Obama and Uribe Talk Trade and Term Limits AS/COA Online 06/30/09

Presidents Álvaro Uribe and Barack Obama met at the White House on June 29. (AP Photos)

Colombian President Álvaro Uribe met with his U.S. counterpart Barack Obama June 29 to discuss the future of the stalled free-trade agreement and Uribe’s political future. At the meeting, Obama praised Uribe’s achievements on improving security and his fight against drug cartels. The U.S. leader even joked about how difficult it would be to match Uribe’s 70 percent approval ratings after two terms in office. Still, Obama advised Uribe against running for a third consecutive presidential term and used U.S. President George Washington’s experience as an example of statesmanship: “[A]t a time when he could have stayed president for life, he made a decision that after service, he was able to step aside and return to civilian life. And that set a precedent then for the future.”

Obama’s counsel for Uribe to avoid a third term through constitutional change coincided with world attention on Honduras. A day earlier, a coup occurred in the Central American country after Honduran President Manuel Zelaya, planned to go forward with a referendum deemed illegal by the country’s main institutions. Obama expressed his support for democratically elected Zelaya and described the overthrow as “not legal.” Colombia also rejected the coup.

In Colombia, a referendum to pave the way for Uribe’s reelection still faces hurdles in Congress and already shows signs of fatigue among supporters. Cambio magazine explains that the chances to approve the legislation are slim, even with Uribe spending his political capital to move it forward. But Semana magazine says, “Uribe has radicalized his position about the referendum,” and that he sees it “as a matter of pride.”

The pending bilateral free-trade pact was also a central conversation point for the two leaders during their White House meeting. Obama offered his support for the deal but explained that concerns linger in U.S. Congress over human rights violations against Colombian labor leaders. At the summit, Uribe said that “we are very receptive to receive any advice, any suggestion that help us see how we can achieve our goals of zero human rights violations in Colombia.” After an event co-hosted by the Council of the Americas at the Wilson Center on the morning of June 30, Uribe said he had found Obama “more disposed and interested” in the trade deal. COA’s Eric Farnsworth blogs for Americas Quarterly, the two leaders’ meeting shows “that the bilateral agenda with Colombia goes well beyond passage of one agreement, as important as that is, and that the U.S.-Colombia relationship is strong and enduring.”

Learn more:

• COA Vice President Eric Farnsworth’s AQ blog post about Obama’s meetings with Uribe and Chilean President Michelle Bachelet.
• AS/COA coverage of Uribe’s dilemma about his second consecutive reelection.
• Americas Quarterly’s web exclusive about whether Uribe will seek reelection.
• Transcript of Obama-Uribe press conference following their June 29 meeting.
• Colombia’s constitution.
• Text of the pending U.S.-Colombia Trade Promotion Agreement.
• Semana analysis of U.S.-Colombia relations.

Interview: COA’s Eric Farnsworth on Panama’s Presidential Election AS/COA Online 04/29/09

“Some observers have made the case that the population is growing restless for a return to economic growth and that, obviously, has political implications, including that the opposition candidate could win a decisive victory on Sunday.”

In an interview with AS/COA Online’s Carlos Macias, Council of the Americas’ Eric Farnsworth lays out what the results of Panama’s May 3 presidential election could mean for the country’s economy and for bilateral relations with Washington. He explains that Ricardo Martinelli, who leads in polls, “has always been able to navigate the very complicated relationship with the Unites States.” As an officer in the Department of State beginning in 1990, Farnsworth was involved with work focused on the reestablishment of democracy in Panama after Operation Just Cause.

AS/COA Online: Given the popularity that President Martin Torrijos enjoys as his term ends, why is the opposition candidate Ricardo Martinelli ahead in the polls over the candidate from Torrijos’ party, Housing Minister Balbina Herrera?

Farnsworth: I think for a couple reasons, not the least of which is that Panama’s growth has stalled dramatically. Over the past several years Panama enjoyed growth at 8, 9, or 10 percent annually, which was at times the highest in all of Latin America. Panama’s population enjoyed that and began to get a little bit used to it. But now with the economic crisis that’s impacting the entire world and Panama’s reliance on international trade for its own well being, growth figures for Panama have decreased quite a lot. Some observers have made the case that the population is growing restless for a return to economic growth and that, obviously, has political implications, including that the opposition candidate could win a decisive victory on Sunday.

AS/COA Online: If Martinelli wins on Sunday, what does it mean for the future of the U.S.-Panama Free Trade Agreement?

Farnsworth: It’s a promising sign because Martinelli has said publicly that he wants good relations with the United States and his record bears that up. He was a former government minister, he was a former chairman of the Panama Canal, and so he’s worked with the United States quite closely in the past. He understands the historical relationship with the United States and he is somebody who is business-oriented and has always been able to navigate the very complicated relationship with the Unites States.

I’m optimistic. I think that he has the right vision for relations if, indeed, he is elected. If he’s elected, I think it’s a promising sign for the bilateral relationship.

AS/COA Online: What would a possible Martinelli administration mean for further Panama Canal development?

Farnsworth: Again, I think it’s a positive, and the reason why is Martinelli understands very clearly the needs of the Canal and the needs of global commerce because he has been so directly involved with Canal issues for a long time. He is sensitive to the needs of the Canal and sensitive to the entire expansion project that’s going forward. Of course, the Canal is the goose that lays Panama’s golden eggs. He understands that it really is a key to Panama’s future. I don’t have any hesitation to think that if he is elected president that the Canal project would continue to go forward and would be a big success.

AS/COA Online: Where does Panama stand in terms of its relations with other Central American countries?

Farnsworth: Well, it’s an evolving relationship. Panama remains unique in many ways. One is the historical relationship with the United States. And traditionally it’s been a crossroads. It’s a crossroads for Latin America and it’s also a crossroads from east to west. So you don’t have the same type of economy or the same type of history as the rest of Central America or, indeed, South America. Panama has not yet worked out its own self-identity to understand if it really is part of Central America yet or if it’s more of an independent actor in the Central American context.

And that issue has real implications, for example, in the context of Central American trade. If Panama saw itself more as a Central American country it would already have a free-trade agreement already with the Unites States through the DR-CAFTA. So these self-image issues have practical implications for Panama’s position in terms of not just global politics, but global economics.

AS/COA Online: And what about its relationship with South America?

Farnsworth: I think the relationship is generally good. The relationship with South America at this point tends to be almost purely economic. Ecuador, Peru, and Chile are sending their products through the Canal to get to Europe and vice versa. You don’t have the same sort of political issues that you used to have, for example, when the United States controlled the Panama Canal Zone, or Panama was seen as some sort of imperialistic extension of the United States. At that point, the South Americans were skeptical of Panama, let’s put it that way. But since the turnover of the Canal in the end of 1999 the relationship has been built on economics and built on Panama as a maturing democracy and the relations with the rest of South America are generally pretty good.

There is one other aspect that needs to be addressed and that’s the narcotics relationship and that goes directly to Panama’s relations with Colombia. There’s law enforcement cooperation between the two countries as Colombian guerrillas have at times been across the border and taken sanctuary in Panama. But cooperation between those two countries in particular continues, and I think it’s a very good sign.

AS/COA Online: On a different note, what kind of growth prospects do you see for the tourism industry in Panama?

Farnsworth: I think the prospects for tourism in Panama are really quite good. Obviously with the global downturn, tourism generally worldwide has decreased but Panama has something that will always be of interest to international tourists—the Canal. To the extent that you have a strong cruise ship and tourist industry based on global economic conditions, I think Panama will always have a special place in the tourist trade. I think the government has really taken steps to try to build Panama as a tourist destination, not just a pass through. That will allow for even greater tourist revenues and an even stronger position for Panama in the global services economy. That’s really what the basis of Panama economy is of services, and tourism is certainly a part of the overall strategy.

Read the interview originally posted at the AS/COA website.

The Americas 2008: A Year in Retrospective AS/COA Online 12/23/08

View a slideshow of the most compelling events in the hemisphere. Also, read an article by AS/COA Online Managing Editor Carin Zissis on the most riveting events affecting the Americas in 2008.

Click the image to watch the photo gallery.

Economic Revival in Peru AS/COA Online 07/18/08

President Alan Garcia and new Finance Minister Valdivieso at the latter’s swearing-in ceremony in Lima on July 14. (AP Images)

Over the past couple of weeks, the already strained American economy has been plagued by bad financial news. After heavyweight investment bank Bear Stearns needed a rescue from bankruptcy, giant mortgage lenders Fannie Mae and Freddie Mac also required a bailout from a federal government struggling to handle an economy not officially in “recession,” but “sluggish,” to say the least.

In contrast, several emerging economies in Latin America have thus far shown signs of remaining insulated from the U.S. credit crunch and a weak dollar market. Peru serves as a prime example, posting impressive growth results. As reported by the Instituto Nacional de Estadística e Informática, GDP growth in May 2008 rose (PDF) to 7.3 percent, resulting in 83 consecutive months of growth. In the last 12 months, the growth rate hit 9.37 percent, boosted by strong performance in the construction, mining, and agriculture sectors. In another indication of growing confidence in the country’s economy, when comparing May 2008 statistics with May 2007, the number of Peruvians returning (PDF) from abroad increased by 4.3 percent while the portion emigrating decreased by half a percentage point.

Following in the footsteps of Fitch ratings, Standard & Poor’s raised Peru’s credit rating to investment grade on July 14, making the country even more attractive for investors. Meanwhile, Luis Valdivieso, a former International Monetary Fund official, was sworn in as Peru’s new finance minister to replace Luis Carranza, who resigned (Carranza will remain close to the government as a presidential adviser). Valdivieso has emphasized goals that include more equal wealth distribution and taming growing inflation. Investment bankers, who perceive him as likely to uphold his predecessor’s tight fiscal policies, approve of the new minister.

To complement Peru’s gain in financial momentum, other reports signal that more growth is on the way. Peruvian exports to the European Union (EU) grew 21 percent in the first five months of 2008, totaling more than two billion dollars worth of trade. The news comes as Peru continues to be part of free trade agreement (FTA) negotiations with the EU as a member of the Andean Community—composed of Bolivia, Colombia, Ecuador, and Peru. Yet talks have stalled since the EU recently approved a controversial new immigration directive.

But Peru faces other challenges beyond the blocked FTA with the EU. In the country’s southern regions, recent protests led by disgruntled miners highlight the wealth disparity between the rural and urban populations. The Financial Times reports that 39 percent of the total population lives below the poverty line, with residents of rural areas accounting for a disproportionate amount of the Peruvians living in poverty. Protesting miners demand better wage controls on rising prices, and a more equal distribution of mining company revenue.

In an op-ed for Poder magazine, COA’s Eric Farnsworth examines how Peru has seized the moment to improve its global standing. Speaking at COA’s annual Washington Conference in 2008, Carranza stressed poverty reduction as a key to Peru’s sustained growth. Read an AS/COA’s hemispheric update on Peru’s economic growth.

Read the article as originally published at the AS/COA website.

Download a PDF file here.

Canada’s Latin American Ties AS/COA Online 06/12/08

Chilean President Bachelet and Canadian Prime Minister Harper met this week in Ottawa.

In the last month, Canadian Prime Minister Stephen Harper’s administration has scored major commercial deals with Peru and Colombia, and celebrated its successful Free Trade Agreement (FTA) with Chile. Harper’s administration has pursued a policy of reengagement with Latin America, seeking to support development in the region. “The Canadian experience shows that, over the long term, there is really no better way to boost living standards than with free trade, ” Harper said in a November 2007 interview with Americas Quarterly.

During this week’s visit by Chilean President Michelle Bachelet to Canada, the two leaders celebrated the tenth anniversary of the countries’ bilateral FTA and signed additional agreements. Harper called the pact a “a model of successful partnership in our hemisphere.” Trade in goods between Chile and Canada grew 226 percent over the past decade, reaching $2.34 billion last year. In an effort to replicate the Canadian-Chilean success, Harper¹s government is betting on new deals with other Latin American countries.

Peru’s new FTA with Canada, signed on May 29, has supported the Andean country’s growing presence in global markets by securing a commercial partner to maintain its enviable GDP growth: 9.2 percent in the first quarter of 2008 alone. It is expected that Canadian agricultural and beef industries will gain immediate access to Peruvian markets. On the flip side, Peruvian dairy products, poultry, and refined sugar will enter Canada almost duty-free.

Canada and Colombia have also moved toward solidifying their trade partnership. Officials from both countries completed negotiating an FTA on June 7. The deal must be ratified by legislative bodies from both countries in order to take effect. If the deal wins approval, Colombian farmers will benefit with tariff reductions on products including beef, flowers, sugar, and ethanol.

The completed negotiations come at a time when a U.S.-Colombia trade pact has stalled in U.S. Congress. Although U.S. markets have historically been the main recipients of Latin American exports, obstacles to the passage of U.S. trade deals in recent months—including with Colombia and Panama—opens the door for Canada to improve ties with Latin America. As the Financial Times reports, “While Washington’s efforts to make trade inroads in Latin America have stumbled lately, Canada has quietly moved to steal a march.”

Ottawa hopes to become less reliant on the slowing U.S. economy. After a weak first quarter performance in 2008—including growing unemployment, negative GDP growth, and rising inflation—Canada has more motives than ever to strengthen commercial ties with new hemispheric partners and is exploring FTAs with Panama, the Dominican Republic, the Caribbean Community, and the Central American Four (El Salvador, Guatemala, Honduras, and Nicaragua).

Read the article as originally published at the AS/COA website.

Download a PDF file here.