Joe Biden and South America: What to Expect in Key Countries?
The article was originally published in “The Musings Of A Politics Junkie & Closet Economist.” To read more, please visit the website.
Trade, commerce, and economic growth…why discuss other things, at least, for now?
We are less than 60 days away from inauguration day for president-elect Joe Biden. Some South American politicians and activists, including Argentinian President Alberto Fernández and Uruguayan President Luis Lacalle Pou, seemingly cannot wait for that day. Others, such as Brazilian President Jair Bolsonaro, may be more hesitant. Both sides should be excited and cautious.
A Biden administration should be expected to be a partner to South America due to Biden’s prior enthusiasm and interest in the region. Still, increased diplomatic communication and engagement does not necessarily suggest a major shift in policy. For example, President Donald Trump’s Growth in the Americas initiative, which promotes collaboration with private industry to fund infrastructure projects across Latin America and the Caribbean should continue. This conspicuous response to China’s expansion into the region will likely have support within a Biden administration and Congress, especially with countries such as Brazil, Argentina, Chile, and Ecuador in South America already signed onto the initiative.
Similar economic initiatives in the region could be low-hanging fruit for continuity. Yet, the Biden administration will also have to confront the language of (or change the tone on) tariffs and economic threats when engaging South America as well as steer a pathway to engaging on democracy and the drug trade in the region. Democracy as a policy does not always go well…despots and autocrats can win elections too. And the drug trade is, as we all know, an incessantly ongoing touchy subject that has cost many real (and political) lives in its path. Thus, when looking at the key countries in the region (i.e., Brazil, Argentina Colombia, and Venezuela) for a Biden administration, plotting a strategy that is focused on economic growth and trade and layered with capitalistic market-friendly policies may be the winning mix for change in the region (and at home).
A deeper exploration of U.S. engagement with these key countries largely suggests that there may be a change in tone but not exactly a change in policy thinking.
Brazil
The “Trump of Tropics” meets the anti-Trump president…
It is not hard to imagine how the relationship between Joe Biden and Brazilian President Jair Bolsonaro could get off to a rocky start. Joe Biden has publicly criticized the environmental policies of Bolsonaro with poignant attacks on the response to the Amazon fires by the Bolsonaro administration. Biden went as far as telling the Americas Quarterly earlier this year that “If Brazil fails to be a responsible custodian of the Amazon rainforest, then my administration will rally the world to ensure the environment is protected.” It is expected that Biden will bring the U.S. back to the Paris climate deal thus it is easy to think he will not back down on protecting the Amazon. Also, during the campaign, he proposed a $20 billion global initiative to protect the Amazon to which Bolsonaro classically responded that he “does not accept bribes.” Trump, at the time, tweeted his support for Bolsonaro…it is best to assume the Amazon and climate change may not be the best topics for dinner conservation for Biden and Bolsonaro.
A Biden administration may find more alignment with Bolsonaro by pursuing a stronger economic partnership. At some level, Trump elevated Brazil above Argentina when he voiced support for Brazil to join the Organisation for Economic Co-operation and Development (OECD) before Argentina. The Trump administration followed up the support with a limited trade agreement to facilitate commerce between the countries, strengthen regulatory practices and cooperation, and fight corruption. A Biden administration could fare well to follow the path that Trump’s administration was, in practice, outlining for engagement with Brazil.
Brazil’s desire to join the OECD, which currently only has four Latin American members (i.e., Chile, Colombia, Costa Rica, ad Mexico) amongst its 38 member states, will force the country to adopt some economic reforms it would not pursue in ordinary due course. In other words, the desire to join the OECD can be similar to the desire of some European countries to join the European Union (EU)…some countries will truly change the laws and rules of its country to align with the greater body for admission. Though, the EU also shows how some countries adopt rules for admission then backtrack once admitted (but let us ignore that for now). Maybe walking down the OECD aisle with Brazil could be very beneficial for the United States. Brazil is the ninth largest economy in the world and the largest trading partner in South America for the U.S. Simply put, a Brazil with more market-friendly policies and regulation, increased governance, and more economic alignment with the U.S. surely cannot be a bad thing.
Argentina
The marriage of a leftist and a liberal…probably not
Argentinian President Alberto Fernández took some relief in watching Biden win this presidential election. After Fernández won his election in October 2019, Trump was quick to warn Fernández that his administration should not be friendly with other leftist leaders in the region, including Venezuelan President Nicolás Maduro and former Bolivian President Evo Morales. Furthermore, Trump appointee Mauricio Claver-Carone, then-senior director for Western Hemisphere affairs at the National Security Council and now President of the Inter-American Development Bank (IDB), did not attend Fernández’s inauguration ceremony reportedly after learning that a Maduro official would be attending the inauguration. Biden has long critiqued the nomination of Claver-Carone to the IDB as being “ideological” more than anything else, especially as Claver-Carone is the first U.S. head of the bank. Normal tradition is to nominate a Latin American to the post.
Be that as it may, Biden’s critique of the IDB nomination has little to do with Argentina…that reality underscores the probable storyline for a Biden administration with Argentina. There will be some dialogue between the countries to facilitate increased commerce and trade. That dialogue may include discussing the International Monetary Fund’s (IMF) $44 billion credit line to Argentina. Beyond that, Argentina will potentially be an afterthought with the Biden administration offering kind words and support but hesitant to get its hands dirty in the country’s politics and economics. Maybe there is a little discussion on clean energy and oil drilling but that will be a side show to the larger internal discussion in Argentina on Argentina fixing Argentina’s economy…i.e., the next couple years will not be about the U.S. or Biden when it comes to Argentinian politics.
Colombia
President Iván Duque Márquez is not President Juan Manuel Santos…time to make a new friend
Colombia has long been a part of the Biden foreign policy or, better yet, the “keystone” of U.S. policy in Latin America, as Biden notably described it early this year in an op-ed. Cynics will say the words were patent pandering for Hispanic votes in a tight presidential election. But that critique would be unfair to Biden, who spent significant time as senator (and then-ranking member on the Senate Foreign Relations Committee) securing funding for Plan Colombia, an initiative which provided money to combat the drug trade in country.
Biden also supported Colombia’s efforts to negotiate a peace deal under then-President Juan Manuel Santos with members of the Fuerzas Armadas Revolucionarias de Colombia (FARC). Now, the administration of President Iván Duque Márquez, if not actively undercutting the peace deal as suggested by some critics, is not precisely helping that peace deal to be successful. Duque has many Colombian politicians who oppose the peace deal and the concessions to the FARC…some of those politicians were happy to openly show support for Trump’s re-election campaign. Also, lockdowns, shutdowns and economic suffering are also a major hinderance to a successful peace process. All this makes for a lot of work on day 1 for a Biden administration.
If Biden wants to be active in re-engaging Colombia on the peace deal and beyond, he may want to start with facilitating stronger commerce, trade, and economic growth and working with the country to fight covid-19. Helping everyday Colombian pockets is a better first step to peace than anything else in the country. If anything, Biden may want to sidestep discussions on coca cultivation and drugs in Colombia in the initial days…it will have to be a topic of discussion at some point. A Biden administration will not want to appear soft on the drug trade nor as aggressive as Trump, who favored resuming aerial eradication of coca crops. That is not an easy policy balance to maintain (nor broach in the early days) versus simply talking covid-19 and economic recovery…the latter of which proved successful, at least, in the U.S. election.
Venezuela
Time to negotiate for a transitional government?
Venezuela is always part of the Latin American discussion. But observers may notice that there is not much to say here. Biden is not a socialist (as if that really needs to be stated) and will remain a formidable opposition to Venezuelan socialist President Nicolás Maduro. Still, it is not clear how a Biden administration will approach Venezuelan opposition politician Juan Guaido, who declared himself the country’s interim president in January 2019 with some international recognition but failed to push Maduro from power. Trump ardently backed Guaido and refused to concede anything to Maduro. A Biden administration, on the other hand, may try to negotiate a deal with Maduro if the opportunity presents itself. It is hard to say a potential deal is outright wrong, but many Venezuelans and outsiders will be skeptical of any deal for a transition of power in the country. Venezuelans also are not looking for symbolic political change. Regardless of political leanings, the paradoxical reality of an oil rich country with staggering inflation and poverty requires economic solutions to the everyday Venezuelan life. It is not clear that a transition government or split government can deliver that change…but then again, it is also clear that the current stalemate is essentially a Maduro presidency which is obviously not helping the situation. A true step to getting Maduro out of power would be the equivalent of winning the presidential lottery for approval ratings for the Biden administration. Misplaying your leverage and strengthening Maduro’s position, however, could be an outright catastrophe for a Biden administration.
The article was originally published in “The Musings Of A Politics Junkie & Closet Economist.” To read more, please visit the website.
