Obama to refocus on Latin America amid Chinese push

Barack Obama

WASHINGTON, (Reuters) – President Barack Obama     travels to Latin America this week seeking to reassert  economic leadership in a region Washington once dominated but  where it now faces growing competition from China.

Barack Obama

On his first trip south of the border in nearly two years,  Obama will visit countries where many are skeptical a president  preoccupied with Middle East unrest, Japan’s nuclear crisis and  U.S. domestic problems can offer much to an increasingly  independent-minded Latin America.

His March 19-23 tour takes him to South American powerhouse  Brazil, free-market success story Chile and tiny El Salvador.

Obama’s challenge will be to convince Latin Americans, who  have long chafed at U.S. perceptions of their countries as  Washington’s “backyard,” about his commitment to making the  region a priority for trade and investment at a time when China  is seizing the initiative there.

The trip also has important political implications at home.  The White House is touting Latin America as a fertile market  for increased exports that Obama sees as a path to creating  U.S. jobs, considered crucial to his 2012 re-election chances.

But Latin America, buoyed by growth outstripping the U.S.  recovery, is not only diversifying economically but showing it  is no longer as willing to take its cues from Washington.

“We can’t ignore the Western Hemisphere nor can we take it  for granted, because other people are moving in very quickly  and very effectively,” said Eric Farnsworth, vice president of  the Council of the Americas.

UNMET EXPECTATIONS

Obama raised expectations at the 2009 Summit of the  Americas in Trinidad when he promised an “equal partnership”  with Latin America based on mutual respect and shared values.

It was seen as a welcome change of tone in a relationship  that was often marked by heavy-handed use of U.S. military and  economic power for much of the 20th century and evolved into a  policy of neglect over the past decade after many countries  underwent democratic transformations from military rule.

Though Washington’s image has improved from the lows of the  Bush era and Obama remains personally popular in Latin America,  diplomatic advances have failed to materialize along with hopes  for significant easing of a long-standing U.S. embargo on  communist Cuba and reform of U.S. immigration laws.
There has also been disappointment at Obama’s failure so  far to win congressional approval for stalled trade pacts with  Colombia and Panama, and over what was widely seen as a muddled  U.S. response to the 2009 coup in Honduras.

Preoccupied with crises abroad, budget battles in Congress  and his own re-election bid, Latin America seems to have  slipped down Obama’s agenda, although the White House insists  he has been “deeply engaged,” meeting the region’s leaders  regularly at world summits.

“The other countries very much want to see the U.S. engaged  in international economic affairs and show leadership.” Obama’s  deputy national security adviser, Mike Froman, told reporters  before the trip.  “I think the president has done that.” U.S. officials hope that Obama’s trip — his most extensive  to the region since taking office — will reassure America’s  closest neighbors and help bolster ties.

NEW REALITY

While the visit will be sweetened with business deals and  side agreements, it will yield more symbolism than substance.

It will also underscore that the era when the United States  held unquestioned economic sway is over.

China and India are making deeper inroads. Their appetite  for raw materials at home is helping to spur growth in the  Latin America, which once lagged behind the United States.

Recognition of this trend is reflected in the choice of  Brazil, the region’s top economy and an emerging world power,  as Obama’s main stop on his tour.

He wants to take advantage of a chance to repair ties since  President Dilma Rousseff took office in January, U.S. officials  say. Tensions rose under former President Luiz Inacio Lula da  Silva over, among other things, Brazil’s overtures to Iran. Rousseff, a pragmatic leftist, has veered back toward  Washington and away from anti-U.S. leaders like Venezuela’s  Hugo Chavez, but she will likely insist on results with Obama.

With China having overtaken the United States as Brazil’s  leading trade partner, the Obama administration is determined  to use the trip to push U.S. interests.

“This trip fundamentally is about the U.S. recovery, U.S.  exports, and the critical relationship that Latin America plays  in our economic future and jobs,” Froman said.

But he made clear that China would be up for discussion  between Obama and Rousseff, especially both governments’  concerns about what is widely seen as an undervalued yuan.

Obama’s visit to Chile will showcase the country as a  U.S.-backed model of market reform and stability since it  emerged from military dictatorship in the 1980s. He will use  Santiago as the setting for a Latin American policy address.

The political counterpoint to Chile, governed by the  center-right, will be Obama’s stop in El Salvador. Its new  elected government, led by members of a former leftist rebel  movement Washington opposed in the Central American country’s  civil war, is seeking closer ties with the United States.

Obama’s itinerary sends a message that he wants to avoid  viewing Latin America through the ideological prism that  prevailed under his Republican predecessor, George W. Bush.

But while the visit to El Salvador is also likely to focus  on concerns about poverty and the spillover of Mexico’s drug  war to its neighbors, expectations are low for new aid  commitments because of U.S. budget constraints.

There could be hard feelings in countries Obama bypasses.  Argentina’s media have depicted his choice of two  market-friendly neighbors as a snub to President Cristina  Fernandez and her interventionist economic policies.