Geopolitical implications of international trade agreements for LatAm (Dec. 22, 2015)

Great series of articles from Nueva Sociedad on the subject of multilateral trade agreements, such as the Trans Pacific Partnership (TPP), the Transatlantic Trade and Investment Partnership (TTIP) and the Regional Comprehensive Economic Partnership (RCEP).

In a long piece Heribert Dieter analyzes the impact of the TPP and the TTIP on commercial policies, and says they represent a return to geopolitics. He laments the move towards such agreements, saying they represent a subpar solution that would be better served by free-trade, but notes that they respond to political exigencies. Such agreements led by the U.S. force BRIC countries to prepare to responde with their own agreements, he says, as they face a future with uncertain commercial and financial regulation. He warns that such preferencial commerce can only lead to commercial Balkanization, with especially risky effects for developing economies which will likely be excluded from production networks. He concludes that developing and emerging markets should learn from post-war Europe and notes that profound regional integration demands the establishment of at least customs union.

The success of the new TPP with have major impact on the integration of Latin American economies, explains Mariano Turzi who compares the east-west division the agreement creates in the region with the north-south division created in the 20th Century by the Panama Canal. The risk for Latin America, he argues, is that the division could translate into different regionalizations (in reference to non-state commercial actors) and divergent regionalisms (in reference to institutional and political dimensions). Such fragmentation is harmful for the region, he says. "Without 'regional conscience' Latin America will lose international action space and in matters of geopolitics and geoeconomy will continue to be relegated to a position functional to designs beyond its opinion and control."

Ana Romero Cano criticizes the potential impact of the TPP in Peru, where she says the agreement will shield major foreign investors and health monopolies. She reviews the process of the TPP negotiations, compared with other free-trade agreements Peru has subscribed to with other counties, and gives a negative assessment of the particular secrecy in which the TPP negotiations were carried out. In the process the "few mechanisms for transparency and information the Peruvian population could count on to know what was being negotiated in this commercial agreement" were pushed back, she writes.

In defense of the TPP agreement, Felipe Lopeandía W., Chile's chief negotiator, argues that inclusion in the TPP was a critical development for the country. He notes that Chile's economic development rests, in large measure, with international commerce, and that subscribing to rules and commercial disciplines is critical to ensure the stability of the country's international insertion.

But what will be the impact of the TPP on non-member states asks Heribert Dieter. The agreement is an exclusive club, he explains -- new members can be forced to make concessions demanded by member states, it's not merely a matter of ratifying the original TPP agreement. "For the big powers competing for power and influence, commercial regulation is becoming a race against time. The losers are the economies who can only pick between accepting far-reaching political rules and not participating, with the risk of suffering economic marginalization."

In an essay Marcel Humuza argues that classical geopolitics is being replaced by "geoeconomy."  The U.S. is betting on commercial agreements as strategic instruments to consolidate its power and organize the international system according to its interests and the European Union's commercial policy is also dedicated to assuring and expanding its area of influence. The author analyzes the TTIP as a form of exclusion for developing economies, or a way of forcing them to accept its established rules. He predicts that the current model is the beginning of a new split world order, with the U.S. and Europe facing off against China commercially.

There's an interview with Uruguayan Frente Amplio party leader Mónica Xavier who suggests the region must unite in the face of the "mega" commercial agreements, which limit sovereign capacity to act. "The potential impact of these big agreements on commercial flows influences the conditions of Latin America's international insertion. That represents challenges in two dimensions: on the one hand, the foreign policies adopted by each State and, on the other the possibilities of strengthening together the regional conditions for the increase in value added production, facing a more virtuous participation in global value chains."

News Briefs

• In the context of student protests of a proposed educational reorganization plan in Brazil's São Paulo state (see Dec. 2nd's post), a group of parents has gone to the Inter-American Commission on Human Rights (IACHR) to denounce violations committed against the students by the Military Police, reports El País. Students occupied more than 200 schools in protest of a proposed plan to consolidate schools, which would affect more than 300,000 students and send many of them to overcrowded institutions. (See last Thursday's briefs.) Signatories of the document presented yesterday, which included the Human Rights and Prison Situation groups of the Public Defender, say the Military Police's actions agains the students represent actions against the right to protest.

• Brazil's new finance minister, Nelson Barbosa, attempted to calm markets yesterday, but got a chilly reception from investors reports the Wall Street Journal. (See yesterday's briefs.)

• Haitian authorities postponed next Sunday's presidential run-off election, amid accusations of fraud and irregularities from opposition candidates, reports Reuters. No alternative date was provided, reports the Miami Herald. The Provisional Electoral Council (CEP) says it will wait for a report from an electoral commission charged with evaluating October's election. (See Friday's briefs.) In an interview with the Associated Press Haitian President Michel Martelly defended the elections and said the opposition allegations of fraud are aimed at strengthening its position.

• At a Mercosur meeting yesterday, Argentine President Mauricio Macri used his speech to appeal for the liberation of jailed Venezuelan political opposition leaders. The hard-stance, a shift for Argentina after the Venezuela-friendly Kirchner administrations, was met harshly by Venezuelan Foreign Minister Delcy Rodriguez, who told Macri he was meddling in Venezuelan affairs, reports Reuters. During his presidential campaign Macri promised to pursue the suspension of Venezuela from Mercosur, citing a clause in the bloc's charter that seeks to punish anti-democratic governments with isolation from the group. But after the Venezuelan government recognized the opposition's landslide win in recent legislative elections he backtracked.

• Panama's Supreme Court ordered the detention of former President Ricardo Martinelli yesterday. The multimillionaire supermarket tycoon who ruled the Central American country from 2009 to 2014 is alleged to have used public money to spy on more than 150 people illegally, one of several accusations he faces, reports Reuters.

• A Cuba deal was an integral part of Obama's foreign policy agenda for his second term. But his achievements in the area are still fragile, and over the next year the White House will seek to safeguard them, explains the Wall Street Journal in a piece on the obstacles he faces regarding international policy. In the case of Cuba it will mean taking additional executive actions so Americans become accustomed to traveling to the island-nation 90 miles off the coast of Florida and U.S. businesses are deeply invested there, according to the WSJ. 

• A Brazilian judge has ruled that mining giant Vale SA shares responsibility for a catastrophic dam break at one of its joint ventures last month because it was using the facility to store its own mine detritus, reports the Wall Street Journal. The death toll in the accident was raised to 17 yesterday, and BHP Billiton Ltd, Vale's partner in the Sanmarco mine, pledged to publicly release the findings of an external investigation into the cause of the disaster, reports the Wall Street Journal in a separate story. (See yesterday's briefs.)

• Iguala's mayor wants to turn turn the page on his city's ugly 15 minutes of fame -- the disappearance of 43 teachers college students 15 months ago. But that seems like wishful thinking according to an Associated Press piece, which notes that there were five murders during the new mayor Esteban Albarran Mendoza's first week in office, and 25 in his first two months. "Disappearances continue, and most of the missing have not been found. For hundreds of families around Iguala there is no possibility of turning the page as long as they have no proof of death or a body to mourn."

• A major fire yesterday gutted the Museum of the Portuguese Language in São Paulo, one of Latin America's most popular and respected museums reports the New York Times.

• Globalization has facilitated cultural exchange between indigenous traditions and Western practices, which has led to a growing interest in the ritual, religious and therapeutic use of ayahuasca, explains a new Transnational Institute (TNI) and ICEERS Foundation report on the challenges associated with the globalization of ayahuasca, and frames issues related to psychoactive plant substances in the broader context of existing drug policies and the current drug policy reform debate.

• Bolivian legislation allowing children as young as 10 to work has created a rift between those who support it as Andean tradition and others who condemn it as exploitation, reports the New York Times.

• Women can climb mountains, even in the traditional skirts and shawls of Bolivian indigenous communities, reports the Associated Press in a feature piece on Aymara women mountaineers.