Regardless of who wins the U.S. election, a new era in the U.S. approach to international trade agreements is about to emerge. Donald Trump has railed against the North American Free Trade Agreement (NAFTA) as the worst trade agreement ever signed by the U.S. and promised to withdraw support for the Trans Pacific Partnership (TPP) if elected. Although not as strident, Clinton, in a reversal of her past pro free trade position, now says that she would renegotiate NAFTA and has come out in opposition to the TPP. Of course, rising opposition to economic globalization and trade integration is not confined to the U.S. as Brexit amply illustrates. We now face a critical moment in the history of global capitalism.
The New Juncture and the Rise of the Political Right
For Latin America, this new juncture is a troubling development. Currently, the U.S. has free trade agreements with 11 Latin American countries, in addition to various trade and cooperation agreements with countries such as Brazil and Argentina. The impact of the rising tide of protectionism coincides with the recent sharp decline in the prices of the region’s commodity exports—upon which most countries have become increasingly dependent for export earnings. In 2015, economic growth in Latin America and the Caribbean declined for the fifth year in a row. Foreign investment in the region, the largest proportion of which comes from the U.S., is declining, particularly in the natural resource sector. Argentina and Brazil are facing deep recessions and even Chile, the “tiger” of the region, is not doing well. The sharp economic downturn precipitated the rejection of the various political left regimes that had used the revenues generated by the commodity boom to reduce poverty, in some cases substantially. Leaders of the political right have risen to the presidency in Brazil and Argentina while the Right has made substantial gains in curbing the power of the Left in Venezuela and Bolivia. Latin America’s Right political leaders are strong free trade advocates. Brazil’s President, for example, plans to revive the Brazilian economy through trade liberalization, new free trade initiatives, and increased investment. In the current economic context, however, such a strategy is not likely to meet with much success. Will the Right’s failure to stimulate a return of economic growth and continued poverty reduction create an opportunity for the return of the political left?
Latin America’s turbulent political history, which has involved sharp swings between regimes of opposing political leanings, strongly suggests that the tide will turn yet again. As the free trade formula fails to bear fruit, a resurgence of the left, backed by a public once again disillusioned with the rightist formula, is bound to emerge. Indeed, even should economic growth return to the region in the near future, the right’s faith in market mechanisms combined with its preoccupation with budget deficits, will likely predispose it to place less emphasis on social spending than the left regimes of the recent past. Further, Latin Americans may reject, even more strongly than before, the free trade/free investment formula of the political right given the abandonment of free trade by the super power to the north, which for so many years held up market liberalization as a panacea to all development problems.
The Left’s New Challenges
However, there are reasons to believe that the return of the political left will not be without difficulties. While in power, the left did little to mitigate corruption, and is now deeply tainted by corruption scandals and charges of economic mismanagement. As economies have been declining, the newly non-poor and even those who have entered the middle class for the first time, are being thrust back into the ranks of the poor; their insecurity and fear renders them easy to mobilize by the political right. In the context of slow growth or economic recession, the most disadvantaged may find non-political outlets for their frustrations and unmet expectations that do not involve support for left candidates and parties. In fact, these outlets may increase support for the political right.
The rapid rise in evangelical Christianity in the region is one such outlet as it provides solace to the poor in ways that mitigate political activism. Evangelical Christianity is especially appealing to the economically excluded. Its preachers tend to look and speak like their congregants. The “health and wealth gospel” tells people that with sufficient faith and prayer, they will obtain everything they want. Because most evangelical sects preach abstinence from liquor and womanizing, they provide poor women with a way to curb the behaviour of husbands and boyfriends. Leaders of the evangelical movement will likely become an increasingly important political force in Latin America’s context of political turmoil and economic disappointment. In Brazil, an evangelical church leader, with support among the poor, recently defeated his left opposition candidate by 20% of the popular vote for the mayoralty of Rio de Janeiro.
At the same time, one of the prominent features of the Latin American reality is the high rate of criminal activity and criminal violence and its incursion into political processes at all levels of government. Of the world’s 50 most dangerous cities, 43 of them are in Latin America. The growth in criminal gangs is closely related to the drug trade, which recruits from the desperately poor underclass, who lack alternative economic opportunities. With the current economic downturn, criminal organizations will have an expanding pool from which to recruit. Meanwhile, violent crime infringes on the lives of all citizens, but particularly on the lives of those living in lower class neighbourhoods. For these citizens, the law and order rhetoric of the political right will be particularly appealing.
Coming Back with a New Strategy
Hence, making a political comeback for the left will not be easy. The Left will need to have an effective short to medium term political strategy that appeals to, and incorporates, a broad cross-section of society. It must also have a long-term economic plan. As recent events have shown, a strategy that involves riding a commodity boom and using the proceeds to mount social programs, however beneficial the short term, unravels when commodity prices decline. The left will need a plan to spur economic growth through the development of (decent) employment generating, sustainable, productive activities. Faced with waning U.S. interest in trade and investment in the region, left regimes will need to cooperate closely and develop complementary activities conducive to regional trading areas. While such course of action is fraught with difficulties, it is probably the best hope for sustainable equitable prosperity.