Latin America

NAFTA was always something that created tension between the US, Canada and Mexico in areas of debate that were never an issue before the concept of free trade became an ethos of foreign policy. NAFTA, originally built on from the Canadian-American Free Trade Agreement (CAFTA), was a progression of the US-Canada Auto Pact which set to reduce barriers to trade in the auto sector, expanding through CAFTA to include other consumer good and into NAFTA, to integrate Mexico into a North America wide trade agreement. The benefits and costs never were ultimately weighted to one side or the other. Canada would benefit from a secured auto market and less restrictions in selling its good to the US, now numbering around 92% of Canada’s exports abroad. Mexico would benefit from becoming a base for manufacturing goods to sell into the US and Canada and allow for employment in their own country in an attempt to curb poverty and increase much needed investment into the Mexican economy. Both would benefit from having a NAFTA Tribunal which would allow for judgments in a binding forum which would assist the two countries in registering just disputes with its massive neighbour, the United States. In turn, US companies would be able to access those markets and allow for US multinationals to set up investments and cross border trade within their own organizations as well as with other companies. US exports to Canada and Mexico since 1994 has made these two countries two of the top importers of American goods. With a population of 32 million and 100 million respectively, Canada and Mexico rival some of the largest markets in the world for US exports. It is hard to measure the true benefit of NAFTA for each country, but with the stability of the modern Mexican economy, the great effect of US companies on the Canadian and Mexican economies and the ability for the US to have two of the world’s largest economies within its economic and political influence, NAFTA was seen as a success by many policymakers in all three countries.

Recently NAFTA has been attacked by Hillary Clinton and to a lesser extent Barak Obama in their bloody and senseless campaigning towards degrading the Democratic Party. With the support for Hillary Clinton coming from many blue collar workers in Ohio, Pennsylvania and other manufacturing regions in the US; NAFTA, Mexico and immigration has become the keys to winning seats over Mr. Obama and his calls for Change. Damage has not only been inflicted on the Democrats, but on America’s neighbours. Countries like Canada and Mexico who have given a lot of support to the US, despite the poor impression of Mr. Bush in both countries, have been fairly good neighbours with the US in the last few years. Canada alone has born the brunt of much of the conflict in Afghanistan since Al Qaeda resumed its offensive two years ago, with most US forces stuck in Iraq. Mexico has opened its oil and petroleum industry towards the US, bringing closer economic ties despite the move by many American companies to China and away from Mexico. Mexico even has taken great steps to alienate Cuba, once a friend of the island nation, now in a cold peace with the Communist nation. The costs and benefits of NAFTA were summed up recently in the North America Leaders Summit in New Orleans where Mr. Bush, Stephen Harper of Canada and Felipe Calderon of Mexico met to discuss the future of North America.

The first volley of issues came as a response to Clinton’s campaign strategy to re-negotiate or scrap NAFTA. The North American Competitiveness Council, a group of 30 business leaders issued a statement promoting NAFTA and its increase since 1994 to creating trade amounting to over a trillion dollars. They also commented of how recent protectionist dialogue would do little to improve the relationship between the countries. Much of the losses of recent employment has come from American companies moving to China, so beating up on NAFTA and not addressing China trade when assisting blue collar workers in the US may simply hurt the relationship with the few neighbours Mr. Bush hasn’t already alienated in the last 8 years. This attack does nothing more than give a false solution to the US economy except for gaining a few votes for Mrs. Clinton and stirring sentiments against Latino immigrants in the US and trade in general.

Despite many in the US attacking Canada and Mexico for taking American jobs and wanting to integrate into the US, and many in Canada trying to tie Prime Minister Harper into the conservative right in the US to prompt and election, the Canadian Prime Minister has been strong in taking a stance on resolving NAFTA and other issues involving its neighbors. Mr. Harper has done a respectable job in addressing problems in NAFTA such as softwood lumber, defining Canada’s role in Afghanistan as a force to create a sustainable environment for aid, and his environmental policies has done a great deal to benefit Canadians and dialogue with Americans alike. Mr. Harper addressed Mrs. Clinton’s assessment of its neighbours as well, making the strong point that in this global energy crisis, Canada is one of the world’s largest exporters of petroleum and gas to the US and has a reserve some say as large as Saudi Arabia.

Harper has always been amicable to the US President, but is clearly not a George Bush of Canada. His support of Canada’s national healthcare system and standing social policies would be savored by many Democrats in the US during an election campaign. Harper clarified his relationship with Mr. Bush at the Summit: “What I appreciate most, what I’ve appreciated in our relationship over the past couple of years, is the fact that whether we agree or disagree, we’re always able to talk very frankly, very upfront,” Felipe Calderon of Mexico also promoted the benefits of NAFTA, helping to grow the Mexican economy to one of its most stable periods since the late 1960s. Both leaders, while surely realising the unpopularity of President Bush, coordinated their address at the Summit in support of NAFTA and against major changes or eliminating the agreement altogether. In the end, anti-NAFTA talks will likely progress into anti-China trade or simply disappear when Clinton loses the nomination for her party to Mr. Obama. With the recognition of America’s neighbours as true colleagues, issues of trade, aid and immigration can be addressed in a progressive manner in Obama’s or McCain’s first term of office.

On March 20th Steve Paiken of TVO.org’s The Agenda had a discussion on Cuba After Fidel and a possible boycott of the Olympic Games. This international panel first discussed the ability and rationale of boycotting the Olympics due to accusation of Human Rights abuses against the Tibetan people and later on a full discussion on the future of Cuba from the perspective of locals, US Experts, Cubans expats and the international community on Cuba after Fidel’s control. The discussion can be seen here and the video on the TVO.org March 20th Video page.

The panel’s discussion hit some key issues important to foreign policy towards Cuba. A comparison of policies towards China when abuse of rights is accepted by the international community, as compared to the heavy sanctions on Cuba for less abusive acts was the glue between the discussions of the two issues. Much of the criticism comes from the openness of the US and other countries towards China when many of the policies towards Tibet run contradictory to policies which support an embargo of Cuba. While rights abuses by any country are unacceptable, it is those who are abused which suffer from inconsistent policies which allow trading partners to ignore political pressures while placing a small country into poverty for the same reasons. Ideally, abuses by Cuban and Chinese officials should not be accepted for the sake of trade, and policies should not starve citizens of any country in an attempt to protect them from the abuses of the own government. This was the case during the oil sanctions on Iraq after the Gulf War, which lead to the starvation of many innocent civilians at the behest of Saddam Hussein. Bad policy which leads to increased suffering of politically oppressed people should be clearly unacceptable in any rights based society.

I encourage our FPA readers to take the time to watch the TVO program. Please address these issues in our blog comments accordingly.

Dorris Lin of our own FPA’s China Blog crosses the ocean with her piece on the new ties China wishes to form with Cuba as the island nation takes to change after the retirement of Fidel Castro. While China and Cuba have always had healthy trade ties ,with Castro gone and China being seen as the next Superpower by many in the US the new relationship Cuba will have with its neighbors will certainly be one of great interest for Washington. See the article here. Also please read FPA’s China Trade Blog as it is guarnteed it will make you smarter!

With the retirement of Fidelito, an assessment of the positives and negatives of the Cuban Revolution has taken place in media all around the world. People hate Castro as much as others love him, mainly because while he has injured many and denied basic rights to activists living in Cuba, he has also earned the respect of others by standing up to the United States and living long enough to brag about it. While this perspective dominates most of the globe, in Latin America there is a third dimension to Cuba. Success with specific social policies places Cuba in high regard in the areas of healthcare as well as anti-poverty policies in comparison to the rest of Latin America. Latin America is considered by many as the most unequal region in the world between the wealthy and the poor, accounting on an average 35-45% or higher of the population of the region living below the poverty line. Cuba on the other hand is well known in the region for having a less severe poverty than its neighbors. Cuban doctors and institutions are the regions best in many areas of medicine and medical research. These pros and cons of Castro’s Cuba has created the divided impression of the outcomes of the Cuban Revolution, especially among Latin America’s poor and those who have had to overcome multiple economic crisis in almost every country in the region since the 1960s.

Taking from the pages of Castro’s policies, Hugo Chavez is seeking to expand his support beyond those struggling to live in Venezuela towards others in the region. While Chavez has an amicable working relationship with most of his neighbors, his reputation in recent events has taken a beating. While he did help rescue kidnapped Colombians from the FARC, he also accused Colombia of plotting his assassination. He even angered the King of Spain who is considered a hero by many in a conference in Spain and few months ago, being told to bluntly “shut up” as recorded on Spanish TV by the King. Chavez also lost much of the support of his own people, losing in a referendum to solidify his power in Venezuela in recent weeks.

This week the International Herald Tribune did a story on Venezuela’s “Mission Miracle”, where Chavez for the last four years has sought to put the oil revenues of the recent boom to good use by giving free eye surgery to many who cannot afford in throughout Latin America. In many countries in Latin America the social heath care system leaves much to be desired, with private care and insurance covering many upper classes and leaving those who cannot afford it the inability to get more expensive treatments in the social health system. The issue of access to health care is currently a major one in the US election and could spark an election in Canada, a country which shares many attributes of socialized medicine but often cannot afford to treat many for complicated surgeries in good time as is the issue in Latin America. In the region, the same problems are exacerbated ten-fold with more than half of the population in some countries unable to access newer forms of treatments for the majority of their families. For this reason Chavez’ has gone to bring those in from all over the region to receive eye treatment which is often not as evasive as other surgeries and which allows people to maintain their vision, a vital necessity in a part of the world where people often have only themselves to keep them afloat. Newer and simple eye treatments are very expensive, but it is a simple way to cure the worries of many impoverished and ill patients all over Latin America.

In reality the support for Chavez comes from one hard reality in Latin America. Poverty and populism often comes together in one form or another, and if you seek to deal with issues on poverty you will always get a lot of support, no matter how tactless you many seem in dealing with the international community. While Fidel often had a lot more finesse than Chavez, many leaders in the region give Hugo a wide breadth because they know that poverty in the region is a never-ending problem and no one really knows how to solve it. With democratization in the region comes the power of voting, and people in dire straits will do what is best for their own personal lives…even if Chavez never shuts up and loses more tact in the future, people will vote for the person who will address their personal concerns in Latin America and in the next few elections throughout the Americas.

Today the well known leader of the island nation of Cuba, Fidel Castro has started on the first steps to the end of his legacy. He retired finally after 49 years of rule since the Cuban Revolution. He is well known as the one of the only leaders in Latin America to successfully stand up to the United States and the man who took Cuba into the Cold War, socialized government and nationalized health care as well as tackling severe poverty in his country which remains an unmanageable historical inheritance in most of Latin America. He is also known for his suppression of media and independent protest in Cuba and has been characterized in many different perspectives by American directors to Simpsons writers to coalitions for the freedom of Cuba and expat Cubans living in Miami and abroad. Today he took a major step to the end of what is certainly known as Castro’s Cuba to most of the world.

The real effect will be on the Cuba people themselves. Since the fall of the Soviet Union the economy of Cuba has been supported by massive non-American tourism and petroleum supports from Hugo Chavez and investment from many unnamed companies who wish to avoid being caught under American commercial bans on Cuba. The likelihood of a large change right now is slim, as Castro will still have a large hand in the policy of Cuba while his brother Raul Castro deals with the continuing embargo and loads of tourists coming to the country. Many prospects of change have already started, as some restrictions on owning property have been weakened in the last 7 years. Foreign companies who wish to buy up anything from this tourist paradise have been able to in recent years as long as the Cuban government or citizens share 50% or more of the property. Cuban exports of sugar and tobacco products have found a place in Europe and abroad, and with the open market policies with other communist nations such as China, the restrictions on Cuba are not finding complete support as they once did in the past. The exception is of course the few interest groups who have direct ties to Cuba itself, who are not likely to forget Castro after only one or two generations living outside Cuba.

The expectation of quick change after Castro dies avoids recognition of the slow change that has taken place in Cuba since 1991. For the most part Cuba’s change is inevitable with Castro or without him. The Cuban government in reality has gained a lot of strength in the last 15 years and quick change will most likely come about if the Castro’s decide it, or if a new JFK happens to take great interest in Cuba and its future.