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World Affairs Councils
1800 K Street NW
Washington, DC 20006
Peter Hakim, Inter Amer
Dialogue, "What Americans
Need to Know about Contemporary Latin America."
(Notes by Prof. Jeremy Lewis.)
Bush speech the previous evening committed US to Latin America.
Caribbean Initiative just implemented, though less than NAFTA. Bush
(like his father) gave full policy speech, unlike Clinton.
Argentine economic bailout needed but technical one, developed in private.
Dark times are upon us for Latin America, espcially Argentina.
Argentina richest, twice per capita wealth of next Latin country.
Countries w/turbulence despite US engagement: Colombia, Venezuela under
Mexico & Peru began year well but now erratic. Both leaderships replaced
political machines especially Fox in Mexico. 90% of Mexican exports go
to US, hence dependent.
Confidence in Democracy is declining in polls each year in Latin America.
US foreign policy priorities changed Sep 11.
Themes of 1990s: democracy, markets, US relations -- everywhere except
3 US-Latin summits in decade.
Yet all this over decade did not reform bureaucracies or lead to transformation.
Still now they say TINA- There is No Alternative.
Latin Am not developing hi-tech like E.Europe - because Latin education
is so poor for its income level. Chile best & Cuba for education
-- and Chile enjoys highest development (after Argentina.)
Amb. Juan Jose Bremer (Mexico), "The
US and Mexico"
2,000 mi border - oil - nat gas
Economic development & openness:
- entered GATT 1986
- Privatization in 1990s
- now 8th largest exporter in world.
- Oil now under 9% of exports - below manufacturing.
- committed to reform of public sector.
- 14% of US EXPORTS
- imports more from US than Euro.
- Fox of PAN opposition is now president
- parties adapting
- Different levels of growth in N, middle & South.
Border issues - cooperation against money laundering & organized
US has 22M population with Mexican heritage.
3M Mexican workers in US - must face reality & accord some rights,
even though a touchy issue.
Wealth concentration a major problem -& tax equals only 16% of personal
Kidnapping & security problem - now coordination of federal & local
Most Mexican population is mestizo - only 11% indigenous, especially South,
Chiapas. Now funding Chiapas better & allowing free movement of Zapatistas.
12:30 Leadership Luncheons
VP of IDB).
Notes by: Thomas J. Reckford, President, World Affairs
Council of Washington, D.C.
Burke Dillon said that the currency board in Argentina
worked all right at first, mainly to combat inflation, but that it should
have been abandoned after six or seven years. There was a good deal
of discussion on dollarization, which was adopted by Ecuador with some
success two years ago. Dollarization is effective
in fighting inflation, but it makes it impossible for the government
to print its own currency and thus adjust its own monetary policy in times
of need. Dillon then stressed the IDB's involvement in social issues,
domestic violence, race, and poverty among the black
populations of Latin America. In general, the IDB focuses on economic
integration, competitiveness, social reforms, and governance (a polite
way to refer to corruption and modernization of the state).
When asked about trends in foreign direct investment,
Dillon replied that it was concentrated in the big countries and that,
in general, it was pulling back from Latin America. Argentina's recent
nullification of guaranteed tates for privatized utilities has negative
for foreign investment all over the continent.
Dagoberto Rodriguez, with Josefina
Vidal, Cuban Interests Section.
Notes by Eileen Heaphy.
As part of the annual national conference of the World Affairs Councils
of America, WACA hosted a luncheon for 18 WAC members with the Chief of
the Cuban Interests Section (part of the Swiss embassy) at the Red Sage
Restaurant in Washington, DC. The Chief, Dagoberto Rodriguez, had
only taken up his position four months earlier; he was accompanied
by his Political Section Chief, Josefina Vidal.
Rodriguez said that his new task was to improve US Cuban relations by
concentrating on new areas of potential cooperation and by not dwelling
on the past differences that divide us. He described the areas that
he said believed were ripe for further cooperation:
*maritime cooperation in the Florida Straits
*drug interdiction (he stated that Cuba had only minimal drug abuse
but realized the situation could deteriorate)
*cooperation against terrorism (he said that Castro believes terrorism
can be fought without violence, but he understood the difficulties the
US was experiencing. Therefore, Cuba has been supportive of sharing
information on terrorists and was remaining silent on the use of Guantanamo
Naval Base for Taliban POWs)
Rodriguez and Vidal answered a number of questions from a generally
friendly audience, many of whom had visited Cuba.
They explained that the US embargo continued to harm Cuba despite the
fact that most other nations of the world trade with Cuba. Rodriguez
explained the secondary effects of the embargo, for example, if a foreign
company makes a drug that is patented in the US, that drug cannot be sold
These secondary effects, combined with the restrictions on investment
imposed by the Helm-Burton legislation, made much trade difficult or too
Rodriguez and Vidal also justified the Cuban political system thusly:
*election are more fair in Cuba than in the US because there is no special
interest money (of course there is no opposition either)
*dissidents cannot run for office and oppose Castro because they receive
money from foreign governments, i.e., the US.
*real competitive democracy cannot be implemented in Cuba because of
the "special situation," i.e., the embargo.
The luncheon was a good preface to the subsequent conference discussion
Summary of Luncheon with
Ambassador Roberto Saladin Selin, Dominican
Notes by Jennifer Watson Roberts
Based on the progress report given by the Dominican Ambassador at our
luncheon on Thursday, January 17, we can probably count the Dominican Republic
(DR) as one of Latin America’s success stories. The DR has a population
of about 8 million people, and because of its proximity to the US and the
fact that 1.5 million Dominicans live in the US, the ties between the two
countries are strong.
Although a repressive dictatorial regime ruled under General Trujillo
from 1930-1961, the DR has had open elections and commerce since that time
(with a few bumps in the road, including social uprisings and hard currency
shortages). President Mejia, the current Dominican president, has
met with President Bush and discussed many issues including concerns over
the stability of Haiti (almost one million Haitians live in the DR).
The DR is the fifth largest Latin trading partner for the US (after
Mexico, Brazil, Colombia and Venezuela). It is a huge exporter of
apparel, and also claims 70.9% of the sugar import quota for the US, with
the sugar it produces from sugar cane. The DR has several sugar mills
and claims to have the most efficient mill in the world operating outside
of La Romana. The DR also imports a great deal from the US and has
always given the US a positive balance of trade, although the US surplus
has started to dwindle over the past two years.
The DR has maintained an average growth rate in its economy of 5.6%
per year over the past ten years. Tourism is a major industry that
has been hit hard by the events of September 11. Many of its products
are agricultural, including sugar cane, bananas and pineapples, other tropical
fruits, and rice. But there are also a large number of US and multinational
companies located there for finishing and assembly. In textiles,
for example, the fabric is often imported without duty to a free trade
area, then cut and sewn and exported again as a finished product.
The Ambassador took pride in another major export, baseball players.
He said that the DR is the only other country in the world (outside of
the US) that can field two complete teams of all-stars. Dominicans
learned baseball during the Marine occupation between 1916-1924, and the
sport has grown ever since. Sammy Sosa, of course, is Dominican.
We ended our wonderful luncheon with a promise that we would all do
our part to support the Dominican economy by planning to visit one of its
many gorgeous beach resorts one day soon.
Amb. John Maisto, "Western Hemisphere
Notes by Jeremy Lewis, Montgomery Council.
President Bush feels W.Hemisphere is neighborhood.
Has met 20 hemispheric leaders in oval office -- plus Quebec summit.
Trafficking of people, not just drugs - sometimes more lucrative.
Markets & democracy essential to the system.
Corrupt alcaldias are an issue.
Bilateral investment Treaty to prevent rules changing
Fighting ills of contemporary society.
Judicial system reform needed.
FTAA by 2005.
Canada has advantage on trade with Chile -- US needs trade bill.
Argentine leaders now Populist, Left, but accepts Bush speech. Not enough
reform yet now talk of Chilean model, not Venezuelan.
For credible policy Bush needs Trade Promotion authority from Congress
- unlike Clinton let down.
Bush comfortable w/Mercosur.
Many Latins skeptical of TPA now -- now proposals are all on Internet in
4 languages - process to generate momentum.
Venezuela & Colombia -- both need domestic political solutions (Colombia
with US aid).
Mexican debt crisis in 1980s.
Forced Mex to change paradigm from Protectionsim to exporting. Oil
was vast majority of Mexican exports. Unilaterally cut tariffs, joined
GATT 1986. Carlos Salinas post 1988 realized US was largest potential
market -- despite anti-Yanqui slogans -- proposed NAFTA.
Effects both good & bad much greater for Mexico than US. NAFTA
approved closely end of 1993 after much lobbying. Clinton faced opposition
from organized labor, especially in protected inds: steel, mineworkers,
textiles, plus enviros.
Reduction of immgration was a selling point that has not occurred.
Free trade works better when produce same kinds of goods and then specialize.
Other argument for NAFTA was growth in jobs in US -- but a poor argument,
free trade has little impact on net job creation. Some
jobs will be lost.
Mexican bailout $50 Bn, largest to that point (1995). Since then,
high growth rate.
Trade with Mexico has increased more than with any other: $137 BN to US,
$125 Bn to Mexico. Second partner after Canada. Together, one
third of US trade, more than all of EU for US. Japan is third.
In trade growth, NAFTA fabulously successful.. Autos are the
biggest item of trade in both directions.
Canada makes large SUVs, Mexico makes smaller vehicles.
Trade authority opposed by Dems and Unions. Won by one vote in HR
but only by cutting deals -- and Senate still to come.
Enviros a little more supportive of NAFTA. Environmental Commission
in Montreal OK because enviros cooperated -- and Mexican enviros
have grown. Dumping near border has actually improved a little but
Maquiladoras flourished -- like major industries, doing some work before
articles finished in US.
Migration to N. Mexico excessive for resources of N region. S incl
Chiapas even more divided.
Trade disputes get resolved more quickly now. Subcommittees for economists,
on tech isses now are routine.
indirect effects are great -- e.g. each country taking up the other's music
Clinton did not defend NAFTA because of labor unions. US Public is
In Mex equally complicated -- has restructured economy, new manufacturing
jobs. Mexico did not have democratic debate beforehand -- and had
worst economic crisis ever, during NAFTA (even if unrelated.). Only
some Mexican states have benefitted.
Rate of FDI increased after NAFTA becase set rules, stability -- and dispute
resolution was laid down.
Fully 24% of Canadian & Mexican GDP is exports to US!
Job increases in US -- in labor intensive industries. Exported machinery,
technical goods, scientific equipt, agricultural products.
US unemployment kept going down -- indicator of benefit to US even though
now going up now. But jobs little affected by foreignn trade.
Losses in textiles & shoes started well before NAFTA.
Cong has Constitutional authority over trade -- not executive. Trade
agreements though began 1930 with Sec of State Cordell Hull as simple reductions
of tariffs -- congress could define scope. But with non-tariff barriers,
by practices, cong finds it impossible to define in advance.
Fast track necessary for Canadians & EU to make agreets -- it means
Congress will agree in principle and then vote yes or no without amendments.
Countries will not want to negotiate twice -- with President & with
Congress. But some eg Chile willing to go without fast track.
CSIS, (ex U. TX Austin, ex State dept, Chile.)
"Successes of NAFTA since 1994."
Notes by Jeremy Lewis, Montgomery Council.
Robert Pastor's book suggests FTAA development like EU with all institutions.
But US, Mex & Can did not want these institutions.
Customs union has common external tariff -- but Free trade area has no
common tariff. Mex cannot agree to common external tarff because
has own agreets with EU. Common currency needs equal sized economies,
better in EU than in N Amer.
Free trade only relates to goods originating in each country, with rules
of origin against transhipment of other goods.
Pastor's idea of 5-5-5 advisory group.
Yes, Fox was slow to support US after 9/11 -- poorly advised, perhaps Mex
wrongly afraid of requests to supply troops!
Free movet of labor turns FT area into a common market.
Delays on Canadian border of half hour for trucks can break down the just
in time system -- predictability is important.
Still protecting steel, OJ, & far more under recent bill than in Kennedy
round only textiles.
US has extensive ag support system that blocks Brasilian produce.
Debate on ending Embargo of Cuba.
Pro:' William D. Rogers - ex UnderSec of State.
Notes by Prof. Jeremy Lewis, Montgomery Council.
embargo shuts down travel, diplomatic Channels- including War on drugs.
Most atrophied foreign pol. Embalmed, frozen 40 yrs. Family travel strictly
Like Berlin wall - Tear it Down.
70% of Floridians agree -as do 53% of Dade county cuban americans.
Let in light
Freedom is contagious.
Trade ban - we trade with others e.g. China.
Difficult for relations with European traders with Cuba.
Pernicious effects on all trading-partners.
Con: Dennis K. Hays, Cuban-Amer foundn.
rejects that embargo has failed - and that US tourism will bring down
Repressive regimes do not respond to economic pain of people.
Embargo has been responsible for [alloc imptets] in Cuba since end
of Soviet aid.
Castro vetoed act to allow small businesss.
Castro acting reasonably again because in economic trouble.
Economy down 35 - 50%-since end of aid.
Work to toss regime to dustbin of history.
Rogers - do we enhance cuban liberty by restricting our own?
Cuban economy causes opening - not sanctions.
Hays - Helms-Burton only penalises trade with stolen US property.
Hotels are stolen.
Cuban govt pays hotel staff.
Need concessions from Castro before repeal.
Speakers disagreed on whether repeal would reduce Castro's stature.
Interpol for new anti terror net found good cooperation from Cuba.
Hays - like Gotti joining FBI. Cuba has not broken sanctuary
China - should not engage to make more efficient dictatorships.
Rogers - engagement worked for other communist countries.