Healing the Divide? Understanding Latin American Cooperation

Most media usually treat Latin America as a homogenous block; this, however, does not come close to the truth. Although there is a general notion of a Latin American identity1, treating Latin America as homogenous would abnegate the specific historical, cultural and most recently politico-economical paths different countries are taking. Lately economic journalists have focused on Latin American integration, as numerous institutions aimed at stimulating cooperation have been set up and abandoned in the last decades. Some media outlets, such as the conservative The Wall Street Journal, have interpreted the Bolivarian Alliance for the Peoples of Our America (ALBA), the Mercado Común del Sur (Mercosur) and the Pacific Alliance as signs not of integration but of a Latin American split between pro-free trade countries and protectionist countries.2 A split surely existed, but along the axis of the position toward the United States, rather than that of free trade. The gap has nevertheless been narrowing in the last two years. (Featured Image © Wikimedia)

Anti-Imperialism

Mercosur and the Pacific Alliance, respectively facing the Atlantic and the Pacific, are both trade blocs. In the three years it has existed, the Pacific Alliance (comprised of Mexico, Colombia, Peru, Chile and Costa Rica) has managed to slash trade tariffs on 92% of the products between the participating countries, with the remaining 8% to be phased out.3 Mercosur (Brasil, Argentina, Paraguay, Uruguay and Venezuela) has, as a customs union, also eliminated intra-zone tariffs.4 Yet, while Mercosur’s growth has slumped (1% GDP growth in 2014) in recent years, the Pacific Alliances economic growth has soared (3,1% GDP growth in 2014).5

They differ not in their stance on free trade but by their position towards the US. The Pacific Alliance countries have traditionally been allies of the United States and all have bilateral free trade agreements with the US. Chile and Costa Rica even participate in the US led Trans-Pacific Partnership (TPP). The Mercosur countries, especially Venezuela and Argentina, are more cautious about US relations and Mercosur turned to the European Union as their major trading partner.6 However, it is wrong to portray Mercosur as an anti-American block.

Ever since Venezuela’s accession to Mercosur in 2012, it has tried to exert influence over Mercosur, hoping to convert it into an anti-American, anti-neoliberal power within Latin America.

Venezuela has, under Chavez leadership, aspired to unify Latin America and positioned itself as an anti-neoliberal force, taking over the anti-imperialist (read: anti-American) position from Cuba.7 With the electoral successes of other populist-leftist leaders in Latin America, such as Correa in Ecuador and Morales in Bolivia, Venezuela’s clout grew. They aligned themselves in ALBA (The Bolivarian Alliance for the Peoples of Our America), an intergovernmental organization, to promote integration based on bartering, social welfare and mutual economic aid. Ever since Venezuela’s accession to Mercosur in 2012, it has tried to exert influence over Mercosur, hoping to convert it into an anti-American, anti-neoliberal power within Latin America.8 Although Venezuela did not fully succeed, its influence was real.

The anti-imperialist position of the ALBA countries is often perceived as being anti-establishment and anti-global (read anti-free trade). The ALBA countries, however, propose an alternative globalisation that is not left to private companies and with appropriate caution towards the US.9 The reason this is neglected or misinterpreted has to do with the historical context, which is mostly forgotten.

A History of US Intrusion

The United States have a long history of intrusion in Latin America; from the Monroe Doctrine (1820) onwards, the US has seen Latin America as its backyard where it could intervene according to its own interests. This has led to the 1920s Banana Wars to protect commercial interests in Central America and the Caribbean10, the 1950s assassinations in Central America, the 1970s Operation Condor in South America to keep right-wing dictators in place, and the 80s and 90s where the US used the IMF as proxy to promote disastrous neoliberal policies in the region.11 Many details are known only now through the release of classified documents by the White House and National Security Agency. These documents can be found on the website of the National Security Archives, managed by the George Washington University in Washington DC. Intervention is not a thing of the past, however. Recently leaked documents have shown that the US has tried to ‘bully’ the newly elected Evo Morales of Bolivia into following a neoliberal approach.12

The resentment towards the US is mostly fuelled by these historical traumas, emotional arguments and open challenges of Washington, such as the controversy about a concession for a US military base in Manta (Ecuador) that was not prolonged13, the street protests against the Bush proposed Free Trade Area of the America’s (FTAA) in 200514 and statements such as the one made by Morales’ in 2010 about the creation of CELAC:

“A union of Latin American countries is the weapon against imperialism. It is necessary to create a regional body that excludes the United States and Canada. …Where there are U.S. military bases that do not respect democracy, where there is a political empire with his blackmailers, with its constraints, there is no development for that country, and especially there is no social peace and, therefore, it is the best time for prime ministers of Latin America and the Caribbean to gestate this great new organization without the United States to free our peoples in Latin America and the Caribbean.”15

But the Bolivarian countries are also weary of free trade agreements with the US because of other Latin American experiences. They see free trade with the US as a form of neo-imperialism, because the US does not trade on equal footing with its partners. They refer to Mexico that has been partially worse off since the North American Free Trade Agreement (NAFTA). Mexico did not experience any extra growth compared to non-NAFTA Central American states and saw its agriculture decline due to the American subsidies for domestic produce.16 However, according to the World Bank the middle class has increased over the last decade.17 The disastrous neoliberal policies in Argentina in the 90s have left a mark on the continent as well. Bolivarian leaders use these examples in their anti-American rhetoric, which makes signing free trade deals with the US very hard to align with their policies.18

Exit of the New Left?

The influence of Venezuela and Ecuador is waning on the Latin American stage. Their heavy dependence on oil and continuing economic woes are a heavy strain on their international prestige. Chavez’s successor Nicolas Maduro is too preoccupied with staying in power, leaving the leading role of the “New Left” to Rafael Correa.19 Correa himself, however, is losing ground in Ecuador.20 Evo Morales’ Bolivia seems to be the last socialist country in the region boasting steady growth numbers of 5%.21 Perhaps Morales will take up the role as a New Left leader? Even if he does, I believe the success of New Left politics is past its peak. A year ago the Washington Post headed: “In Latin America, the right retreats as left wins more elections”22 Today the reverse trend seems to have set it. The approval ratings of Maduro and Correa are falling. Correa even declared not to run for a third term as president, even if it were to be allowed by the constitution.23 In addition, Kirchner’s handpicked successor could not secure the presidency in one round during the Argentine elections last week. Argentinian president-elect Macri, won by promising economic reforms and proposing to throw Venezuela out of Mercosur.24

Is the continent re-aligning itself? Is it healing the divide? Even if it is, it will be interesting to see how the blocks will respond to free trade agreements with different players, such as the European Union and South-East Asia.

Many Latin Americans have become disillusioned with the New Left dream. It appears they are now looking to the Pacific Alliance’s methods to find renewed growth. Not coincidentally, Mercosur and Pacific Alliance are growing towards each other, talking about cooperation and integration.25 Is the continent re-aligning itself? Is it healing the divide? Even if it is, it will be interesting to see how the blocks will respond to free trade agreements with different players, such as the European Union and South-East Asia.

 

The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of International Perspective. Please be advised that all works found on International Perspective are protected under copyright, more information in the Terms of Use.

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By | 2017-02-03T22:52:33+00:00 November 29th, 2015|Categories: Insight|Tags: , , |0 Comments

About the Author:

Ruben Peeters
Ruben is a Belgian student of Socio-Economic History. He focuses on geopolitics, history, economy and trade. Ruben also has a passion for Ecuador, Singapore and the US.

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