flickr / Creative Commons Attribution-NonCommercial-ShareAlike 2.0 Generic (CC BY-NC-SA 2.0)

Antonio / Flickr / Creative Commons Attribution-NonCommercial-ShareAlike 2.0 Generic (CC BY-NC-SA 2.0)

Central America’s emergence as a principal transit route for illicit drugs from South America to the U.S. has given rise to local retail markets supplying users within the region.  A study of three Costa Rican communities – one in greater San José and two along the Caribbean coast – highlights several factors that determine the scale and consequences of these local markets.  Among the most important are the high levels of social exclusion experienced by households in these localities and residents’ motivation to become involved in the business because it offers resources (money, power and prestige) that cannot be achieved through the legitimate channels of education or quality employment.  Other factors include the proximity of the communities to drug trafficking routes and the extent of previously existing demand from local consumers.

One of the most significant characteristics of local drug markets in these communities, as elsewhere, is that they are socially and territorially bounded because trust is the key factor shaping relationships between suppliers, sellers and consumers.  Some local suppliers maintain direct ties to cartels, but they operate their businesses independently.  Youth are assigned the most vulnerable tasks and are thus disproportionately represented among those arrested and convicted of crimes.  Violence serves as the principal instrument for controlling and regulating the drug trade, and the result is that for youth in these settings violence becomes normalized as a routine form of behavior.  This spawns a generalized climate of fear and insecurity, and the typical response of community residents is to retreat from public space and to isolate themselves inside their homes.

These findings support calls for new responses to the drug trade at the community level.  Central American governments, encouraged to a significant degree by U.S. programs, have tended to emphasize repressing and “combatting” the scourge of drug trafficking, yet where this approach has been implemented – particularly in Central America’s Northern Triangle — social problems have only gotten worse.  In Costa Rica, it’s not too late to undertake a comprehensive strategic review of policies in this domain and to bolster programs to stabilize affected areas.  Particularly if designed and implemented from the bottom up, programs can identify and reach out to vulnerable residents before they are drawn into drug micro-markets as vendors, consumers, or both.  Vocational training programs matched to real employment opportunities are absolutely fundamental – to reduce residents’ social exclusion.  Our research findings indicate that enhancement of public spaces where community residents can congregate and initiatives focused on building trust between communities at risk and representatives of the state can also be highly productive.  Costa Rica is at a critical juncture: it can either sustain and expand the participatory policy frameworks that buttress community cohesion and resilience or run the risk of falling into the devastating spiral of delinquency and violence that has plagued its neighbors in the Northern Triangle.

*Dr. Calderón Umaña is a researcher at FLACSO-Costa Rica.  The study is being conducted by FLACSO-Costa Rica with funding from the International Development Research Centre.

Argentina: Burying the hatchet?

By Arturo C. Porzecanski*

Photo credits: Finizio and Global Panorama / Foter / Creative Commons Attribution-NonCommercial-NoDerivs 2.0 Generic (CC BY-NC-ND 2.0)

Photo credits: Finizio and Global Panorama / Foter / Creative Commons Attribution-NonCommercial-NoDerivs 2.0 Generic (CC BY-NC-ND 2.0)

The administration of Cristina Fernández de Kirchner has shown a willingness to bury the proverbial hatchet and bring to a definitive end what was once the largest sovereign default in recorded history – nearly $100 billion in obligations to domestic and foreign bondholders and official foreign-aid and export-credit agencies, including the United States Export-Import Bank.  In late May, Argentina reached an agreement with its official creditors (gathered as the so-called Paris Club), committing to repay everything that had come due in full and in cash – nearly $10 billion in principal, past-due interest, and interest-on-interest – over the next five years, starting with a down-payment in July.  In recent days, President Kirchner has also signaled that she is ready to negotiate a payment plan with bondholders who are potentially owed even more than the Paris Club creditors.  The trigger for this conciliatory attitude is two U.S. Supreme Court decisions announced on June 16 which granted jilted creditors wide latitude in seeking redress from Argentina.  The first ordered the government in Buenos Aires to stop discriminating among its bondholders by paying most but not all of them; and the second mandated banks operating in the United States to disclose any and all assets owned by Argentina anywhere in the world, facilitating efforts to seize them by unpaid creditors.

Argentine governments since the closing and troubled days of 2001 have taken a notoriously hard line toward creditors ever since Acting President Adolfo Rodríguez Saá announced that he would be suspending payments on the public debt and dedicating all sums budgeted for that purpose to fund an emergency jobs program and increased social spending.  Cristina and her predecessor (and late husband), Néstor Kirchner, embraced a populist-cum-nationalist view of the world according to which the state must favor the interests of the majority of its population, particularly in terms of redistributing income from the “haves” to the “have nots.”  Pervasive state interventionism, confiscatory taxation, disrespect for private property rights, widespread controls (on prices, interest rates, foreign trade, and capital flows), and confrontational attitudes toward investors became the hallmark of economic policy in Argentina.  Despite a vigorous economic recovery starting in mid-2002, creditors never got a single payment from Argentina – and the government made only an arrogant take-it-or-leave-it proposition to private creditors by which they would turn in their bonds and receive new ones worth one third as much.  By late 2010, over 92 percent of the private creditors capitulated and went into the debt exchange.  According to a reputable comparative study of sovereign defaults in the Journal of International Money and Finance published in 2012, Argentina’s behavior towards its creditors displayed an exceptional degree of coerciveness.  While Argentine and European creditors had no luck pursuing their claims in their respective courts, most bondholders who had legal rights under New York State law succeeded in obtaining favorable judgments – and lately, in gaining enforcement rights as well.

Argentina has set such a bad example in terms of how to restructure the public debt that no other nation has dared to follow it since.  Given the recent advance in creditor rights courtesy of the U.S. Supreme Court, chances are that no other government will ever be motivated to copy Argentina’s rogue-debtor behavior – a very good outcome for the world at large.  Concerns that the decade-long judicial fight in the United States will slow down or impede future sovereign debt restructurings are greatly exaggerated.  Before reaching their decisions, the U.S. courts heard from many academic and non-academic experts, and from several governments (Brazil, France, Mexico and the United States), and the New York District Court of Appeals dismissed warnings of impending doom as “speculative, hyperbolic, and almost entirely of [Argentina’s] own making.”  Argentina engaged in uniquely egregious misconduct, violating the well-established norms of sovereign debt restructuring, refusing to negotiate with its creditors, ignoring court orders, and failing to honor its obligations subject to U.S. law despite the country’s unquestioned ability to pay.  The legal rights conferred to minority bondholders in the 1990s, which were actionable in this instance, have been superseded during the 2000s by the widespread inclusion of new “collective action” clauses, inspired by English law, preventing a small minority from blocking a debt restructuring supported by a large majority (at least 75 percent) of creditors.  These clauses have worked very well in recent years, including in the cases of Greece and Belize in 2012 and 2013, respectively.  Therefore, while the advancement of creditor rights brought about by the Argentina litigation will encourage governments to be more conciliatory towards their creditors, the evolution of market practices means that fewer than 8 percent of total creditors will never again be able to demand payment in full the next time that a government obtains the consent of everyone else.

*Dr. Porzecanski is Distinguished Economist in Residence at American University.