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China’s Claim in Latin America: So Far, a Partner not a Threat

By light years, Washington traditionally has held the upper hand when it comes to foreign influence on Latin America. Its hemispheric power-advantage rests on decades of security, trade, investment, and ideological connections. However, the era of globalization is now tearing down many of the world’s hemispheric divides. Latin America is rapidly diversifying its international relations as major regional powerhouses, such as China, increase their presence in the region. Many view China’s growing influence in the western hemisphere as a challenge to the U.S.’s historic regional supremacy. However, the struggle for power and influence need not automatically reflect a winner-take-all competition, as both outside megaliths can benefit from China’s presence in Latin America.

China’s Economic Expansion
China’s phenomenal economic growth in the past quarter century has helped motivate Beijing to globalize its industries. From 1990-1998, China’s average annual economic growth rate was 11.2 percent, compared to the world’s average rate of 2.4 percent during the same time frame (China’s Average Economic Growth Rate in the 90s Ranked 1st in the World 2000) and the country’s growth rate is projected to remain above 8.5 percent for the next five years (Erikson 2008). Beijing’s economic ties to Latin America have witnessed comparable growth: from 1993 to 2003, China’s trade with Latin America increased by 600 percent (Xinhua News Agency 2004). Chinese president Hu Jintao set the mark for increasing trade with Latin America to $100 billion by 2010, a goal easily met when trade surged to $102.6 billion in 2007, which represents a 42.6 percent increase from 2006 (Erikson 2008).

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This analysis was prepared by COHA Research Associate Jamie Heine.

U.S.–Mexico NAFTA Transportation Agreement Imperiled

The governing idea behind NAFTA is to remove trade restrictions so as to encourage the free-flow of goods and services across the North American continent. Along the U.S. – Mexican border, however, the reality is that the ground transportation of such goods remains highly congested and drawn out. Long-haul trucks from Mexico are restricted from operating in the U.S. except within designated commercial zones located in border-cities such as San Diego, El Paso and Brownsville. At these sites, the contents of a truck must be unloaded and transferred onto a domestic carrier in order to continue to their final destination. Authorities estimate that this obvious kink in the supply chain costs U.S. consumers $400 million a year.

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This analysis was prepared by COHA Research Associate Chris Sweeney

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Latin America and Europe: The Future Of EU-ACN Trade Negotiations

Since 1993, representatives from the member countries of the Andean Community of Nations (ACN) and the European Union (EU) have met periodically to strengthen their commercial and political ties. From the European side, the eventual goal of these meetings was to allow for the Andean countries to find an alternative development model to the one proposed by Washington. This would allow for the EU to assist in creating development programs and offer the Andean nations opportunities for economic integration with the European body. As part of this assistance, the ACN and the EU would negotiate a treaty to enhance their political dialogue and cooperation. Though negotiations have been stalled for quite some time, the potential Association Agreement resulting from the meetings would include pursuing common political and economic goals, such as a free trade agreement (FTA) between the two blocs and for further support for development within the Andean region.

Analyzing the Association Agreement
European politicians would like their Latin American counterparts to believe that the above are the goals of the Agreement. In reality, the actions of EU leaders do not begin to address the complex political-economic situation found within the Andean region. Furthermore, it would be naïve to underestimate the possibility of special interests pressuring Andean politicians to sign an FTA and equally as far-fetched to assume that Europe intends to help the ACN out of pure altruism. The proposed FTA is based on previous agreements negotiated by Peru and Colombia (the latter ones, yet to be ratified) with the U.S. and must be closely scrutinized in order to ensure that it is both efficient and rejection proof.

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This analysis was prepared by COHA Research Associate Guillermo Cornejo

A Fact of Life: Strategic Alliance for Venezuela and Russia

Venezuelan President Hugo Chávez met yesterday in Moscow with his Russian counterparts Russian President Dimitri Medvédev and Prime Minister Vladimir Putin. They seemed to enjoy every moment of the occasion, even though it was rather short when it came to hard developments. The encounter was arranged to formalize a military and defense alliance between the two countries, dubbed the “Alianza Estratégica.” The three leaders placed great stress on the importance of the meeting in which trade deals, arms sales, coordinated energy policies and the expansion of trade and joint financial services were achieved between the two nations.

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This analysis was prepared by COHA Research Associate Raylsiyaly Rivero

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The Growth of Petrocaribe: A Win for Venezuela Foreign Policy

Costa Rica and Guatemala are the latest to sign up with Petrocaribe

Nineteen Caribbean Basin nations now receive subsidized oil shipments from Venezuela

The future could not look brighter for Petrocaribe, a Venezuelan-led oil consortium that offers preferential financial terms on crude oil to signatory nations. In the past few of weeks, both Guatemala and Costa Rica have joined, bringing its total membership to nineteen. Costa Rican President Oscar Arias, otherwise an ally of the U.S., sent his official request on July 16 to join the organization, perhaps because the cost of importing oil has doubled between 2007 and 2008 to $2.8 billion. Guatemala, one of two Central American countries to have its own domestic oil supply, turned to Petrocaribe on July 11 in order to reduce its internal debt by curbing imported oil costs.

Subsidized Oil Shipments
Petrocaribe sells crude oil at market value, giving member states three months to pay 40 percent of the bill and 25 years to pay off the rest, at a one percent rate of interest. Because the conglomerate undersells the international price of oil per barrel by 23 percent, it is estimated that Guatemala will save $2,043,300 and Costa Rica $1,255,170 annually if the price of oil remains around $130 per barrel.

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The Women’s Development Bank in Venezuela: “Creating a Caring Economy”

The Women’s Development Bank in Venezuela, abbreviated Banmujer, joins a long trend of micro-credit institutions intended to alleviate poverty by supporting small-scale entrepreneurs. What makes Banmujer unique is that it loans only to women; in fact, it is the only state-sponsored women’s micro-credit bank in the world. Since its inception on March 8, 2001, Banmujer has been commended for its successes in helping women escape poverty and in instilling a new economic model of cooperation instead of competition.

Women’s Rights in Venezuela
Over the past decade, the Venezuelan government has been remarkably supportive of women’s rights. For example, the Bolivarian Constitution, adopted in 1999, uses non-sexist and gender-neutral language throughout. Instead of “all men are created equal,” as is stated in the U.S. Constitution, Venezuela’s constitution holds that “all persons are equal before the law.” When discussing the role of the President, it says “Presidente o Presidenta,” instead of using only the male form.

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