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Inicio arrow Análisis arrow Latinoamérica arrow Political Situation in Latin America: July 2014

Political Situation in Latin America: July 2014 PDF Imprimir E-Mail
Aug-04-14 - by Rosendo Fraga

1. The 46th Summit of Presidents of Mercosur is held in times when the Group has lost thrust and seeks to be rekindled. This situation results from the fact that the inclusion of Venezuela as full member two years ago undermined cohesion, that Brazil has now attached more importance to blocs such as Unasur and Celac in its regional policy and that Argentina has had a more aggressive trade policy towards several South American countries, including those of Mercosur. This Summit has been postponed many times and should have been carried out a month ago in late June. Cristina Kirchner takes over as pro-tempore president in times when Argentina heads for a new default amid a conflict with the US court, whose decision is hastening it. For its part, Venezuela also faces a conflict with the American courts after a General, former head of intelligence services of Chavez (Carvajal) was arrested in Aruba, accused of complicity with FARC drug cartels. The Dutch court decided on releasing him, preventing the issue from escalating. But the major point for Mercosur is the FTA talks with the European Union, the most important extra-zone agreement of the regional bloc, which has been postponed several times and now Brazil seems to promote but for which Argentina and Venezuela seem not to be so interested. For his part, the head of the European Commission (Durao Barroso) claimed “not to understand why the EU still does not have an FTA with Brazil”, raising the possibility of signing it with this country, given the reluctance of other partners of the regional group.

2. Mercosur takes a step towards seeking to create a broader regional economic bloc, spreading to the rest of the region except for the Pacific Alliance countries. This bloc’s initiative to hold a meeting of Mercosur and Pacific Alliance ministers in the last week of July, has been postponed to be confirmed by the Mercosur to prevent overlapping with the summit. Last week the ministers of economy of the 12 Unasur countries, who form the “South American Council of Finance and Economy” gathered in Buenos Aires. On that occasion, the ministers of 7 countries that are part of the Banco del Sur project –Mercosur and ALBA in South America- ratified the decision of moving on in the project of Banco del Sur who was promoted by Chavez and supported the position of Argentina in the controversy with the American justice. On this occasion, the meeting proposed by the Pacific Alliance could have taken place out of the initiative of the Chilean president because the ministers of both groups got together, with the exception of the Mexican minister. While this meeting is protracted, Mercosur signs a “great economic zone of shared development” with the ALBA countries (Cuba, Ecuador, Nicaragua, Bolivia which has requested joining Mercosur, and Venezuela) and with Petrocaribe agreement, the dozen countries along the coastline of the Caribbean sea, which receive cheap oil from Venezuela. To strike a balance, Brazil has proposed considering a reduction of tariffs in South America, including three countries of the Pacific Alliance (Colombia, Peru and Chile) but would exclude the fourth (Mexico).

3. The visit of the Chinese President to Cuba has put underscored the political interest of the Asian power in the region, shared by his Russian colleague. In both cases, they have tried to generate moves and signs of support to countries which have conflicts with the United States. The two have visited Cuba and Argentina, Putin added Nicaragua and Xi, Venezuela. In this country, the Chinese President renewed a credit for USD 5 billion to buy Chinese products paid for with oil. In Cuba, he signed several agreements of cooperation and investment, aiming to become the first investor in the island, at a time when it opens up to capitalism with the Chinese model, moving on in economic reforms but keeping the authoritarianism and single-party political system. Fidel said that the current leaders of China and Russia remember the resolve with which both powers faced the United States at the time of the cold war. In Nicaragua, a Chinese business group ratified its interest in building a passage channel between the Atlantic and the Pacific as an alternative to Panama and Argentina, Xi signed an agreement to finance purchases for USD 11 billion, through a loan from the Chinese Central Bank.

4. Meanwhile the US faces growing problems due to the arrival of undocumented children in Central America. Obama met on Friday, July 25, with the Presidents of Guatemala, El Salvador and Honduras in Washington. They are the three countries where the majority of children and adolescents, who have illegally entered the country in recent months, come from. The idea of offering them a development plan that will reduce the levels of poverty and insecurity which are the cause of this immigration (all three are among the four most insecure countries of Latin America and among the top ten most insecure in the world) has not materialized. Obama limited himself to pointing out that those children who could not qualify for the program of asylum of refugees that has US has, would be returned to their countries. This stiffened position is partly explained by the criticism of the Republican opposition and the public opinion in general to illegal immigration. At the same time, the State of Texas deployed 1,000 National Guardsmen at the border to combat the illegal trafficking of people and at the national level "operation coyote" was launched for the same purpose. Mexico’s cooperation to confront the problem is essential, given that illegal children are coming to the United States via this country.

5. To conclude:

a) The 46th Summit of Mercosur presidents seeks to rekindle the group though without concrete advances in the inclusion of new full members or in the talks with the EU.

b) This group moves on in the creation of a “large shared economic zone” with the ALBA and Petrocaribe countries, though without forging ties with the countries of the Pacific Alliance.

c) The President of China ended his regional tour in Cuba, seeking to change his country into the major investment in the island and just like Russia, seeking to support the country in the conflict with the US.

d) This country faces a growing regional problem due to the immigration of illegal minors of the three countries of the “North Triangle” of Central America (Guatemala, Honduras and El Salvador).

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