President Obama Prepares to Travel to Latin America

Press Release: President Obama Prepares to Travel to Latin America with Few Accomplishments and Even Fewer Prospects

by COHA Research Associates Robert Cavooris, Christina Sabato, and Mike Reaney

•Major disappointment over U.S. president’s and secretary of state’s meager perception on the importance of the region

On March 19, President Barack Obama will embark on his first tour of selected Latin American nations since taking office two years ago. Stops on his trip will include Brazil, an emerging world power, Chile, a stable U.S. ally, and El Salvador, a Central American nation mired in an ongoing drug and anti-crime war. By strengthening ties with these countries, President Obama hopes to maintain a balance of power in the region against members of the Caracas-led Bolivarian Alliance for the Americas (ALBA). This left-leaning intraregional coalition seeks greater independence from Washington and the right to strengthen their relations with foreign nations hostile to U.S. interests. To counter this, President Obama is bolstering moderate allies in Brasília, Santiago, and San Salvador by expanding commercial ties, supporting private-sector infrastructure development, and providing military aid.

Brazil

Brazil has eagerly awaited President Obama’s arrival ever since his November 2008 pledge to former President Luiz Inácio Lula da Silva to visit the country “as soon as possible.” After two years, it seems the U.S. President has finally found time in his schedule. Admittedly, Lula did not leave office on the most amicable terms with Washington—policy differences like Brazil’s support for Iran’s nuclear program in early 2010 created a rift between the countries. Obama predictably waited for Lula’s successor Dilma Rousseff who has proved to be much more deferential to U.S. interests, as demonstrated by her inaugural speech wherein she expressed hopes to “deepen” ties with the U.S.

After three months in office, President Rousseff’s foreign policy has been in line with U.S. objectives. Rousseff has distanced Brazil from Iran by aborting Lula’s failed effort to mediate Tehran’s nuclear goals and by criticizing human rights abuses under President Ahmadinejad. Additionally, Brasília and Washington have been working closely together on the Interim Haiti Recovery Commission since early 2011. Rousseff also appointed Antonio Patriota, a former Brazilian ambassador to Washington, as her minister of external relations. She also rolled back negotiations regarding a multi-billion dollar defense contract with France for F-X2 fighter jets, which was negotiated under the Lula administration. Some have speculated that Rousseff’s pro-U.S. leanings not only prompted her to scale back the French contract, but also to possibly begin negotiations for purchasing fighter jets from the U.S. once the Obama visit is concluded. If the U.S. ultimately obtains this highly lucrative jet contract, it would be an important symbol of Rouseff’s commitment to seek close ties with the U.S.

Brazil’s USD 6 trillion economy is currently the world’s eighth largest, making it an attractive target for U.S. investors. On his February 7, 2011 visit to São Paulo, U.S. Treasury Secretary Timothy Geithner emphasized that improving relations with Brazil was a top U.S. priority. He noted, “Brazil is a major economic and financial power on the global stage. Our economies have similar strengths and face similar challenges. We recognize that economic growth requires a strong, dynamic private sector, a commitment to open and fair trade, and investments in innovation, education and infrastructure.” With no standing Free Trade Agreement (FTA) in existence between the two countries, increasing trade and investment with the U.S.’s twentieth largest trading partner will be at the top of Obama’s agenda. Obama’s talks with Brazilian officials are likely to include cooperative plans on clean energy, reconstruction aid for Haiti, and increased security to alleviate U.S. anxiety over safety at the upcoming 2014 World Cup and 2016 Summer Olympics.

President Obama is expected to address more pressing issues with the Rousseff administration. They are likely to discuss Brazil’s newly discovered oil and gas reserves, available for export since the country is rapidly becoming energy self-sufficient. Obama may want to use energy companies to invest more in this sector of the Brazilian economy, especially because China already has large fossil fuel investments in Brazil’s mineral and energy sector. Rousseff seems unable to decide whether to uphold her receptivity to Chinese investements in undervalued yuan, or seek greater financing in weak dollars from the United States. President Obama’s goal will probably be to ensure that the surging South American giant stays on a course that is compatible with U.S. commercial interests.

Chile

As President Obama makes his way to South America, he will meet with President Sebastián Piñera of Chile for the first time. The meeting marks a continuation of the cordial partnership between the U.S. and Chile, and will likely include talks of bilateral cooperation on regional security, trade, and energy issues, with a heavy focus on economic development.

The two countries share like-minded thinking on a number of issues and policies. Security remains at the forefront of these issues, as emphasized at the 2010 Global Nuclear Security Summit, where Obama thanked Chile for its efforts in promoting nuclear non-proliferation. The U.S. and Chile have committed themselves to international diplomacy in other venues, displayed through a combined attempt to implement peacekeeping in Haiti.

President Obama’s State of the Union Address, which outlined national U.S. goals, turned out to parallel Chile’s objectives regarding economic stability through job creation and free trade. Billionaire President Piñera has argued, “Growth and job creation are the only ways to overcome poverty permanently.” An economic union occurred in 2003 when the U.S. and Chile signed a FTA. Traded goods include the U.S. imports of fruit, copper, seafood, and wood, whereas the U.S. provides Chile with heavy machinery, oil, aircraft, and other commodities.

Obama’s agenda for the visit will include talks on energy. Chile agreed to Obama’s “Energy and Climate Partnership for the Americas” which hopes to spark an energy revolution throughout the region. The initiative intends to diversify the supply of power through renewable energy, investment, and high-energy efficiency.

When the February 2010 earthquake struck Chile, the Obama administration was quick to provide humanitarian aid. This further established that the U.S. and Chile are not only politically allied, but aspire to a genuinely amicable relationship as well. U.S.-Chilean ties are expected to further improve following Obama’s visit.

El Salvador

Many have questioned the choice of El Salvador as a destination on Obama’s diplomatic trip to Latin America. While Chile is a cooperative ally of the U.S., and Brazil’s powerhouse economic status warrants such a high-level visit, it is less clear as to why President Barack Obama is going to San Salvador. One possibility is that the Salvadoran government is something of a model for how the U.S. would like all Central American states to behave. It is open to continuing free trade and believes in militarization in the name of security.

The main policy issue that the U.S. is likely to highlight is the ongoing concern over the regional war on drugs. El Salvador’s President Mauricio Funes declared on January 24th, 2011 that the military of El Salvador would continue to be used “indefinitely” to fight the increasing violence of drug traffickers and lawless gangs throughout the country. This declaration is in line with Washington’s policy of militarization against the narcotics trade. San Salvador’s military surge is funded in part by the USD 200 million that the U.S. has pledged as part of its Central American Security Initiative. In 2011, this will include more than USD 8.6 million in military and police aid for El Salvador. Obama will likely re-affirm the U.S. commitment to supporting the military as a solution for drug trafficking during the upcoming trip. This continues the trend of a militarized U.S. drug policy in Latin America that began with Plan Colombia a decade ago, in recent years continued with the Mérida Initiative in Mexico, and is now part of the policy in Central America. Hopefully, Salvadoran foreign minister Hugo Martínez will highlight the importance of reducing inequality and poverty as an integral step in combating crime and violence.

Another topic likely to arise in Obama’s meetings with Salvadoran leadership is the Dominican Republic-Central America Free Trade Agreement (CAFTA-DR), which El Salvador ratified in 2006. During its five year membership, the country has seen little of the promised benefit from its participation in the FTA and some civil society groups have brought a legal challenge against it, claiming that it violates the country’s constitution. The Constitutional Court has accepted some of the charges, and has asked that President Funes and the legislature demonstrate the constitutionality of the agreement. This has yet to occur, and so the status of the agreement is sure to arise in Funes’ talks with President Obama.

Knowing that there might be domestic Salvadoran political backlash over the CAFTA-DR and the unending drug cartel and gang violence, it is important for the Obama administration to legitimize Funes as much as possible. During the Salvadoran presidential elections in 2009, some U.S. politicians, such as U.S. Rep. Dana Rohrabacher (R-CA) and Rep. Dan Burton (R-IN), tried to de-legitimize Funes as a candidate before he had even taken office by baselessly associating his party, the left-leaning Farabundo Martí National Liberation Front (FMLN), with Iran and al-Qaeda. The Obama administration is trying to dispel this characterization by showing its support for the center-left government as an alternative to the more radical faction of the party. According to Michael E. Allison, Professor of Political Science at the University of Scranton, “the trip is designed to shore up Funes and other moderate forces in the country. It’s in the U.S.’ interest that Funes succeeds and either a similar center-left or center-right government follows him into power.”

Historically, the U.S. has tended to support the extremist right-wing Nationalist Republican Alliance (ARENA) party. But since this party has become unreliable and politically fragmented, the Obama administration sees the moderate branch of the FMLN that Funes represents as a preferable option to the more militant FMLN party cadres that are highly critical of U.S. policies regarding free trade and counter-narcotics. This leftist faction of the FMLN, supported by large segments of civil society, would likely turn instead toward regional cooperation with Venezuela and the other ally countries. Washington would, as expected, prefer to keep the country within its sphere of influence rather than lose its present status of being highly dependent on the U.S.

Looking Ahead

Considering that traditional U.S. territorial dominance has declined in the hemisphere over the last fifteen years, it is important in Washington’s view for it to maintain strategic alliances wherever it can in Latin America. Brazil will soon be a diplomatic and economic giant which Washington would be wise to pursue for its large markets and potential energy reserves. In Santiago, Obama and President Piñera will seek to further advance the long-standing relationship between Chile and the U.S. In El Salvador, the U.S. President will try to bestow some increased measure of legitimacy upon his key Central American counterpart and expand military cooperation against street gangs and drug organizations.

It is uncertain whether this trip will result in concrete policy agreements, stoke controversy in Latin America, or simply fade into history as one of many ceremonial diplomatic trips abroad by a sitting U.S. president. COHA will be observing and reporting on the trip throughout its duration. When the trip comes to a close on March 23, COHA analysts will attempt to fathom the full impact of the Obama trip as the story develops.

ENDS

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