Seeking 'A New Path'

By Oppenheimer, Andres | Hemisphere, Spring 1998 | Go to article overview
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Seeking 'A New Path'


Oppenheimer, Andres, Hemisphere


Will the defeat of President Clinton's "fast track" authority to sign new free trade agreements generate a backlash in Latin America? Will the increasingly powerful center-left coalitions in Mexico and Argentina shift away from a US-proposed hemispheric free trade bloc?

The answer is yes, according to a document prepared by potential presidential candidates from some of Latin America's leading opposition parties. The document in question--a 24-page manifesto entitled, "After Neoliberalism: A New Path"--was released in Buenos Aires in November 1997. The alternative vision of development presented in its pages may have a significant impact on US exports--and jobs--in coming years.

The explicit critique of neoliberalism was the result of four meetings in Mexico, Chile and Costa Rica by a group of centrist and leftist politicians, several of whom have a good shot at winning their countries' next presidential elections. Members of the group, informally known as "the Buenos Aires Consensus," included Mexican politician Vicente Fox, Cuauhtemoc Cardenas, Manuel Camacho and Andres Manuel Lopez Obrador; former Brazilian president Itamar Franco and leading opposition candidate Luiz Ignacio "Lula" da Silva; Argentine opposition leaders Graciela Fernandez Meijide, Carlos "Chacho" Alvarez and Rodolfo Terragno; and Ricardo Lagos, Chile's public works minister. Nevertheless, the document makes it clear that not all participants agreed on all points. The final product was not signed, to avoid time-consuming debates over details, and at least one of the original members of the group--Brazil's da Silva--has already asked that his name be removed.

Despite these drawbacks, the group's attack on neoliberalism represents an opposition consensus on major issues, including the following points:

* "To set in motion mechanisms for regulating speculative foreign investment." The group suggests following the example of Chile and Malaysia by limiting massive overnight withdrawals from local stock markets, in an effort to prevent the sudden waves of capital flight that periodically cripple Latin American economies.

* "More integration among ourselves, and less with others." The group hopes to strengthen and expand Mercosur, the South American free trade agreement that includes Argentina, Brazil, Paraguay and Uruguay. The logic behind this argument is that Latin America should become a strong free trade bloc in its own right before engaging in trade negotiations with the United States.

* "The taxation rate should rise progressively to international levels." Wealthy Latin Americans pay significantly less taxes than their counterparts in the United States or Europe. The document proposes new value-added taxes, as well as more stringent taxation of charitable contributions and inheritances.

* "Privatization should be implemented on a case by case basis, not as a matter of ideological dogma." The document argues that the purpose of privatization is to fragment ownership and encourage competition, not simply to transform key industries from state monopolies into private monopolies.

* "We must open up the communications media, which in most Latin American countries have passed from state control into the hands of private monopolies." The concentration of radio and television licenses should be limited, as it is in the United States, to prevent news monopolies in specific markets.

Jorge Castaneda, the Mexican political scientist and New York University professor who organized the meetings along with Brazilian-born Harvard Law School professor Roberto Mangabeira Unger, insists that the Buenos Aires Consensus will not undo the economic reforms undertaken by most Latin American countries.

"What has been done is a given," Castaneda says.

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