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  • U.S.-Mexico Border Means Opportunity, Not Just Drugs and Thugs

    December 18, 2013

    by Kezia McKeague

    The U.S. House Foreign Affairs Western Hemisphere Subcommittee chose the fitting location of Tucson, Arizona, to convene a field hearing on trade facilitation in the border region on December 9. Dotted with cacti, this college town lies at the heart of the desert landscape that belonged to Mexico until the Gadsden Purchase of 1853. Today, Mexico is Arizona’s largest trading partner, yet perceptions of the border often identify it as a security threat rather than as an economic opportunity.

    Last week’s hearing marked a refreshing effort to rebalance policymakers’ attention. In his opening statement, Chairman Matt Salmon (AZ-R) defined the objective: “to get at what we need to do in the public and private sectors to improve border infrastructure and better facilitate trade without letting down our guard on security efforts.” Recognizing that the two economies are deeply intertwined, he pointed to “the good news”—that the commercial relationship continues to grow—and “the bad news”—that ports of entry face significant challenges in keeping up with this growth.

    Western Hemisphere Subcommittee Ranking Member Albio Sires (NJ-D) alluded to the solutions needed to resolve tensions between border security and trade facilitation, while Representative Kyrsten Sinema (AZ-D) criticized “long and unpredictable wait times” at the border. Representative Ron Barber (AZ-D) unequivocally stated that “we must expedite the legal flow of traffic,” and Representative David Schweikert (AZ-R) cited the “amazing opportunity” represented by the potential for lower energy costs bolstering a manufacturing renaissance on both sides of the border.

    On both sides of the aisle, the consensus was that the security-versus-trade debate has been overly skewed towards the former.

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    Tags: Mexico, Mexico-U.S. Relations, trade

  • Mexico-U.S. Relations Remain a Priority

    September 25, 2013

    by Kezia McKeague

    September has been a difficult month for U.S. policy toward Latin America.  Between the crisis in Syria and the NSA surveillance disclosures, U.S. Secretary of State John Kerry cancelled an address to the annual CAF conference, Vice President Joe Biden cancelled a trip to Panama, and Brazilian President Dilma Rousseff cancelled a state visit to Washington DC. 

    The sole exception to the raft of cancellations was the launch of the U.S.-Mexico High Level Economic Dialogue (HLED), which still took place on September 20 in Mexico City, in the presence of Biden and several U.S. cabinet officials.

    That the Mexico trip was planned at all testifies to the importance of the economic relationship with our third-largest trading partner.  That it happened according to schedule says a great deal about Biden’s emerging role as an envoy to the Americas, and about the Mexican administration’s pragmatism and diplomatic maturity.

    Biden first outlined the Obama administration’s commitment to deepening engagement with the Western Hemisphere at the Council of the Americas’ 43rd Washington Conference on the Americas in May.  Soon after, he traveled to Brazil, Colombia, and Trinidad and Tobago.  He also hired Juan S. González, a well-respected Latin Americanist as his Special Advisor on the Western Hemisphere (a first for his small foreign policy team).  This week, he is scheduled to meet with Uruguayan President José Mujica as well as with members of U.S. Congress for a wide-ranging conversation on the region.  Previous presidents have appointed special envoys for the Americas, but in Obama’s second term, the vice president himself has emerged as the de facto—and much more powerful—emissary for U.S. interests to Latin America’s rising economic and diplomatic powers.

    Of those powers, Mexico is the clear priority. “The Western Hemisphere has always mattered to the United States, but I think it matters more today because it has more potential than any time in American history,” Biden pronounced at the conference in May.  Last week in Mexico, he was explicit about the primacy of economic interests with our NAFTA partner: “There is no relationship that we value more, there is no economic relationship that we think holds the most promise and there is no part of the world that has the opportunity to do as much to generate economic growth over the next 20 or 30 years in the hemisphere.”

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    Tags: Mexico-U.S. Relations, Enrique Peña Nieto, Joe Biden

  • Discovering the Dream of a Cuba for all Cubans

    March 22, 2013

    by Kezia McKeague

    Yoani Sánchez is known for her mordant accounts of the vicissitudes of life under a repressive government. Yet on Wednesday night, at an auditorium at Georgetown University simply adorned with a Cuban flag, I was inspired not only by the lyricism of her Spanish, but by her tone of reconciliation and hope. In wide-ranging remarks, the dream of “a Cuba where all Cubans fit” was the recurring theme.

    The island of Sánchez’s imagination celebrates intellectual pluralism, suppressed for decades but now growing from a whisper to a clamor in the “virtual Cuba” of dissident bloggers. It also unites Cubans “from the two shores.” Sánchez vividly conjured the image of islanders and exiles looking at two sides of a mirror and recognizing each other, in direct defiance of a government that has separated gusanos (worms) from revolutionaries.

    The equally intrepid blogger Orlando Luis Pardo Lazo, who joined Sánchez on her whirlwind speaking tour in Washington DC expressed the joy he finds in building bridges with the Cuban diaspora. Responding to requests from Cubans around the world, he snaps photographs of stucco houses shaded by mango trees, family crypts in the Cemetery of Colón, even the graceful slope of Havana’s seawall—all frozen in the memory of the exiliado.

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    Tags: Yoani Sanchez, Inclusion

  • U.S.-Mexico Trade War Looms in Tomato Dispute

    September 28, 2012

    by Kezia McKeague

    Fears of a trade war between the United States and Mexico escalated on Thursday following a preliminary decision in the politics of tomatoes. In a surprising and premature ruling, the Commerce Department sided with Florida tomato producers in terminating an agreement that has set a minimum price on Mexican tomatoes imported into the United States over the past 16 years.

    The Mexican Government has already threatened to retaliate, with ramifications for other commodity producers caught in the cross-fire. Earlier this week, Secretary of Economy Bruno Ferrari had promised that if the United States makes a hasty decision, instead of conducting a standard 270-day review, “Mexico will use all our legal means to defend our producers.” A final ruling could also endanger talks over other bilateral trade disputes.

    For Mexican tomato growers, termination of the agreement would allow U.S. growers to file formal complaints accusing the Mexicans of unfair trade practices, which they did repeatedly before the agreement’s adoption in 1996. The Mexicans argue that they are being punished for their success—for growing a superior product and for honoring the pact over 16 years.

    Thursday’s announcement seemed particularly harsh given the timing: Mexican tomato producers were scheduled to meet with officials at the Commerce Department on Friday to discuss ways to resolve the dispute. The growers have said they are willing to accept a higher floor price for their tomatoes.

    Read More

    Tags: Mexico, tomato growers, trade

  • U.S.-Mexico Trade War Looms in Tomato Dispute

    September 28, 2012

    by Kezia McKeague

    Fears of a trade war between the United States and Mexico escalated on Thursday following a preliminary decision in the politics of tomatoes. In a surprising and premature ruling, the Commerce Department sided with Florida tomato producers in terminating an agreement that has set a minimum price on Mexican tomatoes imported into the United States over the past 16 years.

    The Mexican Government has already threatened to retaliate, with ramifications for other commodity producers caught in the cross-fire. Earlier this week, Secretary of Economy Bruno Ferrari had promised that if the United States makes a hasty decision, instead of conducting a standard 270-day review, “Mexico will use all our legal means to defend our producers.” A final ruling could also endanger talks over other bilateral trade disputes.

    For Mexican tomato growers, termination of the agreement would allow U.S. growers to file formal complaints accusing the Mexicans of unfair trade practices, which they did repeatedly before the agreement’s adoption in 1996. The Mexicans argue that they are being punished for their success—for growing a superior product and for honoring the pact over 16 years.

    Thursday’s announcement seemed particularly harsh given the timing: Mexican tomato producers were scheduled to meet with officials at the Commerce Department on Friday to discuss ways to resolve the dispute. The growers have said they are willing to accept a higher floor price for their tomatoes.

    Read More

    Tags: Mexico, tomato growers, trade, U.S. Commerce Department

  • The Politics of Tomatoes: U.S. Risks Trade Dispute with Mexico

    September 13, 2012

    by Kezia McKeague

    On October 8, Mexico is set to become a full partner in the Trans-Pacific Partnership (TPP) negotiations.  As Mexican Ambassador to the United States Arturo Sarukhan is fond of saying, with TPP Mexico and the U.S. are playing chess, not checkers. Indeed, Mexico’s participation in the high-standards pact represents a unique opportunity to consolidate our strategic bilateral partnership and deepen our economic integration in the context of like-minded countries along the Pacific Rim.

    Yet even as we celebrate cooperation at the level of geopolitics and multilateral negotiations, we cannot ignore the more prosaic frictions that inevitably arise in such a broad and dynamic relationship. Recently, these have included spats over chickens and washing machines, while the latest issue revolves around tomatoes.

    Tomato disputes have a long history. With the advantages of ideal soil and climate conditions and low labor costs, Mexico became a major player in the U.S. market following the embargo placed on Cuba in 1962. After decades of tomato trade wars, the signing of the North American Free Trade Agreement (NAFTA) in 1992 eliminated tariffs on Mexican tomatoes over a ten-year transition period, despite the opposition of Florida agricultural producers. In 1996, at the behest of Florida’s tomato industry, the U.S. Commerce Department initiated an anti-dumping investigation to determine whether tomato imports from Mexico were being sold at less than fair market value. To suspend the investigation, Mexican producers agreed to a minimum price for imports. This so-called “suspension agreement” has been honored for 16 years, with two renewals as well as adjustments of the reference price.

    Fast forward to the electoral year of 2012, and Florida tomato growers have requested that the Commerce Department end the suspension agreement so they can initiate a new anti-dumping investigation against Mexican tomatoes. They argue that the agreement is outdated and fails to protect them against the Mexican competition; their critics accuse them of a transparent attempt to use a swing state’s political clout on behalf of protectionist interests. 

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    Tags: trade, Arturo Sarukhan, Mexico, Trans-Pacific Partnership

  • NAFTA Partners Deserve Quick Entry into TPP Talks

    April 4, 2012

    by Kezia McKeague

    Assembled in the White House Rose Garden for a joint press conference on Monday, the “three amigos” of North America projected an image of trilateral comity in keeping with the depth of their countries’ relationships. Yet Mexican President Felipe Calderón and Canadian Prime Minister Stephen Harper departed the one-day North American Leaders’ Summit without a firm commitment from U.S. President Barack Obama on their request to join the Trans-Pacific Partnership (TPP). Buried in the penultimate line of the lengthy joint statement was a coy response: “The United States welcomes Canada’s and Mexico’s interest in joining the TPP as ambitious partners.”

    As President Obama acknowledged in the Rose Garden, TPP’s high-standards approach “could be a real model for the world.” Indeed, the goal of the original four TPP members—Brunei, Chile, New Zealand, and Singapore—was to create a uniquely comprehensive agreement to which like-minded countries on both sides of the Pacific could accede, thus linking Asia and the Americas. Similarly, the U.S. decision to join TPP made more sense for the bloc’s potential to grow than for the market-access gains to be found in the members’ relatively small economies.  For Washington, TPP carries significant strategic weight as long as it continues to expand.

    To its credit, the Obama administration recognizes the geopolitical benefits of TPP in the context of increased U.S. engagement with the Asia-Pacific.  Its reluctance to advocate for expanded participation from the Western Hemisphere, however, risks a gross strategic oversight. As Harper candidly remarked to an audience at the Woodrow Wilson Center on Monday, while “most of the members of the Trans-Pacific Partnership would like to see Canada join, I think there’s some debate, particularly within the (Obama) administration, about the merits of that."

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    Tags: NAFTA, Canada, trade, Mexico, Stephen Harper, Barack Obama, Felipe Calderon, Trans-Pacific Partnership

  • Cuba Again: ALBA Threatens Boycott of the Summit of the Americas

    February 10, 2012

    by Kezia McKeague

    At the conclusion of the Fifth Summit of the Americas in 2009, President Obama called for hemispheric partnership in place of “stale debates and old ideologies.” Three years later, the stalest of all debates is once again dividing the region. Ecuadorian President Rafael Correa leads a threat to protest the absence of Cuba at the Sixth Summit by boycotting the entire event. While the political storm clouds will likely dissipate before April, the episode reveals the magnified symbolic importance of the lone outlier in the inter-American system.

    Correa’s proposal immediately met with the avid support of Venezuelan President Hugo Chávez and the other members of the Bolivarian Alternative for the Americas (ALBA) bloc gathered in Caracas last weekend. In response, a spokesman for the U.S. State Department appropriately pointed out that Cuba has not reached the threshold for participation—the essential elements of a representative democracy—as recognized at the Third Summit in Québec in 2001. The Secretary-General of the Organization of the American States (OAS), José Miguel Insulza, hastened to add that the Cuban government has not requested “the process of dialogue” necessary to participate in the OAS, as stipulated by the 2009 resolution that revoked its nearly five-decade-old suspension. Meanwhile, Colombian Foreign Minister María Ángela Holguín has reiterated that an invitation does not depend on her government, which will host the Summit in Cartagena, but rather must result from a consensus decision among the member countries.

    The notable lack of consensus is striking for what it says about the incentives and challenges faced by each of the actors involved. Policy toward Cuba has always generated controversy, less for the island itself than for larger principles; Cuba can represent either a litmus test for a government’s commitment to human rights and democracy or, as is so common in Latin America, a measure of a government’s independence from Washington. While this week’s debate does indeed spark a sense of déjà vu, it also demonstrates shifting dynamics in inter-American relations.

    For Ecuador’s agent provocateur, Cuba fits neatly into a strategy of discrediting the OAS in favor of hemispheric organizations that exclude the United States, principally the new Community of Latin American and Caribbean States (CELAC). Correa is locked in a fight with the Inter-American Commission on Human Rights, an autonomous branch of the OAS that has documented his abuse of press freedoms. Fellow firebrand Hugo Chávez is facing his own domestic problems, with rising inflation and crime endangering his electoral prospects in the October presidential contest while also contributing to a loss of regional influence for the ALBA bloc. In this context, Caracas and Quito have little to lose in promoting Havana’s participation in the Cartagena Summit, even knowing that the proposal will be a non-starter in Washington.

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    Tags: Cuba, Barack Obama, Hugo Chavez, ALBA, Rafael Correa, CELAC

  • Expiration of Ethanol Support a Plus for U.S.–Brazil Relations

    January 12, 2012

    by Kezia McKeague

    With the expiration of the U.S. tariff on ethanol imports at the end of 2011, this year marks a potential watershed in U.S.–Brazil trade ties.  For three decades, Washington protected corn-based ethanol producers from Brazil’s more environmentally-friendly and economically-efficient sugar-based ethanol.  Now, without the 54-cent-per-gallon tariff on imported ethanol or the corresponding 45-cent-per-gallon tax credit, the U.S. market is open for business for ethanol imports. 

    The demise of these protectionist measures removes a bone of contention with the Brazilian government, saves U.S. taxpayers about $6 billion a year and expands access to cleaner energy for U.S. consumers.  Though the move will have positive foreign policy repercussions, it stemmed from domestic political dynamics: as the industry matured, subsidies became a harder sell, particularly at a time of high corn prices.

    Ironically, Brazilian ethanol production fell in 2011, requiring imports from the United States to meet local demand.  This unusual situation, largely due to poor weather and delays in crop replanting after the 2008 financial crisis, will minimize the immediate impact of the end of the U.S. ethanol tariff. Still, industry analysts expect new investment to revive exports.

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    Tags: Brazil, alternative energy, energy, Ethanol

  • U.S. Congress Reacts to Security Threats

    October 25, 2011

    by Kezia McKeague

    Peter Smith’s classic text on U.S.-Latin American relations, Talons of the Eagle, posits a basic rule: the greater the perception of extra-hemispheric threat, the greater the attention to Latin America.  This is particularly true in the U.S. Congress, where the region’s diversification of relations beyond the Western Hemisphere tends to arouse suspicion and competitive pressure.

    China is the most obvious target, oft-mentioned in the debate over the free-trade agreements with Colombia and Panama.  India has also become more active in the region, and even Russia is touting its renewed interest in Latin America.  It is Iran, however, that is doing the most to raise congressional hackles—vividly so in a recent House Foreign Affairs Committee hearing on “Emerging Threats and Security in the Western Hemisphere.”

    As Chairman Ileana Ros-Lehtinen recognized in her opening statement, the hearing could not have been more timely, coming two days after U.S. officials announced an alleged attempt by the Iranian Quds Force to hire the Zetas, a Mexican criminal organization, to assassinate Saudi Arabia’s ambassador to Washington.

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    Tags: Security, U.S. Congress

  • Colombia, Panama and South Korea FTAs Move Through Congress

    October 5, 2011

    by Kezia McKeague

     

    Colombian President Juan Manuel Santos drew laughter and applause when he placed the U.S.-Colombia free-trade agreement (FTA) in the “hands of God” at an AS/COA program last month. But now that the White House has submitted the long-pending pact to Congress, its earthly fate lies just where it belongs.

    House Speaker John Boehner has pledged quick consideration of the agreements with Colombia, Panama and South Korea, in tandem with the Senate-passed legislation reauthorizing Trade Adjustment Assistance.  This afternoon the Ways and Means Committee favorably reported out all three implementing bills, leaving supporters and opponents to gear up for a floor debate and vote expected as early as next Wednesday.

    That debate will center on job creation on the one hand and labor concerns on the other—particularly in the case of Colombia, which remains the most controversial of the three countries.  The Obama Administration has rightly emphasized the economic arguments that carry weight on Capitol Hill in the context of 9 percent unemployment.  But it’s worth remembering that the FTAs are just as important to U.S. geopolitical interests.

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    Tags: Free Trade Agreement, Juan Manuel Santos

  • Canada-Colombia Free-Trade Agreement Enters into Force, U.S. Continues to Wait

    August 15, 2011

    by Kezia McKeague

    I’ve got a flag on my lapel, not a maple leaf,” U.S. Trade Representative Ron Kirk exclaimed at a Senate Finance Committee hearing in March.  Today, as Canada’s free-trade agreement (FTA) with Colombia enters into force, it is the maple leaf that represents competitive pressures on U.S. market share and the political influence that goes with it.

    Canada and Colombia are two of our closest friends in the Western Hemisphere, and their strengthened commercial ties clearly benefit their mutual interests as well as Washington’s broader goal of promoting open markets and economic development.  Yet U.S. businesses and their congressional advocates are keenly aware that Canada has beat us to the punch, leaving U.S. exporters to an important emerging market at a competitive disadvantage.

    The implications of delayed ratification of the U.S.-Colombia FTA are not lost on either Colombia or Canada.  As Colombian President Juan Manuel Santos bluntly put it in a recent interview with Americas Quarterly, “American products are being replaced in the Colombian market because other countries have free-trade agreements.  If the FTA is not approved shortly, the U.S. will continue losing market share.”  Those losses will be particularly acute in the agricultural sector, where duty-free Canadian wheat will likely replace U.S. imports.

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    Tags: Canada, Free Trade Agreement, Colombia

  • Continued Partisanship at Mock Mark-Ups of Trade Bills

    July 8, 2011

    by Kezia McKeague

    After Republicans won the House last November, predictions of gridlock usually cited one potential exception—trade policy.  President Obama affirmed his support for free-trade agreements (FTAs) in his State of the Union address in January, raising hopes that the three pending deals could be approved this year.  As a Senate Foreign Relations Committee minority report argued, in an era of divided government, the agreements “provide an opportunity for bipartisan cooperation on the administration’s stated goal of doubling exports in 5 years.”

    If only it were that easy.  While yesterday’s “mock mark-ups” were a welcome and necessary step, they didn’t stand out for bipartisanship.  The House Ways and Means Committee approved the implementing bills for the Colombia and Panama FTAs on partisan lines, with all Republican Members voting for them and all Democratic Members voting against.  Many of these Democrats expressed support for the agreements, but used their nay votes to protest the omission of Trade Adjustment Assistance (TAA) in the South Korea bill.

    Indeed, TAA has proved to be the partisan sticking point.  Many Republicans and Democrats can agree that free-trade agreements are tools to spur job creation and growth without deficit spending, but the same can’t be said of training for displaced workers.  The unfortunate irony is that the fiscal cost of renewed funding for TAA would be much lower than the cost incurred to U.S. businesses by a failure to approve the three FTAs.

    On the Senate side, the Finance Committee met yesterday on the second try, after Republicans boycotted the mock-up originally scheduled for June 30.  The South Korea bill, with TAA language included, was the target of the partisan standoff, passing on party lines by 13 Democrats to 11 Republicans.  Ranking Member Orrin Hatch vowed to vote against the agreement if it includes “the TAA poison pill.”  For once, Colombia was less controversial with an 18-6 vote, and Panama passed easily, 22 to 2.  No amendments passed.

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    Tags: Colombia, Panama, Free Trade, U.S. Congress

  • The Future of Andean Trade Preferences

    June 7, 2011

    by Kezia McKeague

    As U.S. trade policy has returned to the headlines in 2011, much of the discussion is focused on  packaging the three pending pacts (Colombia, Panama and South Korea) into one large bill or sequencing the consideration of each individual free-trade agreement (FTA). And more recently talk is centered on the impasse over Trade Adjustment Assistance (TAA).  But less attention is on other components of the broader trade agenda awaiting congressional action, namely extension of trade preference programs.

    Back in February, Republicans scrapped a House of Representatives vote on extension of the Andean Trade Preferences Act (ATPA) to protest the lack of a firm timetable for moving the Colombia and Panama FTAs.  The result: duty-free treatment expired for Colombian and Ecuadorian imports.  Since then, the Obama administration has pressed for renewal, even as the future of this 20-year-old program remains in doubt.  Could the next renewal of ATPA be its last?

    Initial ATPA participants included Colombia, Peru, Bolivia, and Ecuador.  The goal was a noble one: to encourage a shift away from illegal drug production by expanding alternative export sectors and promoting economic growth.  In 2008, Bolivia was suspended from the program when the Bush Administration deemed it incompliant with eligibility criteria related to counter-narcotics cooperation, and in 2010, Peru was dropped from the list of beneficiaries following approval of its FTA with the United States.

    Now, only Colombia and Ecuador are left.  In Colombia’s case, the argument for one more renewal is sound.  Exporters are counting on a retroactive extension that will cover tariff costs since February, and they’ll continue to need the preferences until the FTA enters into force, assuming all goes well in Congress this summer.  The bigger picture is that Colombia is a key U.S. ally that deserves better than the uncertainty created by short-term extensions.  The most recent ATPA renewal, in December 2010, lasted only six weeks. 

    Read More

    Tags: Free Trade Agreement, Colombia, Panama, South Korea


 
 

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