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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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.

Drug Cartels Move Beyond Borders AS/COA Online 12/19/08

A vigil in Mexico for drug war victims. (AP Images)

Two years after Mexican President Felipe Calderón declared war on the country’s drug cartels, the bloodletting continues to spread. Despite impressive arrests and narcotics seizures, the murder rate doubled in 2008 over the previous year. Moreover, the gangs’ tentacles reach into the highest levels of government down to local police forces. But the drug war’s impact has also been felt well beyond Mexico, with links extending across the Americas, into Europe, and as far as Australia.

Out of fear of the drug war’s overflow, Guatemala plans to deploy several hundred soldiers along its border with Mexico during the next few weeks. In September, Guatemalan President Álvaro Colom accused the cartels of high-level infiltration after it came to light that his office had been bugged. Analyst Sam Logan at ISN Security Watch describes Guatemala as the “release valve” for the cartels, given its low altitude and proximity to paved roads in Mexico. Logan also points out that, in South America, Peru saw ties develop between Mexican drug cartels and the Maoist Shining Path guerillas. Recent attacks on the Peruvian army in which 15 soldiers and two civilians died were blamed on ex-guerrillas hired by Mexican drug traffickers to “secure their trade routes out of the mountains.” According to a UN report, coca cultivation increased in Peru, Colombia, and Bolivia by 16 percent since 2001.

The connections appear to reach even further south; Argentina has become a drug trade hub, fueling the U.S. methamphetamine and European cocaine demands. Latin American Thought blog’s Eliot Brockner reports on the recent seizure of 1,000 kilos of cocaine at Buenos Aires’ port. The fact that Mexican drug cartels “can use Argentina as an entry (ephedrine/pseudoephedrine) and exit (cocaine) point suggests there is a fairly well-coordinated smuggling ring capable of transporting large quantities of illicit merchandise across South America,” he writes.

The cartels’ links reach beyond the Americas. A Stratfor analysis covers Mexican connections with Italy’s ‘Ndrangheta organized criminal clan, allowing for drugs to be shipped from Colombia through Mexico to the United States and on to Italy. From there, the drugs could be distributed to the European market. Earlier this month, a cocaine bust involving the arrest of three Mexican nationals by Australia’s federal police uncovered that country’s local link to that Mexico’s cartel.

The 2009 National Threat Assessment published by the National Drug Intelligence Center identifies Mexican drug-trafficking organizations as “the greatest organized crime threat to the United States.” With an eye to the problem, the United States released $197 million to Mexico at the beginning of December—the first of a $400 million package to fight organized crime through the Mérida Initiative.

As the crisis grows, so do the calls for solutions. Harvard International Review’s Jason Larkin suggests that, in the absence of decriminalization or results from increased militarization, negotiation with cartels stands as an option, “just as the U.S. has considered negotiating with the Taliban.” In a lengthy article, OpenDemocracy.net writes that “legalization may become the most effective weapon in the arsenal aimed at organized crime…it seems now is the perfect time to give it a try,” after a thorough analysis of the crisis. A Semana op-ed compares the tragedy facing Mexico to the one in Colombia’s recent history. It recommends that Latin American governments come together to coordinate efforts to halt the bloodshed, which could help affect change internationally. A Cox News Service article looks to similar organized crime circles of the past, ranging from Chicago during Prohibition to Italy’s Mafia, and suggests that peace may come through legalization or by fragmentation of the cartels.

El Universal features a multimedia page that tracks the ongoing violence and keeps a complete tally of the war’s victims in Mexico. Read an AS/COA analysis on how gun smuggling from the United States into Mexico fuels the war.

En español.

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Americas’ Security Cooperation Revisited AS/COA Online 09/05/08

Brazilian Supertucanos in a military demonstration earlier this year. (AP Images)

Officials from 34 countries gather at the VIII Conference of Defense Ministers of the Americas held in Banff, Canada, from September 2 to the 6. The central premise of the summit—first held in 1995—revolves around “confidence-building through cooperation and collaboration.” This year, topics include peacekeeping support in places like Haiti and generating security assistance for events such as the 2010 Winter Olympics in Canada. A recent event hosted by the Council of the Americas examined how the ministerial filled a void by allowing defense counterparts from countries across the Western Hemisphere to interact and thereby readied to cooperate in times of natural disasters or political disputes. Yet speakers at the COA meeting also raised a critique that the summit had yet to provide results beyond introductions and interactions.

This year’s summit comes at a crucial moment when several nations in the Western Hemisphere are beefing up their defense capabilities, enacting regional defense cooperation treaties, and when some intend to boost their status as weapon suppliers. Setting the example as host, Canada revealed its 20-year, $490 billion “Canada First Defense Strategy,” a detailed plan to modernize its armed forces and its military industry. U.S. Secretary of Defense Robert M. Gates also delivered a speech highlighting ongoing cooperation programs such as the recently approved Merida Initiative involving a U.S.-Mexico-Central America partnership to fight drug-related violence, Caribbean Community efforts to improve security on their waters, and the proposed South American Defense Council. “We have a collective dream: a free, prosperous, and secure hemisphere. By working together, we can transform that dream into reality and embrace the great promise and potential of the Americas,” added Gates.

Just two months ago, the United States reactivated its Fourth Naval Fleet drawing mixed reactions from South American leaders calling to establish a defense council to safeguard the region’s biodiversity and, more importantly, its hefty energy reserves. During a speech at AS/COA’s Latin American Cities Conference in São Paulo on July 10, U.S. Ambassador to Brazil Clifford Sobel raised the fact that some had suggested the fleet could have more aggressive purposes. “Let me be very clear. Let me use this forum to say it is not true,” asserted Sobel, saying the fleet will have no offensive capabilities and will instead serve to provide humanitarian support during natural disasters.

Using cash flow from the booming commodities markets, countries such as Brazil, Chile, and Venezuela have been modernizing their militaries. Brazil has doubled its military expenditure since the year 2000, according to the Stockholm International Peace Research Institute, and reached an agreement with France to get the necessary technology to start building nuclear submarines in 2009. Blogger Sam Logan points out that Brazil—with plans to expand its ammunition industry—serves as South America’s champion arms supplier, selling army vehicles to Bolivia, and Supertucano planes to Colombia and Chile.

Meanwhile, Chile purchased 340 German tanks, frigates, submarines, and more than two dozen F-16 fighters. Venezuela also inked a deal with Russia this past July worth more than $3 billion, represented in Sukhoi fighters, helicopters, and air-defense missile systems.

Some analysts remain skeptical about the utility of the conference. Ray Walser of the Heritage Foundation, a conservative think tank, criticizes the lack of strategic and diplomatic meaning of the summit and suggests that effective partnerships require “actual friends and genuine partners.” While holding Caracas responsible for causing rifts, Walser also charges Washington with “inflicting serious wounds to our hemispheric relationships” by failing to approve a trade pact with Colombia or drop a tariff on Brazilian ethanol.

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Leaders Stand Up for NAFTA AS/COA Online 04/22/08

North American leaders at the New Orleans’ summit. (AP Images)

With a race for the White House in full swing and dominated by issues that hinge on North American relations—including trade policy, immigration, and border security—the leaders of Canada, the United States, and Mexico met in New Orleans for the April 21 and 22 North American Leaders’ Summit.

In response to recent criticism of the North American Free Trade Agreement (NAFTA) by Democratic presidential candidates, U.S. President George Bush, Canadian Prime Minister Stephen Harper, and Mexico’s President Felipe Calderón praised the trade pact. Harper called NAFTA “our best option to create jobs and compete effectively” while Calderón said the agreement created jobs in Mexico that helped slow emigration to the United States. Bush voiced support for NAFTA and also argued for passage of bilateral deals with Colombia, Panama, and South Korea. The North American Competitiveness Council presented a report—called Meeting the Global Challenge—voicing concern about recent isolationist rhetoric and providing recommendations to improve border management.

Information released by the White House in advance of the meeting emphasized the benefits of NAFTA: Canada serves as the United States’ number one trading partner while Mexico ranks third; combined three-way trade reached $930 billion last year and will likely hit $1 trillion by the end of 2008. In a Wall Street Journal op-ed, John Engler of the National Association of Manufacturers takes on the argument that a trade deficit between the United States and its NAFTA partners has led to job losses; he points out that the deficit relates largely to energy imports and not manufactured goods. On C-SPAN’s Washington Journal COA’s Vice President Eric Farnsworth explains that, “For what NAFTA was designed to do, it’s been a success.” He describes the treaty as a “living document” that’s frequently revised by the three countries to make improvements.

In addition to NAFTA, regional security emerged as a paramount issue; Calderón emphasized the importance of bolstering security along the U.S.-Mexican border and applauded recent efforts by the Bush administration to halt arm smuggling and illegal crossings. Bush, in turn, lauded praised Calderón’s anti-drug efforts and encouraged Congress to approve the proposed Merida Initiative, a $1.4 billion project that aims to fight gangs, drug trafficking, and human smuggling in Mexico and Central America. A Brooking Institute analysis takes a closer look at how U.S. national security policy has shifted its attention to transnational crime in Latin America. At a recent AS/COA roundtable, Assistant Secretary of State David T. Johnson of the Bureau for International Narcotics and Law Enforcement Affairs discussed the Merida Initiative.

Calderón also raised the issues of immigration, bringing attention to the contribution of Mexican immigrants in the rebuilding of New Orleans during the aftermath of Hurricane Katrina. He emphasized the importance of finding a solution to the question of immigration reform “with respect and responsibility.” The U.S. presidential cycle has coincided with an upswing in anti-immigrant rhetoric and a patchwork of state immigration laws in the United States. The shift toward immigration crackdowns may be having an economic impact; according to the World Bank, remittances slowed down (PDF) last year for the first time since they began being tracked tracked, affecting recipients in Latin America.

In an op-ed for the Calgary Times, AS/COA President Susan Segal highlights NAFTA as “the most effective tool we have to increase trade among the United States, Canada, and Mexico.” AS/COA Online takes a closer look at the remittance slowdown as well as Calderón’s support for Mexican immigrants during his January visit to the United States.

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