PUZZLES FOR THE NEWCOMER

Relationships will be far from simple and straightforward for the new administration

Frequently, foreign policy is not a key agenda issue at election time, and the forthcoming presidential elections are no exception. However, foreign policy advisers to the three key candidates have offered some clues in several talks and press interviews. There seems to be a confluence of opinion with regard to rapprochement with the United States (US) and the European Union (EU). However, there also seems to be agreement among the advisers about protecting current relations with China as well as Russia.

And while it’s true that there are differences in the level of priority that each candidate assigns to these objectives, in all cases they are at the top of their agendas. And they all ascribe great importance to the relationship with Brazil in particular.

This is very good news, especially given the politicians’ harsh controversies about the national agenda, partly due to the needs of political campaigning but mainly reflecting the profound rift in Argentina’s society. Continuity, predictability and rational players are always a welcome asset in foreign policy.

The bad news for those that will sit inside the Casa Rosada and the Palacio San Martín after 10 December, is that existing and, perhaps, future close relations with the above named countries will be far from simple or straightforward.

Close to home, Brazil, our next door neighbour, is stomaching an explosive mix. The country’s very poor economic performance of late, which is widening its deficit gap, combined with the saga of the corruption scandals — in which a number of government officials and lawmakers are involved — has resulted in a dramatic drop in the president’s public-approval rating. She is also weathering strong political pressures from different — and often opposing — sectors ranging from the São Paulo industrialist lobby, to citizens indignant with corruption, in addition to the social pressures derived from increasing unemployment.

It is in this context that Argentina has to reach agreements on bilateral trade, as well as the way in which Buenos Aires and Brasilia will go about negotiating on the EU and Mercosur fronts. Whilst everybody agrees that both foreign ministries have very adept officials, the fact is that both governments might be forced, in the near future, to prioritize their own internal interlocutors at the time of negotiating with each other. This sort of scenario can be very frustrating for all parties involved.

The China question

Overseas, China, has recently been in the news because of the weakness of its financial markets. But this is only part of the problem, and perhaps the least significant part. The way in which China commemorated the recent Victory Day holiday (against the Japanese), with a very impressive military parade, is sending out the clear signal that — despite the headlines in the global press — its aspirations of being a major power remain intact. Moreover, some observers have voiced suspicions about the possibility that the excessive fall of the Chinese currency was self-inflicted and perhaps a deliberate move aimed at showing off its ability to be a financial nuisance.

As I’ve stated previously in this column, China’s real objective is to increase pressure on the IMF in order for the Yuan to be admitted as part of that organization’s basket of currencies. The SDR, which stands for Special Drawing Rights, now includes the US dollar, the Euro, the Swiss Franc, the Japanese Yen and the Pound Sterling. The IMF says that it will only accept China into that club when the Yuan is traded on the free market, without any government intervention. This looks unlikely to happen very soon.

In addition, China continues to confront the US through quite unsubtle gestures. The guest list for the Victory Day military parade was a roll-call of heads of state that are unfriendly toward the US. Predictably, Russia’s Vladimir Putin and Venezuela’s Nicolás Maduro were quite prominent guests. They are also part of this country’s current circle of friends. Less prominent was Argentina’s Amado Boudou. Please note that it is up to the reader to decipher whatever message may be gleaned from this last reference.

Another Chinese gesture is the recent opening of a Yuan clearing bank in South Africa, thus giving Beijing a somewhat privileged position. This happens at the same time when Nelson Mandela’s original party, the African National Congress (ANC), has increased the volume of its anti-US rhetoric. Next month, the ANC is expected to issue a foreign policy statement blaming Washington for about everything which was and is going wrong in the world, from the Tiananmen massacre in Beijing 26 years ago to the current conflict involving Russia in Kiev.

Argentina’s foreign policy after 10 December will be to pursue a double objective of rapprochement with the West and maintaining and strengthening ties with the East, all set against this very complicated background. While relations with Brazil do not imply geopolitical choices between two sides, current and planned ties with the different players definitely does.

Optimists will call this scenario a challenge for the new administration. Pessimists (or realists?) will call it bad news. Make your choice.

CREDITS: BUENOS AIRES HERALD