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.

Will Bolivia Board the Lithium Express? AS/COA Online 6/23/09

The Salar de Uyuni holds the second largest lithium reserves in the world. (AP Photo)

Bolivia finds itself in the middle of a struggle for controlling and exploiting a key natural resource for the future of the world’s auto industry: lithium. Underneath the Salar de Uyuni, a salt desert in the southwest region of the Andean country, lie approximately 5.4 million metric tons of the resource. The deposits represent almost half of the world’s lithium reserves. American, Chinese, French, South Korean, and Japanese companies have expressed interest in a slice of the pie. But Bolivian President Evo Morales has made clear that his government, while looking for foreign investment, does not plan to give away sole exploitation contracts to any foreign company. His plans involve a state-run initiative to harvest the mineral deposits and manufacture batteries for electronics and, eventually, the world’s nascent electric vehicle market.

Unfortunately, Morales plans are easier said that done. The Salar de Uyuni in the department of Potosi has limited infrastructure to effectively mine the lithium deposits. As reported by newspaper La Rázon, Bolivia’s Mining Minister Luis Alberto Echazú acknowledged that the country hopes to move forward with the mining operation on its own but still needs a foreign partner to industrialize the battery production. “We need the technology to fabricate car batteries because we are still light-years away from it, that’s why we need a partner,” said Echazú.

Bolivia’s history of nationalizing foreign assets and breaking contracts with energy companies since Morales won the presidency in 2006 may seem like a deterrent for foreign investors. Yet companies like France’s Bolloré, Japan’s Sumitomo and Mitsubishi, South Korea’s LG, and even General Motors (before it declared bankruptcy) wooed Morales’ administration in search of agreements. The Times of London chronicles the competition between Chinese and Japanese delegations in Bolivia, which included donations to build a school in Morales’ hometown and military equipment. Still some preoccupation looms in investor’s minds, as demonstrated in dealings with the state-owned Yacimientos Petrolíferos Bolivianos (YPFB). After YPBF took over the natural gas and oil industries, production has dropped and corruption scandals have flourished.

But while debate persists in Bolivia, other countries have geared up to serve as suppliers in the upcoming lithium boom. Enter Chile, the leading lithium producer and holder of the world’s largest reserves, estimated at 7.5 million metric tons. U.S. Geological Survey expert Brian Jaskula said that more recent studies have reaffirmed Chile as the world leader. He also noted that, given Bolivia’s lack of infrastructure to commercially produce lithium, it may “end up missing the lithium express.” Other considerable lithium reserves are located in Argentina, China, and the United States.

The international pressure to secure access to this new commodity will likely increase in the next decade thanks to Washington’s push for lower emission electric vehicles powered by lithium polymer batteries. The U.S. Energy Department is offering up to $1.5 billion in federal grants for American companies to produce these new batteries and related components. Furthermore, the government is set to release on June 23 $25 billion to the car industry for the development of fuel-efficient cars.

Learn more:

• January 2009 U.S. Geological Survey Mineral Commodity Summary on lithium.
• Background on Bolivia’s infrastructure and economy in the Central Intelligence Agency’s World Factbook.
• U.S. Department of Energy’s portal on its Advanced Technology Vehicles Manufacturing Loan Program (ATVM).
• Technical report on the only lithium plant operating in the United States in Clayton Valley, Nevada.
• View a forecast report on the global supply and demand for the lithium industry through the year 2020 made by consultants TRM Group Inc and commissioned by the Mitsubishi Corporation.

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

Ethanol: Brazil Celebrates, United States Debates AS/COA Online 06/04/09

Pumping an ethanol blend at a Brazilian fuel station. (AP Photos)

São Paulo hosted the 2009 Ethanol Summit from June 1 to 3, featuring heavyweights such as President Luiz Inácio Lula Da Silva’s Chief of Staff Dilma Roussef, Petrobras CEO Jose Gabrielli, and environmental activist and former U.S. President Bill Clinton. Speakers discussed new cellulose-based ethanol plants, forecasts of increasing ethanol usage in Brazil, and concerns about deforestation. Meanwhile, Colombia has become South America’s second biggest ethanol player and seeks to build its industry. In the United States, the discussion surrounding biofuels continues to focus on subsidies given to U.S. corn growers, corn-based ethanol’s impact on food prices, and tariffs imposed on Brazilian sugarcane-based ethanol.

At the summit, Roussef announced Brazil’s moves toward producing for commercial use cellulose-based (also known as second-generation) ethanol made mainly from woodchips and switchgrass. She also said Brazil hopes to start selling ethanol in that form domestically by the year 2012. Second-generation ethanol should capture almost 30 percent of the Brazilian market by 2020, according to the president of a private firm who spoke at the summit. Gabrielli trumpeted the fact that Petrobras will invest $2.8 billions in biofuels for the next four years and expects that ethanol will represent 75 percent of the Brazilian fuel market by 2020. But with such massive growth, questions surfaced about the dangers of deforestation. Clinton urged Brazil to take decisive steps to protect the rainforest, reduce its carbon footprint, and share its technology with potential ethanol producers like the Dominican Republic and Haiti. In December, Brazilian Environmental Minister Carlos Minc unveiled an ambitious plan to curb deforestation rates by 72 percent by 2017.

Colombia is also pinning hopes on increasing its stake in the ethanol market, given its position as the second largest producer in Latin America. Colombian Agriculture Minister Andrés Fernández said last month that, with six new projects dedicated to ethanol coming online this year, the country’s production capacity should increase twofold. He also said Colombia plans for a fifth of the cars made or imported to have engines using fuel made up 85 percent ethanol blend by 2012. Still, the increases use of ethanol elevates fears that prices on food containing sugar will rise, as they did happened last year in the United States with corn-related products, El Espectador reports.

In the United States, where corn-based ethanol dominates the industry, the debate continues. The Wall Street Journal reports on two federal studies that found corn-based ethanol carries a high price tag for consumers and questionable environmental advantages. In an article for BusinessWeek, automobile journalist Ed Wallace suggests “we must immediately drop the 51 cents per gallon blending credit for ethanol creation in America and drop the 54 cents per gallon tariff on imported Brazilian ethanol.” Lula and U.S. President Barack Obama discussed the 54-cent tariff imposed to Brazilian sugarcane-based ethanol by Washington during his March 14 visit to the White House without any effect. Obama said then that the measure “it is not going to change overnight” but hinted that “over time this source of tension can get resolved.”

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

OAS Ponders Cuba’s Return AS/COA Online 05/29/09

A human rights protest in front of Havana’s capitol building. The OAS is assessing Cuba’s reentry, but Washington continues to raise rights concerns. (AP Photo)

As part of the White House’s more open approach to Cuba, the Obama administration made a move this week that could assist Havana’s readmissiont to Organization of American States (OAS). At a May 27 meeting of the Permanent Council of the OAS, the United States introduced a proposal to allow Cuba to eventually rejoin the organization. The move is in line with the warmer tone set by the Obama administration on Cuba; the White House has already eased travel and remittance restrictions for Cuban Americans and recommended restarting bilateral immigration talks. But Washington has indicated that Havana must adhere to the rules set out Inter-American Democratic Charter to gain readmission. It remains to be seen if Cuba will reciprocate by taking steps toward addressing political freedom and human rights issues.

Honduran and Nicaraguan delegations also submitted resolutions to pave the way for Cuba to rejoin. Costa Rica had intended to submit a plan, but one from the U.S. State Department replaced that country’s proposal, reports The Miami Herald. The OAS commissioned a working group to start deliberations based on the proposals and report back to the OAS General Assembly, which convenes in San Pedro Sula, Honduras, on June 2 and 3. The working group is expected to use the proposals “to find a consensus text for an eventual resolution on Cuba.”

The State Department’s decision to submit a proposal comes after the Fifth Summit of the Americas, when a number of hemispheric leaders called for Washington to improve relations with Cuba. Last week, U.S. Senator and Ranking Republican on the Senate Foreign Relations Committee  Richard Lugar (R-IN) said he does not believe Havana should gain instant readmission into the OAS without addressing rights issues, but that Washington must recognize concerns held by other countries at next week’s OAS summit. “There should be a way to harmonize the desire of many of our Latin American allies to reintegrate Cuba into the Inter-American system with the United States’ interest in reforming our policy towards Cuba,” said the senator.

At a May 27 press briefing, U.S. Department of State Spokesman Ian Kelly said the proposal submitted to the OAS “supports the OAS taking steps to initiate a dialogue with Cuba regarding its eventual reintegration into the inter-American system.” Still, the Obama administration has stated that Havana must abide by the OAS Inter-American Democratic Charter to gain readmission. “Any effort to admit Cuba into the OAS is really in Cuba’s hands,” Secretary of State Hillary Clinton told the Senate Foreign Relations Committee on May 20. “They have to be willing to take the concrete steps necessary to meet those principles.” She made similar statements at COA’s Washington Conference on May 13. “We look forward to the day when every country in the Americas, including Cuba, can participate in our hemispheric partnerships in a manner that is consistent with the principles of the Inter-American Democratic Charter.”

At the same conference, Senator Robert Menendez (D-NJ) decried the idea of bringing Cuba back into the OAS fold without a dramatic improvement in human rights and democracy on the island. “For the OAS to readmit a regime that engages in this type of systematic suppression of human rights, it would have to rip up its Democratic Charter as a farce.” He also suggested that Washington cuts U.S. funding to the OAS in the case that it allow Havana to rejoin without undertaking democratic moves.

So far, Cuba has not indicated interest in rejoining. Earlier this week, Cuban Foreign Minister Bruno Rodríguez said Havana was proud that it did not belong to the OAS, saying: “[T]he OAS is totally anachronistic; it serves other interests, and we feel that our path, Cuba’s path, is one of Latin American and Caribbean integration, without a presence from outside the continent.” However, just before Cuban President Raúl Casto hinted at a willingness to discuss human rights matters with the United States.

Writing for Americas Quarterly’s blog, AS/COA’s Senior Director of Policy Christopher Sabatini writes that, for the Obama administration, it is “better to try to loosen some elements of isolation to further what is the crux of U.S. policy towards the region: supporting the development of independent civil society and improvement in human rights on the island.”

In an AS/COA interview, OAS Secretary General José Miguel Insulza voiced support for overturning the 1962 resolution that ejected Cuba as a member country from the OAS. He also explains that if that happens, it would be just the first of many steps toward Cuba’s full reinstatement.

Listen to the audio of as AS/COA panel discussion on the Cuban diaspora.

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

To Run or Not to Run: Uribe’s Question AS/COA Online 05/21/09

President Uribe still ponders a possible third term. (AP Photo)

Colombia’s Defense Minister Juan Manuel Santos steps down from his post on May 23 to become a presidential candidate for the 2010 elections. But there’s a catch: He’ll only declare his candidacy if President Álvaro Uribe chooses not to run for his second reelection. In an interview with Caracol Radio, Santos said that “he had the hunch that Uribe may not run” but that the president may not make his decision until October. Moreover, Colombia’s Senate approved legislation this week allowing a public referendum on whether President Álvaro Uribe should be allowed to run for his second consecutive reelection. The president may be delaying his decision in order to make the opposition seem weak and divided, thereby giving his party a boost on election day.

When Semana picked Santos as Colombia’s 2008 person of the year in December, the minister was already acting like a candidate on the road, offering gifts in various communities and inviting journalists to follow. In an interview with Cambio magazine this week, Santos reiterated his loyalty to Uribe and to upholding his democratic security policies if elected. Still, Santos finds himself competing for second place in popularity standings with former Medellín Mayor Sergio Fajardo. Other presidential hopefuls include former Agriculture Minister Andrés Felipe Arias, Ambassador Noemí Sanín, and the leader of the Cambio Radical political party Senator Germán Vargas Lleras.

During a September 2009 AS/COA luncheon, Uribe stated that “Colombia needs to reelect policies, not people.” Yet, eight months later, he remains ambiguous about his intentions. His approval ratings run above 70 percent and polls indicate he would likely win reelection. The Senate bill approving a reelection referendum earlier this week was passed by a 62-5 vote, though more than two dozen members of the opposition refused to participate. The bill needs to be reconciled with one from the house, then evaluated by the Constitutional Court. After clearing those hurdles, the referendum may be scheduled for some point in the fall.

Uribe’s popularity appears to stem from the fact that his administration oversaw the significant weakening of the Armed Revolutionary Forces of Colombia (FARC) and a period of economic renewal. In contrast, his high ratings have not been significantly damaged by recent wiretapping scandals involving Casa de Nariño and the Supreme Court, a cooling economy, or the extrajudicial killings of civilians by members of Colombia’s armed forces. “It may just be that they’re drinking Uribe’s Kool-aid,” comments the Latin American Thought blog in an analysis of recent poll data. The blog also suggests that Colombians place higher value on their security and economic issues than on democratic freedoms.

The idea of a third term for Uribe is a source of controversy for many. The Christian Science Monitor raises the question of whether Uribe is “following [Venezuelan President Hugo] Chávez’s footsteps?” In response, “Uribe has said he is only interested in seeing continuity for his security policies, but he has also hinted that he is the best one to do it,” the Monitor adds. Miami Herald’s columnist Andrés Oppenheimer says that Uribe should not run because “he would lose all moral authority to criticize Chávez and other elected autocrats who see themselves as ‘indispensable men’ and who end up destroying their countries’ institutions. There is no such thing as a good dictator, and Uribe would not be an exception to the rule.” The Economist reflects on the good and bad of Uribe’s two presidential terms but says: “If he doesn’t quit while he is still ahead, history may judge that Mr. Uribe began to undo his own achievement.”

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