A New Strategy for Latin America

The Summit of the Americas was a flop. Now Obama has an opportunity to recast inter-American partnership around energy security—and counter China.

President Obama arrived at the sixth Summit of the Americas, held last weekend in Cartagena, Colombia, prepared to tout his particular vision of free trade. Leaders from thirty-two Latin American and Caribbean countries, meanwhile, showed up ready to broach the issue of decriminalizing use of some types of drugs. The stage was set for each side to talk past the other. Alas, that would have been a classier outcome.

Instead, the summit was haunted by those not in Cartagena. Eleven U.S. Secret Service agents were flown out of Colombia just hours before the summit began for cavorting with prostitutes, casting a pall over the weekend. And Cuban leader Raul Castro wasn’t in attendance because of U.S. and Canadian refusals to admit an unelected leader. This disagreement may prevent the next meeting from being held in 2015.

As the speeches rolled on through the weekend, it became apparent that Latin America’s leaders were unified only by their dissatisfaction with U.S. policies—particularly on drugs and Cuba. Brazil harped on the need for more balance in international exchange rates, but Mexico and others benefit from their market-driven exchange rates. Argentine president Cristina Fernandez de Kirchner further exposed the lack of regional cohesion when, near the summit’s end, she tried to coax the agenda to her revanchist claims over the Falklands Islands. With few backers, she stormed out early.

Now U.S.-Latin American relations appear more adrift. Latin America as a whole is growing twice as fast as the United States, and many countries want and deserve a serious partnership with Washington. But President Obama is an unconvincing partner. Obviously he faces political constraints this election year, but beyond that, he has stalled on trade treaties with Latin American countries that still want to preferred access to the U.S. market, and he’s made it clear that his strategic priority is a “pivot” toward Asia.

A New Energy Strategy

Still, all needn’t be lost, and recent politicking may present a unique opportunity. Over the past ten days, President Obama has met with leaders from America’s three biggest trade partners in the hemisphere—Canada, Mexico and Brazil—on two occasions. After cooling his heels in Washington this week, Obama should make a speech similar to the one he recently gave in Cushing, Oklahoma, and propose a new basis for hemispheric partnership—energy security.

The geoeconomics are straightforward: Latin America is just beginning to tap into a fresh oil and natural-gas bonanza, fuel that can be in Texas within days, as opposed to the six weeks it can take to ship oil from Venezuela to Asia. The technology of U.S. energy companies is absolutely necessary if Brazil is to recover its vast offshore oil reserves; U.S. industry will also be needed if Argentina and Mexico are to tap their shale-gas reserves, estimated to be the third- and fourth-largest in the world, respectively. Thanks to the oil and gas windfall sweeping the Americas, over the next ten years the United States could possibly eliminate oil imports from the Middle East altogether.

Already there are inklings in this direction. Last year, Obama nixed the ridiculous tariff on Brazilian ethanol, even as U.S. ethanol exports to Brazil surged. Recently, Secretary of State Clinton and Mexican foreign minister Patricia Espinosa signed an agreement to allow joint exploration over a Delaware-sized swath of the Gulf of Mexico previously under moratorium.

China’s Play for the Americas

Dithering, moreover, poses a strategic challenge. China is rejigging Latin America’s infrastructure to ease the flow of natural resources to Asia. Brazil’s new port complexes aim to quench Chinese demand, and many are financed by China. China is building a “dry canal” across Colombia meant to rival the Panama Canal. In short, Chinese foreign investment in Latin America is geared for the long term and often defies market fundamentals, suggesting Beijing expects a contest among world powers for energy resources in the future.

Colombia, Mexico and Brazil are all wary of China’s growing influence in their backyard. Why isn’t the United States? U.S. foreign policy has a rich tradition of fretting about foreign powers using Latin America as the “soft underbelly” through which it is vulnerable to injury. Now, a slight reversion to that old preoccupation might actually do some good. Latin America represents the United States’ soft undercarriage, and China is trying to take control over the region’s resources.

Sean Goforth is author of Axis of Unity: Venezuela, Iran and the Threat to America (Potomac Books, 2012).

Image: Presidency of the Nation of Argentina