TAKING NOTE: Oil, Markets and Solidarity

...addresses...

...If it comes into being, this hoped-for agreement will go by the name of the Free Trade Area of the Americas (FTAA...

...They spring from a desire to negotiate from a position of greater strength, reducing the South's debilitating dependence on the North...

...One of their weapons is oil...

...Washington's strategy has been to create such a market-driven bloc within the proposed FTAA...

...investment if the Mexican government wanted to see some pro-Mexican immigration reform emerging from that committee...

...When Washington talks about energy, one gets the very clear impression that it is only U.S...

...market...

...They have emphasized their interest in seeing Mercosur develop as a political union and to see Latin America negotiate as a bloc with the United States...

...In response to this hegemonic attitude, Venezuela's Hugo ChAvez has proposed the creation of a Latin America oil conglomerate called "Petroamerica...

...They say they would like to negotiate an accord that would fall into place gradually, step by step, according to each country's readiness to integrate...

...oil that is at stake: it is Washington that must secure oil fields, negotiate with the Saudis, pressure the Mexicans, etc...

...Based on South-South solidarity, Petroamtrica would include the participation of major oil producers like Petroleos de Venezuela (PDVSA), Mexico's Pemex, Brazil's Petrobras, Colombia's Ecopetrol and Argentina's Repsol YPE As a prelude to this region-wide energy bloc, Venezuela and Argentina have already signed an agreement to form "Petrosur," a company to be owned jointly by PDVSA and Repsol YPF, with the active participation of private capital from both countries...

...It is pushing as hard as ever for an "opening" of the region's economies through an agreement that would give pride of place to transnational business and promote easy cross-border flows of investment, trade and various kinds of services (though not labor...

...hegemony is necessary for the South to grow, develop and come into its own...

...Opponents of such an institutionalized opening fear it might become the ultimate arbiter between a variety of national protections and an international (or interAmerican) right to do business, legitimizing unchecked flows of destabilizing speculative capital...

...Mercosur and Petroamerica both spring from a practical kind of regional solidarity and a hope to generate more internal trade and investment within Latin America itself...

...Others fear that giving pride of place to the market means, as has often been remarked, giving even more power to those who control the market: those who, more often than not, have U.S...

...Lula, Chavez and even market-friendly leaders like Mexico's Vicente Fox and Chile's Ricardo Lagos have recognized that some prudent solidarity in the face of U.S...

...administrations-Bush, Clinton and Bush-have worked hard to form a U.S.controlled hemispheric energy bloc...

...The United States now consumes 16 million barrels a day, about 25% of the world's supply, a demand expected to surge over the next two decades...

...And as for pressuring Mexico, members of the House Committee on International Relations recently suggested that Petroleos Mexicanos (Pemex) further open itself to U.S...

...two of Mercosur's associate members, Mexico and Venezuela, rank second and fourth, respectively, among the suppliers of crude oil to the U.S...

...politicians speak as though the world's oil is rightly theirs, thus their legitimate concern with the Middle East and other oil-producing regions...

...The key negotiations are taking place in the FTAA Trade Negotiations Committee, co-chaired by Brazil and the United States...

...Until now, individual Latin American economies have been too small and/or too weak to negotiate their way into the world economy on favorable terms...

...It is in this climate that the last three U.S...

...In the ongoing FTAA talks, the opposition to the international "right to do business" has been led by the region's middle-income countries, particularly Brazil in alliance with its (not all middle-income) trading partners in the Southern Common Market (Mercosur), Argentina, Uruguay and Paraguay The Mercosur countries point to the growing income gap between countries of the region over the past 25 years of pro-market restructuring, and say they are more interested in leveling the playing field of the Americas and, if necessary, in surrounding themselves with a protective "wall of dignity" until that leveling begins to take place...