A Tit for Tat over Trucks AS/COA Online 03/20/09

Trucks at the U.S.-Mexico border. (AP Photo)

A move by U.S. Congress to stop a cross-border trucking program drew a counterpunch from Mexico this week. The recently signed U.S. spending bill ended funding for a pilot program allowing Mexican trucks to transport cargo inside the United States and vice versa. With the program a long overdue part of the North American Free Trade Agreement (NAFTA), Mexico chose to retaliate. The administration of Mexican President Felipe Calderón unveiled new tariffs for close to 90 industrial and agricultural products imported from the United States. Yet Washington announced a pair of high-profile visits to Mexico by U.S. Secretary of State Hillary Clinton and U.S. President Barack Obama, opening the door to smooth the turbulence over trade and security issues.

As the tariffs were announced, Mexico’s Economy Secretary Gerardo Ruiz Mateos said that the now-suspended pilot program had been successful with no major safety incidents. He also said the cancellation of the program is “wrong, protectionist, and clearly violates the [NAFTA] treaty.” A Department of Transportation report found that Mexican truckers registered under the program met all 22 safety mandates demanded by U.S. Congress.

The duties, which went into effect on March 19, represent tariff increases of as much as 45 percent on $2.4 billion worth of exports, explains Sidney Weintraub of the Center for Strategic and International Studies in a Forbes.com editorial that breaks down the history of the trucking plan. The Mexican government carefully chose the products on the tariff list “to avoid pushing up prices of staples in Mexico while hitting goods that are important exports for a range of American states. That way, it could have maximum political effect north of the border,” The Economist explains. Wall Street Journal warns that Mexico can turn to other trading partners—Europe, Canada, and Latin America—to replace the U.S. brands. Total trade between Mexico and the United States stood at over $367 billion in 2008.

Trade and trucks are not the only matters troubling U.S.-Mexican relations at the moment. At AS/COA’s recent annual Mexico City conference, Calderón condemned remarks originating in the United States that question Mexico’s institutional strength in the face of violent organized crime. He raised concerns about U.S. drug consumption and arms smuggling and urged joint U.S.-Mexican action to fight drug cartels.

Given the tensions, the timing of the upcoming visits by Obama and Clinton could prove crucial to giving ties between the neighbors a boost. Appearing on National Public Radio’s “Diane Rehm Show,” COA’s Eric Farnsworth explained expects that this bump in trade relations won’t escalate “at a time when, I think, neither nation could afford it.”

Mexico’s El Universal takes a closer look at the trade rift and plans for Obama’s trip to Mexico in advance of April’s Summit of the Americas. Clinton’s visit next week will pave the way for Obama’s. Moreover, the appointment of former Dallas Mayor Ron Kirk as the new U.S. Trade Representative gained congressional approval this week, just in time to tackle the problem. “It will be one gnarly challenge after the next for the new U.S. trade representative, starting with the trade war that erupted this week with Mexico,” says Dallas Morning News.

Some contend that killing plans for a trucking program will result in higher shipping costs. Bloomberg reports that what a truck could haul from one point in Mexico to another in the United States will take three different trucks and one extra day without the program. The Bureau of Transportation Statistics shows that the value of goods transported by truck between both countries rose to $234 billion last year. Mexico’s decision came as the World Bank raised alarm about protectionist measures undertaken by G20 members in the midst of the global financial crisis.

AS/COA hosts a program on March 24 in advance of the Obama and Clinton visits. Learn about the event, which will involve a panel videoconferenced in New York and Washington.

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Funes Calls for Unity after Win AS/COA Online 03/17/09

Byline shared with Carin Zissis.

Salvadoran President-Elect Mauricio Funes addresses supporters. (AP Photo)

Salvadorans chose leftist candidate Mauricio Funes as their new president in the heavily contested March 15 election. Funes put his first foot forward as president-elect with a call for national unity, vows to jump-start the ailing economy, and a pledge for moderation over radicalism. “There will be no confiscation, we will not reverse any privatizations. We will not jeopardize private property. There is no reason at this moment for fear,” said Funes, who pulled in just over 51 percent of the vote.

The former CNN journalist’s victory could be considered a major milestone in El Salvador’s history as it marks the end of 20 years of presidents from the Nationalist Republican Alliance (ARENA). Seventeen years after the end of the country’s civil war, the Farabundo Marti National Liberation (FMLN), once a Marxist guerilla group, comes to hold executive power. The Economist reposted a 1992 article online marking the end of the 12-year civil war that claimed 75,000 lives and turned the country into “a pawn on a great board whose far corners were in Angola and Afghanistan.” A GlobalVoices post logs positive reactions to Funes’ win from across the Salvadoran blogosphere. An editorial in the Los Angeles Times says the “peaceful change of power is gratifying.” It also describes the country as “supremely divided and impoverished” and commends Funes for his calls for unity following a deeply discordant campaign.

Despite Funes’ pledges to take a more centrist path—along the lines of Brazilian President Inácio Luiz Lula da Silva—some suggest he could be pulled to the left by members of his party. He has said he does not plan for his country to exit from membership of the Central American Free Trade Agreement. But some suspect that other members of his party, including his vice president Salvador Sanchez Ceren, will seek to reverse market friendly reforms. Wall Street Journal explains that, while El Salvador’s economy has one of the most dynamic private sectors in the region, some business owners worry about Funes’ capacity to govern in tune with some of the more radical members: “Many here fear that the FMLN bloc in the National Assembly, with whom Funes has never had to work on legislation, may not share the new president’s willingness to compromise with private enterprise.” Still, even if Funes finds himself pressured to turn leftward, he will also have to find a way to work with ARENA, which holds a large number of seats in El Salvador’s legislature and could block legislation.

During the election cycle, Arena candidate Rodrigo Ávila brought up concerns about Funes and the FMLN, comparing his rival to Venezuelan leader Hugo Chávez or neighboring Nicaragua’s Daniel Ortega. Indeed, as a Foreign Policy web exclusive noted, a great deal of the language used by both campaigns “focused on the situation outside the country’s borders.” The article suggests that, although some raised concern about U.S. intervention in the Salvadoran election, Barack Obama’s victory likely helped boost the FMLN as Funes modeled his campaign rhetoric after the U.S. president’s “change” message.

The impact of events beyond the Central American country’s borders could play a role in economic policy charted by Funes. As financial crisis grips the United States, concerns rise over the dependability of remittance flows from Salvadoran immigrants working abroad. Last year, Salvadoran immigrants living in the United States sent $3.2 billion home and 22.3 percent of families in El Salvador receive remittances. The Inter-American Development Bank this week predicted a drop in remittances to Latin America in 2009. Funes himself raised concerns about remittances in an interview with Los Angeles-based La Opinión. He pointed out that these funds represent 18 percent of El Salvador’s GDP, making close relations with the United States crucial.

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ARENA, FMLN Face Off in El Salvador AS/COA Online 03/10/09

Rotating campaign ads show the faces of ARENA’s Ávila (L) and the FMLN’s Funes. (AP Photo)

Update: FMLN candidate Mauricio Funes has been elected as the next president in El Salvador after winning with approximately 51 percent of the vote, ending the 20-year rule of the ARENA party.

Salvadorans head to the polls on March 15 to elect their next president. Voters will choose between the governing Alianza Republicana Nacionalista (ARENA) party candidate Rodrigo Ávila and the opposition’s Farabundo Martí National Liberation Front (FMLN) candidate Mauricio Funes. Recent polls and international media forecast that the leftist FMLN candidate appears poised to unseat ARENA, which has held power since 1989. Ávila says that a Funes victory would bring in a government similar to that of Venezuelan President Hugo Chávez.

A poll conducted by Central America-based CID-Gallup released two weeks before the elections shows Funes leading the race by more than five percent over his opponent. But the election is not won yet; President Antonio Saca noted that the key to win the election remains in the hands of undecided voters, who make up as much as 20 percent of the electorate.

Funes, a former television journalist, has long been outspoken critic of the government. The FMLN nominated him in September of 2007. Since then he has attempted to calm critics who point to the leftist roots of his party. In an interview with the Honduran newspaper La Prensa, Funes said his political platform uses Brazilian President Luiz Inácio Lula da Silva as point of reference rather than Chávez. He also said that, as president, he would not join regional agencies such as the Bolivarian Alternative for the Americas if doing so would threaten bilateral relations with the United States.

Ávila, a former chief of the national police, closed his campaign with a massive rally at the Cuscatlán Stadium in San Salvador shouting the slogan “Country yes, Communism No.” In an interview with Univision’s Jorge Ramos, Ávila extolled the economic improvements gained under two decades of ARENA rule. He also defended his record as a police chief in the 1990s. Ramos also interviewed Funes a week earlier.

The state of the economy and security stand as priority issues in the election. El Salvador has the second-highest homicide rate in the world after Iraq, reports the Miami Herald in an article about Salvadoran gangs. The Economist Intelligence Unit predicts a marked slowdown in the country’s GDP growth through 2010 and warns that, “regardless of the final outcome in the presidential election, no party will have an outright majority in Congress, complicating policy implementation in the next four-year term.”

The National Democratic Institute prepared a report on January legislative elections as well as the March 15 presidential elections. According to their data, ARENA had outspent the FMLN through January 18, with the former accounting for 65 percent of campaign spending and the latter just 19 percent. In the January election, the FMLN won a plurality of votes in the Legislative Assembly by winning 35 out of 84 seats. However, ARENA won the mayoralty of San Salvador, ending over a decade of FMLN control of the capital.

Some have wondered what role Washington will play in this election, given past U.S. involvement in Salvadoran politics. A Boston Globe op-ed recalls the country’s 2004 election, when the Bush administration drummed up fears by implying that an FMLN victory could result in a change in migratory status for Salvadorans living in the United States. According to the U.S. State Department, Salvadorans working in the United States sent $3.8 billion in remittances in 2008, benefiting more than 22 percent of the population. As expected, in December the U.S. Citizenship and Immigration Services bureau extended the Temporary Protected Status for Salvadorans until September 2010. Still, over 200 American academics wrote to Secretary of State Hillary Clinton asking for a U.S. government statement of impartiality.

Angus Reid Global Monitor offers a timeline and background information on the election.

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Bogotá-Quito Ties Still Run Cold AS/COA Online 03/05/09

Ecuadorian soldiers fly over a border area close to Colombia. (AP Photo)

Diplomatic relations between Bogota and Quito remain broken a year after a border standoff. A March 2008 raid by Colombian authorities on a guerilla camp took out the second of the Revolutionary Armed Forces of Colombia (FARC) in command and more than 20 others. The attack, made on Ecuadorian territory, also spurred a military buildup by Quito and Caracas on their Colombian borders. Within weeks, the threat of conflict was defused. Still, squabbles continue between Colombia, Ecuador, and Venezuela, even with mediation by the Organization of American States (OAS).

In recent remarks, Colombian Defense Minister Juan Manuel Santos justified the raid as an act of legitimate defense, sparking controversy in both Quito and Bogota. President Álvaro Uribe responded by reprimanding the minister. Santos’ strong statements led some to wonder if they serve as an indicator of his intention to run in next year’s presidential election.

Yet Santos’ remarks did little to curry favor in Ecuador. In an interview with RCN Radio, Ecuadorian Vice President Lenín Moreno said that “it is very difficult” to normalize bilateral relations given Santos’ declarations. The comments drew the ire of Caracas as well; the Venezuelan government issued a statement about the remarks, saying that they threaten the stability and sovereignty of countries in the region.

Meanwhile, Ecuador’s Foreign Minister Fander Falconí criticized Uribe’s government for failing to handle the question of displaced people seeking refuge in and near Ecuador. The Office of the UN High Commissioner for Refugees (UNHCR) oversees a refugee registration project launched by Quito in December. The UNHCR estimates that some 20,000 refugees live in Ecuador but that as many as 130,00 could need international protection. Additionally, the government of President Rafael Correa has stepped up operations along Ecuador’s northern border by dismantling more than 200 guerrilla camps in the last two years, Colombia’s El Pais reports.

But Colombia has its own grievances with Ecuador’s government. Data obtained from a FARC laptop during the raid raised concerns about links between the guerilla group and Ecuadorian officials. Former official José Ignacio Chauvin, a close aide to former Minister of State Gustavo Larrea, admitted that he met with FARC’s late second-in-command Raúl Reyes seven times, reports El Universo. An editorial in Ecuador’s Hoy proposes the creation of an independent commission to steer Ecuadorian politics away from the dark waters of drug-trafficking influence.

World Politics Review explains that after a year, “[B]oth sides’ failure to make progress on reconciliation may be politically motivated.” The article explains that, while Correa gains support by defending Ecuador’s sovereignty at all costs, Uribe has other matters to deal with; restoring diplomatic ties with his neighbor may not stand as a top priority.

Still, despite the controversy, economic ties appear to stand strong between the neighbors. Colombian exports to Ecuador increased 16.1 percent and Ecuadorian exports to Colombia rose 10.5 percent last year, totaling more than $2 billion in 2008, according to Colombia’s Commerce Ministry.

Tensions between the two Andean nations involved OAS mediation over the past year. In an interview with AS/COA Online, OAS Secretary General José Miguel Insulza likened his OAS role in Latin America as that of a bombero (firefighter) putting out fires across the region. As recently as February 26, Insulza visited Correa and urged reconcilation, to no avail.

A new article by the Economist looks back at raid and calls it a success in terms of inflicting permanent damage to the FARC, saying Colombia paid a small price. Colombia’s Defense Ministry reports on the massive defections facing the guerilla group. Read more about he FARC’s growing weakness and signs—such as hostage releases—that it may be changing course.

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