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Obama: The first hundred days and a new stance with Latin America

Article by Foreign Policy Centre

May 15, 2009

Regarding Latin America, Obama seems to have elected an efficient strategy, different from that practiced by his predecessor. The natural choice of Lula as Obama’s “partner” in the continent, widely recognized as a praiseworthy choice, was no surprise. The Department of State acknowledged that Latin America has been neglected by the USA as a low priority region throughout the decade of 2000. It is easy to understand why. September 11, and the USA’s many actions in the Middle East and Asia all greatly limited Latin American inclusion on the country’s foreign agenda. At the same time, Latin America has been experiencing a boom period in its regional geopolitics. Countries which used to only consider their domestic issues, working hard to solve problems like economic instability, lack of institutional solidity and serious crises of corruption have now managed to find a balance, giving way to a “rebirth of regional geopolitics”. This rebirth allowed Venezuela to use a new national energy policy to become a regional player in an attempt to create a realm of political influence. Most regional leaders have come to understand that their energy sources are the key to accessing neighbor countries.

Thus, Bolivia began to take advantage of its status as a natural gas supplier in order to renegotiate its international and domestic contracts, as well as its relation with Argentina and Brazil. Not only that, but highly important political matters in the country, such as the exit to the Pacific Ocean, may be considered null and void as a component of the energy supply strategy. Ironically, Chávez’ Venezuela benefited from the much criticized war in the Middle East, by seeing its oil reserves raise a good amount of capital, thereby allowing it to intervene in policies of other countries like Ecuador, Bolivia, Paraguay, Argentina and Nicaragua. Paraguay also realized that they could take advantage of the “energy geopolitics” trend and demanded a renegotiation of its Itaipu Treaty with Brazil. Chile, suffering from a lack of natural gas, sees in the Pacific Ocean a possible solution for its problems. And Argentina, with its industry almost ruined by a lack of energy infrastructure, is scrambling to find suppliers at any cost.

In this scenario, Brazil is a standout once again with its pre-salt discovery. Obama knows that in order for the United States to regain its respect and a certain degree of influence in Latin America, he must appoint a strong, well-respected “representative”. Approaching Lula is a strategic move, just like other decisions that the Department of State has made.

My remarks concerning the USA’s political behavior and these signs of change, as well as the USA’s understanding of the current moment, bring us to several conclusions:

1. Differently from what had been expected, Brazil’s relationship with the continent’s “radical” leftist countries did not evolve to a level of fraternity;

2. The Gasoduto do Sul (South Gas Pipeline), Unasul and other ideas of partnership involving strong political ties did not go forward, showing that Brazil is following its own agenda;

3. Anti-Americanism is concentrated in the Andean region. The oil production crisis and stagnation faced by Venezuela should be enough to prevent such feelings from thriving; Obama believes that it may be the right time to change this situation;

4. Brazil needs an ambassador who is more politically than commercially talented; Tom Shannon is one of the possible choices;

5. The USA government is intensifying its contacts with Brazilian analysts in an attempt to understand the scenario as a whole in time to design strategies, instead of acting only in matters in which the country is specifically involved;

6. Brazil can and must lead initiatives to help the USA to regain prestige in the region.

These remarks will lead to some short, middle and long term changes in the relation with Brazil and consequently with the region:

Short Term
1. Ambassador with political skills;
2. Visits from high ranking government officials to Brazil;
3. Implementation of a continuous prospective view in the Brazilian and Latin-American political environment (instead of a factual view);
4. Dialogue strategy with opinion makers outside the government sphere.

Medium Term
1. Technological cooperation (to generate solid ties for the development of technological research);
2. Better acceptance of certain Brazilian products in the USA (like ethanol);
3. Monitoring of a contact network in the Brazilian Congress, civil society and the press;
4. Development of a Positive Agenda with the Brazilian Government.

Long Term
1. Potential support to Latin America in trade battles against the European Union;
2. Acceptance of the role as a viable and profitable alternative for future LA-China and LA-India partnerships;
3. Constant dialogue following a Positive Agenda, solid since its implementation.

All of this follows a basic rationale: for many years Latin America depended on the US and European markets to serve as the backbone of its raw material export platform. This always gave Europe and the USA the advantage in negotiations. Today, stable growth in Brazil, Peru, Colombia, Chile and other countries has provided Latin Americans with the powerful alternative of the domestic market. Besides, China, India and Russia have become the customers LA has always asked for. Thus, Europe and USA will have to adapt to a different reality at the negotiation table, where they are no longer the only alternatives for the Latin-American export market.

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