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Posted on 11/18/2005 7:48:27 AM PST by Valin
In the aftermath of the 2005 Summit of the Americas, the clash between two giants has reached full swing. Mexico and Venezuela, both within the top five economies in Latin America, are in the midst of an escalating diplomatic conflict in which they have recalled their ambassadors—a rare diplomatic move for Latin-American countries. It’s the resounding clash between two competing visions for Latin America, and this time, it’s not Venezuela vs. the U.S. Rather, it’s Venezuela vs. Mexico—or, more precisely, Chavez against those in Latin America who favor free trade.
The dispute climaxed when the Venezuelan president called Mexican president Vicente Fox a puppy of American imperialism, and then, last Sunday, uttered the threat “don’t mess with me.” But the rift goes well beyond rash bravado and diplomatic ties. Despite Chavez’s oft-mentioned grand illusion of regional integration, Latin America is bitterly divided.
Back in 1994, the first Summit of the Americas laid out a common vision—the Free Trade Area of the Americas (FTAA)—for boosting democracy and free trade in the region. In order to promote regional economic growth, the first Summit set out with a goal to reduce or eliminate trade barriers and protectionism. And despite some domestic resistance, agreements of this sort—like the North American Free Trade Agreement and the recently adopted Central American Free Trade Agreement—have been achieved.
FTAA, however, hasn’t been put into practice. The reasons are many and complex, but an obvious stumbling block, in addition to their bold resistance to liberalization, is Venezuela’s Bolivarian Alternative for the Americas (ALBA)—a pact based primarily on socialist principles.
Filled mostly with vague and redundant rhetoric about solidarity and poverty relief, Chavez’s plan lacks any concrete details and consists mainly of oil handouts. He has an eye towards integrating Latin-American states and developing “the social state, in the interests not of elites, but of the people.” And given, in part, that the developed world hasn’t been the most consistent advocate of free trade practices—consider the irony of preaching free trade and subsidizing the agricultural industry in the U.S.—Chavez’s argument has its charm.
The problem with Chavez’s vision is that the historically popular strategy of pitting the U.S. against the rest of the continent isn’t working. The old foe is no longer the only one who speaks highly of liberalizing trade. Free trade, although not a magic pill, has brought tangible benefits to Latin America.
It would be naive to argue that the globalization process is entirely win-win, but according to the Foreign Agricultural Service, agricultural trade between the U.S. and Mexico has increased 149% since 1993, “reaching $15.8 billion in 2004.” And this comes despite U.S. agricultural subsidies. It’s becoming quite clear that increases in exports and imports strengthen the economy and make each country better off.
Part of the difficulty is that although free trade produces more benefits than costs, there is potential for losses—especially among the poor. Without easy access to education, new job skills, a functional financial system, and a politically stable environment that supports entrepreneurship, the poor are in a difficult position to adjust to the economic transition.
This makes the impoverished easy prey for political opportunists like Chavez, who find it more convenient to derail free trade than to enact policies that would enable the poor to reap the benefits of new economic opportunities. After all, if the poor become prosperous, it would be much harder to buy votes. This time, as strange as it may be, hope for the poor may come in the form of a diplomatic conflict.
The recent rift between Mexico and Venezuela shows that it’s not a matter of the Northern bloc against the Southern. Although Chavez commands popular approval in some circles, a recent report from Latinobarometro, a non-profit polling organization, shows that most people agree with the statement “a market economy is the only system which can develop your country.”
The issue boils down to two competing visions by Latin Americans for Latin America. The first understands the benefits of economic cooperation and free markets—although much remains to be done in the area of state building. The second subsidizes an illusory revolution with the same instrument it wishes to demonize: economic growth.
José Idler and Mario Villarreal are NRI fellows at the American Enterprise Institute.
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Too funny.
You do of course know that he is closely allied with Castro.
I'll give a nickel to the first person who suggests that ALBA is a stalking-horse for FTAA.
ALBA is a stalking-horse for FTAA!
Where's my money? :-)
Why do you suppose he's against this then?
This sounds like a good thing. Then maybe the Mexican president will get his act together and support his own people.
From your article:After all, if the poor become prosperous, it would be much harder to buy votes.
The recent rift between Mexico and Venezuela shows that it’s not a matter of the Northern bloc against the Southern. Although Chavez commands popular approval in some circles, a recent report from Latinobarometro, a non-profit polling organization, shows that most people agree with the statement “a market economy is the only system which can develop your country.”
And the people are right.
Oh, Chavez wants Free Trade alright. He wants Free Trade between all the various SSRs after he succeeds in bringing Che Guevara's vision into fruition. The vision is of a USSR of the Americas, from Tierra Del Fuego to the Bering Straight. Chavez must be put down.
He wants to create his own internationalist group. But only after all of the Americas become Communist.
And this is a bad thing?
Buchanan might ask Chavez to be his running mate in 2008.
Pat Buchanan...Pat Buchanan? Didn't he used to be someone?
It'd be bad for Chavez, good for his people, good for the region and good for America.
So, you think it's bad for the American people to pay this $1.2 billion per year?
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