Obama says yes to Africa but no to Latin America?
By ANDRES OPPENHEIMER
Published: 12 August 2014 07:40 PM Updated: 12 August 2014 07:40 PM
Watching President Barack Obama at his mega-summit with nearly 50 African heads of state in Washington, in which he announced $33 billion in investments and vowed to increase access to electricity to 60 million African households, many of us asked ourselves the same question: Why doesn’t he do the same with Latin America?
The conventional wisdom among the thousands of dignitaries and businesspeople who converged on Washington for the Aug. 5 U.S.-Africa Leaders Summit was that the Obama administration organized the event in a desperate effort to catch up with China. In recent years, China has become Africa’s top business partner.
Well, I’ve got news for U.S. policymakers: If Washington continues to pay little attention to Latin America, the same will happen there. It’s already happening in several countries in the region.
Not only China, but also Russia and Japan — whose heads of state visited Latin America in recent weeks — have announced big plans to expand their presence in the region.
The U.S. share of Latin America’s trade has dropped from 53 percent of the region’s worldwide trade in 2000 to 35 percent in 2013. Meanwhile, China’s share has soared from 1.9 percent to 12 percent over the same period, according to Inter-American Development Bank figures.
What’s more, if current trends continue, by 2025 Latin America’s trade with the United States will have declined to 17 percent of its total trade, while Latin America’s trade with China will have reached 17 percent, says chief development bank trade economist Mauricio Moreira.
And these figures include Mexico, a huge Latin American economy that does relatively little business with China. If you exclude Mexico, China’s presence in the region will dwarf the United States’ by 2025, the projections show.
Yes, the United States holds a regular Summit of the Americas every three or four years, and the next one will be in Panama in 2015.
But recent summits have been a flop, to a large extent because of Venezuela’s petro-dollar diplomacy, which virtually controls the votes of at least 16 Central American and Caribbean countries through its Petrocaribe-subsidized oil shipments, and because of Brazil’s reluctance to work for the success of any summit it does not lead.
So what can the United States do? Here are three things:
First, the Obama administration should show the region that it cares. Everybody understands that Secretary of State John Kerry is tied up with more urgent matters in the Middle East and Ukraine, but so far this year only two of his 21 trips abroad were to the region. ['Cares' LMAO]
And for last week’s second-term inauguration of Colombian President Juan Manuel Santos, which was attended by the presidents of Mexico, Peru and several other countries, the White House sent U.S. State Department counselor Thomas Shannon, a highly respected diplomat but hardly a celebrity.
Second, Obama could build his legacy in the region by proposing a new plan to deepen trade and investment relations with the 11 countries in the region with which the United States has free trade agreements, including Mexico, Colombia, Peru and Chile.
The White House is negotiating free trade agreements mostly with Asian Pacific Rim countries and the 28-nation European Union. Kerry told me in an exclusive interview in December that he is exploring a regional trade initiative in the Americas, starting with deepening ties with Mexico and Canada, but that’s the last I heard of it. [Bet that's the shale gas / oil ties.]
Third, Obama should counter Petrocaribe with a U.S.-Caribe initiative, taking advantage of the fact that Venezuela has gone bankrupt and its oil facilities are crumbling, while the United States will soon become self-sufficient in energy, and may even become an oil exporter.
Petro-diplomacy may be used by Washington, just as it has been used by Venezuela, some Washington insiders are thinking.
[...]
[...] The U.S. economy is recovering, and China’s is slowing down. It’s time for Obama to focus on Latin America, much as he did on Africa last week.
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What makes the world go around?
1. Trade Race.
2. Arms Race.
It's just a relentless race to have more than the other guy: more guns, more money, more investment, more regional control, more profits, more whatever. It never lets up.
US (given huge shale boom) is probably focusing on securing energy export to Europe, which is probably a more stable trade opportunity than Latin America, I'm guessing. US now has a huge energy supply it needs to find markets for and it wants to make the most of locking Russia out of the European energy market, I'm guessing. Europe, on the other hand, has high energy needs.
Anyway, that's what I'm thinking but I'm new to watching politics, so don't take that as gospel.
China's hardly doing a massive take-over in South America. Its trade's grown, but it's nowhere near as high as US trade.
Trying to work out what petro-diplomacy is, I came across this:
Politics of Oil Nationalization
Several countries have nationalised foreign-run oil businesses, often failing to compensate investors. Enrique Mosconi, the director of the Argentine state owned oil company ... YPF, which was the first state owned oil company in the world ...
In 1953, Iran's Premier Mohammed Mossadegh was overthrown by a CIA/MI6 covert action known as Operation Ajax. The goal was to prevent Mossadegh from nationalizing the Anglo-Iranian oil company which later became British Petroleum.
Similarly Venezuela nationalized its oil industry in 1976. [wikipedia]
How evil is this? They violated national sovereignty and changed the course of a nation's future -- for oil!
It gets worse. The Shah was involved in helping foreigners profit. The wikipedia on Operation Ajax is -
here.
Anyway, don't exactly know what petro-diplomacy is, but the Op Ajax was an interesting aside.
Petrocaribe - wikipedia
here - is a Venezuela and Caribbean countries alliance for purchase of oil from
Venezuela for 'preferrential payment' (whatever that is).
Found preference payment in relation to bankruptcy, but that's not it.
Couldn't be bothered looking any further. Guessing that it has
something to do with making payment to Venezuela a priority or something
like that.
Venezuela's gone bankrupt, according to the article. So how can that be? (Should know this from prior look-ups, but I've got a shocking memory. LOL)
At a quick glance, looks like Venezuela going bust is to do with 'pillaging' (ie social spending and SUBSIDISED PRICE selling, as well as no investment and low production) the oil companies - Economist -
here.
Haven't checked to see what other oil producers there is in Latin America.
So what's the US likely to do?
Well, the summit in 2015 isn't a long way off. The bet is that if the US can make a dollar in Latin America it will pursue that avenue as well.
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