Tuesday, March 14, 2017

Lat Am seeking free trade beyond Trump (March 14, 2016)

Representatives from the now failed Trans-Pacific Partnership accord, scuttled by U.S. President Donald Trump earlier this year, are meeting in Chile to attempt to negotiate a new trade deal. In the absence of the U.S., China has taken a leadership role in talks, reports Reuters. South Korea has also joined, and the two counties, which did not form part of the TPP, are expected to focus on broad Asia-Pacific trade integration, reports CNBC

China has stressed that the Chile talks are not about reviving the TPP, and is expected to seek to capitalize on the economic vacuum created by "America First" policies. "Since Trump's November election win, China has tried to position itself as a champion of free trade," notes Reuters.

The Pacific Alliance ministers seeking to move forward in trade talks with Asia will likely seek to build on the TPP, according to Bloomberg.

Peru, for example, will seek to expand free trade agreements with Association of Southeast Asian Nations (ASEAN) countries, but through the Pacific Alliance, reported EFE last week.

Latin America has traditionally turned to the U.S. or Washington backed institutions in economically turbulent times. Right now the region's economies have contracted for a second year in a row and projected to grow by 1 percent, explains Kevin Gallagher in a Foreign Policy piece from earlier this month. But Trump hasn't projected himself as a willing interlocutor on these issues.

"Enter China, which just days after the election released a new white paper calling Latin America and the Caribbean a “land of vitality and hope.” The plan promises to implement earlier pledges of trade and investment, but without the U.S.-strings attached in terms of deregulation and name-calling," he writes. (See post for Dec. 16, 2016.)

He warns however that increased trade with China has led to de-industrialization, due to importation of cheaper Chinese manufactured goods, and environmental degradation and social conflict as a result of Chinese purchase of oil and minerals. "Unfortunately, unless there is a course correction in U.S. policy, it looks like — for a little while at least — it will be up to Latin American governments themselves to carve out a more constructive relationship with a Chinese government that appears more-than-willing to fill the vacuum potentially left by the United States."

If the U.S. isn't willing to free trade with Latin America, the region should build a free trade area without the U.S., argues Andrés Velasco in a piece on Project Syndicate. In fact, U.S. absence from a regional agreement would smooth the way for Brazilian participation, and the crossroads comes at a time when trade friendly governments are in power in several countries, he notes.

"Now that Trump has called Mexican immigrants rapists and has called for a wall on the border (along with a tariff on Mexican exports to pay for it), trade intimacy with the US is losing – how can one put it politely? – some of its appeal. So it should come as no surprise that Mexican politicians and businesspeople are looking south with newfound enthusiasm."

Pacific Alliance trade bloc finance ministers voiced support for Mexico ahead of its trade talks with the U.S., reported Bloomberg last week. "This concerns all of us," Colombia’s Finance Minister Mauricio Cardenas told a press conference in Santiago. "The Trump-Mexico theme has consequences beyond bilateral relations."

And Brazil's new foreign relations minister said Trump is breathing new life into South American efforts to reach new markets, reports Bloomberg. (See briefs for Feb. 8.)

News Briefs
  • Brasilia is on edge as attorney general Rodrigo Janot reportedly prepares a request to the Supreme Court to open another round of investigations into lawmakers, based on Odebrecht testimony dubbed the "end of the world plea bargain," reports Bloomberg. Judge Edson Fachin is expected to make the testimony public at Janot's request, according to El País. The accusations seem likely to continue to deepen the crisis sparked by Operation Car Wash, and the leadership of the PMDB, PT, and PSDB parties is reportedly implicated along with many high level politicians from Brasilia and several states.
  • But the Supreme Court is likely to begin ordering the release next month of suspects in the country's biggest corruption investigation who have been held for months without being brought to trial, according to a Reuters source. Such a decision would be a setback for Operation Lava Jato.
  • Newly named Brazilian foreign minister, Aloysio Nunes, has become the lated Temer administration cabinet member accused of receiving Odebrecht bribes, reports TeleSUR. A former director at the construction company said that Nunes had received up to US$500,000 from the construction company for his 2010 senate race, reports Folha de S. Paulo.
  • Odebrecht fallout is rattling public works projects across the region, Bloomberg has the latest piece on the issue.
  • A week after International Women's Day campaigns put the issue of gender violence in Latin America in focus, a second-division Brazilian soccer team signed up a goalkeeper convicted of murdering his girlfriend and feeding her body to his dogs, reports the Guardian. Bruno Fernandes de Souza was released from jail last month on a appeal, and the decision by Boa Esporte drew criticism from the victim's family as well as among the general public. Three sponsors withdrew backing in protest. A recent Amnesty International country report found that lethal violence against women increased by 24 percent over the past decade, and that Brazil was one of the worst Latin American countries in which to be a girl or woman.
  • Colombia's Congress approved a special peace jurisdiction for crimes committed by guerrillas and military during the country's civil war -- a key element of the peace accord with the FARC, reports El País. The bill passed nearly unanimously: 61-2. The court system will be made up of three sections: a truth commission, a unit to search for missing people, and a temporary, autonomous body to try crimes committed during the armed conflict before December 1, 2016, reports AFP. The final version incorporated the polemic "command responsibility" clause -- which exonerates military commanders from crimes committed by subalterns, unless they had "effective control over their conduct," explains la Silla Vacía. (See March 1's post, for example. Human Rights Watch has criticized that the clause would leave military commanders off the hook in the false positives scandal, for example.) La Silla Vacía has more on the nitty gritty of the final bill approved.
  • Bolivia's government has proposed a bill that would legalize abortion in cases of extreme poverty, reports El País. The novel bill would also permit interrupting pregnancy within the first 8 weeks when the woman already has three children or is a student. Grave fetal malformation and child pregnancy would also be valid reasons for abortion, in addition to those already contemplated by Bolivian law: risk to woman's health or life and rape or incest. The president of the Lower House, Gabriela Montano, defended the proposal, saying that "the only thing that is being done is adapting the criminal code to the Bolivian reality" since "the poorest women die in underground clinics from poorly practiced abortions," reports TeleSUR.
  • InSight Crime has more analysis on testimony implicating two former Honduran presidents' brothers in organized crime. Devis Leonel Rivera Maradiaga, the former head of the so-called Cachiros, implicated the brothers of former President Porfirio Lobo and that of former President Mel Zelaya, while testifying in a New York. (See yesterday's post.)
  • Argentina is planning at least four energy auctions over the next year, that could attract as much as $7 billion in foreign investments, reports Bloomberg.
  • No companies placed bids on the sale of a Peruvian polymetallic smelter last week, a blow to President Pedro Pablo Kuczynski's plan to sell it and process more of its mineral exports, reports Reuters. (See briefs for Aug. 1, 2016, on Kuczynski's plans for La Oruya.)
  • Sen. Carolina Goic was chose as Chile’s Christian Democratic Party presidential candidate for November's elections, reports EFE.
  • AMLO was asked about his relationship with former Iguala mayor José Luis Abarca in a New York meeting, reports El País.
  • A bipartisan group of U.S. lawmakers has asked Trump to maintain an independent State Department office dedicated to assisting Haiti, reports the Associated Press.
  • Exciting for a very small subsection of researchers: The world’s first fluorescent frog has been discovered in the Amazon basin in Argentina, reports the Guardian.

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