Washington policy splits South America into two parts

While Colombia, Peru and Ecuador seek a free trade agreement with the United States, Argentina, Bolivia, Brazil and Venezuela take steps to create a multinational state owned energy corporation.
From the times of the “Monroe Doctrine”, early in the 20th century, Washington has played a dominant role in the foreign and domestic policy of South American countries. All along the last 100 years, the power of the US eagle has been felt in the usually impoverished but independent South American nations.

Historically, US political and economical influence could be felt more in the Andean countries - Colombia, Peru, Ecuador and Venezuela according to the circumstances - than in what is known as the Southern Cone – Chile, Argentina, Uruguay, and due to its size, Brazil. While the first group of countries did not develop a national industrial complex, the second one (Argentina and Brazil, mainly) did it with relative success in the 60th.

It is not strange that the first group of countries has always supported US foreign line, while Southern Cone’s approaches on international affairs have been more or less independent along the past century.

As usually, History tells something about present times. Today, US plans to wrap up a Free Trade of the Americas agreement have split positions across the continent. Despite full integration talks, while Colombia, Peru and Ecuador seek a free trade deal with the United States, Argentina, Bolivia, Brazil and Venezuela take steps to create a multinational state owned power energy corporation.

As it became known on Tuesday, Colombia, Peru and Ecuador started talks with the U.S. on an accord enabling the Andean nations to keep selling flowers, garments and tuna duty-free to America should plans for a hemisphere-wide trade bloc fail. At the same time, and without US approval, Argentina, Bolivia, Brazil and Venezuela started speeding up negotiations to integrate their Oil & Gas production into a new company, which according to the original project launched by Venezuela’s government would be either called PetroAmerica or PetroSur.

As Brazilian, Venezuelan and Bolivian states have their own controlled power monopolies, Argentina, which privatized it in the 90th, is speeding up the creation of a new state owned Oil & Gas company. Local sources confirmed Argentine Energy (or Enarsa by its initials in Spanish) will be brought to light as soon as possible. The new company will pump the vast off-shore reserves lying in the depths of the South Atlantic Ocean, as the inland operations have been ceded to private local and multinational players.

All together, these four countries explain 11.5% of world’s crude reserves and 14.5% of the total production. PDVSA, the Venezuelan Oil Giant is the fifth world exporter and Petrobras, the Brazilian company, is the world’s first Off Shore oil producer. In natural gas, they represent 5.2% of world’s reserves and 7.5% of its production, according to a research carried on by the Latin American Energy Organization.

The idea of these countries is to increase its power of negotiation on world’s tariffs and to become energetically independent in the near future. “The State has to recover its power of setting the strategic lines of the economy after dismissing it by adopting IMF’s pro-market policies in the 90th”, said in a PRAVDA.RU interview, Ruby Daniel Hernandez, an Argentine economist from the National University of San Martin (UNSAM, by its initials in Spanish).

“Neo-conservatives are pro-abortion thinkers: they do not want the State to create companies, but if they are successful, then they want governments to privatize them”, says Hernandez. Something like that is happening in Argentina. Pro-market ideologists say it makes no sense to create a new company to explore off-shore basins. That’s exactly the same they said in 1922, when the then local authorities funded YPF, the former State oil giant which used to have interests even in Middle East and was sold to the Spanish Repsol in 1997.

Hernan Etchaleco

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Author`s name Evgeniya Petrova