Latin America's Response to Mark Carney's Speech

I was watching a webinar put on by the Canadian Council for the Americas, which naturally touched on Mark Carney's speech. Robert Funk, a Chilean professor (but also Canadian) noted how unusual it was to have people talking about a Canadian Prime Minister's speech in casual conversation. And I don't blog very much about Canada.

It resonated elsewhere and Claudia Sheinbaum praised it. Carney will spend a lot of the year traveling, which already includes Brazil and I imagine will include plenty more of Latin America. This isn't exactly new, but the sense of urgency is intensifying.

A question came up in the webinar about whether Canada would lead some sort of group of middle powers, which I think misses the core point. This isn't a "movement" per se but rather just the rational response by sovereign countries with options. There doesn't have to be a leader, which suggests common political views, policies, and the like.

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Mark Carney's Speech and Latin America

Canadian Prime Minister Mark Carney's speech at Davos is all about autonomy and fits exactly with my own argument with regard to Latin America.

[M]any countries are drawing the same conclusions that they must develop greater strategic autonomy, in energy, food, critical minerals, in finance and supply chains.

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Allies will diversify to hedge against uncertainty.

They'll buy insurance, increase options in order to rebuild sovereignty – sovereignty that was once grounded in rules, but will increasingly be anchored in the ability to withstand pressure.

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We are calibrating our relationships, so their depth reflects our values, and we're prioritizing broad engagement to maximize our influence, given and given the fluidity of the world at the moment, the risks that this poses and the stakes for what comes next.

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The past few days, we've concluded new strategic partnerships with China and Qatar. We're negotiating free trade pacts with India, ASEAN, Thailand, Philippines and Mercosur.

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[T]he middle powers must act together, because if we're not at the table, we're on the menu.

This is all exactly right and Latin America has been doing it since the 1990s, with acceleration once the first Trump administration demonstrated the United States could not longer be relied upon. Note the "past few days" comment. In the first year of this second term, governments are working overtime to forge new partnerships.

The United States remains extremely powerful and is always a partner, but just not to the same extent that it used to be. Governments have to hedge, they just have no choice, especially when tariffs are announced based on person dislike. Those tariffs might never materialize, and often don't, but plenty of times they do.

Watch for more trade and investment announcements. They'll be coming for sure.

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Are People Aware of Mexico's Economic Impact?

John Hyatt, a former student who is now a business consultant in Mexico, pointed this Economist article out to me. It looks at the role of Canadian and Mexican lobbying in the United States to emphasize the impact of Trump's policies (e.g. tariffs) on their districts. Here is an eye-opening sentence:

Most American lawmakers are said to be surprised when told how much trade their district does across the Mexican and Canadian borders.

I would say this is hard to believe, but we should know better. This is Congress we're talking about. The magnitude of Mexico's economic impact on  the United States has been reported endlessly, but people still have a difficult time pinpointing how it affects the specific places they live. This is the same dynamic as immigration. Immigrants impact our lives in a direct but often invisible way that people either don't realize or don't want to realize.

A lot of this is old fashioned nativism. It simply does not occur to many people--including high elected officials--that they are dependent upon Mexicans for anything. Latin American lobbying is an understudied topic, but it is a critical part of Latin American foreign policy. Here is a news article back in 1993 during the NAFTA negotiations:

The Mexican government has unleashed the most expensive and elaborate foreign lobbying campaign ever undertaken here, hoping to ensure passage of the trade agreement it wants with the United States and Canada, a nonprofit research organization said Thursday.

So Mexico has been lobbying forever, yet its economic impact never fully sinks in. For Mexico, it is a constant (and unending) process of reminding people of what should be obvious.

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Will Aid Spark Violence in Venezuela?

I am quoted in this Bloomberg article about the Lima Group meeting in Ottawa yesterday. I spoke about the effect of aid, making the point that the chances of confrontation are high if foreign countries try to force aid into Venezuela. I wrote about this a few days ago as well, laying out different scenarios.

The Lima Group official statement says the following:

They reiterate their deep concern about the serious humanitarian situation in Venezuela caused by the Maduro regime. They consider it imperative that access to humanitarian assistance be guaranteed in order to respond to the urgent needs of Venezuelans. They call upon the United Nations and its agencies and the international community to be prepared to provide humanitarian assistance to vulnerable populations in that country, whenever possible, and based on their needs.

Nicolás Maduro's response was this:

 “A Venezuela no se le puede hacer una promesa falsa de una supuesta ayuda humanitaria, a Venezuela hay que convocarla al trabajo, a la producción, al crecimiento de nuestra economía, no somos mendigos de nadie”, dijo Maduro.

Right now, there is an impasse. Justin Trudeau's offer of aid appears only to be going to neighboring countries. However, Juan Guaidó announced that today the first order of business of the National Assembly is to discuss where the aid should go. He wants it inside Venezuela.

Making this discussion public ratchets up the possibility of armed confrontation because all forces will concentrate on those areas. I suppose it's possible to have it all be a fake and then move the goods into the country somewhere else entirely.

Guaidó wants to make the military choose. I take it he believes that when faced with the choice of shooting or feeding, they will choose feeding and the regime will collapse (incidentally, this may have been a Colombian brainchild). This is risky and scary (if indeed it was Colombian, they certainly are familiar with risky and scary).

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Canada's Stance on NAFTA

There are all sorts of issues popping up as part of the NAFTA negotiations going on. One in particular that caught my eye came from Canada:

Canadian negotiators are demanding the United States roll back so-called "right to work" laws – accused of gutting unions in some U.S. states by starving them of money – as part of the renegotiation of the North American free-trade agreement. The request is part of a push by Ottawa to get the U.S. and Mexico to adopt higher labour standards under the deal.

This not only goes after "right to work" laws but it hits Mexican corporatism directly, which has involved corrupt deals between the government and union leaders. Therefore they rejected the idea.

Overall, it's healthy to have a more public discussion of wages. An important part of my Latin American Politics class is to explain why countries can see strong economic growth and general dissatisfaction at the same time. Even if you have a job, it might pay very little and offer few to no benefits, which has become increasingly problematic in the United States.

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