Toni Solo: US v Latin America - No Neutral Corner

Mediocrity detests talent. On one level, the recent exchange of abuse between lilliputian Vicente Fox and Hugo Chavez reflects no more than that. Chavez looms large over Fox for many reasons, not least because 80 years ago Mexico under President Calles defied the United States the way Chavez does now. Chavez seems likely to succeed where Calles failed. Fox's hostility to Chavez probably springs as much from Mexico's history and his National Action Party's (PAN) roots as to his collaboration with the Bush regime.

Calles tried to impose Mexico's revolutionary constitution of 1917, expropriating foreign oil companies and dismantling the influence of the Catholic Church. As well as the hostility of foreign petrol interests and the Cristero armed rebellion, he also faced the hostility of aggressive international creditors. PAN was born out of those years, a reactionary, elitist, pro-church political movement hostile to the Mexican revolution. Sharp political antagonism between Hugo Chavez and Vicente Fox is hardly a surprise.

Fox criticised both Argentina's President Kirchner and Venezuela's President Chavez at the recent Summit of the Americas in Argentina's Mar de Plata. Both Kirchner and Chavez responded in kind. But whereas Fox mended fences fast with Kirchner, he and his advisers pushed the spat with Hugo Chavez to the point where ambassadors of both countries were withdrawn, leaving relations between the two governments managed at the level of charge d'affaires.

The agenda at the Mar de Plata summit was supposed to be primarily about employment. Fox wanted to force discussion of the Bush regime's continental trade project, the Free Trade Area of the Americas (FTAA). Summit host Nestor Kirchner refused. Outside the official summit engagements, President Chavez attended a huge rally where he declared the FTAA dead and buried. His speech was enthusiastically received by tens of thousands of people.

Free Trade - the Andes take their time

After the Central American Free Trade Agreement negotiations, the US government's drive to close a clutch of similar trade-in-your-sovereignty deals in the Andes has faltered. The US had originally planned to wrap up those deals in early 2005. But over the last week all three Andean countries concerned, Ecuador and Colombia first and finally Peru, withdrew from trade talks with US negotiators. The general complaint is that US negotiating positions on agriculture and other key issues like intellectual property and services are too rigid. US negotiators seem to be relying on the looming expiry of earlier preferential trade agreements with the Andean countries to force their advantage.

With the Hong Kong World Trade Organization summit scheduled for early December, it seems unlikely that the Andean trade talks will resume in earnest until late January or February next year. That shifts the whole programme of talks much closer to upcoming elections in all the countries concerned, edging these trade-in-your-sovereignty deals into play as more immediate electoral campaign issues. That may well affect the course of the trade talks, as negotiators go to work with one eye on their governments' electoral prospects

In Mexico, the majority can reflect on sliding living standards as a result of the North American Free Trade Agreement. Chile is moving relentlessly towards a trade deficit caused by soaring imports after two years of its trade deal with the US. As time goes by, more and more evidence shows that "free trade" with the US is a poisoned chalice for the majority, benefiting mainly US multinational corporations and local elites ready to sell out their own people.

For resentful, isolated failures like George W. Bush and his factotum Vicente Fox, inspirational popular figures like Hugo Chavez make for embarrassing comparisons in that context. The imperial media seldom draw them. But people in South American countries are finding the comparisons harder and harder to ignore.

For the moment, following Fox's aggressive remarks in Mar de Plata, Bush can claim that not just the US has trouble with Hugo Chavez, look, he's upset Mexico too! For his part, Fox is able to wield his version of Chavez as a bogeyman to frighten Mexican electors, hey, opposition presidential front runner Lopez Obrador is friendly with Hugo Chavez, be careful! But that particular anti-Chavez vehicle, low on mileage, will soon splutter to a halt.

Mexico - steadily failing its people

In fact, it probably helps focus attention on a question of some importance for Mexicans. Is Mexico in decline? It is slowly slipping down the list of the world's most powerful economies, from 10th in 2003 to 12th in 2004. Looking at the World Bank macroeconomic indicators anyone would think Mexico was booming. Gross domestic product is running at over US670bn and gross national income per person is over US$6700. But, as everywhere else, these macro figures are meaningless when set against the gross inequality that characterises Mexico just as it does the rest of Latin America.

Even the World Bank seems to agree that Mexican poverty levels in 2004 are similar to those of the pre-NAFTA years of the early 1990s. Around 50% of people live in poverty and over 20% in extreme poverty - as if anyone has any reliable measure for those terms, which no one does. In many ways Mexico has yet to recover from the financial crisis of 1994 and 1995, grossly exacerbated as the sequel to that crisis was by the North American Free Trade Agreement (NAFTA). Employment is no guarantee of security - half of Mexicans in employment lack statutory employment benefits.

Fox's posturing on the international scene may well also be part of a forlorn, sulky effort to put some lustre on his failed presidency. Certainly, ordinary Mexicans have fared ill under his government. In July this year the US authorities shut down their consulate in Nuevo Laredo in Tamaulipas. The uncontrollable narcotics related violence there made it too unsafe to keep open. In Ciudad Juarez, the serial murders of hundreds of women, mainly workers in the city's numerous maquilas, remain unsolved.

Fundamental rights are routinely abused by security forces throughout the country. Last year's orgy of police violence against hundreds of anti-globalization demonstrators in Guadalajara around the European and Latin American "free trade" summit was symptomatic. Violence against environmental and indigenous groups and activists is endemic. All these problems are aggravated by the social and demographic changes provoked by Mexico's deepening agricultural decline.

Recently PRI Senator José Castro Veracruz denounced the government's failure to assist populations enduring hunger in 70% of the municipalities of eight states, Chiapas, Oaxaca, Guerrero, Veracruz, Yucatan, Hidalgo, Pueblo and Campeche. No clearer signal could be given of the crisis in Mexico's rural communities. Rice production has fallen from 30,000 farmers working 250,000 hectares to just 5000 working 70,000 hectares. Mexico now imports rice for domestic consumprion. In 2008, NAFTA provisions will mean domestic basic grain production of both maize and beans become completely unprotected.

Leading opposition figure Andres Manuel Lopez Obrador whom Fox seeks to tag as a demagogue, wants to renegotiate NAFTA to protect as many as 3 million rural families threatened by the incoming NAFTA measures. The corollary of agricultural decline is marked demographic shift, with hundreds of thousands of people from rural areas on the move in search of a better life. Agriculture has lost over two million jobs in recent years. While industry has created around two million jobs in the same period, the economically active population has increased by over ten million. "Free trade" may mean marked increases in foreign investment, but only in certain sectors for a small number of firms. As more money flows in, ever more money flows out. Capital flight in Mexico is at record levels.

Recuperating social and economic rights

In December Venezuela will become a full member of the Mercosur trading bloc. It will join Argentina, Brazil, Paraguay and Uruguay, making Mercosur a more formidable trading bloc despite Mercosur's own internal contradictions. In December too, Bolivia may well elect progressive indigenous leader Evo Morales as President. Overall, the US government is perceptibly losing ground on several fronts in Latin America. Even in the military sphere, it's efforts to help narco-President Alvaro Uribe defeat the peoples' armies of the FARC-EP and ELN in Colombia's civil war have failed demonstrably. That failure explains increasing US government efforts to involve other Andean nations in military cooperation, such as the recent US-instigated fifth Regional Security Conference in Ecuador's capital Quito, which Venezuela did not attend.

Mexico becomes an associate member of Mercosur later this year. That may be an opportunity for the US and its allies to sneak more trojan horses into Mercosur. Or it may be an opportunity for a future Mexican government to make its north south, as Hugo Chavez has put it, switching economic priorities from enriching foreign multinationals and creditors in favour of its own people. Like Cuba's government, Venezuela's authorities recognise the social and economic rights of their people. Mexico's government does not really, hence its incipient decline and the crucial relevance of the Zapatista movement to an inclusive future for all Mexicans shoved to the margins by decades of social and economic injustice.

Venezuela is addressing in successful and practical ways its problems of poverty and inequality within a continent wide strategy based on sovereign integration. By contrast, like all the other trade-in-your-sovereignty politicians in Latin America, Mexico's current leaders have no idea how to overcome poverty and inequality. They tag along on the shabby coat tails of the grandiose derelict once recognisable as the United States, failing ever more noticeably to meet their people's basic needs.

Suspending diplomatic relations with Caracas shows up that failure clearly and indicates the lack of options facing other Latin American countries. The continental choice at government level is between dead-end, sterile "free trade" neo-colonialism and sovereign integration prioritising people's social needs over corporate profit. It is the economic version of Bush's aggressive "either with us or against us" mantra, the latest version of perennial US "do what we want, or else" diplomacy.

toni solo is an activist based in Central America - contact via www.tonisolo.net

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