O’Neil: Bush Looking for Foreign Policy Success on Latin American Trip

Shannon O’Neil, a CFR expert on Latin America, says President Bush, after virtually ignoring Latin America since 9/11, is hoping for a “foreign policy success” as he leaves on a five-nation trip starting March 8. But O’Neil says that because of his lame-duck status, it will be hard for Bush to achieve very much.

President Bush is leaving on Thursday for a five-nation trip to Latin America. Can you talk about where he’s going and what to expect in each country?

He’s going to Brazil, Uruguay, Colombia, Guatemala, and then finishing in Mexico. In each country, he has different priorities that he’s pushing. The first country he’s going to is Brazil, where the main points on the agenda are going to be energy policy and in particular issues of ethanol. What they’ve talked about is an agreement that is going to be signed there to help Brazil distribute both ethanol and its technology to produce ethanol throughout Latin America and other parts of the world.

The next place he’s going is Uruguay, and there they will be talking about the first steps toward a free-trade agreement. He’ll then go to Colombia. Colombia’s been one of the biggest supporters of the United States and its President [Alvaro] Uribe is a strong ally of the Bush administration. They’ll be talking there about democracy promotion, about narcotics trafficking, and also about Plan Colombia—the aid the United States has provided to Colombia. He’ll then go to Guatemala, showing his support for the president [Oscar Berger]. They will talk a bit about the move from dictatorship in Guatemala in the past to now an open democracy. This is also meant as support for Guatemala, which supported the United States last fall when it put its name up as the Latin American member for the UN Security Council in opposition to Hugo Chavez, the leader of Venezuela who wanted that seat for his country. And then finally, he’s going to Mexico to meet President Felipe Calderon and push forward lots of mutual interests we have in terms of immigration, stopping drug trafficking, and trade.

Talk a bit about the ethanol question with Brazil. Given the a high tariffs in the United States on importing ethanol,  it’s not a question of Brazil and the United States agreeing to import or export ethanol to each other, is it?  

Right now there’s a fifty-four-cent tax per gallon on Brazilian sugar-cane ethanol that would come into the United States. So that is actually not on the table. What is on the table is that the Bush administration is offering to help Brazil take the technology they have created to make ethanol over several decades and sell it to other countries and build, potentially, plants in other countries. The idea is to reduce the rest of Latin America’s dependence on oil with the hope that would then bring down oil prices. So not necessarily bringing Brazilian ethanol to the United States, but bringing it to the rest of the world.

Are there a lot of other countries in Latin America that have sugar?

There is a lot of sugar production in Latin America, particularly in the Caribbean area. And there’s sugar production in other parts of the world. Some think that Brazilian technology could be used in Africa or elsewhere in the world.

Of course, if the oil price came down, it would help every country. But it seems like a long way off before we’re at that point.

It does seem that way, but the idea is that hopefully this would be one small step in helping with that.

Is this a little slap at oil exporter Venezuela too?

I’m sure it is a slap at Venezuela. Venezuela right now is obviously one of the biggest beneficiaries of high oil prices. And Chavez has used the benefits of that oil to place himself firmly in the anti-America camp.

Let’s jump to Mexico. When you talk about Mexico, you get this tremendous political controversy in the United States over immigration and border control. The president has been pretty steadfast in wanting more liberal immigration proposals that would have guest workers, much less harsh than members of his own party would like, although I’m sure Democrats as well are against the “illegals.” Is that the case?

It’s mixed actually. Overall the Democrats are probably much more supportive of a guest worker program and earned citizenship for those who are already here than Republicans. But you know, it’s mixed on both sides.

What is the attitude of unions?

Unions would be happy if there was an earned citizenship, because then there’s a larger base for them to mobilize. Right now, undocumented workers undermine the unions. But if there are guest workers, they’re formally included in the labor markets and they could be unionized.

What will they talk about in Mexico? Calderon is a new president, in office only three months. What can Bush do? He promised Mexico a lot back in 2001.

Bush started his administration saying that Mexico was the most important foreign policy relationship we have. And then after September 11, 2001, Mexico really went off the radar screen and is just now being brought back, in large part because of immigration having become such an important domestic political issue in the last year.

There are so many issues that are so important for us. One is immigration. One is obviously drug trafficking across the border. Another issue is our own trade. Mexico is one of our largest trading partners. There’s so much going on back and forth between the border in terms of what we sell down there and what they sell up here that it’s really a crucial relationship.

I was fascinated by an article [March 5, 2007] in the Wall Street Journal about the success of Wal-Mart in Mexico.

Wal-Mart is the largest employer in Mexico. It’s amazing. The very low prices have been a huge boon for the average Mexican. WalMart has also been able to start a banking sector within their stores. That actually will be incredibly important for the average Mexican—for the working class and the middle class.

So they can borrow money?

Yes. Having access to credit has always been an issue in Mexico. Until now, access to credit has really been relegated to the upper classes. Spreading that to a wider majority will be important for Mexico’s growth.

The State Department says this is the “year of engagement” in Latin America. Is this just hyperbole? We’ve been disengaged all these other five years.

We’ve been disengaged since September 11, 2001. This is a return to recognizing Latin America and our interests there. But I also think it’s an attempt by the Bush administration to have a foreign policy success. They’ve had a lot of problems in other areas of the world. And now they’re finally turning to Latin America. It is good for Latin America that Bush is going to five countries. But what he can actually deliver to them at this point is probably fairly minimal. He has less than two years left in office. Everybody’s calling him a lame duck. He now has an opposition-controlled Congress, so it’s very unlikely some measure the Democrats don’t agree with or don’t push forward themselves will be passed. Bush, particularly on trade issues, probably has very little to concretely offer these countries. He loses his fast-track authority in July in terms of approving trade agreements, and it’s very unlikely the Democrats will renew that power for him for his last year and half. That basically means most new free-trade agreements will be dead in the water.

Now which ones have we signed with Latin America?

We signed NAFTA [North American Free Trade Agreement] a long time ago. We’ve signed free trade agreements with Chile and Colombia. We’ve also signed agreements with the Andean region, though some of those are coming up for renewal, and there’s an issue over extending those agreements, which is right now in Congress. Peru, Colombia, Ecuador, and Bolivia are included in that somewhat. We recently, just a year ago, signed the CAFTA, which is the Central American Free Trade agreement. Those have been approved by Congress, though the Andean ones are now waiting for reaffirmation or extension.

You mentioned Uruguay. We want to start negotiating with Uruguay?

That will be a discussion with President Tabaré Vázquez during this trip. It will be a very long, drawn-out process, because in order for Uruguay to sign a free-trade agreement with the United States, either the rules of Mercosur have to change or it would have to leave. Mercosur, the South American free-trade agreement, is between the countries of Brazil, Argentina, Uruguay, and Paraguay. Just recently Venezuela joined as a full member.

Is it unusual that Bush is not going to Argentina?

Well, he often said he would go to Argentina. Just recently two high-level Bush officials did go to Argentina, but there’s a question about whether or not he was invited or whether he actually chose to go. President Nestor Kirchner has been placing himself in opposition to Bush on many issues, and Kirchner’s up for election in October.

Let’s talk about Venezuelan President Hugo Chavez and his supporters. Is he really a serious problem for the United States or more a headline-making issue?

I think it’s a headline-making issue. Chavez uses anti-Americanism to appeal to his domestic base. But much of this is a domestic political issue. He is pushing himself onto the world stage, and he’s able to do that because of oil revenues. He has a lot of money behind him, and he’s able to go out on these big trips. And he’s able to offer other countries benefits for meeting with him and engaging with him. But his real ability to undermine U.S. interests around the world is small.

I read that his popularity in Latin America is sinking.

Latin America people talk about this “turn to the left” in Latin America because so many leftists leaders have been elected. There are big differences, however, among the leftist leaders. There’s Chavez, who is sort of a socialist, populist, old anti-American type. But then you have people like President Luiz Inácio Lula da Silva in Brazil, President Michelle Bachelet in Chile, and President Tabaré Vázquez in Uruguay. These leftists are really leftists who are more in the social democratic tradition of Europe. And so they’re open to free markets. In fact, they’re signing free-trade agreements around the world, but they also want to increase the social protections and social policies to help their countries, which have large, poor populations. These countries are actually in opposition to the type of things Chavez is doing, particularly the nationalizations of industries and his more socialist, populist policy. Not everyone is falling into Chavez’s camp. In fact, many are moving away from him.