Our answer: Yes. We say yes more out of hope than conviction. Tone will be as important as substance in the days following President Trump’s inauguration. Poised to meet Peña Nieto on January 31, president Trump seems ready to question just about everything that has traditionally defined the bilateral relationship. His rise to the presidency was partly fueled by blaming Mexico for many of the challenges facing the United States. So, Trump supporters and the media at large will pay close attention to what he does on issues like trade and immigration. Collaboration is essential; this will be possible only without overblown rhetoric.
Mexico’s “bet” on North America is still relatively new and collaboration has brought many benefits—from securing Mexico’s southern border to stem unauthorized immigration from Central America, to maximizing a trade relationship—where $1.5 billion crosses the Rio Grande every day—that allows North America to better compete globally.
For all these reasons, we hope the reality of a beneficial collaborative relationship will sink in sooner rather than later, allowing deals to be struck. In Mexico, Peña Nieto has said he is willing to sit down with Trump to discuss modernizing the North American Free Trade Agreement (NAFTA), and he has appointed Luis Videgaray—the architect of Trump’s visit to Mexico City last September—as the country’s new foreign minister. And days before Trump’s inauguration, Peña Nieto affirmed he was ready to discuss collaboration to counter unauthorized immigration—one of the top-two most contentious bilateral issues.
There are huge challenges ahead, and diplomats have a difficult task rebuilding a frayed relationship. But a good working relationship between Mexico and the United States is not only desirable: it is necessary.
Our answer: Yes. Developments occur slowly in Venezuela, and it is unlikely that the social disintegration currently roiling the country will explode and force President Maduro out of office before April. Now, things have become even more complicated: earlier this month, hardliner Tareck el Aissami became the country’s new vice president, putting him in line for the presidency in the case of a successful recall vote against Maduro.
The prospects of having Aissami as head of government might be just as scary to the opposition as keeping the status quo. The former interior minister and governor of Aragua state has called his rivals “terrorists,” “murderers,” and “criminals,” declaring his own intransigence and rejecting compromise multiple times. Nominating him was a swift move on the government’s part, as the recall is now that much less appealing for the opposition.
That said, we are betting that Maduro will be forced to leave Miraflores before the end of the year. The situation is gruesome—Venezuela is in a battle for survival in the most literal of senses, as its people struggle daily to obtain food, electricity, and medical care. Hundreds of protests erupt every month, and the opposition is running out of options to accomplish change through constitutional means. Maduro and hardline chavistas have so far been able to delay the inevitable fall of the government, but it is clear to everyone that Venezuela is a ticking bomb. The big question: will change happen before civil strife spins out of control?
Our answer: No. Polling shows that most Americans, across the political spectrum, support the rapprochement with Cuba, and there is little political capital to be gained by rolling back these changes. Internationally, retreating from engagement with Cuba would also have the unintended consequence of facilitating the path of other nations—notably China—as they work to increase their economic ties to Latin America, which could strengthen to the detriment of US interests. But with a number of aides expressing strong anti-rapprochement views, it is likely that Trump will alter some components of the new policies. For example, the new president may reverse executive actions with minimal appeal to the broader American public, such as regulations that allow certain Cuban officials greater access to dollars and US banking. It is unlikely, however, that Trump will undo the expanded travel opportunities or new business ventures. After all, this is a man who made his fortune in real estate and is likely to recognize the opportunities for American companies represented by the new businesses popping up in Havana.
Our answer: Yes. 2017 will offer a break from the political limbo Colombia experienced last year. Despite the deep polarization currently plaguing both political elites and society at large, this year will bring major milestones for the successful implementation of the peace accord. President Juan Manuel Santos has majorities in Congress—as evidenced by the ratification late last year of the peace agreement—that will enable the legislature to pass crucial, long-needed reforms such as modernizing the agricultural sector and making the political system more inclusive. Although Uribismo will likely continue its fierce opposition to the accord—which may weaken it politically—it will not stop implementation, as those with the power to move it ahead are on board.
Fast-track authority granted to President Santos by the Constitutional Court will enable him to swiftly pass key laws required for continued implementation of the accords, as evidenced by the quick approval of an amnesty law for lower-ranking FARC members last year. While the complete implementation of the accord will take at least ten years, laws passed in 2017 will set the foundation for most of the long-term reforms, such as political participation for FARC, a new anti-drug policing strategy, and the creation of the Special Jurisdiction for Peace.
Our answer: Yes. Brazilians will celebrate when the worst recession in the country’s history indeed abates in 2017. The pain may linger a bit longer though: Brazil’s economy shrank 3.8 percent in 2015 and about 3.2 percent in 2016, while unemployment affected roughly 12 million people. Recovery will take time and no one thinks growth will surpass 2 percent annually for at least another five years. However, there are already signs of a recovery, including lower inflation, and many reforms Brazil needs to get itself back on track are in the works. The first such reform—a cap on public expenditures for at least ten years—has already passed in Congress, in spite of the controversy surrounding the topic. Next, we anticipate pension reform to be approved in 2017, and labor reform will come right after that.
Will these reforms be easy? No, and there is plenty of room for error. We expect a spike in protests as well, as Brazilians express their concerns about the future. Moreover, Brazilians may not feel the benefits for the country in the short run in the short run. All in all, however, Brazil is moving in the right direction, and there is reason to hope investment will grow again in the coming months. Start cutting those limes.
Our answer: Yes. With presidents in Argentina and Brazil devoted to changing their countries’ directions, and the reassuring support of Uruguay and Paraguay, Mercosur is close to making a deal with the Pacific Alliance. Argentina was granted “observer status” in the Pacific Alliance last June. What’s more, Argentine President Mauricio Macri has already stated that he would like the two blocs to reach a commercial agreement, and he is now taking steps to reduce trade barriers with Brazil.
Overall, the regional recession has hit the inward-looking Mercosur particularly hard; it needs to open its markets as domestic consumers will no longer be the chief conduit to propelling growth. The early December suspension of Venezuela from Mercosur, once the wildcard that could have prevented a smooth signing, bodes well for accelerating a new relationship between Mercosur and the Pacific Alliance.
Our answer: Yes. Independent senator and journalist Alejandro Guillier has unexpectedly surpassed former President Ricardo Lagos and other household names in recent polls. While former President Sebastián Piñera still remains the favorite to succeed Michelle Bachelet as Chile’s next president, Guillier is gaining ground fast. Chileans are very unhappy with the current government—insufficient efforts to provide free higher education and an inability to reform the private pension system have led to massive protests—and Guillier is part of President Bachelet’s center-left Nueva Mayoria coalition. But it is hard to see Chile’s voters casting their ballots for a former president who has been on the political scene for decades. It is certainly possible that Bachelet’s historically low approval ratings will hurt Guillier’s candidacy; indeed, Bachelet’s coalition has already lost key municipalities to right-wing opposition group Chile Vamos in this year’s mayoral elections. But we think that, like in so many other places, Chileans will prefer a complete change.
Our answer: Yes. The region currently has the highest rate of women legislators in the world and has seen undeniable progress in terms of institutional protections and rights guarantees in recent years. However, challenges abound. Women make up a larger percentage of the poor; most women engaged in paid labor are employed in the informal sector and work an average of eight hours more per week than men—only to earn less than their male counterparts. The number of female homicides has increased alarmingly in the region. In fact, at least twelve of the twenty-five countries with the highest murder rates of women are in Latin America and the Caribbean.
But there are reasons for hope. The Ni Una Menos (Not One Less) demonstrations, spurred by the assassination of sixteen-year- old Lucía Pérez in Argentina, spread to several countries in Latin America, with thousands of women marching against gender-based violence and demanding their governments offer better protection for women’s rights. The Commission on the Status of Women—dedicated to the promotion of gender equality and the empowerment of women—meets at the United Nations in March 2017. With Brazil chairing the commission, the circumstances are right for women to demand policies that protect them and expand their opportunities, and for countries in the region to step up their efforts and mobilize increased resources for this crucial cause.
Our answer: Yes. Argentina’s economic transformation is on the right track. President Mauricio Macri’s administration has moved to rein in inflation, strike a macroeconomic rebalance, and implement market-friendly initiatives after more than a dozen years of protectionist policies enacted by presidents Néstor Kirchner and Cristina Fernández de Kirchner. President Macri’s challenge will be pushing through sufficient fiscal reforms to revive the economy before the mid-year legislative elections. Still, trends toward sustainable economic development, social inclusion, and global economic integration are signs of success. While results will not manifest overnight, President Macri’s policies are likely to turn Argentina’s economy around over the course of 2017.
Our answer: Yes. There will be a lot of packing and unpacking for Chinese delegations going forward. President Xi Jinping visited Chile, Peru, and Ecuador in November 2016 as part of a trip around the Asia Pacific Economic Cooperation Summit in Lima. The Chinese president has now visited the region three times since becoming president in March 2013. While he is scheduled to visit a fourth time in January 2018 for the second China-CELAC forum in Santiago, it is highly likely that his premier Li Keqiang or a vice premier will visit in 2017. China sees a strategic opportunity in 2017 to gain ground in Latin America at the expense of the United States. As the Chinese saying goes, courtesy demands reciprocity—Li Shang Wang Lai (礼 尚往来). Several Latin American presidents visited China in 2016, including the presidents of Brazil, Argentina, Mexico, Peru, and Uruguay.
Geopolitics are also at play. China will have the most to gain in Latin America from the possible protectionist moves expected from the Trump administration. President Xi recognizes the significance of Latin America to China’s global trade and has repeatedly stated his interest in further developing economic cooperation and strategic relationships with the region. Closer ties between China and Latin America are on the horizon.