Why Obama is courting his troublesome neighbours

In a world of shifting power balances, the president is wise to re-engage Latin America.

Barack Obama brings to a close today what for him has been a troubled, and troubling, five-day tour of Latin America.

Before he began his trip in Brazil on Saturday, Hillary Clinton had talked up the visit as heralding "a new era" in US-South American relations. Events in Libya have largely focused the world's attention since then. But it would be a mistake to underestimate the importance of this trip for US-Latin American relations. In that sense, Clinton may well be proved to be right – if not quite in the way she imagined.

Because, for all diplomacy-friendly images of Obama playing soccer with kids in a Rio slum, or the first lady dazzling the Chileans with her fashion sense, the picture this trip has revealed above all is that the US is in a weaker position with respect to the continent than it has been for years. Whisper it quietly, but there seems even to be a sense of concern within the Obama camp that the US might have dropped the ball in what it has long thought of as its own backyard.

Just last year, 32 Latin America and Caribbean countries formed a new regional organisation, the Community of Latin American and Caribbean States (CLAC), with just the United States and Canada excluded. The year before that, China overtook the US as Brazil's major trading partner. It has been offloading investment ever since.

Were it not for the sheer weight of Brazil's growing stature and the extent of economic interest by China, the US would doubtless have been only too happy to jog along for some years to come in the cold war redux mode Obama began with. It was certainly ambivalent at best during the coup that overthrew Manuel Zelaya in Honduras in 2009.

But 2009 is beginning to feel like a long time ago now. Since then, Brazil under Lula has spoken out in support of Iran. And even as the Obama roadshow got under way, Dilma Rousseff had Brazil abstain in voting on the UN Security Council resolution on the situation in Libya. If this doesn't make clear the challenge that Brazil poses to US political clout in the region, Rousseff's trip to China next month almost certainly will.

Hence the distinctly audible change in Washington's tune, as articulated by the White House adviser Ben Rhodes. It is "imperative", he says, "that the United States not disengage from these regions". To which Obama's senior Latin American adviser, Dan Restrepo, added that what is at stake during this trip is "the restoration of American influence and appeal" in the region.

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You wouldn't have heard that a few years ago, but global political and economic circumstances are changing fast. And in US geostrategy, "engagement" is the new defensive play of choice. The cold war was all about containing and distancing threats, either militarily or economically. Today it is all about insisting on reconnection – and Latin America looms large here.

Which is why this trip has gone ahead even though Obama was forced to juggle dinner with Chile's president, Sebastián Piñera, alongside updates from national security advisers on the situation in Libya.

A still-fractious recovery from financial crisis and high unemployment rates make it almost essential the US expand trade southwards. And Obama knows only too well that Latin America stands to play an important role in American moves towards energy security, too. Engaging in both these arenas will also be seen domestically as a way to get some of America's 14 million officially unemployed back to work.

But engaging in this way will mean eating more humble pie than Republicans, at least, are likely to want to digest. Above all it will mean some measure of support by America for Brazil's gaining a permanent seat on the Security Council – the major challenge here being whether it now makes sense to try to hasten that process, cultivating Brazil in order to later use it as a foil against the other Brics, which also abstained during the Libya vote.

So, too, will it mean listening to the voices of ordinary South Americans, rather than reading their needs through the polarised right-left rhetoric that clogs up most debate on the continent. Judging by Obama's willingness throughout the trip so far to extol the virtues of Latin American democracies as an example of what Arab nations in the Middle East might aim for, there seems to be at least some willingness here to budge a little from positions of the past.

Just beware America's interpretation of what a good functioning democracy actually means in the Latin American context. That may be one thing that is slower to change.

Either way, we now have a better sense of where Obama's current thinking on Latin America is heading. And the answer is that he is looking at it through the prism of 2012.

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Will Euroscepticism prove an unbeatable advantage in the Conservative leadership race?

Conservative members who are eager for Brexit are still searching for a heavyweight champion - and they could yet inherit the earth.

Put your money on Liam Fox? The former Defence Secretary has been given a boost by the news that ConservativeHome’s rolling survey of party members preferences for the next Conservative leader. Jeremy Wilson at BusinessInsider and James Millar at the Sunday Post have both tipped Fox for the top job.

Are they right? The expectation among Conservative MPs is that there will be several candidates from the Tory right: Dominic Raab, Priti Patel and potentially Owen Paterson could all be candidates, while Boris Johnson, in the words of one: “rides both horses – is he the candidate of the left, of the right, or both?”

MPs will whittle down the field of candidates to a top two, who will then be voted on by the membership.  (As Graham Brady, chair of the 1922 Committee, notes in his interview with my colleague George Eaton, Conservative MPs could choose to offer a wider field if they so desired, but would be unlikely to surrender more power to party activists.)

The extreme likelihood is that that contest will be between two candidates: George Osborne and not-George Osborne.  “We know that the Chancellor has a bye to the final,” one minister observes, “But once you’re in the final – well, then it’s anyone’s game.”

Could “not-George Osborne” be Liam Fox? Well, the difficulty, as one MP observes, is we don’t really know what the Conservative leadership election is about:

“We don’t even know what the questions are to which the candidates will attempt to present themselves as the answer. Usually, that question would be: who can win us the election? But now that Labour have Corbyn, that question is taken care of.”

So what’s the question that MPs will be asking? We simply don’t know – and it may be that they come to a very different conclusion to their members, just as in 2001, when Ken Clarke won among MPs – before being defeated in a landslide by Conservative activists.

Much depends not only on the outcome of the European referendum, but also on its conduct. If the contest is particularly bruising, it may be that MPs are looking for a candidate who will “heal and settle”, in the words of one. That would disadvantage Fox, who will likely be a combative presence in the European referendum, and could benefit Boris Johnson, who, as one MP put it, “rides both horses” and will be less intimately linked with the referendum and its outcome than Osborne.

But equally, it could be that Euroscepticism proves to be a less powerful card than we currently expect. Ignoring the not inconsiderable organisational hurdles that have to be cleared to beat Theresa May, Boris Johnson, and potentially any or all of the “next generation” of Sajid Javid, Nicky Morgan or Stephen Crabb, we simply don’t know what the reaction of Conservative members to the In-Out referendum will be.

Firstly, there’s a non-trivial possibility that Leave could still win, despite its difficulties at centre-forward. The incentive to “reward” an Outer will be smaller. But if Britain votes to Remain – and if that vote is seen by Conservative members as the result of “dirty tricks” by the Conservative leadership – it could be that many members, far from sticking around for another three to four years to vote in the election, simply decide to leave. The last time that Cameron went against the dearest instincts of many of his party grassroots, the result was victory for the Prime Minister – and an activist base that, as the result of defections to Ukip and cancelled membership fees, is more socially liberal and more sympathetic to Cameron than it was before. Don’t forget that, for all the worry about “entryism” in the Labour leadership, it was “exitism” – of Labour members who supported David Miliband and liked the New Labour years  - that shifted that party towards Jeremy Corbyn.

It could be that if – as Brady predicts in this week’s New Statesman – the final two is an Inner and an Outer, the Eurosceptic candidate finds that the members who might have backed them are simply no longer around.

It comes back to the biggest known unknown in the race to succeed Cameron: Conservative members. For the first time in British political history, a Prime Minister will be chosen, not by MPs with an electoral mandate of their own or by voters at a general election but by an entirelyself-selecting group: party members. And we simply don't know enough about what they feel - yet. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog. He usually writes about politics.