LATIN AMERICA/US: Obama may mark attitude shift

By Michael Shifter
Oxford Analytica, November 21, 2008

SUBJECT: US relations with Latin America under President-elect Barack Obama.

SIGNIFICANCE: Obama's election has generated enormous goodwill and enthusiasm in the region, as in the rest of the world. Although many Latin Americans are expecting change from Washington, most understand that Obama and Congress will be consumed by other urgent priorities -- not only the deepening financial crisis, but also the wars in Afghanistan and Iraq.

ANALYSIS: US President-elect Barack Obama's top priority will be the US economy. There will be political pressure from key domestic constituencies for the new administration to turn inward and move away from global responsibilities. Early on, Obama's commitment to cooperative approaches will be put to a test. Latin America has already been profoundly affected by the global financial crisis, and the long-term impact -- on political and social conditions as well as economic outlook -- could be sustained and serious. Latin Americans will be waiting for signs that the United States is prepared to support direct or multilateral loans to help shore up economies in the region. Although Obama's foreign policy priorities will not be in the Western Hemisphere, his administration will nonetheless have to deal with a range of challenges from the outset.

1. Trade. When Obama takes office, a highly controversial free trade agreement (FTA) with Colombia will still be pending. Obama has opposed the deal mainly due to continued human rights abuses and trade unionist killings. Consistent with his emphasis on human rights -- the closing of the Guantanamo facility will be among his highest priorities -- Obama will insist that Bogota makes significant improvements in reducing human rights abuses and prosecuting those responsible. Although the FTA is likely to be passed eventually, mounting worries about extrajudicial killings and President Alvaro Uribe's ambition for a third term will complicate its passage. A final deal may only be possible if there are advances towards serious health care reform and other social safety net measures for US workers.
   
   Sensitive to charges of unilateralism, Obama has backed away from his primary campaign pledge supporting reopening the 1993 NAFTA trade agreement with Mexico and Canada. Instead, he will probably strike a middle ground that combines continued free trade expansion while incorporating more serious labour and environmental protections
   
   
2. Security/drugs. Despite Obama's opposition to the Colombian FTA, he has supported continued aid to Bogota in its fight against drug-fuelled violence, as an extension of Plan Colombia and the Andean Regional Initiative. His administration is likely to demand strict adherence to human rights conditions and reallocate the funds for a greater emphasis on social development versus security aid. Stronger US budget pressures and improved security in Colombia mean that aid levels are almost certain to wind down in coming years.
   
   If organised crime in Mexico continues to spread (especially over the US border), this issue could become a high priority and absorb increasing resources. Obama has backed the anti-crime Merida Initiative, which provides 1.4 billion dollars over three years in support and training to Mexico and, to a lesser degree, Central America. However, there has been virtually no policy attention focused on drugs, leaving it unclear how an Obama administration will approach this issue. Drug policy has been on autopilot despite being costly and ineffective, so any serious review in Washington would be cheered in Latin America).
   
   
3. Immigration. Many in Latin America, particularly in Mexico, are hoping that the Obama administration will move quickly and decisively to push comprehensive immigration reform. Obama has supported this position and it is certainly one of his stated legislative priorities. However, it would be politically risky early on to push such a divisive issue, even within his Democratic Party. Still, overwhelming support from Hispanic voters played a critical role in Obama's election, particularly in key states such as Florida, Colorado and New Mexico. This has generated high expectations for fundamental change in immigration policy.

• Cuba. No issue on the Latin America agenda is as symbolically important as Cuba and none has been as much a prisoner of US domestic politics. On this issue in particular, many Latin Americans expect Obama to make a break with the past. Florida's election results show the political costs are not as high as they once were, making it more likely that he will at least fulfill his campaign pledge to remove remittance and travel restrictions for Cuban-Americans. Obama is unlikely to lift the embargo in the short term, but rather to seek to use that possibility to nudge Havana toward opening up its political system. Obama backed off his initial campaign promise to meet leaders such as President Raul Castro without preconditions, although he would probably pursue lower-level channels of communication and identify areas of cooperation with Havana -- in short, gradual relaxation, a cautious but determined approach.
  
  
• Venezuela. With ambassadors expelled from both Caracas and Washington, US-Venezuelan relations have reached a low point. Although President Hugo Chavez has expressed hope for a rapprochement under Obama, the new US president is likely to move cautiously. Ambassadors will probably be reinstated, while there may well be an effort to open channels of communication and explore areas of cooperation. However, real improvement depends largely on whether Chavez continues his efforts to curtail US influence and deepen alliances with Russia and Iran.
  
  
• Brazil. Obama's efforts to overcome energy dependence on such countries as Venezuela are likely to lead his administration to pursue a strategic partnership with Brazil. Although it will be politically difficult to remove US tariffs on Brazilian ethanol exports, Obama will probably recognise the opportunity offered by alternative energy cooperation and Brazil's major offshore oil discoveries. Obama's telephone call to President Luiz Inacio Lula da Silva on November 11 suggests he senses the enormous importance of Brazil in advancing US interests in Latin America. Obama is likely to embrace Brazil's more assertive global leadership, manifest in the form of a permanent seat on the UN Security Council, as well as regional initiatives such as UNASUR (South American Union) and its efforts to resolve domestic tensions in Bolivia.
  
  
• Latin America team. Although no decisions have yet been made, there is already speculation about who will make up Obama's Latin America team. This will be critical, since the highest-level officials will be focusing on other foreign policy priorities. The post of Assistant Secretary for Western Hemisphere Affairs (now occupied by Thomas Shannon) may be especially important. Two top choices appear to be Dan Restrepo, a former congressional aide who coordinated Obama's Latin America team during the campaign, and Frank Sanchez, a former Clinton White House aide from Florida, who played a key role in Obama's national Hispanic outreach.