U.S.-Venezuela Relations

U.S.-Venezuela Relations Progress through Return of Recalled Ambassadors

On June 26, 2009, almost a year after U.S. Ambassador Patrick Duddy was ordered to leave Caracas, the Chávez and Obama administrations were able to come to an agreement that allowed Duddy and his Venezuelan counterpart Ambassador Bernardo Álvarez, to return to their posts. Late last year, as a result of growing tensions between Venezuela and the United States, both nations withdrew their ambassadors. Unable to resolve the dispute before his departure from the White House, President George W. Bush left it for Obama to handle. Venezuelan Foreign Relations Minister Nicolas Maduro spoke to U.S. Assistant Secretary of State for Western Hemisphere Affairs Thomas Shannon on June 23 in regards to restoring both diplomats as soon as possible. By June 26, Alvarez was preparing to return to Washington as Venezuela’s legate. Duddy, too, was back in Caracas on behalf of the United States, by the end of June.

Initial Dispute
The contention between Venezuela and the United States began in September 2008, but it was not due to any direct confrontation between the two countries. Rather, it was triggered by an incident involving Bolivia and the U.S. Ambassador to La Paz, Philip Goldberg. Bolivian president Evo Morales accused Goldberg of attempting to overthrow his administration, with Washington’s backing, and ordered him out of the country before he could pose a further threat to his government. As a gesture of support and solidarity with Morales, Chávez demanded that Ambassador Duddy leave Caracas. The Bush administration responded in kind by expelling both Venezuela’s and Bolivia’s ambassadors to Washington. More than eight months and one presidential administration later, a renewal of dialogue between Venezuela and the U.S. has brought about the settlement of the dispute and the full restoration of diplomatic relations, with both countries committing themselves to engage each other in a constructive manner.

Profile of Constructive U.S-Venezuela Relations
A robust relationship between Caracas and Washington is vital for the Obama administration if it seriously seeks to improve the United States’ injured ties with Latin America. In recent years, Venezuela, along with Cuba, has had a history of tumultuous encounters with the United States. In order to create stronger bonds with the region, Obama has decided to display a new willingness to work with Venezuela by entering into positive diplomatic links with Caracas. The power and influence Venezuela holds in Latin America stretches far beyond the reach of Hugo Chávez’s infectious and often blunt rhetoric. In May 2009, The Economist reported that neighboring Latin American countries owe Venezuela more than $24 billion, illustrating Venezuela’s impressive economic clout in the region. Projects such as the Bank of the South, Telesur and the Bolivarian Alternative for the Americas (ALBA), among other economic initiatives, have been having a far-reaching impact in Latin America. These various alliances, often created through Venezuelan-funded projects, are continuously increasing in size and scope as new ones develop and come to the fore. As these initiatives gain momentum, Venezuela, through Chávez’s activism, cements its regional leadership. Even the sharp decline in oil prices and the shrinkage of Venezuela’s available funding, which have cut the volume of financing from Caracas, have failed to significantly curtail the spread of Chávez’s influence and ideology.

Importance of oil
U.S. dependence on Venezuelan oil reinforces the necessity of maintaining a functioning relationship between the two governments. Since Chávez was elected president in 1998, he has demonstrated a clear understanding of the strategic aspect of Venezuela’s unfettered oil production. Throughout his time in office, Chávez has not only recognized that oil production is his country’s strongest and most indispensible asset, but has also managed to use it to maintain economic leverage in carrying out negotiations with an ever-widening range of foreign nations – both friend and foe. After Saudi Arabia, Venezuela is the largest oil exporter to the U.S. from the Organization of the Petroleum Exporting Countries (OPEC), making it unlikely that Washington could become completely independent of Venezuelan oil any time soon. According to the Energy Information Administration (EIA), the U.S. has imported an average of 1.4 million barrels of crude oil and derivatives a day from Venezuela for the past 11 years.

The highest recent rate of exports from Venezuela to the U.S. dates back to 1998 when 1.7 million barrels arrived daily, whereas a decade later 1.1 million barrels arrived daily. The decline in oil exportation to the U.S. over this ten year period has been linked to the flagging nature of the technology of the state-owned oil company PDVSA, domestic political strife, difficulties in maintaining the necessary volume of production and an effective level of oil field maintenance. Further contributing to this is Venezuela’s reduced dependence on the U.S. market due to newfound opportunities in such non-traditional partner nations such as China and India. However, with the current undermining of both nations’ economies within the larger setting of a global economic crisis, it is crucial for them to maintain a robust line of communication and trade between them.

A Nuclear Threat?
Venezuela has never seriously been identified as a nuclear threat because it lacks familiarity with and access to nuclear technology. Instead of implementing a strategy to become a nuclear power, Venezuela has chosen to rely on the implicit threat of interrupting oil supplies to exert its influence over important geopolitical issues and to ensure that its interests are not overlooked. However, in 2005 Chávez suggested that Venezuela could be interested in becoming a nuclear power, hinting that the country would look to Tehran for assistance. He made clear his public support for Iran’s behavior regarding its nuclear ambitions during an International Atomic Energy Agency (IAEA) meeting that had on its agenda a call for the suspension of the Middle Eastern nation’s uranium enrichment program. Since Venezuela’s vote against the suspension of Iran’s nuclear programs, the two countries have developed deepening political ties, which have nurtured a growing concern in Washington.

Chávez and the Bush administration
Chávez is frequently being classified as almost indiscriminately hostile to U.S. policy. During the period of the Bush administration, he was best known for expressing his often controversial opinions and for the graphic rhetoric he employed to describe the U.S. president. His most hostile statement famously occurred in September of 2006 in a speech Chávez presented to the United Nations General Assembly. In no uncertain terms, Chávez compared President George W. Bush to the devil. His ferociously negative sentiments toward the U.S. president stemmed as much from Bush’s position as head of a nation with a long history of military and political intervention in Latin America as from specific policies directed at Caracas, which were meant to isolate Chávez. The mutual antagonism culminated with the expulsion of ambassadors last September, after the fracas ceased to escalate, although it was never resolved.

Chávez and Obama provide some hope for resolving historical differences
It did not take long before Chávez had a significant interaction with the Obama administration. During the Summit of the Americas, which met earlier this year at Trinidad and Tobago, Chávez handed Obama a copy of Eduardo Galeano’s Open Veins of Latin America, which is a bitter account of the role the U.S. and colonial powers like Spain and Portugal, played in pushing Latin America into a state of dependency, a double-edged sword which Obama accepted in good spirits. Attempts to restore diplomatic relations between Venezuela and the United States were evident even before the book’s presentation.

The visibility of Chávez and Obama exchanging hand shakes and dialogue gave hope to the possibility of these presidents cooperating to heal open wounds and reach agreements on divisive issues left over from the Bush administration, most notably Washington’s intransigent position on the Cuban embargo. Chávez has argued for drastic modifications to Cuba-U.S. relations, focusing on changes in Washington’s policy towards Havana. The United States’ stop-and-go policy toward the region was evident in a recent interview of Secretary of State Clinton with an independent Venezuelan television station. Clinton indicated that there was not much more that Washington was prepared to do in regards to Cuba until political changes were made on the island, referring specifically to U.S. demands that political prisoners be released and free elections staged. Although the Obama administration has hesitated to lift the embargo completely, it has taken steps to adjust legislation that adversely affects Cuban-Americans living in the United States. Progress in the form of policy change is occurring with such measures as the “Freedom to Travel to Cuba Act,” which lifts restrictions on Cuban-Americans traveling to the island, sending remittances, and making phone calls to family members in Cuba. Nevertheless, until the embargo is lifted entirely – hopefully in a short amount of time – the Obama administration will be unable to have a completely non-confrontational relationship with Chávez.

This analysis was prepared by COHA Research Associate Leonardo Faria Chusán
July 27th, 2009
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