Despite Obama/CIA misdirected "charm", Americas summit boosts utter U.S. isolation....
CARTAGENA, Colombia — The big headlines at the summit of President Barack Obama and 29 other hemispheric leaders that ended here Sunday focused on the U.S-Latin American spats over Cuba and the Falkland/Malvinas Islands, but the talk behind the scenes among the presidents dealt with something that worries them much more - the return of protectionism.
Granted, most of the presidents and prime ministers spent much of their time during their public appearances talking about Latin America's demands that Cuba be invited to future U.S.-Latin American summits, and that a planned summit final declaration include a paragraph backing Argentina's territorial claims on the Falkland/Malvinas Islands.
Failure to reach a consensus on both issues led to the collapse of the hard-negotiated 16-paragraph summit final declaration. It was replaced by a presidential statement by the summit's host, Colombian President Juan Manuel Santos, in which he summed up his view on the summit's conclusions.
But behind closed doors, most presidents talked about the rising trade barriers that several Latin American countries, especially Brazil and Argentina, are erecting to protect their industries, senior U.S. and Latin American officials say.
New measures by these and other countries to restrict imports are causing growing concern in the hemisphere. In the private talks among the leaders, "there is much more conversation about the economy and trade than on the big headline issues, such as Cuba and the Falkland/Malvinas," Roberta Jacobson, the top U.S. State Department official in charge of Latin American affairs, said in an interview.
Mexican President Felipe Calderon took the unusual step of denouncing the protectionist trend publicly at the beginning of the summit, in a meeting with some of the hemisphere's top business leaders and of naming names.
Latin America's way to face the world's economic recession "should clearly not be protectionism," Calderon said. "There are protectionist measures in the U.S. Congress, but there is also protectionism in many, I would say, in all of our countries."
He added that for Mexico "it is vital to have a free trade agreement with Brazil. But unfortunately, what we are finding (in Brazil) is a trend in the opposite direction."
Mexico is increasingly angered by Brazilian measures to reduce imports of cars from Mexico, which had grown spectacularly since a 2002 agreement that allowed free trade in cars between the two countries. Brazil's super-strong currency had made it much cheaper for companies to import foreign-made cars.
But similar spats are taking place across the region. Argentina recently stopped granting automatic import licenses, and started to demand that its importers match their orders with exports, which has hurt countries across the region, including Argentina's Mercosur common market partners Brazil, Uruguay and Paraguay.
Last month, the United States and 39 other countries, including the European Union, Japan and Mexico, filed an unusual complaint at the World Trade Organization against Argentina's latest trade barriers. It asserted that Argentina is not only requiring more import licenses, but that the system is arbitrary and unpredictable.
Argentina responded in a statement that "Among the WTO 157 members, the United States and the European Union have received the highest amount of complaints, and their trade policies are being investigated by specialized courts. We will accept no external pressure."
On Saturday, at the start of the two-day summit in Cartagena, Obama held a 20-minute private meeting with Argentine President Cristina Fernandez de Kirchner that centered on the international complaints over Argentina's import restrictions, and on efforts to have it not spoil overall bilateral relations, officials familiar with the discussions said.
Elsewhere, Colombia is complaining about trade restrictions in Ecuador, and Peru about trade barriers from Brazil. Despite Latin American leaders' frequent summits in which they solemnly swear the start of the region's definitive economic integration most recently, they created the Community of Latin American and Caribbean States, or CELAC trade within the region was already relatively small before the latest wave of trade barriers.
While trade among European nations amounts to 67 percent of their worldwide trade, and commerce among Asian countries amounts to 47 percent of their total trade, Latin America's intra-regional trade is only 22 percent of its total commerce, according to the Inter-American Development Bank.
Why are Latin American leaders raising trade barriers to their neighbors? Alicia Barcena, head of the United Nations Economic Commission for Latin America, said the the explanation has a lot to do with South America's commodity boom, and the resulting appreciation of South American currencies in recent years.
As countries become more heavily dependent on commodity exports to China and have increasingly strong currencies, their industrial sectors become an increasingly smaller portion of their economies.
"There is concern in South America about de-industrialization," Barcena said. "Therefore, some countries are taking measures to support their productive sectors," including several that others see as trade barriers.
President Barack Obama patiently sat through diatribes, interruptions and even the occasional eye-ball roll at the weekend Summit of the Americas in an effort to win over Latin American leaders fed up with U.S. policies.
The United States instead emerged from the summit in Colombia increasingly isolated as nearly 30 regional heads of state refused to sign a joint declaration in protest against the continued exclusion of communist-led Cuba from the event.
The rare show of unity highlights the steady decline of Washington’s influence in a region that has become less dependent on U.S. trade and investment thanks to economic growth rates that are the envy of the developed world and new opportunities with China.
It also signals a further weakening of the already strained hemispheric system of diplomacy, built around the Organization of American States (OAS) which has struggled to remain relevant during a time of rapid change for its members.
Seen as an instrument of U.S. policy in Latin America during the Cold War, the OAS has lost ground in a region that is no longer content with being the backyard of the United States.
“It seems the United States still wants to isolate us from the world, it thinks it can still manipulate Latin America, but that’s ending,” said Bolivian President Evo Morales, a fierce critic of U.S. policy in Latin America and staunch ally of Venezuela’s leftist leader Hugo Chavez.
“What I think is that this is a rebellion of Latin American countries against the United States.”
In all fairness to Obama, the outcome had little to do with his conduct or even that of secret service agents whose indiscreet encounter with prostitutes in the beachside city of Cartagena, Colombia, overshadowed much of the proceedings.
He was in fact commended by several presidents for listening politely to political leaders, helping soften perception of U.S. officials as arrogant and domineering.
“I think it’s the first time I’ve seen a president of the United States spend almost the entire summit sitting, listening to the all concerns of all countries,” said Mexican President Felipe Calderon.
“This was a very valuable gesture by President Obama.”
But Obama’s staid charm was unable to paper over growing differences with the region.
Facing a tough re-election race this year, Obama had no room to compromise on the five-decade-old U.S. embargo on Cuba that is widely supported by conservatives in the United States, and particularly the anti-Castro exile community in Florida, a key state in a presidential vote.
U.S. insistence that Havana undertake democratic reforms before returning to the hemispheric family led to a clash with a united front of leftist and conservative governments that see Washington’s policy toward Cuba as a relic of the Cold War.
The unexpected result was a diplomatic victory for Havana.
The newfound regional unity on Cuba may augur a growing willingness across the political spectrum to challenge the U.S. State Department on thorny issues for years considered taboo.
That could include insistence that the United States assume greater responsibility for reducing consumption of illegal narcotics as an alternative to the bloody war on drugs and its rising toll on Latin America.
“From the so-called Washington consensus … toward a nascent consensus without Washington for a united Latin America,” tweeted Venezuela’s foreign ministry, referring to orthodox economic policies advocated by Washington in the 1990s.
NEW DIPLOMACY, NEW ECONOMY
The stark divide over Cuba – with 32 nations in favor of inviting it to future summits and only the United States and Canada opposed – will fuel arguments that the OAS is an outdated institution for regional diplomacy.
The OAS already faces competition from alternative forums such as the Union of South American nations (Unasur) and the Chavez-backed Community of Latin American and Caribbean states (Celac).
Despite the new winds blowing in regional diplomacy, economics is driving the changes as much as politics.
Once seen as monolithic block of basket-case economies dependent on U.S. support, Latin American countries are coveted investment destinations with sophisticated financial systems that have innovated in areas ranging from energy to aviation.
Chinese companies eager to pump oil, harvest soy and build badly needed infrastructure are showering them with offers of investment and financing.
With the U.S. economy still struggling to stay above water and foreign aid budgets seen dwindling, Washington has fewer sticks to brandish and fewer carrots to offer.
“This summit was a reminder, a wake-up call, that the traditional way of doing business vis-a-vis the region is eroding,” said Geoff Thale, program director at the Washington Office on Latin America....