Bush’s Blast against Latin America’s “False Populism” May Be Getting It All Wrong

Politicians find it exceedingly difficult to explain free trade's virtues without drowning the listener in a torrent of common coinage. For a recent example of this, take President Bush's speech in Miami, designed to shore up flagging congressional support for pending free-trade agreements (FTAs) with Colombia and Panama. Echoing those all-too-familiar Bush bromides, he insisted that approving these FTAs would fortify "freedom," strengthen "democracy," and increase "prosperity" in Latin America.

Whether these present imperiled FTAs—particularly the one involving Colombia—are able to work the rainmaker miracle expected by their backers is certainly debatable. However, another argument that Bush is quick to unsheathe should be seen as a complete illusion: that "these [FTAs] will counter the false populism promoted by some nations in the hemisphere." Let's assume that by "some nations" he's referring to the "new left" leadership of Venezuela, Bolivia and Ecuador, among others. Their presidents have already made known, with varying degrees of frequency and virulence, their disdain for Bush's economic vision for Latin America. Nor is it only a coincidence that these leaders have all been elected or reelected during Washington's FTA crusade of recent years.

Look at Ecuador: during May of last year, the government of then-President Alfredo Palacio ejected U.S. oil company Occidental Petroleum Corp. (Oxy) for alleged contract violations. In retaliation, the U.S. government suspended FTA negotiations with Quito, which brought cheers from indigenous groups who saw the agreement as detrimental to their culture and quality of life. Oxy's induced departure made presidential hopeful Rafael Correa, who at the time trailed more moderate candidates, happy as well: harnessing the support of students, leftist intellectuals and indigenous peoples opposed to the FTA, the populist went on to ride a wave of nationalist and anti-U.S. sentiment all the way to the presidential palace.

Unlike Correa, Venezuela's President Hugo Chávez and Bolivia's President Evo Morales had no pending U.S. FTA to rally the people against; what they did have, like their Ecuadorian counterpart, was a bitter history of Washington meddling in their affairs and a gross income disparity, aggravated in the 1980s and 90s by wealth-concentrating neoliberal policies. Responding to popular discontent over the results of these policies, both reformers won their elections by campaigning for extensive state intervention in the economy—antithetical to the spirit of economic liberalization that neoliberals and White House sages aggressively promote and that FTAs, at least theoretically, incorporate. Both South American leaders have delivered on promises made to their core constituencies, especially where the sale of natural resources is concerned: Bolivia's Morales expropriated the country's gas industry only five months after being elected, and Chávez forced foreign oil companies to sell off majority stakes in their Orinoco Basin fields last summer to the Venezuelan state oil company, causing Exxon Mobil and ConocoPhillips to pull out.

Instead of effectively countering what Washington insists in describing as a "false populism," U.S.-backed FTAs—coupled with the unflattering legacy of Washington's continued endorsement of a rich man's Latin America—might inadvertently have been encouraging it, by promoting policies that augment rather than diminish the social unrest off of which populists feed. These populists, in turn, can jeopardize the wellbeing of U.S. economic interests in the region, as Chávez has done, by tarnishing Washington's regional motives and the sincerity of its concerns. This backlash may also come to negate some of the gains in market access that FTAs provide.

So how can Bush say that FTAs with Peru, Colombia and Panama would stem the tide of leftist "false populism" sweeping South America? If he really believed this assertion, he would end the Cuba trade embargo, which could certainly strike a sharper blow against anti-U.S. sentiment in Latin America than any FTA could.

It's easy to pretend that casting bilateral FTAs upon the region will heal all of Washington's political woes and fulfill Latin America's economic yearnings. It's much harder, however, to engage in constructive and painstaking diplomacy, which is probably the only effective prescription against the "false populism" that seems to so alarm President Bush.