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WikiLeaks: Fissures Over South American Left Integration

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Over the past few years, the international left has derived much satisfaction from the course of South American political and economic integration. The novelty of such integration is that it has proceeded along progressive lines and has been pushed by regional leaders associated with the so-called "Pink Tide." With so many leftist leaders in power, it is plausible to surmise that a left bloc of countries might challenge Washington's long-term hemispheric agenda. Yet, behind all of the lofty rhetoric and idealism, serious fissures remain within South America's leftist movement, both within individual countries and within the larger regional milieu.

That, at least, is the impression I got from reading U.S. State Department cables recently declassified by whistle-blowing outfit WikiLeaks. Take, for example, the Luiz Inácio "Lula" da Silva administration in Brazil, which at times encouraged a "hostile" climate against the Free Trade Area of the Americas or FTAA, a corporately-sponsored plan backed by Washington, while on other occasions encouraging "public doubt and confusion through its own often-conflicting statements" about the accord. Behind the scenes, the Brazilian government was much more divided on the matter than commonly portrayed, torn between its South American loyalties on the one hand and the desire to gain access to the lucrative U.S. market for agricultural and industrial goods on the other.

In 2003, the U.S. Embassy in Brasilia noted that "Brazil's political goals, which include a leadership role in South America along with a strong focus on development and the social agenda, sometimes clash in its pursuit of certain national economic interests." Cautiously, Brazil conducted sensitive negotiations with Washington over the FTAA. Lula's position was somewhat delicate: while the president needed a substantial export boost to fund his social agenda, producers were fearful about facing increased competition.

Across the border in Argentina, Lula could count on political ally Néstor Kirchner, and as a result the prospects for further integration through South American trade bloc Mercosur looked bright. On the other hand, however, Mercosur remained "more important as a political project than an economic one," and virtually all Brazilians recognized that, in the long term, Mercosur would not offer a viable long-term solution to Brazil's export needs.

Itamaraty vs. Other Agencies

In addition to the economic contradictions, Lula faced serious political fissures within his very own cabinet over the FTAA. In other pieces, I have noted the open U.S. disdain for Brazil's Foreign Ministry, known as Itamaraty. A den of suspicious leftists, Itamaraty and its diplomats proved frustrating to Bush administration officials time and again. Particularly irksome to the Brasilia embassy was Itamaraty's "rigid perspective" (read "opposition") on FTAA policy. Specifically, the Americans fretted that Itamaraty Secretary General Samuel Pinheiro Guimarães and his ideological clique was driving anti-FTAA sentiment.

In the long-term, however, such leftist sentiment within Brazilian foreign policy circles may be shunted aside by powerful interests. Writing to the State Department, U.S. diplomats noted that "not everyone within the diplomatic corps nor within the government agrees with Itamaraty's current FTAA policy." Specifically, Itamaraty faced opposition from the ministries of Agriculture, Development and Finance, and such divisions offered up a tempting target for Washington.

Ultimately, the U.S. embassy decided that it would not seek to "exploit differences among ministers," but further WikiLeaks cables suggest that the Americans continued to gauge such fissures. Airing dirty laundry before U.S. officials, Paulo Venturelli of the Ministry of Agriculture remarked that Itamaraty negotiators were "paranoid" and had even lied to Lula about the status of FTAA deal making. Venting yet further, Venturelli said that "top level officials" at the foreign ministry were "formulating policy based totally of 1960's North-South ideology and without real economic consideration." In a jarring break from normal diplomatic protocol, Venturelli himself advised the Americans to take a "hard line" with his own government, and to either "tell Brazil to take the FTAA as is, or be left behind as the U.S. and the other countries proceed to form the FTAA."

The story was much the same during a meeting with Arno Mayer of the Finance Ministry who advised the Americans how to outflank and strengthen rival Brazilian agencies favoring the FTAA. Mayer noted that Finance was supportive of FTAA but unfortunately Itamaraty was responsible for formulating trade policy. Within Itamaraty, Mayer continued, officials believed that the U.S. was "out to isolate Brazil." In an effort to "personalize" the FTAA issue, Itamaraty diplomats portrayed U.S. trade policy as "aggressive" and aimed at "encircling Brazil" by cutting deals with other Latin American countries.

Tensions within Brazilian-Venezuelan Dynamic

In the event, Lula did not conclude an FTAA deal with the United States, and as a result the path was cleared for greater South American political integration along progressive lines. Yet, even so, WikiLeaks documents reveal great fissures within the Mercosur bloc of nations.

Take, for example, the whole issue of Venezuela's admission to Mercosur, a development which stood to destabilize the delicate geopolitical balance. Publicly, the Lula administration supported Venezuela's bid to join the large South American trade bloc. President Hugo Chávez was, after all, a kindred political spirit and represented a key force driving the region's "Pink Tide" to the left.

On the other hand, Lula's team and even Itamaraty did not "seem to be going out of their way to actively promote" Venezuelan membership. Indeed, during a private meeting the Brazilian Vice-Minister of Development, Industry and Trade implied that Brazil "lacked enthusiasm" when it came to wider integration. What is more, the Brazilian private sector was divided about Venezuela's bid. While one group favored greater export opportunities, another "worried that Venezuela's admission to Mercosur will further complicate Brazil/Mercosur's trade negotiations with other partners."

These businesspeople were concerned about Venezuela's more avowed anti-imperialist stances, particularly Chávez's opposition to the FTAA. Moreover, they fretted that Brazil could be tainted through its association with Venezuela, and Chávez could "undermine" key efforts to establish trading links with the European Union. In the long run, however, the Brazilian political elite seems to have calculated that it would be more worthwhile to bring Venezuela into the Mercosur fold, thereby constraining and moderating Chávez and not leaving him "to his own devices on the outside."

Still, the insufferable Chávez was difficult to take as he had "frequently stolen the stage at Mercosur gatherings from Brazil's President Lula," and openly challenged Brazilian leadership by supporting Bolivian President Evo Morales's moves to grab assets belonging to state Brazilian energy company Petrobras. Speaking to influential members of the Brazilian political elite, U.S. diplomats picked up on some skittishness. Take, for example, one Senator Heraclito Fortes, who told the Americans that Chávez's behavior during a summit held in the Brazilian city of Manaus was "not normal."

During the proceedings, the firebrand Venezuelan leader reportedly insulted the conservative Brazilian Congress, thus leading the Chamber of Deputies to postpone a bill dealing with Venezuela's accession to Mercosur. Expressing concern, Fortes remarked that Chávez was intent on garnering veto power within Mercosur, which would be "too much power for someone so unstable."

Southern Cone Skittishness

The Brazilians weren't the only ones who expressed skittishness on Venezuela. In Brasilia, U.S. diplomats met with their Argentine counterparts who said that Chávez's membership in Mercosur would be "problematic." Traditionally, the Argentines and Brazilians had dominated Mercosur with "Paraguay and Uruguay trailing along behind." If oil-rich Venezuela were to join Mercosur, however, this would introduce a "destabilizing element, with Caracas playing the Brazilians against the Argentines and vice versa to increase Venezuelan influence."

Elsewhere within the Southern Cone, regional leaders were "suspicious of his [Chávez's] motives and objectives." Indeed, Mercosur members gave second thought to their pro-Chávez leanings once it became clear that Venezuela was intent on pushing an assertive agenda. Take for example Chilean President Michele Bachelet, who reportedly stated her "firm dislike" of Chávez in private. The only reason the socialist leader supported Venezuela in the first place was that she was "under great internal pressure from pro-Chávez members of her administration who want her to publicly support Chávez."

Montevideo Intrigue

Even as Brazil and Argentina grew leery about Venezuela's entry into Mercosur, other smaller countries became concerned about being eclipsed by powerful neighbors. Take, for example, tiny Paraguay which "chafed" under the Mercosur "yoke." According to U.S. diplomats, Brazil withheld or delayed its electricity payments to Paraguay if its smaller neighbor refused to go along with Brasilia's strategic objectives.

Uruguay, too, found itself in a geopolitical quandary. A tiny nation sandwiched between Brazil and Argentina, the country formed part of Mercosur and the region's pink tide to the left but simultaneously embarked on a high stakes double game with the Bush administration. Fearing that its political and economic interests might not be served by Mercosur, Uruguayan President Tabaré Vázquez flirted with the notion of signing a free trade agreement with Washington.

In Montevideo, U.S. diplomats sought to parse the diplomatic tea leaves. In early 2006, U.S. Chargé d'Affaires James Nealon wrote that Uruguay might have been prompted to seek a free trade agreement with Washington due to the country's soured relations with Argentina. Specifically, Uruguay had grown embittered over a bilateral dispute involving a paper mill. On the economic front meanwhile, some Uruguayans blamed Argentina for dragging their tiny nation into a terrible financial crisis following the 2002 "corralito" bank run.

By openly questioning the underlying validity of Mercosur, however, Vázquez risked alienating not only his leftist regional partners but also "hardened lefties" within his own Frente Amplio coalition. The Uruguay government was "navigating a fine line" by seeking to expand its trade relations with the rest of the world while simultaneously remaining a part of Mercosur. Vázquez himself, wrote U.S. diplomats, was more of "a pragmatist than an ideologue." A sly fox, the president sent conflicting signals over his country's economic and political loyalties.

Speaking in Caracas, Vázquez derided free trade with the United States, but backed a faction within his own coalition to keep the option open. By openly traveling to Venezuela and standing with Chávez, Vázquez angered the U.S. But WikiLeaks cables also reveal a fawning and deferential Uruguayan president who sought to appease Washington. In an attempt to "allay U.S. fears" over Vázquez's rambling press conference with Chávez, obsequious Uruguay Minister of Industry and Energy Jorge Lepra called upon Nealon for a one-to-one meeting.

Never fear, Lepra declared: his boss knew "how to manage the radicals within his governing Frente Amplio coalition." Sometimes, the minister added, Vázquez needed to "placate that crowd," but rest assured internal politics would "have little effect on his [the president's] foreign policy overtures towards the United States." Far from being a reluctant partner, Uruguay strenuously pursued the free trade matter behind closed doors. In a follow up meeting, a very worried Lepra expressed grave concern over the fate of the trade deal, which unfortunately for Montevideo failed to materialize in the final analysis.

Bank of the South Imbroglio

WikiLeaks reveal yet further fissures within the left coalition, even when it came to hallmark initiatives designed to challenge the U.S. Take, for example, the much heralded Bank of the South, a new financial institution aimed at counteracting the nefarious International Monetary Fund and World Bank. Formed in late 2007, the bank was expected to contribute to regional integration, poverty alleviation, and investment. During a ceremony, Chávez as well as Evo Morales of Bolivia and Rafael Correa of Ecuador made "forceful comments" criticizing large financial institutions which had imposed lending conditionality and offered "bad advice" to their clients.

During the ceremony, Brazil's Lula as well as Argentine president-elect Cristina Fernández de Kirchner lauded the creation of the new bank. Privately, however, both leaders were more circumspect. According to U.S. diplomats, "Argentine and Brazilian officials are working behind the scenes to moderate Venezuela's influence in the organization of the bank in order to avoid the overt politicization of the Bank's lending policies." In Montevideo meanwhile, Uruguayan Finance Minister Danilo Astori said he did not believe that Bank of the South was particularly useful and moreover Uruguay only agreed to participate "so as not to be isolated."

The Fraught Path to South American Integration

In the long run, the so-called Union of South American Nations or UNASUR may replace Mercosur as the guiding mechanism for regional integration along progressive lines, which could represent a blow to Washington's hegemony. Yet, if WikiLeaks cables are again any indication, UNASUR has had difficulty getting off the ground amidst internal fissures. Though Venezuela and Bolivia would have surely liked to see UNASUR strike a combative stance towards the U.S., there was little agreement about how to deal with Washington.

Not to worry, the Chileans related to U.S. diplomats in Asunción: Santiago had already spoken to Paraguayan officials who had "all agreed that the UNASUR declaration should not be anti-U.S." Indeed, during an UNASUR meeting the ostensibly leftist Paraguayan President Fernando Lugo had steadfastly "held that line." Moreover, Chilean diplomats claimed that Chávez, who had delivered a feisty anti-imperialist speech at the UNASUR summit, annoyed most other heads of state.

Behind the scenes, Venezuela reportedly lobbied Paraguay to cancel an upcoming meeting between Lugo and Bush, but that effort had failed. Moreover, if WikiLeaks cables are to be believed, Paraguay is just as shifty a player as Uruguay. Confiding in the U.S. ambassador in Asunción, Lugo remarked that he had reached out to the rightist opposition in Bolivia. In addition, the Paraguayan leader believed that indigenous president Morales had "a complex" about race. In a report to Washington, the Americans noted that Lugo continued to "walk a fine, pragmatic line on regional politics."

Counteracting the Leftist Pink Tide

Whatever the shortcomings and weakness of the leftist "pink tide" in South America, however, the pace of regional integration seems to have seriously alarmed U.S. diplomats. Speaking to their superiors at the State Department, Americans officials noted that "the entry of Venezuela into Mercosur clearly altered the power balance and dynamics of the organization. Mercosur has increasingly devolved from an imperfect customs union into a more restrictive and anti-American political organization...It is clear that we need better resources and tools to counter Venezuela's political efforts...[and] politicization of MERCOSUR expansion."

Furthermore, if Mercosur was merely worrying, then UNASUR would seem to represent an even greater ideological challenge for Washington. In a cable sent to Washington, U.S. ambassador in Quito Heather Hodges expressed concern that Ecuadoran President Rafael Correa might take advantage of an UNASUR ceremony to raise the issue of destabilizing U.S.-Colombian military cooperation. "We can be sure," Hodges explained, that Correa "will emphasize the importance of deepening South American integration, and he may well put this in the context of seeking to minimize the influence of and dependence on the United States in the region."

Faced with such ideological pushback, U.S. diplomats soberly assessed the geopolitical milieu and looked for internal weaknesses to exploit. Throughout the Bush years, American officials focused their attention on Venezuela, but cables suggest that small countries like Uruguay and Paraguay were particularly susceptible to U.S. pressure. A shrewd diplomat, U.S. ambassador in Montevideo Nealon wrote his superiors that "it is...probably in our interest to lend a helping hand to government of Uruguay that is struggling to emulate a moderate Chile rather than a Bolivarian Venezuela."

Moving From the Venezuelan to Brazilian Threat

Surely the greatest nightmare for U.S. diplomats is that Venezuela, with its populist anti-imperialism, might steer the course of South American integration. Shrewdly, however, American officials have been able to deal with Brazil, which in turn acts as a moderating force on Chávez. True Machiavellians, U.S. diplomats have even noted that the friction between Venezuela and Brazil "provides an opportunity." Though the WikiLeaks cables leave off in early 2010, it would not be surprising if the Obama administration continues to pursue such a divide and rule strategy to this day.

With Chávez's health now fading fast and Venezuela looking like a rather spent force politically, it would seem natural that Washington will eventually turn its sights upon Brazil. Judging from WikiLeaks cables, the U.S. doesn't have much to fear from this South American juggernaut in an ideological sense, and indeed leftist Itamaraty may be outmaneuvered by more pragmatic forces in the long run. Nevertheless, Brazil is a rising player in the region and U.S. diplomats are keenly aware of this fact.

Take, for example, American ambassador to Lima Curtis Struble, who in 2005 wrote Washington that the U.S. was in an "undeclared contest" with Brazil for political influence in Peru. "We are winning on most issues that count," Struble added, remarking that negotiations over a U.S.-Peru free trade deal had remained positive. However, the ambassador noted ominously, "the government of Brazil is still very much in the game" and had met with some success in pushing for UNASUR which would diminish U.S. influence.

If they are not doing so by now already, American diplomats are probably monitoring Brazil in an effort to preserve U.S. hegemony in the wider region. In the not too distant future, State Department officials may believe it is imperative to sit down with their counterparts in Peru, Bolivia, or Paraguay in an effort to thwart not Caracas but Brasilia, and thus the Machiavellian game will start all over again.

Nikolas Kozloff is the author of Revolution! South America and the Rise of the New Left (Palgrave, 2008). Visit his website, www.nikolaskozloff.com