Ibero-American News Digest

Brazil's Backing of Free Trade Leads to Diplomatic Debacle

Aug. 1 (EIRNS)—Brazil's obsession with getting a better seat at globalization's table, even as that old world order disintegrates, led the Lula government into a diplomatic fiasco, when the World Trade Organization (WTO) Doha Round collapsed last week.

Brazil turned its back on its allies in the G-20 and the Common Market of the South (Mercosur), to fight for the deal offered by WTO director Pascal Lamy, the EU, and the U.S., whose terms Brazil's allies recognized would be genocidal in the midst of an international food crisis. Argentina joined India, Indonesia, and other nations, in defending their right to enact measures to protect their domestic markets from hyperinflated commodity prices.

Brazil went so far as to offer to cut its industrial tariffs by 56% (!), astounding its erstwhile allies, Argentina, India, and South Africa, which together were demanding more protection for their own industries.

Now that the WTO deal has collapsed, a brawl is on in Brazil over whether to continue to push the failed free-trade policies, or change course. The initial reaction of both Foreign Minister Celso Amorim and President Lula da Silva was to insist, on July 30, that they would immediately seek bilateral free-trade agreements, mentioning Mexico, the Central American countries, and the EU as potential targets.

Despite the tension over Brazil's betrayal in the Doha talks, Lula will be in Argentina on Aug. 2-4, to try to mend fences and refocus discussion on the issue of regional integration. Venezuelan President Hugo Chávez will join them on the last day, turning the discussions into the latest "Presidents' Club" effort to strengthen integration.

The visit provides an opportunity for Brazil to climb down from the free-trade limb it has been clinging to. Argentine President Cristina Fernández de Kirchner reiterated on July 31, that her goal is to "reindustrialize Argentina" and not just be "another segment of the international economy" whose only purpose is to export raw materials. It was this industrialization policy that Argentina defended at the Doha Round talks in Geneva, she said, and this is the "banner" we proudly fly.

Colombia, Venezuela Reiterate: Integration Will Proceed

July 29 (EIRNS)—To achieve real South American integration, it is imperative to build a means of mass transportation which links the countries of the South. "We want the railroad to run from San Cristobal [in Venezuela], passing through Villavicencio [in] Colombia's plains.... This is very important for all of us," Venezuelan President Hugo Chávez declared in his Sunday national broadcast on July 27. He added that this project will extend into Bolivia, Brazil, and Argentina.

This was the second time in recent weeks, that Chávez has spoken of a continent-wide railroad, an idea which is clearly taking on new life.

At the same time, the Venezuelan President went after Colombian Defense Minister Juan Manuel Santos, who had, once again, made a show of expressing cynicism about cooperating with the Chávez government and such regional integration efforts as the South American Defense Council, the latter a Brazilian-initiated forum which Colombian President Alvaro Uribe had just announced Colombia would join. The fact that this time Santos made his remarks during a visit to Washington, D.C., last week, was particularly provocative.

Chávez declared Santos to be "the number one enemy," who is doing damage to Colombia, and to South America, but he took pains to emphasize that his beef was not with the Colombian government as a whole. "We are countries with different approaches, but we are not enemies," he said.

As had occurred the first time Santos's public attacks on the Chávez government threatened to derail the Colombian President's peace initiative with Venezuela, the office of the Colombian Presidency immediately issued a press release restating its policy: President Uribe has instructed the Foreign Ministry, and his entire Cabinet, to diligently work on advancing the integration projects with Venezuela to which he had committed his government in his July 11 summit with Chávez. The foreign ministers of the two countries are to meet in August to ensure that bilateral relations are moving forward—and members of the government should work towards this, in the discreet terms appropriate for binational integration.

Lyndon LaRouche has emphasized that moving forward on such rails-for-peace projects is critical to the Americas defeating Britain's Opium War against the region, and "turning terrorists into farmers."

Argentina Re-Nationalizes Airline; Vulture Funds Drool

July 26 (EIRNS)—Argentine President Cristina Fernández de Kirchner announced July 21 that her government is renationalizing Aerolineas Argentinas, once the state's proud flagship airline, which was privatized in 1990 by then-President Carlos Menem.

Argentina is buying up majority shares in Aerolineas from the Spanish Group Marsans, which bought the airline in 2001 from Spain's Iberia airline. Under private ownership, the airline was asset-stripped, such that today, it has an $890 million debt, is $60 million in arrears on fuel payments, and has 60% of its 57-aircraft fleet grounded, due to lack of spare parts. Fernández says she is committed to getting the airline back into operating shape.

One immediate crisis is that the airline overbooked passengers for the Winter vacation period beginning July 28, to the tune of $140 million. The government is scrambling to try to provide service. In addition, vulture funds that didn't participate in the 2005 debt restructuring, are now drooling at the prospect of seizing Aerolineas's aircraft, once the renationalization is complete and the aircraft are considered legitimate state assets.

Sonora to Calderón: The System Is Crashing; Build the PLHINO!

July 31 (EIRNS)—When he visited the state of Sonora this morning, Mexican President Felipe Calderón was greeted by a full-page advertisement in the state's leading daily, El Imparcial, with the bold headline: "In the Face of the Food Crisis, Let's Build the PLHINO."

The ad, signed the Pro-PHLINO of the XXI Century Committee, brought the stark message: Today's worldwide economic crisis is no cyclical event, but a "systemic crisis" from which no nation can escape, and whose most dramatic expression is seen in the global hyperinflation hitting energy, raw materials, and most especially, food. Food-import-dependent nations like Mexico will find that there are no grains available on the market, even if they have the money to buy it.

To secure its food supply, the State must invest in ambitious infrastructure projects such as the Northwest Hydraulic Plan (PLHINO), which would link the water basins of the states of Nayarit, Sinoloa, and Sonora, and open up more than a million hectares for cultivation, create hundreds of thousands of productive jobs, and generate electricity.

The relevant Congressional committees, the legislatures of the states immediately involved, and most recently, a meeting sponsored by the National Governors Conference, have endorsed construction of the PLHINO, the ad reports. "But, Mr. President, your National Water Commission (CONAGUA) is refusing to use the monies allocated by Congress a year and a half ago to build the PLHINO. The time has come for you to intervene, to prevent social chaos."

The Pro-PLHINO Committee, representing farm, labor, business, youth, and other institutions of Sonora, and founded by leaders of the LaRouche movement in Sonora a year ago, has made construction of the PLHINO a strategic national issue. The Committee has organized a growing movement of people who believe that the Northwest "must fulfill its mission of providing the nation with the food which is today needed so urgently," and that means taking on the opponents of the PLHINO.

Mexicans Say No to Privatizing PEMEX

July 31 (EIRNS)—Upwards of 1.7 million Mexicans turned out on July 27 for the first of the popular referendums organized by the Democratic Revolutionary Party (PRD) and other opposition forces, on the Calderón government's stated intention of privatizing the national oil company, Pemex. Over 800,000 people came out to vote in the non-binding plebiscite in Mexico City, along with another 950,000-plus in nine states, of which a reported 82% voted against privatization, and expressed their disagreement with Calderón's restructuring plans—designed under massive pressure of the bankrupt international financial institutions—to hand over Mexico's oil to foreign private predators.

Although protest organizers had hoped for an even larger turnout, the vote nonetheless demonstrated that there is still substantial ferment against the disintegration of Mexico's economy—and especially its ability to feed its population—under the weight of the international crisis. Similar plebiscites will be held in the other the states, on Aug. 10 and 24.

Well-informed political sources in Mexico report that the Calderón government, however, does not plan to listen to this protest movement, and will instead try to ram the privatization legislation through Congress, relying on his own PAN party and corrupt allies within the PRI, in particular. Behind all of those forces, however, are the snarling orders coming from bankrupt London and Wall Street financial institutions.