protests, South America SAN SALVADOR, El Salvador (CN) — With political unrest in Chile, Peru, Brazil, Venezuela, Ecuador and Bolivia, virtually the entire continent of South America is in the throes of drama unseen for a generation. And welcome to everybody. I’m not sure what they would be. A global pandemic. Q: My name is Ali (sp). TAYLOR: If I may jump—well, you can jump in too, but—(laughs)—. That being said, you know, new media sources and social media have played an extraordinary role in all of the corruption scandals across the region in the last three to five years, and so there is more—there’s some democratization there. Anyway, it’s time. So I think there are—in that sense, the external support, while it’s not going to determine how this comes out within Venezuela, I think could be helpful, if there’s a unified and a very forceful position. I think now, as Kellie said, the Venezuela issue is a real test to see what it can accomplish. The corruption scandal has further politicized the media, and I think this is very troubling for the long term, especially for democracies in the region. But if there’s anything that we’ve learned through our own electoral process last year here in the United States, is that your macroeconomic indicators can be strong but if wages and employment are lagging, the political payment can still be pretty fierce. ARNSON: Right. And I’m wondering the effectiveness of the OAS. TAYLOR: I’ll take the Latin America piece. So that, I think, is—you know, it is one issue that’s out there. issue is very, very important at the outset—(audio break)—both from the United States in drug production. (Applause. Thank you. Time for your questions. “Test” meaning that there’s not this kind of very, which it has been in the past, kind of a moderate, you know, expression of concern about all of the emails that you’re getting about, you know, we worry about people, but that there’s a much higher level and much more forceful diplomatic pressure. But it’s a really important signal—(audio break)—investigations that are all beginning to converge. I think that Santos’ visit was in general a success. You know, this session doesn’t deal with the one case that would have reinforced your position, which is Mexico and the prospect that Lopez Obrador could be the next president of Mexico. All rights reserved. In which case, given all the polls that we know, the opposition would win, and you’d see some sort of transition to a more democratic government. And so that’s been a real challenge, coupled with the challenge that financially, you know, the OAS is not in good shape, supported mainly by the United States. Q: On Venezuela, I mean, if I might just push you a little bit. The news this morning, reports that our president has decided we will join Nicaragua as the only two countries in the hemisphere that are not participants in the Paris Agreement on Climate Change. It’s hard to recall anything comparable certainly in the western hemisphere in recent—in recent memory. ARNSON: There’s a Brazil piece in there and an Argentina piece. And I think they delegitimize the government. So the instruments are limited. We’ve mentioned it in the context of the Pacific Alliance. And just speaking from a commercial standpoint, kind of where I spent my day today, you know, this is an area where, frankly, the U.S. has a lot of competitive advantage. SHIFTER: Yeah, I think that, you know, we may know more this afternoon about the OAS, after this important meeting of foreign ministers, and what ultimately is the result of the role of the OAS in Venezuela. United States - United States - Secession and the politics of the Civil War, 1860–65: In the South, Lincoln’s election was taken as the signal for secession, and on December 20 South Carolina became the first state to withdraw from the Union. I mean, we were represented in that meeting, but only by the U.S. ambassador there, no one from USTR, et cetera, although some folks from Ways and Means and Senate Finance did attend. Q: Thank you. You know, they’re sensitive to it. So I think that’s going to be an issue, and it’s going to be a major test for Santos, if he’s able to bring those levels down. Economic issueshave played a significant role in the widespread dissatisfaction. Unfortunately, in Latin America, prejudices and stereotypes from the past remain and cases of harassment or street violence against women continue. It’s touched maybe a dozen other Latin American companies, mostly through the company of Odebrecht. How do you see this affecting relations with respect to environmental and economic issues in the hemisphere? Is Pinera Impairing Chile’s Leadership on Climate Change? To view this video please enable JavaScript, and consider upgrading to a web browser that And actually, when you look around Latin America, especially South America, what you see is a turn to stalemate. What is the likelihood—and now we have these leaked conversations, supposedly, of the current President Michel Temer on the phone basically approving of the payment of hush-money to keep people from talking about some of the scandals. And this was a joint settlement between Brazil and Switzerland and the United States. And how they’re pragmatic because they’re waiting for some new governments. So I think, you know, what more forceful measures? And that I think—that you see a negotiation that would call for elections, basically. In farcical elections for a new legislature, Maduro’s party took control of the last remaining bastion of the opposition, the National Assembly. You know, this is really one of the first times in, you know, Brazilian history that U.S. companies needing to operate under the rules of FCPA is actually a value add. And one of the problems with the OAS is that it does everything. In other words, what has been launched and started can never be sort of put back in the bottle? And I think it should focus on what its mandate is, which is as a political forum dealing with democracy and human rights. So I think the corruption issue will unquestionably be there, but I’m just concerned, knowing Colombia and having listened to some of the speeches already of the precandidates, that the rhetoric may be pushed in a direction, unfortunately in my view, so that this peace issue once again—as it has been for the last how many years, the last decades—becomes the central issue. One shouldn’t rule out the scenario that this government will stay in power, despite all of the tremendous problems that we know about, the crises. Thanks, everyone, for being here. The Trump administration really hasn’t yet come forth with a policy of where they’re going to go, but what’s the way to go? And what we’ve seen is that the protests have been large against Temer, but not large enough—not at the scale of the 2013 protests that brought down Dilma Rousseff. They’re all very valuable parts of the OAS—the Interamerican Human Rights Commission is very important. The United States of America has always been historically marred by social, political or economic issues: ever since attaining Independence, the … And that I think has led governments from, you know, Peru to Argentina, Mexico—Mexico’s a case that has—you know, as you know, it doesn’t have a great tradition of—you know, is very respectful of sort of sovereignty and non-intervention, but has taken—the foreign minister has taken a very forceful stand on Mexico. Another two are supreme court justices who are fairly political. They become angry to be asked to respect the rules when others are excepted. In that case, and I’ll finish here, today as we meet there’s a meeting at the Organization of American States, a consultation with all the foreign ministers in the hemisphere about the Venezuela crisis. ARNSON: OK. Importantly, I think 80 percent of that settlement went back to Brazil, and I think that sent an important signal to Brazilians about what our intentions were. In the category of what should United State do regarding Venezuela, for the past two years our approach has essentially been let’s not be heavy handed, let’s try and let other countries take—be involved to try and push the issue of what to do on Venezuela. And Venezuela will be a test. You know, they were pragmatic when they voted for Hugo Chavez. That’s creating quite a bit of discord with the labor community, which is obviously not to be overlooked in Argentina. You know, I think that he has basically done the best that he could with not—without having a majority in the congress during his time in office to enact some fairly ambitious reforms and, as you say, make a good amount of progress. If you look at Peru, we haven’t talked about, Chile looks like it’s going that way. Argentina's government has said the new one-off wealth tax could see Latin America's third-largest economy collect up to $3.7 billion. The following is a compilation highlighting unique initiatives taking place in every South American country, each with its own unique approach to common challenges faced by investment promotion agencies. TAYLOR: That’s a great question. The decline in social and economic inequality registered in many Latin American countries since the late 1990s coincided with a shift away from the politics of market-based structural adjustment and towards a political landscape in which the social problems of poverty and inequality play a prominent role. And now we’re at a point where, once again, if governments don’t deliver, then people are going to vote them out. And I think if the pressure increases from the outside, then I think there could be—you know, then I think—I think that could be helpful in sending a message to people within the government that this—that all the governments are really—are against—condemn what’s going on, and could lead to some sort of fracturing and fragmenting within the government, which could open some possibilities for a negotiated scenario. But again, here, this is a congress two-thirds of whom are, you know, pretty involved in—have been implicated in corruption scandals. I mean, I think Latin America has been consistently pragmatic. It’s my hobbyhorse, so it’s the key issue—(laughter)—for I would say at least the next decade, as the region comes to terms. One of the first issues that, Michael, you addressed was Venezuela. Please raise your hand, identify yourself, and wait for the microphone. I mean, one of my—one my questions about the depth and the breadth of the current corruption scandals has to do whether it’s going to result in just complete alienation, you know, of the public. But you’re closer to it. We can divide the environmental challenges into those that are already apparent and those that will become more so through the 21st C. (World Bank, 2016) Among the former, the most obvious one is the pollution that mars many cities in Latin America. Vizcarra’s Ouster Puts Constitutional Reform on the Agenda in Peru, Chile Prepares to Write a New Constitution—and a New Social Contract, Arce Looks to Heal Bolivia’s Divisions, but Morales’ Shadow Looms Large, COVID-19 Is Making the Latest Migrant Exodus From Venezuela Even Worse. Nothing compared to Brazil, but you have had some corruption scandals that, you know, for Chilean standards have gotten folks pretty riled up. And now the eruption of I think a truly historic—not just in Brazilian terms but in world terms—corruption scandals, the number of people in the government, in the congress, in the business sector that have been—that are either being investigated or have been charged or in jail. President Macri of Argentina was just here at the White House, met with President Trump, had a number of meetings around town. Now, the—now, the extreme case that Venezuela could do—I mean, the OAS could do is to invoke the Democratic Charter, which was approved on September 11th, 2001, in Lima, Peru. And that—you know, the OAS has challenges in that regard. Doing so will leverage the United States' enduring strength: its high-end market. And if it’s not, I think there’s going to be concern. It’s higher than both the Brazilian president and the Colombian president have combined, just to put it in some perspective. They have set out a scope of collaboration. Not only small, Caribbean states, but you look at a country like Peru, where you have the major metropolitan area of Lima basically in a desert, the major population center. And that would—if they do that and they get the two-thirds votes to do that, that would mean a suspension of Venezuela from the OAS. I want to ask Michael, President Santos was just here, visited the White House, made the rounds on Capitol Hill. His numbers are excellent. This really has put a lot of pressure on Temer. And so you know, this is something that there was sort of a decline in the profile of Brazil on the international stage, even before all of these scandals began to emerge. Challenges to the political order The economic and social changes taking place in Latin America inevitably triggered demands for political change as well; political change in turn affected the course of socioeconomic development. In many cases, this results not so much from industry as from the massive concentration in 1-2 urban areas in each country. Of course, making political tradeoffs to obtain majorities in Congress is common practice worldwide, but it often leads to corruption. And we’ve had the PRI that came back. But I would also point to the fact that the OAS has taken—today is behaving and performing in ways that are much improved by comparison to where it was even in the not-so-distant past. And it would help to have somebody of stature and authority representing the United States at the OAS, I think, to really push on some of the reforms that need to take place. I think these measures are symbolically important. It is part of the greater Americas which include North America and Central America. But I think—first of all, we’ve seen change in governments in the region. There’s the expectation that the former president, Sebastian Pinera of the right will be reelected. It’s compounded by the fact that the drug issue and the (wheat ?) So what do you see as the likelihood that Temer will be able to stay in power? You’ve got a review of all of our FTAs and membership in the WTO. So the other two options are a court case, which is currently ongoing in the electoral court—the supreme electoral court. And just thinking of the executive orders that have an impact on the countries of the region—or could, depending on how the actions linked to those executive orders come out, you’ve got a review of the country we have deficits with. And so there is a lot of uncertainty about if whoever that candidate may be—and I think we don’t know yet, it’s totally wide open—but if there’s a candidate that has that position, whether this thing is going to—is going to go forward and how that will play in Washington with different groups. In the next five years, South America will see more frequent changes in governments as a result of public dissatisfaction over economic mismanagement, widespread corruption, weak economic performance due to softer Chinese demand for commodities, and social stresses associated with new entrants to the middle class and the working poor. But, I mean, I do think that it’s something that needs to be discussed. This is bad for everyone. So we should just be realistic and honest and upfront about that possibility. And it’s not just the Odebrecht case, because now we have this meat packing case, and there are many other cases that are likely to have international legs. I do see a silver lining here though, which is that in the Odebrecht case, the Brazilian prosecution has been really an important international player, and a player that has worked to cooperate with other Latin governments, and worked to, you know, teach, to counsel, to advise other prosecutors around the hemisphere. Politics, religion, and social issues might not belong at the dinner table, but these elements are certainly crucial to our lives. SHIFTER: It will help the Nicaraguan relationship. Experts analyze the political challenges and economic issues of the countries in South America from Venezuela to Argentina, including a close … I think the solution, whatever it is—and hopefully it will come soon, and hopefully it will be democratic—will be a product of what happens internally. I doubt very seriously that that would happen, because congress would have to approve the constitutional amendment. And you know, is it possible for the left to come back? The court has seven members. And so there is a question here what that’s going to do to the economy, and so there’s some pushback from the business community saying, you know, it’s one thing to investigate corruption, it’s another to completely destroy the economy. I mean, let’s not—you know, I don’t think we should kid ourselves. Police brutality and racism. There’s enormous uncertainty. Vizcarra’s Ouster Puts Constitutional Reform on the Agenda in Peru. Judge Moro, who’s at the head of the Lava Jato investigation, said, look, I’m not trying to destroy the economy, I’m trying to destroy the corruption. Is that a guarantee it’s going to work? I mean, my bias a former trade guy is, you know, let’s start talking to Brazil about, you know, acceding to the Government Procurement Agreement. I think to the extent that there are divisions and splits—which we’re already starting to see—and to the extent that they grow, then I think that opens up possibilities. And so it’s hard to build a consensus which underlies the OAS and really is the nature of the OAS to move forward on a lot of positions. Here we go again. SHIFTER: I mean that—no, I don’t—I’m not talking about Noriega—. And if that were to happen, the congress could approve his removal with a two-thirds vote. This is a very sad, tragic situation. I know that there’s a lot happening in terms of humanitarian aid, just the—just the tragedy of the humanitarian crisis is real. HOCK: Well, I think, looking for silver linings, that one of the silver linings on this topic is that south-south trade discussions are in the spotlight. And that obviously would have tremendously troubling implications and consequences. But you know, there is an enormous division and polarization in these societies. Richard Downey from Delphi Strategic Consulting. South America. More broadly, you know, I think that the Lava Jato investigation in Brazil is the first time any payors have ended up in jail, and it’s one of the first times politicians have ended up in jail too. And, you know, whether that move towards South America—(audio break)—come to this hopefully later, with the election upcoming in Chile, whether Chile will continue to play that role. So we’ll see what happens in Cali at the end of June. But, you know, there are Mexicans you speak to today that didn’t like Lopez Obrador and haven’t liked Lopez Obrador, but they say, well, you know, we had two governments of the PAN. Vivian Lowery Derryck, the Bridges Institute. And this is a case that, ironically, was filed by a current ally of the Temer regime. He, since taking office, has launched this very ambitious process of economic reform to undo the economic mismanagement and corruption of previous—of at least the decade or so of the—of the Kirchner years. A lot of the promises that were made as far as what will happen if we enact an ambitious reform agenda vis-à-vis investment, et cetera—you know, a lot of that has not come to fruition, due to things that are, frankly, outside of his control. Now it’s gotten worse in Colombia. And that’s the fresh water that comes down from the Andes for the rest of the country. I think that the corruption issue will clearly be there. 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