Today in Los Cabos, Mexico, at the G-20 summit, U.S. Trade Representative Ron Kirk welcomed Mexico into the Trans-Pacific Partnership (TPP), an agreement currently under negotiation by nine Pacific nations. Mexico is an obvious and logical country for participation, particularly given the NAFTA relationship with the United States and Canada, and expressed interest in joining last November at the Asia-Pacific Economic Cooperation (APEC) meeting in Hawaii. Canada also expressed interest in the TPP at the same time, and will presumably be welcomed in the short term once last minute kinks in the pre-negotiation process are worked out.
Until today, Mexico and Canada were the two remaining APEC nations in the Western Hemisphere outside the TPP negotiations. Having them on board will strengthen the negotiations by bringing significant added economic heft, support increased hemispheric economic integration, and begin to build out a more strategic approach to hemispheric trade relations. In addition, there is no particular reason to believe at this point that the negotiations will be slowed appreciably by Mexico’s participation.
Making the announcement on Mexico today was an important step, given President Felipe Calderón’s hosting of the G-20 as well as the imminent elections in Mexico on July 1. At the same time, it is a signal to other prospective TPP participants that the process is open and welcoming to those nations willing and able to sign on to the high-standards, commercially-meaningful approach that has been set out by the original parties to the discussions. That is a critical incentive to encourage potential TPP nations to make the reforms that will position them to participate in the agreement.
Of course, this is only relevant for nations that would be allowed into the agreement in the first place even if they take such steps. At this point, only current APEC member nations are eligible to join the TPP negotiations. This unnecessarily binds U.S. policy in the Western Hemisphere, because it means that countries like Colombia, which otherwise would appear to be excellent candidates, have little additional incentive to prepare themselves politically or economically to participate in the TPP. That in turn causes nations to seek other partners in order to achieve the same goals. Indeed, we are seeing exactly that phenomenon across Latin America.
Top stories this week are likely to include: G-20 economic summit in Los Cabos; Rio+20 conference on sustainable development in Rio de Janeiro; the hemisphere reacts to Obama’s immigration policy shift; South Korea’s president and China’s premier embark on separate Latin America tours; and Humala’s approval hits a new low.
G-20 Summit Kicks Off in Mexico: The annual global economic and financial summit known as the Group of Twenty, or G-20, takes place today and tomorrow in Los Cabos, Mexico, after having been preceded by the B-20 business summit. The G-20 is comprised of the European Union members and 19 other major economies; together, they represent 90 percent of the world’s GDP, 80 percent of worldwide commerce and two-thirds of the globe’s population. The world will pay close attention to any developments from the summit, given the fragility of the eurozone and the apparent slowdown in China, which has led to a growth deceleration in Brazil and other economies dependent on Chinese manufacturing. AQ Editor-in-Chief Christopher Sabatini posits, “President Felipe Calderón has promised a major breakthrough on the economic crisis that has the world on edge. But can the G-20 really affect the deeper structural and confidence issues facing the global economy?”
Rio+20 Hits the Ground Running: Although the United Nations Conference on Sustainable Development, or Rio+20, began last week, the high-level meetings take place from Wednesday through Friday after the G-20 concludes. Nearly 115 heads of state are expected to attend this environmental summit, which is the largest UN conference in history—with nearly 50,000 in attendance. However, U.S. President Barack Obama, British Prime Minister David Cameron and German Chancellor Angela Merkel will be noticeably absent. Will Rio+20 produce any tangible results? Notes Sabatini: “What was once considered the starting point of global discussions over environmental issues has unfortunately become just an anniversary. To inject this forum with the importance and urgency that is necessary to change the course of global environmental issues, the United States and other developed nations need to step up—this time for real.”
The Hemisphere Reacts to Obama Policy Shift: Friday’s surprise announcement from the U.S. Department of Homeland Security that the Obama administration will stop deporting young undocumented immigrants with no criminal records and who have completed some college education or military service sent shockwaves around the U.S. and beyond. While critics of the Obama administration, such as Arizona Governor Jan Brewer, derided the move as “backdoor amnesty,” the League of United Latin American Citizens (LULAC) praised the Obama administration for answering “the prayers of families across the nation by implementing a long-awaited change to the current immigration policy.” However, some in Latin America lament the timing of the directive. La Tribuna in Honduras believes that the policy shift “arrived late” for many Hondurans, with La Opinión concurring that the Obama plan came late for “many dreamers.” Says Sabatini: “While appreciated, it’s sad that it’s taken this long to get to an issue that should have been easy three years ago. Has the immigration debate sunk so low and political opportunism climbed so high that this is the most important pro-immigration piece of policy reform that can be passed today—and clearly for electoral reasons?” AQ Senior Editor Jason Marczak agrees: “The president’s executive action is a great moment for the 800,000 undocumented youth who grew up in the United States and will now be able to more fully contribute to our society. But why couldn’t this have been done in late 2010 when the DREAM Act was blocked in Congress? The beneficiaries of this policy could have been legally working without the fear of deportation for the last 18 months if action had been taken sooner.”
South Korean and Chinese Leaders to Visit Latin America: South Korean President Lee Myung-bak will attend the G-20 and Rio+20 conferences, and then depart afterward to Chile and Colombia later this week for bilateral visits. Further, Chinese Premier Wen Jiabao will pay official visits to Brazil, Uruguay, Argentina, and Chile, where he will meet with the presidents of those four countries and deliver a speech at the UN Economic Commission for Latin America and the Caribbean (ECLAC) secretariat in Santiago.
Humala’s Approval Rating Hits New Low: Peruvian President Ollanta Humala’s approval rating has hit its lowest mark since he took office in July 2011, according to a new poll from the Ipsos Apoyo firm published yesterday. His approval rating stands at 45 percent while his disapproval rating is 48 percent. This is likely due to his stance on pushing forward with mining projects and invoking the emergency law to quash protests in northern Peru. Can he turn the unpopular tide? Sabatini says that “President Humala has failed to articulate how his outsider campaign and alleged commitment to social inclusion is different from his predecessors. In the absence of a defined, structured party system, Peruvian presidents are hostage to the vicissitudes of popular opinion—and this can be very dangerous.”
Meeting with Mexican President Felipe Calderón yesterday, International Monetary Fund (IMF) Managing Director Christine Lagarde praised the Mexican government for its “strong fiscal, financial and monetary policies,” which have contributed to the country’s development in spite of the global economic downturn. She also lauded Mexico’s “solid” financial institutions just one day ahead of Mexico assuming leadership of the G-20 for the next 12 months.
Mexico was the second stop on Lagarde’s three-day tour of Latin America—her first since taking office in July. Prior to her meeting with Calderón, Lagarde also met with Mexican Secretary of Finance and Public Credit José Antonio Meade and Agustín Carstens, the country’s central bank chief. On Monday, Lagarde met with Peru’s president, finance minister, and Central Reserve Bank president in Lima. She traveled to Brazil this morning, where she will also meet with top officials, including President Dilma Rousseff.
The international debt crisis has figured prominently in Lagarde’s discussions, with analysts predicting ahead of her trip that she would seek support to help contain the European debt crisis. In a press release issued yesterday, Lagarde said, “I am confident that under Mexico’s leadership the G-20 will be effectively contributing to the global agenda, including putting a stop to the debt crisis in Europe.” Regarding the IMF’s own role, Lagarde told reporters that, while ready to help resolve the euro debt crisis, the IMF would also “be attentive and spare resources…for those countries that are bystanders of the crisis.”
For its part, Mexico “will be more than willing to collaborate,” said Carstens, although Calderón also noted that he believed the euro zone has adequate tools to resolve its current crisis.