Free Trade Bush's Way
On the eve of George W. Bush's recent tour of Latin America, Mexican writer Carlos Fuentes equated the advantages of a global free market with the peaks of the Himalayas, characterizing them as summits so inaccessible that the poor cannot even see them, let alone scale them. Fifteen years of US-prescribed free markets and trade liberalization in Latin America have generated an average annual growth rate of only 1.5 percent, far short of the 4 percent needed to make a serious dent in poverty levels. Add to that the Mexican peso meltdown of 1994, economic stagnation in Central America, the Brazilian currency crisis of three years ago, the political and economic collapse of Peru, endless war in Colombia, coup jitters in Venezuela and the staggering crash in Argentina, and one can understand Fuentes's pessimism.
"Trade means jobs," Bush said as he met with regional leaders and promised a harvest of benefits from his proposed Free Trade Area of the Americas (FTAA)--a thirty-two-nation pact Washington hopes to implement by 2005. But for all Bush's talk of a prosperous hemispheric future, his policy initiatives are mired in a cold war past. The Administration has just anointed a former Oliver North networker and interventionist hawk, Otto Reich, to head the State Department's Latin America section. And much as in the days of the Reagan wars in Central America that Reich helped promote, the Bushies seem to believe that the region's ills are better solved by guns than butter. No sooner had Washington signed off on the sale of a new fleet of F-16s to Chile (ending a two-decade ban on sophisticated-weapons sales to Latin America) than the Administration began asking Congress to increase military aid to Colombia and to lift all restrictions on its use. Those critics who argued that the $1.3 billion antidrug "Plan Colombia" would suffer mission creep and inevitably morph into a prolonged counterinsurgency war are now seeing their darkest fears confirmed.
On the economic front, Bush offered little more than warmed-over trickle-down Reaganomics to a continent in desperate need of a lift from the bottom up (the three countries he visited--Mexico, Peru and El Salvador--all suffer poverty rates of 50 percent or more). Certainly not lost on his Latin American audiences was the one-sided nature of the free trade offered by Bush. For nearly two decades now, Latin Americans have been told that by adhering to the "Washington Consensus" of market liberalization they will be able to partake of the rich American pie. But the cold fact is that the US market has remained closed to a cornucopia of Latin American goods.
Some remedy was found in the past decade's Andean Trade Preference Act, designed to lure impoverished Latin Americans away from local drug economies by allowing them to freely export a list of 4,000 goods into the United States. But since ATPA expired last year, the Senate and the White House have balked at its reauthorization because of protectionist pressure from conservative, primarily Southern, textile and agriculture interests. Its reinstatement could shift 100,000 farmers in Peru alone from coca to cotton cultivation.
Washington's refusal to depart from such unequal and inflexible models has--unwittingly--provoked some positive alternative stirrings. The use of armored cars and tear gas barrages in downtown Lima during the US-Peruvian presidential meeting was an official acknowledgment of the growing restlessness with the status quo. Newly elected President Alejandro Toledo has seen his popularity plummet to 25 percent as he has failed to offer economic alternatives. In Brazil center-left candidate Luiz Ignacio "Lula" Da Silva leads in this fall's presidential polls and vows to block the FTAA if elected. Even the incumbent, more conservative, President Enrique Cardoso has begun to steer Brazil toward more independence from Washington. It's still too early to predict how the developing debacle in Argentina will play out.
Finally, El Salvador, where Bush ended his Latin American tour, couldn't have provided a more fitting showcase for the current disjuncture between Washington and its southern neighbors. During the 1980s the United States was willing to spend billions to fight a war against leftist insurgents and promised a bright, democratic future. That conflict was settled ten years ago with a pact that opened up the political system but did nothing to address the social ills that provoked the war in the first place. And once the guerrillas were disarmed, Washington lost interest; in the past decade US aid has been reduced to a paltry $25 million a year. Today El Salvador languishes with vast unemployment, radical economic disparities and a murder rate forty times higher than that of the United States.
Democrats like California Assembly Speaker Antonio Villaraigosa are probably right when they claim that Bush's trip was aimed more at luring the domestic Latino vote than at building bridges to the South. During his 2000 campaign, Bush excoriated Bill Clinton for squandering a chance to improve relations with Latin America. But now Bush seems to be following in that same sorry tradition.