Mission Report

Report on the Mission to Argentina, Brazil and Chile

The Council of American Ambassadors sponsored a mission to Argentina, Brazil and Chile from May 6-18, 2000. The delegation, which included ten former United States (US) Ambassadors [See Annex], visited Buenos Aires, Santiago, Rio de Janeiro and Brasília to investigate the political and economic situation in three Latin American countries.

Besides briefings with US Ambassadors John O’Leary and Anthony Harrington in Chile and Brazil, Chargé d’Affaires ad interim Guy Burton in Argentina, Acting Consul General Ronald Robinson in Rio and the Embassy and Consulate country teams, the delegation met with host country government officials and business representatives at the highest level. Our interlocutors included: Brazilian Foreign Minister Luiz Felipe Lampreia, Head of the International Department of President Cardoso’s office, HE Eduardo dos Santos, the Under Secretary for Political Affairs in Argentina’s Ministry of Foreign Affairs, Ambassador Ricardo Ricardes, President of the Brazilian Development Bank, Mr. Francisco Gros, and Jaime Bázan, President of the Chilean-American Chamber of Commerce.

Although the delegation visited each city for a relatively short period of time (approximately two business days in each place), members came away from their experience with several lasting impressions.

First, despite challenges to the democratic system in neighboring countries, such as alleged voter fraud in the May 2000 presidential election in Peru and a military coup in Paraguay, democracy in Argentina, Brazil and Chile is holding. All three countries have had several successive democratically-elected governments, and the officials with whom we met reiterated their governments’ strong desire to work with the United States to strengthen democracy in their countries and in the region.

Second, the Argentine, Brazilian and Chilean economies are moving forward. Argentina’s per capita Gross Domestic Product (GDP) of $8,950 is the highest in the Southern Hemisphere.* Its policy of pegging the Argentine dollar to the US dollar has provided stabilization in the short term. 

Chile’s highly educated and productive workforce, high standards of business ethics and open economy have combined to produce an average growth of seven percent in the Chilean economy over the last 15 years. Further, its experience with an innovative privatized pension system may offer insights for other states, particularly the US.

Brazil, the largest country in South America, accounts for 40 percent of the continent’s Gross National Product (GNP). Argentina and Brazil are founding members of MERCOSUR (or MERCOSUL in Portuguese), the common market of the South, and Chile is an associate member. All three countries look upon MERCOSUR as an intermediate step towards the creation of the Free Trade Area of the Americas (FTAA) or in Portuguese, the Associacao de Livre Comercio das Americas (ALCA) by 2005.

FTAA/ALCA brings together 34 democratic nations—from continental giants like the US and Brazil, to some of the smallest countries in the world. It addresses the most complex issues: the opening of services markets, the development of electronic commerce, the response to the growing interest in trade and trade policy by civil society, and more.

While looking forward to working with the US on the achievement of the FTAA, our interlocutors in all three countries view it with some skepticism given the Clinton Administration’s failure to secure fast-track for Chile’s accession to the North American Free Trade Agreement (NAFTA) in the 1990s.

This outcome—coupled with a Latin American perception that US policy in the region is defined by “knee-jerk reactions to Cuba” and “anti-narcotics trafficking efforts in Colombia”—leaves officials in the three countries visited to conclude that the US views the region with “benign neglect.”

Cognizant of this sentiment, US officials in Argentina, Brazil and Chile acknowledge the need to build awareness and focus within the US on the countries of the Southern Hemisphere. In this regard, we hope the pages that follow can help to shed light on the important activities and initiatives underway in three important neighbors in the Americas.

Argentina

The delegation’s first stop was Buenos Aires, the capital of Argentina. The Council’s visit coincided with the second democratic mayoral election in Buenos Aires since the end of Argentina’s “dirty war,” the period of military rule (1976-1983) during which many people died and others “disappeared,” allegedly abducted by the military government.** The free and fair May 2000 mayoral election is further proof that Argentina has emerged from that earlier period and embraced democracy.

This democratic trend is also evident on the national political scene. On October 24, 1999, voters elected Fernando de la Rúa President of Argentina for a four-year term. He took office on December 10, replacing President Carlos Saul Menem. According to the US Department of State, “the elections were considered free and fair.” President de la Rúa’s political party, FREPASO, is an alliance between the old established Radical Civic Union and the left-of-center FREPASO. While FREPASO does not have an absolute majority in the lower House, it has enough support to be effective. The opposition party, the Peronists, still dominates the Upper House (Senate); however, it is fractured and thus not very effective.

Argentina’s Economic Situation

Underlying political stability is the progress made in opening up Argentina’s economy. The early 1980s in Argentina were marked by hyperinflation and economic instability. The Menem Administration’s “Convertibility Plan,” which pegged the Argentine dollar to the US dollar, coupled with other economic reforms, such as reducing the State’s role through privatization, helped to bring the situation under control. 

Following seven years of economic growth, the economy slowed in 1998 due in large part to a reduction in foreign capital flows. In 1999, the country entered a recession, with GDP declining an estimated three percent. According to the US Department of State, unemployment rose to 13.8 percent in 1999, compared with 12.4 percent in 1998.

However, thanks to an increase in exports, the US Embassy predicts that Argentina’s economy will emerge from the recession and register three to four percent growth in 2000. President de la Rúa is pressing ahead with economic reform, submitting to the Argentine Congress a tax reform package and a wage reform proposal—the latter being passed by the Senate on April 26, 2000.

In fact, overwhelming passage of the labor reform bill in the opposition-controlled Senate marked an important victory for the new administration and its economic agenda. The bill, intended to lower the unemployment rate by reducing labor costs for businesses and curtailing the power of big labor, should “go a long way toward shaking up a rigid labor code that was set in the 1950s by President Juan Domingo Perón,” noted The New York Times of April 28. That code invested most power in one big national labor confederation and undercut any renegotiating of labor rules and salaries when business conditions changed.

The new labor code encourages businesses to hire more people at lower costs by reducing payroll taxes to 12 percent from 17.5 percent and allows companies to increase the length of the probationary period during which workers can be dismissed without benefits. It also makes labor contracts more flexible and allows collective bargaining at the company level.

Argentine businesses and Wall Street welcomed the Senate action while Argentine labor leaders and unions, predictably, voiced opposition. A national strike was held on May 5. However, it is expected that President de la Rúa and his labor code will prevail when the House takes up the legislation later this year.

In addition to reform, Argentina’s economic activity—particularly export growth—is enhanced through the country’s participation in MERCOSUR, a regional customs union and emerging trade bloc (which includes Argentina, Brazil, Paraguay and Uruguay and has associations with Chile and Bolivia). According to the US Department of State, MERCOSUR is “one of the largest and most dynamic integrated markets in the developing world. Close cooperation between Brazil and Argentina—historic competitors—is key to MERCOSUR’s impressive growth. Argentina’s trade with the other members of MERCOSUR has grown fivefold since 1991.” Thirty percent of Argentine exports goes to Brazil. Consequently, Argentina will focus more attention on deepening MERCOSUR relations in the near-term.

US-Argentine Relations

The United States also has played an important role in Argentina’s economic story. After Spain, the US is the largest foreign investor in the country with $16 billion in sectors such as telecommunications, banking, electric energy generation and gas and petroleum production.

The United States and Argentina enjoy a close bilateral relationship. Former President Menem used the term “carnal relations” to describe relations between the two countries. President de la Rúa refers to them as “intense relations.”

Despite the close relationship, the US has not had an Ambassador at its Buenos Aires post since James R. Cheek left Argentina on December 18, 1996. Finally, after a four-year absence, James D. Walsh, a career foreign service officer, was confirmed by the US Senate on June 9 as the United States Ambassador to Argentina. He presented his credentials to President de la Rúa on July 3. Argentines welcomed his arrival, particularly after such a prolonged absence of a US Chief of Mission in Buenos Aires.

The friendly Argentine-US relationship translates into cooperation on a number of key issues, including the environment, particularly global warming, international disarmament efforts and the fight against international terrorism and narcotics trafficking.

Further, the two countries often vote together in the United Nations and other multilateral fora. Argentina has participated in peacekeeping deployments mandated by the UN Security Council. Through this participation, Argentina has strengthened her military’s morale and public image, which had suffered during the period of military rule (1976-1983) that was marked by human rights violations, economic decline and military defeat in the 1982 Falklands/Malvinas Islands war. Today, the slimmed-down all volunteer Argentine force focuses largely on international peacekeeping, and the country also boasts the only training center for non-commissioned officers (NCOs) in peacekeeping operations.

The close bilateral relationship was further enhanced during President de la Rúa’s first official visit to the United States from June 11-14, 2000. In a 25-minute Oval Office meeting and a working lunch, Presidents Clinton and de la Rúa discussed strengthening democracy, recent presidential elections in Peru, drug trafficking in Colombia, telecommunications and trade issues. Areas of interest to the US in the economic arena relate to intellectual property rights—especially vis-à-vis American pharmaceutical products—and liberalization of commercial airlines through the realization of an open skies agreement.

Following discussions, US and Argentine officials signed agreements permitting criminal extradition, strengthening anti-corruption efforts in Argentina, enhancing environmental preservation in Argentina’s national parks and expanding scientific cooperation on satellites.

These are highly positive developments, and it is expected that the US and Argentina will maintain their close bilateral relationship and continue to work together in various fora.

Chile

The Council delegation next visited Santiago, Chile where President Ricardo Lagos and his center-left coalition (called Concertación) had been in office barely two months.*** Although the new government may have hoped to concentrate on issues that are important for the country’s future, such as reviving the economy and pushing ahead with social reform, it immediately faced a challenge from the country’s past. 

Former Chilean military ruler, Augusto Pinochet, who had been under house arrest in London and was released on the grounds of ill health, returned to Chile on March 3 to stand trial on home soil for the first time for alleged human rights abuses during his seventeen year dictatorship (1973-1990). According to press reports, President Lagos said that his “duty” as President is to “create conditions” whereby General Pinochet can be tried in Chile. The first step in this process was for the Chilean court to decide whether to strip Mr. Pinochet of his lifetime immunity, a protection accorded to him as a Senator-for-Life.**** President Lagos’ assertion and the decision to allow the courts to resolve political questions illustrate Chile’s commitment to democracy and democratic institutions.

Chile’s Economic Situation

In addition to challenges in the political arena, President Lagos and his government also must address Chile’s economy. After a decade of enviable growth, Chile last year slipped into its first recession since the early 1980s, as the price of its copper exports—which account for 35 percent of the country’s exports—plunged. However, recovery is underway: according to The Economist, unemployment dropped to 8.4 percent in January 2000, down from a peak of 11.5 percent in August 1999. Moreover, inflation is in check and well below government targets. Further, the Chilean-American Chamber of Commerce reports that total accumulated 1999 inflation was 2.3 percent, well below the government objective of four percent.

Underpinning Chile’s economic recovery and positive near-term prospects are three key characteristics that differentiate it from other Latin American countries. These elements are:

 

  • Education: Chile’s impressive literacy rate—94 percent in 1999—translates into a well-educated workforce. Its quality educational system ensures that Chile provides an exceptional standard of managerial, skilled and semi-skilled labor. Also, Chileans are “workaholics,” and their productivity is high.
     
  • “Stick to principles”: Chile promotes high standards of business ethics, and according to the Chilean-American Chamber of Commerce, it holds the top rank among its neighbors in transparency, i.e. a rating that measures the perception of lack of corruption. 
     
  • Open Economy: Chile’s openness to international trade also has contributed to economic growth. According to the US Department of State, in January 2000, the uniform Chilean tariff rate declined to nine percent and will be reduced by one percentage point per year to reach a rate of six percent in 2003. Further, Chile has free-trade agreements that will lead to duty-free trade in most products by the early 2000s with Canada, Mexico, Venezuela, Colombia, Ecuador, Peru, Bolivia, the MERCOSUR bloc and the Central American nations of El Salvador, Nicaragua, Honduras, Guatemala and Belize.

In addition to these factors, Chile’s supportive economic policies also help to promote growth. For example, the 1973-1990 military government initiated a privatization policy—selling many state-owned companies—that was pursued by successive Chilean democratic governments. Chile’s state-owned ports represent the most recent enterprises to undergo privatization, which in this case, entails granting long-term concessions for port operation and management. The three most important state-owned ports have already granted concessions: Puerto Valparaíso (which the delegation visited during its stay), Puerto San Antonio and Puerto San Vicente/Talcahuano. Concessions were due to be awarded at the Ports of Arica and Iquique in February. The US Department of State reports that these five ports “account for approximately 30 percent of the total cargo transferred in Chilean ports and almost 80 percent of the cargo transferred at state-owned ports….”

The establishment of a compulsory national private sector pension system in 1981, another supportive Chilean policy, is effective in increasing domestic savings, thereby augmenting the pool of investment capital and fueling economic growth. Under this system, a worker has seven percent of his wages deposited by the employer each month into an individual pension account (known as a “Pension Savings Account”) that is managed by a private money manager of the worker’s choice. The pension is determined by the amount of money accumulated during an individual’s working years. Neither worker nor employer pays social security tax to the state. Nor does the worker collect a government-funded pension. According to the US Department of State, Chile’s private pension system had assets worth roughly $30 billion at the end of 1998, and the estimated domestic savings rate was approximately 20 percent of Chilean GDP in 1998.

The Chilean experience in this area may well have important lessons for other nations, including the United States where the 2000 presidential campaign featured social security plan proposals from the two major party candidates. According to the National Center for Policy Analysis, several other Latin American countries, notably Argentina, Peru and Colombia, have attempted their own pension reform programs. However, these countries have not had the same success because they attempted to run a state pension system side-by-side with a private system—giving workers the choice of either. Thus, it would appear that Chile’s model of one overall private pension system provides a better chance for success.

Besides privatization and the private sector pension system, a third key Chilean policy is the country’s welcoming attitude toward foreign investment. Chile’s Foreign Investment Law gives foreign investors the same treatment as Chileans. The US Department of State notes, “Registration is simple and transparent, and foreign investors are guaranteed access to the official exchange market to repatriate their profits and capital.”

Total foreign direct investment flows in 1998 reached nearly six billion dollars, about eight percent of GDP. The US is Chile’s number one foreign investor, with more than ten billion dollars in foreign direct investments, primarily in the mining (47 percent) and industrial (42 percent) sectors. US-Chile bilateral trade (six to seven billion dollars annually) over the past three years is approximately treble what it was a decade ago.

US-Chilean Relations

The strength of the US-Chilean trade relationship also is reflected in cordial bilateral relations. In fact, US Ambassador to Chile John O’Leary believes that the “two countries now enjoy their best overall relationship since the Monroe Administration and the O’Higgins Administration first established US-Chile diplomatic relations in January 1823.” Ambassador O’Leary cites these key examples:
 

 

  • Chile and the United States have entered into the most comprehensive Open Skies Agreement (signed on October 21, 1999) that the US has with any country in South America.
     
  • Chile and the US have negotiated the first Social Security agreement between the US and a South American nation (that Ambassador O’Leary signed on February 16, 2000). This agreement harmonizes social security and pension systems thus ensuring that workers receive credit for work performed in the other country and employers do not have to pay double pensions.

Further, the two countries have entered into a landmark joint statement on e-commerce (February 18, 2000), and now are negotiating a bilateral tax treaty to facilitate the flow of labor and capital. These positive developments bode well for continued US-Chilean cooperation in the future.

Brazil

After visiting Buenos Aires and Santiago, the Council delegation next traveled to Rio de Janeiro and Brasília in Brazil, the fifth largest country in the world with a population of 170 million and a GDP of $807 billion (1998).

The Council’s first stop was Rio de Janeiro, a dynamic city that served as Brazil’s capital until 1960. The State of Rio de Janeiro is the second richest in the country, and the Rio Consular District, covering the States of Rio de Janeiro, Bahia, Minas Gerais, Espírito Santo, and Sergipe, accounts for 30 percent of Brazil’s GDP.

The United States maintains a presence in Rio de Janeiro; our Consulate employs 48 Americans and 150 Brazilians in the former United States Embassy building, a rather large structure that sits on a busy downtown street.

The Consulate’s vulnerability to a possible terrorist attack is evident; since 1998, Consulate officials have been looking for a vacant piece of land on which to build a new and smaller-sized building. The State Department is currently considering five possible sites, and it is hoped that a decision will be taken soon. In the interim, $1.5 million in security upgrades will be made to the current building, which is owned by the US government. Bollards will be installed, and the Consulate will work with the City of Rio to redirect traffic.

Downtown traffic is indicative of the vibrant activity that takes place in this city. Famous for its beaches and bossa nova, Rio de Janeiro is also a noted business center. Some of the major American companies with a presence in the city include: IBM, AT&T, Xerox, Citibank and Dow Chemical. However, herein lies Rio’s identity dilemma: Is it sun and samba or industry and economics?

In resolving its identity crisis, Rio, and all of Brazil for that matter, also must address several areas of concern that affect the city’s and the country’s future. First, despite a per capita income of $4,790, Brazil has the sixth worst gap in income distribution in the world. The US Department of State reported that in 1999 the poorest half of Brazil’s population received only ten percent of national income while the richest tenth received 48 percent.

Moreover, many Brazilians lack basic education; the country’s adult illiteracy rate is 20 percent and Rio’s is 38 percent according to the US Consulate General. Among black Brazilians, the illiteracy rate climbs to 50 percent as socio-economic status increasingly appears to be defined along racial lines. Once a country that prided itself on racial tolerance and accommodation, Brazil is coming to the realization that racism exists in its society. According to The Washington Post of June 12, one recent study found that in Sao Paulo, Brazil’s most populous state, blacks had the “highest unemployment rate, rarely made it through high school and were far less likely than non-blacks to work in jobs that paid more than $400 a month.”

Poor residents live in “favelas” (shantytowns), which are breeding grounds for illegal activities, such as drug trafficking, homicide and theft. The United States Consulate in Rio indicated that the rate of solved murders in the city is only ten percent. On its final night in Rio (May 12, 2000), the delegation learned that five people were shot in Copacabana, a popular and elegant tourist area.*****

Exacerbating the situation is a Brazilian cultural trait that prefers to solve one’s own problems by taking matters into his/her own hands rather than turning to the police and/or the courts for a just resolution. As a result, many citizens have handguns, which often end up being used in criminal activities. Moreover, Brazilians do not trust their police; allegations of corruption and crime within law enforcement persist.******

To stem violent crime, the Brazilian government issued a decree on June 20, 2000, that instituted an immediate ban on the sale of firearms. This initiative came as part of a “broader $1.7 billion effort to reduce urban violence and reform the police during the next three years,” reported The New York Times of June 21. The weapons restrictions will remain in effect until the end of this year. By then, the government “hopes to have won congressional approval of a more restrictive bill that would virtually ban the possession of firearms by any Brazilian citizen who is not a member of the armed forces, a police officer or an employee of a private security company.”

The government estimates that “Brazilians now own more than eight million guns, about three-quarters of which are unregistered, and that guns are used in nearly 90 percent of the killings committed in Brazil, a much higher figure than in the United States. Under the proposed legislation, gun owners would have one year to turn in their weapons to the government,” said The New York Times article.

Private Sector Response

In addition to government efforts, the private sector is working to address crime and other social concerns. The Council delegation met with officials from “Viva Rio,” a non-governmental organization (NGO) founded on December 17, 1993, after two tragic events—the notorious “Candelaria massacre” in which military policemen sprayed gunfire at 72 abandoned street children who were sleeping on the sidewalk in front of the city’s most famous church and another incident in which 21 people were killed—resulted in a public outcry against the climate of insecurity prevailing in the city.

Guided by the principles of human rights and good citizenship and supported by private and some government funding, Viva Rio works with 400 low-income communities in 34 municipalities in Rio de Janeiro State, focusing primarily on youth. It aims to raise Rio’s self-image through programs in three key areas: public safety, education and community development. The public safety programs include “Peace in the School” to combat violence in schools by promoting conflict mediation, sports and community action. To build confidence and trust between citizens and law enforcement, Viva Rio sponsors sports competitions (“Peace Games”) for over 40,000 youth, with the support of the police and the fire department.

With respect to education and community development, Viva Rio provides primary and secondary level education for youth and adults in favelas and low-income areas of the city. It also launched a “Rio, Put That Gun Down” campaign in which Rio’s school children secured more than half of the 1,312,929 signatures in a petition drive against the sale of guns in Brazil. The success of Viva Rio’s programs has attracted attention; other cities in Brazil have sought to replicate them in their communities. 

Businesses, too, have attempted to address these social concerns. For example, Mr. Carlos Fernando Gross, Vice President of Rio’s Federation of Industries, explained that of the 240 employees in his pharamaceutical company, approximately ten percent were found to be illiterate. In response, the company, investing in its human resources, offers a two-year educational program for its employees.

In the public sector, the Brazilian government has acknowledged the need to invest more in education, an important ingredient in developing a skilled workforce for its economy. It also recognizes that it must stay the course in its economic reform program to allow for continued development of the country.

Brazil’s Economic Situation

In July 1994, Brazil embarked on its most successful economic stabilization program, the “Plano Real” (named for the new currency, the real). Inflation—which had reached an annual level of nearly 5,000 percent at the end of 1993—dropped to less than five percent in 1998. Brazil accomplished this through a combination of a strong exchange rate, tight monetary policies, trade liberalization and privatization.

Market liberalization and economic stabilization have significantly enhanced Brazil’s growth prospects. Brazil’s trade has almost doubled since 1990, from $50 billion to an estimated $114 billion in 1997, and it has diversified its exports. For example, prior to 1965, Brazil was the world’s largest producer of coffee, which constituted approximately 40–45 percent of Brazil’s exports. Today, Brazil’s number one export is medium-sized airplanes. This export diversification is a notable achievement that has occurred in a relatively short period of time.

The United States represents about 20 percent of that export trade, and ran trade surpluses in 1995, 1996 and 1997 after many years of deficits with Brazil. Foreign direct investment has increased from less than one billion dollars in 1993 to an estimated $17 billion in 1997. The United States is the largest foreign investor in Brazil, accounting for almost $20 billion, or 34 percent of total foreign investment. On-going privatization efforts in the telecommunications, energy and mining sectors of Brazil are of major interest to US companies.

However, Brazil has been and is vulnerable to the volatility in the world economy. The Russian devaluation and default in August 1998 produced a crisis of confidence in emerging markets in general and in Brazil in particular and set in motion events, which culminated in Brazil’s abrupt switch to a floating exchange rate system in January 1999. The change was marked by initial reliance on extremely high real interest rates to stem capital outflow and help stabilize the currency.

In September 1998, Brazil presented its own plan for economic stabilization to the International Monetary Fund (IMF). The plan was accepted, and the IMF sent its first Resident Representative to Brazil in 54 years.******* Mr. Lorenzo Pérez, the IMF’s Resident Representative in Brazil, explained to our delegation that Brazil does have a line of credit with the IMF, and the country is eligible to draw from it on a monthly basis (as needed). He further pointed out that Brazil repaid a previous IMF loan early.

With respect to the current year, Mr. Pérez carefully delineated Brazil’s economic reform agenda:
 

 

  • Introduce more transparent behavior in public finance.
     
  • Reform social security. The current system does not have a minimum age for retirement, and benefits are not based on the number of years an individual contributes. President Cardoso is keen on making reforms; however, the Brazilian Congress holds the key.
     
  • Introduce tax reform. The main problem is indirect taxes. Value-Added Tax (VAT) is charged by Brazil’s states.

The Brazilian government is pursuing these objectives as part of its domestic agenda. At the same time, Brazil maintains friendly relations with many countries, including the United States. In fact, the US was the first country to recognize Brazil’s independence in 1822.

US-Brazilian Relations

More recently, and particularly during the first (1995-1998) and current term of Brazil’s President Fernando Henrique Cardoso, US-Brazil engagement and cooperation has intensified. This is reflected in the unprecedented number of high-level contacts between the two governments, including state visits by the Head of State to Washington and visits to Brazil by President Clinton and First Lady Hillary Rodham Clinton and many US cabinet secretaries.

Further, the delegation’s Brazilian interlocutors were quick to point out that Britain’s Prime Minister Tony Blair and Brazil’s President Cardoso are the only two Heads of State in the world that have been invited as President Clinton’s guests to Camp David.

The cordial US-Brazil relationship manifests itself in cooperation on a number of issues, including environment, anti-narcotics trafficking and space and technology. With respect to the latter, in April of this year, the two countries signed an accord that permits the launching of American satellites on American launchers from Brazil’s Alcântara launching center. In return, Brazil agreed to a series of safeguards intended to prevent it from acquiring the technology of its American clients or passing that information on to other countries.

Situated two degrees south of the Equator, the Alcântara launching center, built by the Brazilian military two decades ago, has “become the focal point of what is perhaps the most ambitious unmanned space program in any developing country. But it is the boom in telecommunications satellites that is likely to ensure it a prosperous future,” noted the May 23 edition of The New York Times.

Because of Alcântara’s proximity to the Equator, rockets launched there can carry relatively heavier payloads than those launched elsewhere. According to the same New York Times article, “The rotation speed of the Earth is greater at the Equator than in zones north and south, and the spin pushes rockets and satellites into orbit faster and with the use of less fuel. That translates into substantial savings for users and a longer useful life for the satellites. Brazilian officials estimate that a launching at Alcântara can be as much as 30 percent more efficient than one from Cape Canaveral, at 28 degrees north latitude.”

Besides space and technology, Brazil and the US are playing important roles in the economic future of the Americas. The two countries are co-chairing the negotiations to draft the FTAA/ALCA agreement that will create by 2005 a single trade zone including nearly a billion people and much of the world—from Recife to Hawaii and from the Arctic Ocean to Tierra del Fuego.

According to the US Trade Representative’s Office, the FTAA/ALCA will deepen trade relationships that already absorb more than half of all the goods exported from Brazil and roughly 46 percent of goods exported from the United States. It will strengthen the ability to achieve shared goals in the broader trading system, notably with respect to liberalization of agricultural trade. Ultimately it will create a lasting, prosperous, peaceful and democratic hemispheric community and potentially provide an important counterweight to the European Union on the global economic scene. Negotiations on the FTAA/ALCA continue; however, it will be left to the next US Administration and its partners to see them to fruition. 

Predictably, economics and trade was one of the areas discussed during the delegation’s meeting at the Foreign Ministry in Brasília. Brazil’s Foreign Minister, HE Luiz Felipe Lampreia, explained that his country wished to expand its exports—particularly orange juice, sugar, steel and tobacco—to the US. He also offered two additional priorities for US-Brazilian relations: to maintain a relationship of trust and openness between the two countries and to work together for the preservation of political stability and democracy in the region. With respect to the latter, the Foreign Minister noted that democracy is a relatively new notion for Latin America, and it takes time for the idea to take root. Thus, it is difficult to compare Latin American countries and those such as the US and the United Kingdom where a tradition of democracy already exists.

Summary and Recommendations

In Argentina, Brazil and Chile, the delegation was impressed by the energy and enthusiasm of the people with whom we met. All three countries have had successive democratically-elected governments and their economies are moving ahead. These developments augur well for the future.

The US can continue to support these trends by maintaining close relations with the countries in the region and by working constructively with our neighbors in the Americas on areas of common interest, such as trade and the environment. We also can work to raise the profile of the Americas among the American people by promoting more people-to-people exchanges, tourism and trade and educational/research missions.

While the Council’s visit to Buenos Aires, Santiago, Rio de Janeiro and Brasília lasted eight working days, the substantive briefings and meetings illuminated many issues. Consequently, we wish to offer several recommendations:
 

 

  1. Encourage the next Administration to pursue the achievement of the FTAA by 2005 as an important trading zone and counterweight to the considerable economic power of the European Union.
     
  2. Promote continued good relations between the United States and the region and work with all nations in the Americas to strengthen and support democracy and democratic institutions.
     
  3. Advocate for a forward-looking US foreign policy that goes beyond a domestically- motivated agenda vis-à-vis Cuba and the anti-narcotics efforts in Colombia and focuses increased attention on all of the nations in our hemisphere.
     
  4. Call upon the next Administration and the Congress to streamline the process of nominating, vetting and confirming ambassadorial candidates and ensure that US Ambassadors are at their posts in a timely fashion.
     
  5. Press for a timely decision on a new site for the US Consulate General in Rio de Janeiro to ensure the safety and security of all. Promote the full implementation of the report on Embassy Security issued by Admiral Crowe’s Accountability Review Boards.

*Editor’s Note: By comparison, Brazil’s per capita GDP is $4,790 and Chile’s is $4,500, according to the World Trade Organization

**Editor’s Note: According to The Washington Post of June 19, 2000, Senator Edward M. Kennedy (D-Mass.) wrote a letter to Secretary of State Albright urging the Administration to “use its influence with the Argentine government to secure the release of documents that could shed light on the fate of Argentina’s ‘disappeareds….’

***Editor’s Note: Ricardo Lagos was sworn into office on March 11, 2000. According to The Journal of the Chilean-American Chamber of Commerce, Mr. Lagos, a 62-year-old former professor, squeaked out a narrow 51.3 percent plurality to beat Joaquín Lavín, the center right coalition candidate, by 2.6 percent in a historic second round runoff election.

****Editor’s Note: In June 2000, justices on a special Chilean court voted 13-9 to revoke General Pinochet’s immunity from prosecution. On July 5, 2000, The New York Times reported that General Pinochet’s lawyers have filed an appeal before Chile’s Supreme Court. On August 8, 2000, the Chilean Supreme Court issued its 14 to 6 decision to divest General Pinochet of his immunity, stated The Washington Post of August 9, 2000.

*****Editor’s Note: According to The Washington Post of June 17, 2000, Brazil whose 170 million inhabitants account for 35 percent of Latin America’s people had 41,000 homicides in 1998, roughly 40 percent of the murders in the region.

******Editor’s Note: According to The Washington Post of July 5, 2000, the Governor of Rio de Janeiro State fired 353 police officers “who had been accused of an array of wrongdoing—from auto theft and extortion to drug trafficking and murder. The officers will face criminal investigations.”

*******Editor’s Note: According to the Central Intelligence Agency’s World Fact Book (1999), Brazil received a $41.5 billion IMF-led international support program in November 1998

 

 


Annex:
Delegation List

Hon. Keith L. Brown and Carol Brown
President, Council of American Ambassadors
Ambassador to Denmark, 1989-1992
Ambassador to Lesotho, 1982-1983

Hon. Edward R. Finch, Jr. and Anne Finch Cox
Ambassador to Panama, 1972

Hon. Alan Green, Jr. and Joan Green
Ambassador to Romania, 1989-1992

Hon. Chic Hecht
Ambassador to the Bahamas, 1989-1992; 
Member of the United States Senate, 1982-1988

Hon. Glen A. Holden and Gloria Holden
Ambassador to Jamaica, 1989-1993

Hon. Henry L. Kimelman and Charlotte Kimelman
Ambassador to Haiti, 1980-1981

Hon. Selwa Roosevelt
Chief of Protocol, 1982-1989

Hon. Paul A. Russo
Ambassador to Barbados and the Eastern Caribbean, 1986-1988

Mrs. L. Nicholas Ruwe (Nancy)
Former White House Social Secretary

Hon. Timothy L. Towell
Ambassador to Paraguay, 1988-1991

Hon. Leon J. Weil and Mabel Weil
Ambassador to Nepal, 1984-1987 

* * *
Maggie Bryant
Chairman, National Fish and Wildlife Foundation

Dr. James L. Cox
Chairman, Cardiovascular Surgery, Georgetown Medical Center

Carolyn M. Gretzinger
Executive Director, Council of American Ambassadors

Mission Date(s)

May 6, 2000 - May 18, 2000

Delegation Members

  • Carol Brown
  • Maggie Bryant
  • Dr. James L. Cox
    Chairman, Cardiovascular Surgery, Georgetown Medical Center
  • Anne Finch Cox
  • Edward R. Finch, Jr.
    United States Ambassador to Panama, 1972
  • Joan Green
  • Alan Green, Jr.
    United States Ambassador to Romania, 1989-1992
  • Carolyn M. Gretzinger
    Executive Director, Council of American Ambassadors
  • Chic Hecht
    United States Ambassador to the Bahamas, 1989-1992
    Member of the United States Senate, 1982-1988
  • Glen A. Holden
    Ambassador to Jamaica, 1989 - 1993
  • Gloria Holden
  • Charlotte Kimelman
  • Henry L. Kimelman
    United States Ambassador to Haiti, 1980-1981
  • Selwa S. Roosevelt
    Ambassador to Chief of Protocol, 1982 - 1989
  • Paul A. Russo
    Ambassador to Barbados and Eastern Caribbean, 1986 - 1988
  • Nancy Ruwe

  • Timothy L. Towell
    Ambassador to Paraguay, 1988 - 1991
  • Leon J. Weil
    United States Ambassador to Nepal, 1984-1987
  • Mabel Weil