Obama to Boost Trade in First South America Tour as China Looms

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By Randy Woods and Helen Murphy
(c) 2011 Bloomberg News
Wednesday, January 26, 2011; 3:46 PM

Obama, in his State of the Union Address last night, announced he will visit Brazil, Chile and El Salvador in March "to forge new alliances for progress in the Americas." During the visit he'll seek to win support for closer economic ties, especially with Brazil in energy, as competitors like China increase investment and trade with the resource-rich region, said Michael Shifter, president of the Inter-American Dialogue.

"There's a very keen awareness in Washington that China is a major trading partner now of Brazil, Chile and Peru," Shifter said in an interview from Washington. "There's a sense the U.S. is missing that opportunity."

China overtook the U.S. as Brazil's biggest trading partner in 2009, and in 2007 surpassed the U.S. as Chile's biggest export market on surging demand for the region's copper, iron- ore and soybeans. Chinese exports to Latin America and the Caribbean jumped 26 percent since 2005, according to a report last year by the United Nations.

A noticeable absence in the regional tour is Colombia, the recipient of $7 billion in U.S. anti-narcotics aid since 2000.

Colombia has been waiting for the White House to submit to Congress a free trade agreement signed in 2006. Obama last night urged lawmakers to quickly approve a pending deal with South Korea, though gave no timetable for approval of the pact with Colombia and another one with Panama.

"If nations don't see they are getting any rewards for their relationships, why do they bother to pay any deference to Washington?," said Ray Walser, a Latin America analyst at the Heritage Foundation. "Obama is saying almost ¿I have nothing to give you, so I will give you myself.'"

White House press secretary Robert Gibbs said today the "historic" trip coincides with the 50th anniversary of John F. Kennedy's Alliance for Progress, which boosted investment and aid to Latin America to shore up regional support for the U.S. during the Cold War.

"It's an enormously important part of the world," Gibbs said on Air Force One en route to Wisconsin.

In Chile, Obama will highlight President Sebastian Pinera's support for free trade, his nuclear non-proliferation agenda and capitalize on U.S. involvement in the rescue of 33 trapped miners last year.

Chile in 2003 became the first nation in Latin America to sign a bilateral free-trade agreement with the U.S. At Washington's request, Chile in March shipped to the U.S. 18 kilograms of highly enriched uranium.

U.S. has been losing market share for its exports to Chile, the region's most open economy. In the first three quarters of 2010, U.S. goods accounted for 16 percent of imports compared with 17 percent in 2009. China's share of Chile's purchases abroad jumped to 14 percent from 12 percent in 2009.

In El Salvador, Obama will meet President Mauricio Funes, who took power in 2009 after defeating a U.S.-allied party that ruled for two decades.


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