GT++Dandgaval+Ort

Plan Text

 * The United States federal government should assist Venezuela in liberalizing its energy sector. **

The Venezuelan oil sector is declining
Ladislaw and Verrastro 3/6 – Ladislaw is co-director and senior fellow with the Energy and National Security Program at the CSIS and Verrastro is senior vice president and James R. Schlesinger Chair for Energy & Geopolitics at CSIS (Sarah and Frank, “Post-Chavez Outlook for Venezuelan Oil Production,” Center for Strategic and International Studies, http://csis.org/publication/post-chavez-outlook-venezuelan-oil-production) __Despite its enormous oil resources, Venezuela’s oil production__ (regardless of whose figures you use) __has long been in steady decline__ .In __2011 liquids production was 2.47 million barrels per day__ (mmbd), __down a million barrels per day since 1999.__ Some of __this__ is __reflects the changing cost and economics of Venezuelan oil production but field decline is significant and //expertise// and reinvestment are questionable and looking harder to come by.__ The internal technical and managerial capabilities of state run oil and gas company PDVSA have deteriorated since the 2002 strike and aftermath. Increasingly, __PDVSA relies on contractors, as well as other private company partners, to keep the fields in production but__ reports state that __contractors have not been paid in months and__ that the __political uncertainty in the country has even driven routine decision making to a halt__. __The sustained political uncertainty has also slowed //investment//; Russian and Indian companies were planning to invest in Venezuela’s oil fields but so far have withheld incremental new money. China has not announced a new line of credit or extensions on its development-linked financing__ since last April. __At the same time that production is dropping, highly subsidized domestic consumption of oil is increasing while revenue from exports is also declining.__ The __United States remains the largest recipient of Venezuelan oil exports__ at 950,000 barrels per day in 2011, roughly 40 percent, plus another 185,000 barrels per day from the Caribbean that was Venezuelan __sourced but those volumes area down as U.S. demand has declined and other crudes have become available__. Venezuela’s next largest export destinations are the Caribbean (31 percent) and then China (around 10 percent). __Venezuela sells to many of its Caribbean neighbors at below market rates due to extremely preferential financing relationships, including additional heavy subsidies__ for Cuban exports. __All of this culminates in an outlook for //continued decline// in oil production and a worsening economic outlook__ for Venezuela during a politically difficult time.

This will collapse the Venezuelan government
Mr Maduro now has to follow in some large footsteps. Charismatic Mr Chavez was a regional leader who created the Latin American Bolivarian Alliance (ALBA) within which populist and progressive regimes could express their aspirations as well as their anger with the US. Mr Chavez was also instrumental in creating the Union of South American Nations (UNASUR) and the Community of Latin American and Caribbean States (CELAC). UNASUR has a modest infrastructure which might become a significant international forum for South America. Mr Chavez and his charisma created something between a political movement and a personality cult in Venezuela, establishing an emotional link with the people, especially the underclass. Mr Maduro will have difficulty maintaining this. The Chavez governments increased social spending to three per cent of gross domestic product (GDP). **__Inequality,__** measured by the Gini Index, **__declined by 10 index points. Extreme poverty was reduced.__** The Chavista movement - the followers of Mr Chavez - was a politically effective, well-oiled machine. But Mr Chavez’s legacy also includes the failure to establish the participatory democracy that he called part of Socialism of the 21st Century. Political freedoms have declined, the space for debate has been reduced, and the rule of law has deteriorated. Mr Chavez carries the blame for the terrible macroeconomic policies his government imposed which have brought Venezuela to the verge of dysfunction. Public administration has become a bad joke. The state simply does not work. The net judgment on the legacy of Hugo Chavez is that his regime represents a lost opportunity. Mr Maduro has to deal with three problems from the moment he assumes power. First is the petroleum industry. The social model built by Mr Chavez will collapse very quickly without increased production. //No Venezuelan government can survive long with the price of oil below US$90 per barrel// or if production continues to decline even at higher prices. Second is inflation. The economy is seriously dysfunctional, largely because of Mr Chavez’s wild spending spree in the year prior to last October’s elections and his dependence on oil revenue. Third is the crime rate which makes Venezuela one of the most violent countries in the world. This is itself symbolic of a more general problem of social cohesion. Today, Venezuelan society is deeply divided. Civil discourse has disappeared, personal freedoms have been severely curtailed, the rule of law is uncertain. It will be a challenge for the new government to avoid civic discord and violence and deal with widespread crime. A rising proportion of this is connected to international traffic in drugs. But it is petroleum which has dominated Venezuela’s economy for nearly a century. Petroleum revenue equals 82 per cent of Venezuela’s GDP. PDVSA was turned into Venezuela’s largest social benefits ministry using virtually all its petroleum sales revenue to pay for the ambitious government social programmes carried out by Mr Chavez when he was president. The variables that will determine the future capacity of the Venezuelan government to pay its debts, control inflation, and pay for its social welfare programmes are the i nternational price of oil; //the level of oil production; and the level of investment//in Venezuela’s petroleum industry. The interplay between these //determines the scenarios for Venezuela’s future.//
 * Tulchin 13 ** - Visiting Fellow at the David Rockefeller Center for Latin American Studies at Harvard University, Latin American scholar, member of the task force on Hemispheric Security Issues at the Center for Hemispheric Policy of the University of Miami (Dr. Joseph S. “Oil price is key to success for Venezuela’s President Maduro” World Review April 24 2013  6/27/13)//AH

And that independently causes global conflict
President Chávez also understands that the process leading to **__state failure is the most dangerous long-term security challenge__** facing the global community today. The argument in general is that failing and **__failed state status is the breeding ground for instability__**, criminality, __insurgency, **regional conflict, and terrorism**__. These conditions breed massive humanitarian disasters and major refugee flows. They can host “evil” networks of all kinds, whether they involve criminal business enterprise, narco-trafficking, or some form of ideological crusade such as //Bolivarianismo.// More specifically, **__these conditions spawn__** all kinds of things people in general do not like such as __murder__, kidnapping, __corruption, intimidation__ , and destruction of infrastructure. These means of coercion and persuasion can spawn further __human rights violations__, torture, __poverty__ , starvation, disease, the recruitment and use of __child soldiers, trafficking in women__ and body parts, __trafficking and **proliferationof** conventional weapons systems and **WMD**__** , **__genocide__ , ethnic cleansing, warlordism, and criminal anarchy. At the same time, **__these__** actions **__are usuallyunconfined and spill over into regional__** __syndromes____of poverty, destabilization, and **conflict**__**. ** 62 Peru’s //Sendero Luminoso// calls violent and destructive activities that facilitate the processes of state failure “armed propaganda.” Drug cartels operating throughout the Andean Ridge of South America and elsewhere call these activities “business incentives.” Chávez considers these actions to be steps that must be taken to bring about the political conditions necessary to establish Latin American socialism for the 21st century.63 Thus, in addition to helping to provide wider latitude to further their tactical and operational objectives, __state and nonstate actors’ strategic efforts are aimed at__ progressively __lessening a__ targeted __regime’s credibility and capability__ in terms of its ability and willingness to govern and develop its national territory and society. Chávez’s intent is to focus his primary attack politically and psychologically on selected Latin American governments’ ability and right to govern. In that context, he understands that popular __perceptions of__ corruption, __disenfranchisement, poverty__, and lack of upward mobility __limit the right and the ability of a given regime to conduct the business of the state__. __Until a__ given __populace generally perceives that its government is dealing with these__ and other basic issues of political, economic, and social injustice fairly and effectively __, instability and the threat of subverting__ or destroying __such a government are real__ .64But failing and failed states simply do not go away. **__Virtually anyone can take advantage of such an unstable situation__**. The tendency is that __the best motivated and best armed organization__ on the scene __will control that instability__. As a consequence __, **failing and failed states** become dysfunctional states, rogue states, criminal states,__ narco-states, or new people’s democracies. In connection with the creation of new people’s democracies, one can rest assured that Chávez and his Bolivarian populist allies will be available to provide money, arms, and leadership at any given opportunity. And, of course, the longer dysfunctional, rogue, criminal, and narco-states and people’s democracies persist, the more they and their associated problems **__endanger //global// security, peace, and prosperity__** .65
 * Manwaring 05 ** (Max G., retired U.S. Army colonel and an Adjunct Professor of International Politics at Dickinson College, Venezuela’s Hugo Chávez, Bolivarian Socialism, and Asymmetric Warfare, October 2005, pg. PUB628.pdf)//SR

The Chavez model in Venezuela has limited investment, restricted growth and increased the risk of oil shocks and instability -U.S. investment can reverse the trend and preserve our influence
Goldwyn 13 --- President, Goldwyn Global Strategies, LLC (4/11/2013, David L., “The Impact of the Tight Oil and Gas Boom on Latin America and the Caribbean: Opportunities for Cooperation,” House Committee on Foreign Affairs; Subcommittee on the Western Hemisphere; “Energy Opportunities in Latin America and the Caribbean” http://docs.house.gov/meetings/FA/FA07/20130411/100622/HHRG-113-FA07-Wstate-GoldwynD-20130411.pdf, JMP) The unconventional revolution will also force the resource-endowed nations of the Western Hemisphere to develop more competitive investment frameworks. North America has become the investment destination of choice, with large markets, attractive fiscal terms, strong rule of law and respect for contract sanctity in the U.S and Canada. As will be discussed in greater depth, many Latin American countries are noted for resource nationalism, volatile investment frameworks, and political extremes rather than stability. In order for Latin America to compete, investment terms will have to improve and regulatory frameworks must be enforced with equity and consistency. In short, the southern half of the Hemisphere must prove that it can adapt to changing markets, resource bases and technologies in order to compete with the opportunities found in North America. The prospects for this adaptation are mixed, providing opportunities for U.S. energy diplomacy. ¶ II. Energy Trends in the Western Hemisphere ¶ The Western Hemisphere has seen the rise of two trends in energy governance in recent years. One trend is towards risingstate control of energy resources – in Venezuela, Argentina, Bolivia and Ecuador in particular. The concern here is that this trend will //limit the growth of global supplies of oil// and gas by undermining the value of existing investments, discouraging future investment and leading to political instability resulting from declining living standards. The economic consequence of this trend is that the hemisphere will contribute less to the diversification of oil supply, thereby engendering a tighter international oil market //more vulnerable to the negative effects of supply shocks//, increasing the importance of OPEC supply and, over time, undermining economic development in the region. The political consequences of these trends include the //decline of U.S. influence in the region// relative to competing ideologies and the erosion of democratic structures. ¶ A second, much more positive, trend is towards creative fiscal regimes that welcome foreign investment and require state owned companies to compete with international companies, with independent regulators that promote fair and efficient regulation. Countries observing this model are increasing production or stalling the decline of existing reserves. Colombia, Trinidad and Tobago, and Peru are key examples of this creative model. ¶ When I last testified on Latin American energy trends before Congress, Mexico was generally considered to be a part of the first group, making the net trend negative. Today, however, Mexico’s government is actively seeking reforms that include, but are certainly not limited to, the energy sector. A new question mark hangs over Brazil, however. While Petrobras had been viewed as an exemplar national oil company in recent years, it has recently seen its production estimates curtailed, and its market value tumble. The company is no longer second in value only to Exxon Mobil. Perhaps as a sign of changing regional dynamics, Petrobras is now reported to be worth less than Colombia’s national oil company, a development that would have been thought to be nearly unthinkable just a few years ago. 14 While natural gas production is rising, oil production is falling, as Petrobras has faced major challenges fulfill both its newfound responsibilities in the deep and ultra-deepwater subsalt resources, companies face challenges meeting aggressive local content requirements and Petrobras struggles to meet the political expectations of the government. ¶ Venezuela and Mexico are the most important oil exporters in the hemisphere. While Brazil, Colombia and Argentina are important destinations for foreign investment, and helpfully produce enough oil to meet their own domestic needs and make some contribution to the global export market, they are not strategic suppliers to the global market at this time. Only Mexico, Brazil and Venezuela produce more than a million barrels per day, although Colombian crude oil production rose as high as 944,310 barrels per day in 2012,15 and Federico Renjifo, the Colombian Energy and Mining Minister, has stated that the country expects to produce 1.01 mbd in 2013.16 Bolivia has enormous gas reserves, but exports mostly to Brazil and modestly to Argentina. Only Trinidad and Tobago is a key supplier to the world gas market. ¶ A. The Rise in State Control ¶ From those countries now committed to increasing state control, the U.S. faces two key challenges: the loss of production growth and diversity of supply from the region if new economic frameworks are unattractive to foreign investors and, most critically, the loss of U.S. influence vis-à-vis competing political visions. ¶ The Economic Impact of Rising State Control ¶ The recent wave of changes in contractual terms and dramatic changes in tax regimes in Venezuela, Bolivia, Ecuador and, in recent years, Argentina, threatens to slow new investment and eventually //deepen instability and poverty// in these nations, as well as destroy shareholder value for the companies invested there. The deterioration in the investment climate for energy in these countries is primarily an economic threat, as it foments an environment where supply is constrained and prices are high. We are seeing the revision of economic terms at a time when producers rather than companies hold more market power. ¶ Venezuela ¶ In 2007, President Hugo Chavez led the nationalization of oil exploration and production in Venezuela, mandating renegotiation of contracts with a minimum 60 percent PdVSA share. While sixteen companies, including Shell and Chevron, complied with the new agreements, ExxonMobil and ENI refused to cooperate and were forcibly taken over. Both companies have pending complaints before the International Centre for the Settlement of Investment Disputes (ICSID) at the World Bank that are expected to be decided in late 2013. As a result of those claims, particularly the ExxonMobil claim, Venezuela withdrew from the ICSID in 2012.17 The impact of the nationalizations, according to expert analysts like Deutsche Bank and Wood Mackenzie, was a massive flight of investment capital from Venezuela ’s heavy oil sector to Canada’s oil sands, effectively freezing development of the hemisphere’s largest oil reserves during one of the greatest oil booms in history. The net impact on Venezuela’s credit and credibility are quite negative, again with //serious negative long-term consequences for the global oil market// and Venezuela’s own economy. In 2008, ENI and Total came reached an agreement with PdVSA regarding a 2005 joint venture requirement that they had not previously signed an MOU for. Terms for involvement in natural gas development in Venezuela are slightly more beneficial, although in 2012, the year before his death, President Chavez expressed some interest in altering those terms. It is generally expected that Venezuela’s oil production will continue to//fluctuate or stagnate without considerable outside investment//. According to the EIA, some analysts estimate that PdVSA must spend at least $3 billion annually in order to keep production at its current levels.18 Venezuela plays a significant role in the Western Hemisphere, acting as a proxy for Cuba and providing oil at favorable cost and financing terms to Caribbean nations through Petrocaribe and the Southern Cone through Petrosur, ventures which add stress to the country’s fiscal situation. While change is unlikely to happen quickly, pressure stemming from the recent failed currency devaluation, rising inflation, and vast external subsidies will take a toll on the economy and are ultimately unsustainable.


 * Venezuelan diversification causes Cuban economic collapse **


 * Fredman 13 ** (Rachel, ‘Latin American Socialism: Churning Along, Economic Failures Aside’, May 30, Diplomatic Courier, http://www.diplomaticourier.com/news/regions/latin-america/1473-latin-american-socialism-churning-along-economic-failures-aside)//MJ


 * __Depending on oil exports rather than developing other competitive industries is just one of Venezuela’s economic problems. It also is a key link between Venezuela and Cuba. Since 2000, Venezuela has provided oil shipments to Cuba well below market rates__**, amounting to $6-$8 billion in [|annual subsidies] . **__This is a crucial lifeline to the hard currency-starved Cuban government__****__, as Venezuela essentially took the place of the Soviet Union__** as Cuba’s primary benefactor. Until its collapse in 1991, the USSR provided $4 billion in annual oil subsidies to Cuba. **__The loss of these subsidies caused the GDP of Cuba to fall by nearly 50 percent__** between 1989 and 1993. **__Cheap Venezuelan oil–__** along with limited privatization and an opening of the island to tourism– **__allowed Cuba to stave off economic catastrophe__**

Cuban collapse causes Latin American instability and terror attacks
__Regardless of the succession__, under the current U.S. policy, __Cuba’s problems of a post Castro transformation only worsen. In addition to Cubans__ on the island, __there will be those in exile who will return claiming authority. And there are remnants of the dissident community__ within Cuba __who will attempt to exercise similar authority. A power vacuum or absence of order will create the conditions for **instability and civil war**.____Whether Raul or another successor__ from within the current government __can hold power is debatable.__ However, __that individual will__ nonetheless __extend the current policies__ for an indefinite period, __which will only compound the__ Cuban __situation. When Cuba finally collapses **anarchy is a strong possibility**__ if the U.S. maintains the “wait and see” approach. __The U.S. then must deal with an unstable country 90 miles off its coast.__ In the midst of this chaos, **__thousands will flee the island.__** During the Mariel boatlift in 1980 125,000 fled the island.26 Many were criminals; __this time the number could be **several hundred thousand flee**__ ing __to the U.S., creating a refugee crisis.__ ¶ Equally important, by adhering to a negative containment policy, __the U.S. may be creating its next series of transnational criminal problems.__ Cuba is along the axis of the drug-trafficking flow into the U.S. from Columbia. The Castro government as a matter of policy does not support the drug trade. In fact, __Cuba’s actions have shown that its stance on drugs is more than hollow rhetoric as indicated by its increasing seizure of drugs__ – 7.5 tons in 1995, 8.8 tons in 1999, and 13 tons in 2000.27 While there may be individuals within the government and outside who engage in drug trafficking and a percentage of drugs entering the U.S. may pass through Cuba, __the Cuban government is not the path of least resistance for the flow of drugs. If there were no Cuban restraints, the flow of drugs to the U.S. could be greatly facilitated by a Cuba base of operation and accelerate considerably.__ ¶ __In the midst of an unstable Cuba, the opportunity for radical fundamentalist groups to operate in the region increases. If these groups can **export terrorist activity from Cuba to the U.S. or throughout the hemisphere** then **the war against this extremism gets more complicated**. Such activity could increase direct attacks and disrupt the economies, **threatening the stability of the fragile democracies** that are budding throughout the region. In light of a failed state in the region, the U.S. may be forced to deploy military forces to Cuba, **creating the conditions for another insurgency**.__ The ramifications of this action could very well __fuel greater anti-American sentiment throughout the Americas.__ A proactive policy now can mitigate these potential future problems. ¶ U.S. domestic political support is also turning against the current negative policy. The Cuban American population in the U.S. totals 1,241,685 or 3.5% of the population.28 Most of these exiles reside in Florida; their influence has been a factor in determining the margin of victory in the past two presidential elections. But this election strategy may be flawed, because recent polls of Cuban Americans reflect a decline for President Bush based on his policy crackdown. There is a clear softening in the Cuban-American community with regard to sanctions. Younger Cuban Americans do not necessarily subscribe to the hard-line approach. These changes signal an opportunity for a new approach to U.S.-Cuban relations. (Table 1) ¶ The time has come to look realistically at the Cuban issue. Castro will rule until he dies. The only issue is what happens then? __The U.S. can little afford to be distracted by a failed state 90 miles off its coast.____The administration__, given the present state of world affairs, __does not have the luxury or the resources to pursue the traditional American model of crisis management.__ The President and other government and military leaders have warned that __the GWOT will be long and protracted.__ These warnings were sounded when the administration did not anticipate operations in Iraq consuming so many military, diplomatic and economic resources. There is justifiable concern that **__Africa and the Caucasus__** __region are potential **hot spots** for terrorist activity__, so these areas should be secure. **__North Korea__** __will continue to be an unpredictable crisis in waiting. We also cannot ignore **China**. What if China resorts to aggression to resolve the Taiwan situation?__ Will the U.S. go to war over Taiwan? Additionally, **__Iran__** __could conceivably be the next target for U.S. pre-emptive action. These are known and potential situations that could easily require all or many of the elements of national power to resolve. I__ n view of such global issues, __can the U.S. afford to sustain the status quo and simply let the Cuban situation play out?__ The U.S. is at a crossroads: should the policies of the past 40 years remain in effect with vigor? Or should the U.S. pursue a new approach to Cuba in an effort to facilitate a manageable transition to post-Castro Cuba?
 * Gorrell ‘5** (Tim, Lieutenant Colonel, “CUBA: THE NEXT UNANTICIPATED ANTICIPATED STRATEGIC CRISIS?” 3/18/5, [] )

U.S. resources and expertise are key to revive the oil sector
Farnsworth 13 - vice president of the Council of the Americas and Americas Society (4/11/2013, Eric, “ENERGY SECURITY OPPORTUNITIES IN LATIN AMERICA AND THE CARIBBEAN, HEARING BEFORE THE HOUSE COMMITTEE ON FOREIGN AFFAIRS SUBCOMMITTEE ON THE WESTERN HEMISPHERE, http://docs.house.gov/meetings/FA/FA07/20130411/100622/HHRG-113-FA07-Wstate-FarnsworthE-20130411.pdf, JMP) More broadly, the //U//nited //S//tates has a strategic interestin working with willing nations in the hemisphere to develop their own energy resources effectively, while promoting models that reduce the negative if unintended consequences of regional energy development, including a lack of transparency and official corruption, the distorting impact of consumption subsidies, an over-reliance on a single commodity or sector , environmental concerns, and a concentration of wealth and political power around the sector. In order to develop their respective industries, nations //need U.S. technology//, management expertise, and investment dollars. They//need our education system// to develop their engineersand seismologists, they //need help to understand regulatory, tax, and policy models// that work, they need to be exposed to best practices in environmental mitigation, and they//need our technical assistance//to improve the investment climate and the rule of law.

The U.S. is losing its influence in Latin America

 * Council on Foreign Relations 08 ** – independent task force project, CFR is an independent, nonpartisan organization (‘US Latin America Relations: A New Direction for a New Reality’, May 2008, http://www.cfr.org/mexico/us-latin-america-relations/p16279)//MJ

For over 150 years, **__the Monroe Doctrine provided the guiding princi- ples for U.S. policy toward Latin America, asserting U.S. primacy in the foreign affairs of the region. Over the past two decades, those principles have become increasingly obsolete. Washington’s basic policy framework__**, however, **__has not changed__** sufficiently **__to reflect the new reality. U.S. policy can no longer be based on the assumption that the United States is the most important outside actor in Latin America__**. If there was an era of **__U.S. hegemony in Latin America__**, it **__is over.__** ¶ In most respects, this shift reflects positive developments within Latin America itself. The region has undergone a historic transformation politically, with military-authoritarian rule giving way to vibrant, if imperfect, democracy in almost every nation. Economically, Latin America is now one of the more open market regions in the world and a crucial global provider of energy, minerals, and food. None of this is to say that Latin America has entirely overcome its history of political tumult or done enough to alleviate poverty, improve competi- tiveness and human capital, or correct extreme inequality. But it does mean that **__U.S. policymakers must change the way they think about the region.__** Latin America is not Washington’s to lose; nor is it Washing- ton’s to save. Latin America’s fate is largely in Latin America’s hands. ¶ **__A failure to acknowledge how Latin Americans define their own challenges has created new political strains in recent years.__** It has also caused U.S. policymakers to overlook the ways in which the United ¶ States can meaningfully contribute to Latin America’s progress—fur- thering the United States’ own interests in the process. **__By truly begin- ning to engage Latin America on its own terms, Washington can mark the start of a new era in U.S.-Latin America relations.__**

Large-scale rapprochement not likely now but oil investment could catalyze stronger relations
Metzker 13 (6/17/2013, Jared, “Analysts Say //Oil Could Help Mend U.S.-Venezuela Relations//,” http://www.ipsnews.net/2013/06/analysts-say-oil-could-help-mend-u-s-venezuela-relations/, JMP) WASHINGTON, Jun 17 2013 (IPS) - A shift in U.S. foreign policy towards Venezuela may be pending as a bilateral rapprochement suddenly appears more possible than it has in years. On the sidelines of talks held earlier this month in Guatemala by the Organisation of American States (OAS), U.S. Secretary of State John Kerry met with Venezuelan Foreign Minister Elias Jaua, with Kerry’s subsequent statements indicating that relations could be heading in a friendlier direction. ¶ “We agreed today – both of us, Venezuela and the United States – that we would like to see our countries find a new way forward, establish a more constructive and positive relationship and find the ways to do that,” Kerry said following the meeting with Jaua, which was reportedly requested by the Venezuelans. ¶ The meeting happened on the heels of the release of Timothy Tracy, a U.S. filmmaker whom Venezuela had been holding on accusations of espionage. His release was interpreted by many as an “olive branch” being offered by the new Venezuelan government of Nicholas Maduro, whose presidency Washington still has not formally recognised. ¶ Only months ago, before the death of Venezuela’s long-time socialist leader Hugo Chavez, any normalisation of relations between Venezuela and the United States seemed highly unlikely. ¶ In 2002, Chavez was briefly removed from power by a military coup d’état that the U.S. Central Intelligence Agency (CIA) had known was imminent. Chavez immediately accused the United States of having played a part in the event. After his suspicions were confirmed partly valid, his rhetoric grew more scathing. ¶ In 2006, he famously told the United Nations General Assembly that then-U.S. President George W. Bush was “the devil himself”. ¶ Following Chavez’s death from cancer in March, however, his hand-picked successor, Maduro, the former vice-president, has not been as vitriolic in his posturing vis-à-vis the United States. ¶ According to Michael Shifter, president of the Inter-American Dialogue, a Washington-based think tank, Maduro has offered “conflicting signals”. ¶ “Maduro has so far shifted in his position toward the U.S. between a moderate approach and a more hard-line one,” Shifter told IPS. ¶ The new president’s waffling may be a reflection of his tenuous grip on power. By many accounts, Maduro lacks the political prowess and rabble-rousing charm of Chavez, who enjoyed military backing as well as fervent support from the lower classes. ¶ In addition to a strong anti-Chavista opposition that openly challenges the legitimacy of his narrowly won election, Maduro has had to deal with a split within Chavez’s own former political base. ¶ Shifter pointed out that among the military, which was once a source of significant strength for Chavez, more support is given to Diosdado Cabello, currently head of Venezuela’s parliament and whose supporters believe he was the rightful heir to the presidency. ¶ Maduro’s legitimacy stems largely from his perceived ideological fidelity, the reason for his selection by Chavez to lead in the first place. Shifter said this leads him to “emulate” his predecessor and makes rapprochement with the//U// nited //S// tates less probable. ¶ Still, //ideological concerns may not ultimately decide the issue//. Venezuela has inherited from Chavez an economy in difficult straits, which continues to suffer from notorious shortages and high inflation. ¶ Oil economy ¶ Over half of Venezuela’s federal budget revenues come from its oil industry, which also accounts for 95 percent of the country’s exports. Estimated at 77 billion barrels, its proven reserves of black gold are the largest of any nation in the world. ¶ Despite a troubled political relationship, its principal customer is the United States, which imports nearly a million barrels a day from Venezuela. ¶ Venezuela’s oil industry has been officially nationalised since the 1970s, and, as president, Chavez further tightened government control over its production. His government took a greater chunk of revenues and imposed quotas that ensured a certain percentage would always go directly towards aiding Venezuelans via social spending and fuel subsidies. ¶ While these measures may be popular with Venezuelans, who pay the lowest price for gasoline in the world, critics argue such policies hampered growth and led to mismanagement of Petroleos de Venezuela, S.A. (PdVSA), the main state-run oil company. ¶ The same critics also point to increasing debt levels, slowdowns in productions and accidents stemming from faulty infrastructure. ¶ In order to boost production, PdVSA agreed in May to accept a number of major loans. This includes one from Chevron, one of the largest U.S. oil companies, which will work with Venezuelans to develop new extraction sites. ¶ “ The oil sector is in deep trouble in Venezuela – production is down and the economic situation is deteriorating,” explained Shifter. //“They know they need foreign investment// to increase production, and this is in part what has motivated Maduro to reach out.” ¶ If its economy continues to falter, Venezuela may be further tempted to embrace the//U// nited //S// tates, which has//the largest, most sophisticated fossil fuel industry in the world//. Kerry’s recent words suggest that the administration of President Barack Obama would be waiting with open arms. ¶ “Venezuela cannot confront its economic crisis and the United States at the same time,” Diana Villiers Negroponte, a senior fellow at the Brookings Institute, a Washington think tank, told IPS, “and we are a pragmatic country which will deal with Maduro if it is in our interests.” ¶ Indeed, Negroponte said she was “optimistic” about the possibility of rapprochement between the two countries within the next six months. She notes a “troika” of issues on which the United States is looking for Venezuelan cooperation: counter-terrorism, counter-narcotics and assistance in ridding Colombia of its FARC rebels. ¶ Nonetheless, major actions remain to be taken if normalisation is to even begin, such as the exchange of ambassadors and official U.S. recognition of the Maduro government. Shifter (who regards the Kerry-Jaua meeting as “a small step”) //was not optimistic// that these larger requirements will be completed in the short term. ¶ “I don’t think Washington is going to push hard to send an ambassador to Caracas,” he said. “It will probably take more time to observe the new government and see where it is going.”

This is critical to boost U.S. influence and mold the regional economic framework
Goldwyn 13 --- President, Goldwyn Global Strategies, LLC (4/11/2013, David L., “The Impact of the Tight Oil and Gas Boom on Latin America and the Caribbean: Opportunities for Cooperation,” House Committee on Foreign Affairs; Subcommittee on the Western Hemisphere; “Energy Opportunities in Latin America and the Caribbean” http://docs.house.gov/meetings/FA/FA07/20130411/100622/HHRG-113-FA07-Wstate-GoldwynD-20130411.pdf, JMP) III. The Impact of Hemispheric Energy Trends on U.S. Foreign Policy ¶ The tight oil boom will produce competitive pressure on the region’s oil and gas producers. If global oil prices soften, revenues could fall significantly and put major fiscal pressure on governments highly dependent on resource revenues for their budgets. The market will impact these economies far more than any U.S. policy can. But there will be a //debate over economic frameworks// in the hemisphere, and //the U.S. should be a part of it//. While U.S. influence in the hemisphere has waned in key areas in recent years, our ability to help these economies revive through //energy investment//, and to grow through more competitive energy feed stocks can help change this pattern if we take advantage of it. We have key strategic partners in the region including Brazil, Mexico, Chile, Argentina, and Colombia. We can effectively use trade as a tool for good, as witnessed by the US-Colombia Free Trade Agreement. We need to appreciate the salience of legitimate regional issues like poverty and advocate how our economic and political models can alleviate them. Examples of this are addressing trade barriers to agricultural imports, expanding educational opportunities in the U.S. for future leaders, improving the visa application process, dealing with migration issues with Mexico in a spirit of respect and fairness, supporting World Bank and Inter American Development Bank infrastructure programs in the hemisphere, supporting the development of civil society and the capacity of democratic institutions, and treating our relations with our hemispheric neighbors as intrinsically important, not as litmus tests of loyalty to the U.S. on issues external to the region itself. In countries where we face ideological competition, it is crucial that we do not abandon the field. We need to increase our diplomatic engagement and defend our way of thinking. ¶ A. Uncertainty in Venezuela ¶ Venezuela has long been seen as the leader of a regional group of states seeking to wage an ideological and political competition for regional influence with the U.S. Yet the death of President Chavez, whose charisma has long been regarded as a key facet of the Bolivarian narrative, and Venezuela’s growing economic problems , which were recently reflected by the government’s efforts to devalue the currency by more than 30% against the dollar, have led some observers to believe that the influence of the Venezuelan model has peaked. Many are now forecasting that the Brazilian economic model, which still provides for a generous state role in the economy, yet does so in a more market-friendly and democratic context, will gain clout among states in the region that remain skeptical of liberal economics and the Washington consensus. ¶ In the wake of Hugo Chavez’s death, many questions remain about whether political change is possible in Venezuela itself. Indeed, the opposition candidate in the April 14 election to succeed Chavez, Henrique Capriles, is a vocal adherent of the Brazilian model that many say is gaining regional traction. Yet it is widely assumed that Chavez’ handpicked successor, Vice President Nicolas Maduro, will win the election. Several divergent prognostications have been made regarding what a Maduro Presidency would entail for the U.S. While some perceive Maduro as a pragmatist who may be amenable to normalizing bilateral ties, others believe that he will be eager to prove his Bolivarian credentials to Chavez’s constituency and reject any U.S. entreaties to reengage. Still others doubt whether he will be able to retain the Presidency at all should the economic situation deteriorate further. Diosdado Cabello, a fellow Chavez adherent who is President of the National Assembly and is reported to be a popular figure among the Venezuelan Armed Forces, is commonly cited as an individual capable of seizing the Presidency, potentially through forcible means, should an opportunistic situation present itself. ¶ The manner in which the next Venezuelan President manages Venezuela’s oil wealth will have significant implications for international oil markets, which remain fairly tight due to supply disruptions in geopolitical hotspots Iran, South Sudan, Yemen, and Syria. In February 2012, the Economist estimated that international markets have lost 1.25 million barrels per day as a result of these and other recent supply disruptions.28 Venezuela is an even more significant player in international markets; EIA estimates that it exports around 1.7 million barrels of crude per day.29 The impacts on Venezuela’s own economy will also be very profound, as Venezuela’s economy is far from diversified and //remains nearly entirely dependent on the oil sector//. In recent years, PdVSA’s exploration and production capital expenditures have not been sufficient to reverse production declines in the country’s mature conventional fields or to harness the country’s massive oil sands reserves in the Orinoco Belt. These unconventional resources are thought to account for around 90% of Venezuela’s remaining proven oil reserves. In order to maintain production at a reasonable clip, the next Venezuelan President will have to //improve the country’s oil and gas investment regime// to attract international firms with expertise in enhanced oil recovery techniques in conventional fields and in the unique, challenging technical requirements for producing the extra heavy crude oil in the Orinoco Belt, and that also have the resources to alleviate massive infrastructure bottlenecks that plague the oil sands production. ¶ It is hard to be optimistic about Venezuela’s near term prospects. Canadian heavy crudes are likely to fulfill a greater share of the US need for heavy crude. While heavy coking refinery capacity is growing world wide, Venezuela will face a challenging market for its crudes and lower profit margins as the distance to market will grow. ¶ B. The Status of Current Dialogues ¶ The US has had a number of bilateral and multilateral energy policy forums in the hemisphere over the years. These forums are platforms to understand market dynamics, share best practices on energy efficiency and conservation, share understanding on ways to enhance energy production, and exchange views on how a nation’s energy policies may be enhanced or reformed to promote the nation’s own policy. These policy dialogues are also essential for building the understanding and relationships that are //essential for trade promotion and conflict resolution//. ¶ Numerous dialogues and programs have been enacted since 2008, when I wrote that engagement with the Western Hemisphere needed to be renewed. Among those are a number of programs and initiatives aimed at energy relations. ¶ The Energy and Climate Partnership of the Americas (ECPA) was founded at the invitation of President Obama following the April 2009 Summit of the Americas, hosted in Trinidad and Tobago. ECPA was intended to focus on issues including energy efficiency, renewable energy, cleaner and more efficient use of fossil fuels, energy poverty, and infrastructure, and Secretary of State Clinton later proposed expanding the focus to include sustainable forests and land use and climate change adaptation. ECPA brings together governments and public and private sector partners to implement initiatives and complete projects, and boasts numerous initiatives in Central and South America and the Caribbean. ¶ Among the ECPA Initiatives are the Colombia Biomass Initiative, which aims to develop a technological plan for the production of energy from agroindustrial biomass, and the Chile Renewable Energy Center, which is intended to serve as a tool and resource for the region as it seeks to increase its use of renewable fuels. Both projects are undertaken in collaboration with the U.S. Department of Energy, which provides technical assistance and opportunities for collaborative work. ¶ Numerous dialogues exist today between the U.S. and Brazil. The U.S.-Brazil Strategic Energy Dialogue (SED), a presidential-level partnership aiming to deepen energy cooperation between the two nations, is one of the most significant. Strengthening energy security, the creation of new jobs and industries and reduction of carbon emissions are key goals of the SED. Major topics of the dialogue include biofuels, renewables and the sustainable development of oil and gas resources. ¶ The US has a trilateral energy policy dialogue with Canada and Mexico, which has addressed electric power, energy conservation, harmonization of standards and market outlooks. It has taken many forms, but it functions very well. In May 2012 the U.S., Mexico, Canada Map of Potential Carbon Dioxide Storage Capacity was released, identifying capacity in North America for at least 500 years worth of carbon dioxide emissions. The “New North American Carbon Storage Atlas” was created through the North American Carbon Atlas Partnership, and was developed by DOE, Natural Resources Canada, and the Mexican Ministry of Energy. ¶ We have many paths for cooperation. What we need now is a sharper focus on what we should prioritize, so we can maximize our impact and make the most of the limited engagement of our senior officials. ¶ IV. Energy Security Opportunities for the U.S. ¶ The Committee is wise to see the unique period of opportunity that the massive changes in oil and gas markets have created for U.S. foreign policy. While we will be more self-sufficient at home, our national security will still depend on a diverse global supply of oil gas, one able to withstand the inevitable disruptions we will face. If we can take this moment to help the hemisphere increase its own self sufficiency, wean itself from high carbon fuels, access more cost competitive feed stocks for power and transportation, and reduce dependence on subsidized Venezuelan fuel oil, we will have helped our own national security interests and helped to foster a freer, more prosperous, and more climate secure hemisphere. Here I offer six steps that the United States can take to meet its energy security goals in the Hemisphere. ¶ 1. Sustain Efforts Aimed at Energy Efficiency and the Adoption of Biofuels and Renewable ¶ Technologies ¶ Lowering global carbon emissions in order to mitigate the impacts of climate change is an important step towards ensuring global energy security. Latin America is highly dependent upon fossil fuels for its energy needs, most notably oil, coal and natural gas. Fuel oil is still a frequently used fuel for power generation, in spite of the fact that it is relatively inefficient and particularly bad for the environment. Hydropower has long been the favored form of renewable energy in Latin America, but changing weather patterns and droughts have prevented it from being fully reliable. The United States has, as described above, undertaken initiatives aimed at expanding the spread of biofuels and renewables in the Western Hemisphere, and this should remain a priority. The expiration of the U.S. tariff on imported biofuels was a step in the right direction, and more can be done to develop biofuels industries in Latin America. The development of new industries, clean energy research centers and government policies incentivizing the use of renewable technologies for power generation will help to build long-term, sustainable industries in the Hemisphere. Regardless of the power source used, energy efficiency is a worthwhile goal for Latin America. The IEA noted in the World Energy Outlook 2012 that while energy intensity is not particularly high in Latin America, it is primarily because high energy intensity in energy producing nations is offset by low energy use in energy importing nations. Improving energy efficiency, particularly in energy producing nations, will permit more efficient use of energy resources, allowing them to stretch farther. Existing forums like the ECPA already have energy efficiency as an issue of focus and can aid in connecting companies that represent successful and proven efficiency technologies with partners in Latin America. ¶ 2. Propagate Advanced Production Technologies Abroad ¶ Latin America has significant reserves of oil and gas, including potentially huge unconventional resources. One of the fastest, and perhaps easiest, ways for the U.S. to ensure diversification of energy supplies is to help other nations take advantage of the unconventional energy revolution. This will mean sharing technology, building regulatory regimes, improving environmental safety standards and possibly even developing infrastructure in nations with shale gas and tight oil reserves. The U.S. should continue to expand upon the work that the Department of State and partner agencies are attempting to achieve through UGTEP, offering technical, regulatory, geological and other support to countries that want to develop their shale oil and gas resources. There are also roles for companies to play, sharing their technology and technical expertise through partnerships, investment opportunities or service contracts. Helping other nations develop their domestic resources will increase global energy security by increasing and diversifying global supply. Natural gas is also, as far as fossil fuels go, a relatively low-carbon source of energy, and the expansion of the shale gas boom may offset global coal consumption and carbon emissions, serving as a boon for climate goals as well. By helping other nations, such as Colombia, Brazil and Mexico, adapt to changing energy markets and complex new sources of energy, the U.S. will be simultaneously ensuring its own energy security. ¶ 3. Research Ways to Encourage Gas Penetration in the Caribbean ¶ With abundant natural gas supply a short distance from the Caribbean, the US should look for ways to back out fuel oil and gasoline as a feedstock for power and transportation. While these nations are trying to maximize renewable energy, they still need a non-intermittent source of power generation. But short driving distance makes CNG or other natural gas technologies a real possibility. The key challenges are moving gas to small islands, ensuring storage or other means of security of supply, and identifying the right forms of vehicle technology. How to make this transition economically is a question for engineers as well as policymakers. The U.S. should design ways that private foundations, in tandem with our national laboratories and perhaps the OAS, can look for near-term, practical ways to increase natural gas utilization. Combined with a permissive policy on natural gas exports to the Caribbean, this could be major step forward for climate and national security for the Caribbean. ¶ 4. Reconsider the U.S. Policy Regarding Oil and Gas Exports and Swaps ¶ In light of the unconventional revolution, the U.S. will have surpluses of natural gas and even light oil, given that the domestic refining system is primarily configured to process heavy oil. Large price differentials also exist for U.S. resources, largely as a result of infrastructure and policy constraints that keep them trapped in the U.S. Current U.S. policy only permits the export of crude oil in highly limited circumstances. A careful reconsideration of U.S. export policy, particularly towards oil, may be warranted. Allowing some exports or swaps of light oil produced in the U.S. for the heavy oil needed for refineries would enable us to supply our hemispheric neighbors, increase export earnings, and sustain domestic job growth. Granting an additional avenue for sale of energy resources, either oil or gas, will also ensure that artificial barriers to export don’t lead to decreased production, high domestic prices and lost value to the economy, while simultaneously adding to global energy supply stability and security. ¶ The hemisphere can also benefit from additional exports of natural gas. Mexico imports costly LNG at oil-linked prices. The Caribbean is dependent on fuel oil for power generation and Brent prices gasoline for transportation. These exports could present a political advantage as well as an economic one, granting the U.S. with another tool to use in the Western Hemisphere, where Venezuelan influence is cemented by subsidized sales of crude oil and products. ¶ 5. Complete the U.S.-Mexico Transboundary Agreement ¶ On February 20, 2012, the U.S. and Mexico signed a transboundary hydrocarbons agreement that allows for the joint the development of oil and gas reservoirs that cross the international maritime boundary between the two countries in the Gulf of Mexico.30 If implemented, the agreement would end the current moratorium on exploration and production in the border area. While the Mexican Senate ratified the agreement on April 12, 2012, the Obama Administration has not formally submitted the agreement to the U.S. Congress for passage. The entry into force of this agreement would render significant benefits for both the U.S. and Mexico.31 It would provide a means for Pemex to collaborate with private companies in the Gulf of Mexico border area, which would give Pemex a crucial opportunity to gain expertise in deepwater activities that could be applied to the firm’s operations throughout Mexico. This would serve U.S. interests by boosting Mexican production and reducing U.S. dependence on imports from more politically troublesome regions, which have replaced lagging Mexican exports in recent years.32 Conversely, U.S. reticence to implement the agreement may send the wrong signal to Mexico and dampen enthusiasm for energy sector reform at a time when the stage may be set for historic change. Indeed, competent implementation of the agreement could demonstrate to Mexico that its interests can be protected in joint production regimes with U.S. companies and bring about an impetus for broader Mexican energy reforms. ¶ 6. Revive Energy Diplomacy and Commercial Engagement¶ Energy diplomacy and commercial advocacy should be vital components of U.S. energy policy in the coming decades. The global energy system is projected to remain dependent upon fossil fuels for the foreseeable future, and as a result, having access to reliable, affordable sources of energy will remain important, as will the stability of energy markets. Energy diplomacy should center on ensuring that the U.S. has good working relationships with the countries that produce and consume energy. //Successful energy diplomacy can serve a critical role in managing tensions over energy development, transportation, investment, and other issues.// ¶ The Department of State has significantly increased its capabilities to conduct energy diplomacy through the establishment of the Energy and Natural Resources Bureau, led by Ambassador Carlos Pascual. Its programs should be robustly funded. We should also deepen the international energy diplomacy capacity of the Department of Energy. The Department of Energy’s relationships with civil servants in ministries across the globe provide a bridge across changes in government here and there. They can talk when the politics of non-energy issues obstruct dialogue among the foreign ministries. It is easier to get Energy Ministers together for regular meetings than Secretaries of State. Their //staff should be expanded// and //serious program budget established//to //make our cooperation more than rhetorical//. For true reform to be achieved, foreign ministers and heads of government will have to be involved, as this will be the key to integrating energy security into foreign policy. ¶ The three countries that need robust attention at this time are Mexico, Brazil and Venezuela. Mexico is considering major reforms and we have much we can share at a technical level on gas markets, unconventional oil and gas technology, safe regulation of the deepwater, and energy efficiency. We should create a quiet bilateral mechanism for sharing this information with Mexican ministries, its nascent regulator and PEMEX. Changing global markets also impact Brazil, and we should ensure that the Strategic Energy Dialogue is reactivated as soon as new officials are on board at the Department of Energy. Venezuela is trickier because it is in political transition and there is a great deal of rhetorical hostility. But the US had a //technical dialogue// with Venezuela that lasted over 30 years. We need to know the new officials at the Ministry and PdVSA and to //share our view of market realities//, even if we may not agree on them. Sometime in 2013, after the Venezuelan elections, this //technical dialogue should be revived//, perhaps at the Assistant Secretary, or Deputy Assistant Secretary level. ¶ Conclusion ¶ Mr. Chairman, the ties between Latin America and the Caribbean and the energy security of the United States are numerous. Here I have addressed only a few of the possible avenues for improving U.S. energy security, and there are undoubtedly more, but the overarching conclusion is that energy security goals in the Hemisphere can be achieved through improved dialogue and relations with allies and adversaries alike. As I stated in 2008, it will require new approaches to energy and foreign policy. It will require fresh policy approaches, money, and creative diplomacy. But more than anything it //will require leadership//. As a citizen I thank the committee for its leadership on this critical issue.

This will boost U.S. standing in important Latin American regional forums
Delahunt 12 --- chairman of the Venezuela-US Friendship Group and retired U.S. Representative (10/30/2012, William, “A new role for the US and Venezuela,” http://www.bostonglobe.com/opinion/2012/10/30/podium-venezuela/EJ6Jd2yRKfaJ76HYrXb4WJ/story.html, JMP) The recent election in Venezuela offers an opportunity to improve the US-Venezuela bilateral relationship. On Oc. 7th, President Hugo Chavez was reelected to a new six-year term by a nine point margin. I — along with hundreds of other international witnesses — was duly impressed with the transparency of the electoral process and the enthusiasm of Venezuelans for democracy. Eighty-one percent percent of registered voters went to the polls! This turnout was remarkable when compared to the United States and other “mature” democracies. ¶ Whether or not one agrees with Chávez’s policies, there can be no doubt that he won these elections fairly. There are so many checks and balances in the electoral system in Venezuela that there is virtually no room for fraud. The voter registry, the voting machines, the electronic ballot and the data transmission system are all fully audited by representatives of all the different political parties and independent observers. ¶ Former President Jimmy Carter recently called the Venezuelan voting system “the best in the world.” He noted that the voting machines print out a paper receipt that voters can look at to verify that their selection was recorded correctly, and poll workers check those receipts against the electronic tally. ¶ I was particularly struck by the atmosphere of peacefulness and mutual respect in the voting centers, where monitors from both pro-government and opposition groups were present. In contrast with elections past, the two main candidates manifested a similar attitude. Once the election authorities announced the results, opposition candidate Henrique Capriles rapidly conceded defeat, and he quickly scolded “radical” opposition supporters who insisted on alleging that fraud had taken place, despite no evidence to support their claims. Chávez also behaved gracefully, calling Capriles the following day to express his willingness to work together to mitigate the polarization that divided Venezuelans. ¶ Most of Venezuela’s political leadership — following a tumultuous power struggle, during which a coup d’Etat and violent protests occurred — appear to have accepted to follow the democratic rulebook and be more tolerant of one another. This is an important step forward, and the United States should encourage Venezuelans to continue seeking common ground, rather than support one group over another, as has at times been the case in recent years. ¶ Most importantly, over 55 percent of Venezuelan voters cast their vote in favor of Chávez. The //U//nited //S//tates should respect this outcome and seek to improve relations in areas where we can agree. //Commercial relations// between our two countries have generally been excellent, despite political differences, and both countries would //greatly benefit from their expansion//. ¶ Venezuela will no doubt continue to //play a central role// in the //region’s new multilateral cooperation and consultation mechanisms//, such as the Union of South American Nations (UNASUR) and the Community of Central American and Caribbean States (CELAC). The //U//nited //S//tates, whichhas increasingly found itself isolated in regional forums, would do well to find ways to work with these new groups on important issues such as drug trafficking and energy cooperation. Improved relations with Venezuela would greatly facilitate this task. Our government will certainly have important differences with Venezuela, particularly in the area of international relations. But we can agree to disagree, as we do with many other partners throughout the world. I am convinced that the Venezuelan government is prepared to //respond favorably to such an initiative//.

That prevents a global war
Rochlin 94 [James Francis, Professor of Political Science at Okanagan U. College, //Discovering the Americas: The Evolution of Canadian Foreign Policy Towards Latin America//, 130-131, Wake Early Bird File] While there were economic motivations for Canadian policy in Central America, security considerations were perhaps more important. Canada possessed an interest in promoting stability in the face of a potential decline of U.S. hegemony in the Americas. Perceptions of declining U.S. influence  in the region – which had some credibility in 1979-1984 due to the wildly inequitable divisions of wealth in some U.S. client states in Latin America, in addition to political repression, under-development, mounting external debt, anti-American sentiment produced by decades of subjugation to U.S. strategic and economic interests, and so on – were linked to the prospect of explosive events occurring  in the hemisphere. Hence, the Central American imbroglio was viewed as a fuse which could ignite a cataclysmic process throughout the region. Analysts at the time worried that in a worstcase scenario, instability created by a regional war , beginning in Central America and spreading  elsewhere in Latin America, might preoccupy Washington to the extent that the United States would be unable to perform adequately its important hegemonic role in the international arena  – a concern expressed by the director of research for Canada’s Standing Committee Report on Central America. It was feared that such a predicament could generate increased //global instability// and  perhaps even a //hegemonic war//<span style="font-family: Georgia,serif; font-size: 8pt;">. This is one of the motivations which led Canada to become involved in efforts at regional conflict resolution, such as Contadora, as will be discussed in the next chapter.

And, relations are key to solve proliferation and climate change - only engagement solves
Zedillo et al 08 --- Commission Co-Chair for the Brookings Institute Report on the Partnership for the Americas and former President of Mexico [Ernesto Zedillo, Thomas R. Pickering, etc, Rethinking U.S.–Latin American Relations A Hemispheric Partnership for a Turbulent World. Report of the Partnership for the Americas Commission, The Brookings Institution, November 2008, http://www.brookings.edu/~/media/Research/Files/Reports/2008/11/24%20latin%20america%20partnership/1124_latin_america_partnership.PDF, ENDI File] The Need for a Hemispheric Partnership Historically, the United States and Latin America have rarely developed a genuine and sustained partnership to address regional—let alone global—challenges. Mutual distrust is partly to blame. Also, the LAC countries were often not ready to make stable commitments. The United States had other preoccupations and did not make hemispheric partnership a priority. Problems and solutions were seen from Washington as country-specific and were managed mostly on a country-bycountry basis through bilateral channels. Meanwhile, multilateral forums —such as the Organization of American States and the summits of hemispheric leaders— ran out of steam, became mired in confrontation, or remained underresourced. ¶ If a hemispheric partnership remains elusive, the costs to the United States and its neighbors will be high,in terms of both growing risks and missed opportunities.Without a partnership, the risk that criminal networks pose to the region’s people and institutions will continue to grow. Peaceful nuclear technology may be adopted more widely, but without proper safeguards,//the risks of nuclear proliferation will increase//. Adaptation to climate change will take place through isolated, improvised measures by individual countries, rather than through more effective efforts based on mutual learning and coordination. Illegal immigration to the United States will continue unabated and unregulated, adding to an ever-larger underclass that lives and works at the margins of the law. Finally, the countries around the hemisphere, including the United States, will lose valuable opportunities to tap new markets, make new investments, and access valuable resources. ¶ It is important to note at the outset that the term “partnership” as used in this report does not mean equal responsibility for all. The asymmetries between the United States and its neighbors are large and will remain so for the foreseeable future. Partnership here means a type of international cooperation whereby a group of countries identifies common interests, objectives, and solutions, and then each partner country undertakes responsibilities according to its own economic and political capacities to generate shared benefits. ¶ Today, four changes in the region have made a hemispheric partnership both possible and //necessary//. First, the key challenges faced by the United States and the hemisphere’s other countries— such as securing sustainable energy supplies, combating and adapting to climate change, and combating organized crime and drug trafficking—have become so complex and deeply transnational that they cannot be managed or overcome by any single country.Washington needs partners in the LAC region with a shared sense of responsibility and a common stake in the future. ¶ For example, drug trafficking and its associated criminal networks have now spread so widely across the hemisphere that they can no longer be regarded as a “U.S. problem,” a “Colombian problem,” or a “Mexican problem.” The threat posed by these networks can //only be countered through coordinated efforts// across producing, consuming, and transshipment countries, all of which have a shared interest in controlling the flow of arms, money, vehicles, and drugs. The process of //combating and adapting to climate change// also exemplifies the need for a hemispheric partnership. All carbon-emitting societies contribute to the problem to different degrees, and all will experience its consequences. The solutions — ranging from developing alternative fuels to adapting to ecological shocks—all require sustained cooperation among the hemisphere’s countries. ¶ The second change is that the LAC countries are diversifying their international economic relations. Their range of trading and investment partners is expanding, with China in particular playing a prominent role in the region. Chinese imports from the LAC countries increased twentyfold between 1990 and 2005, while Chinese exports to the region grew even faster, from $620 million in 1990 to $37 billion in 2005. Latin America is also attracting significant foreign investment from nontraditional sources. Between just 2003 and 2005, the stock of Chinese foreign direct investment in the LAC region increased by 40 percent. China has become a key buyer of commodities, driving up prices and reversing the long-term decline in the region’s terms of trade. Meanwhile, the Caribbean countries have recently signed an Economic Partnership Agreement with the European Union, immediately opening all European markets and gradually opening Caribbean ones. With more valuable exports and less expensive manufactured imports, living standards in the LAC region have improved significantly. ¶ At the same time, many LAC countries have moved beyond their traditional reliance on resources from the International Monetary Fund, the World Bank, and the Inter-American Development Bank. Chile, Mexico, Peru, and Brazil now enjoy investment-grade status from credit-rating agencies and in recent years have been able to raise capital readily in international markets. The same is true of several other countries, including Colombia, El Salvador, Panama, and Uruguay, which until the recent financial crisis enjoyed ready access to private international capital. Regionally owned institutions, such as the Andean Development Corporation and the Central American Bank for Economic Integration, have also reduced the region’s dependence on traditional sources of capital. ¶ Some Latin American countries are investing abroad on an unprecedented scale. In 2006, for example, Brazil invested more abroad ($28 billion) than it received in foreign direct investment ($19 billion). In Chile, private pension funds and the government have become active international investors. Surpluses have allowed Venezuela to inject billions of dollars into other countries, particularly through subsidized oil exports. Many Latin American multinationals—such as Brazil’s Vale, Gerdau, and Odebrecht; and Mexico’s CEMEX, America Movil, and Grupo FEMSA—have become global corporate giants. The current crisis may no doubt affect the relative magnitude of these investments, but economic relationships in the hemisphere will continue to diversify as the world economy recovers. ¶ The third change is that the LAC countries are diversifying their political and diplomatic relations. The most notable example is Brazil, which has opened thirty-two new embassies in the past five years. Together with Venezuela, Brazil is playing a more active political role in the region through the Union of South American Nations, which is already active at the presidential level and is expected to become a key forum for the discussion of defense issues. Mexico and Brazil are also playing prominent roles in international forums and organizations, including the finance ministers’ Group of Twenty and the trade ministers’ Group of Twenty. Brazil has announced its intention to join the Organization of the Petroleum-Exporting Countries and the Paris Club. Chile and Brazil are expected to become members of the Organization for Economic Cooperation and Development (OECD) in the not-too-distant future. Mexico, Peru, and Chile are active members of the Asia-Pacific Economic Cooperation forum. In sum, this diversification of political and economic relations reflects many LAC countries’ new confidence in their capacity to chart their own course in the world. ¶ Their enhanced confidence and autonomy will make many LAC countries much less responsive to U.S. policies that are perceived as patronizing, intrusive, or prescriptive, and they will be more responsive to policies that engage them as partners on issues of mutual concern. Also, the LAC countries’ diversification of economic and political relations means that Washington will have to compete with governments both outside and within the region for regional influence. In particular, Brasília and Caracas are both vying for leadership in South America; and though they may have different visions for regional integration and different ways to approach other governments, they agree that Washington should play a more limited role in their part of the world. ¶ The fourth change is that, today, the LAC countries are better positioned to act as reliable partners. Despite remaining governance challenges, the vast majority of these countries are stable democracies for which competitive elections and peaceful transitions of power are the norm, not the exception. Throughout these countries, civil society groups now participate extensively in the policymaking process, and there is much less tolerance of violence as a means of political expression. ¶ Economic progress has also made the LAC countries more reliable partners. Leaders, including some on the left, are committed to fiscal responsibility. Most central banks are now independent bodies focused on inflation control. Exchange rates largely reflect market forces. As a result, many LAC countries can now look beyond their borders and commit to sustained partnerships and responsibilities on regional and global issues. ¶ In sum, the countries of the LAC region have made significant strides in economic and social development and will continue to prosper even if U.S. leaders remain disengaged. Washington must decide whether it wants to actively reengage and benefit from the region’s dynamism and resources or be sidelined as other economic and political actors fill the void left by its absence.

Garner 10 (Calvin, ‘Venezuela’s Nuclear Program – The Alarmists are Right’, December 13, 2010, http://www.iar-gwu.org/node/240)
Mixed signals from **__a nuclear Venezuela would have troubling implications for keeping Latin America free of nuclear weapons. Brazil and Argentina would__** most likely seriously **__reconsider__** **__their earlier decisions to forgo nuclear weapons in the face of a Venezuela with ambiguous nuclear priorities.__** If either country concluded it could not trust Venezuela’s statements on its nuclear program, **__a South American nuclear arms race could quite likely happen. Proliferation__** on the continent may start in Caracas but it **__would almost certainly spread, ending the international success story of Latin America as a nuclear-weapons free zone.__**

Climate change causes extinction
Mazo 10 – PhD in Paleoclimatology from UCLA Jeffrey Mazo, Managing Editor, Survival and Research Fellow for Environmental Security and Science Policy at the International Institute for Strategic Studies in London, 3-2010, “Climate Conflict: How global warming threatens security and what to do about it,” pg. 122 The best estimates for global warming to the end of the century range from 2.5-4.~C above pre-industrial levels, depending on the scenario. Even in the best-case scenario, the low end of the likely range is 1.goC, and in the worst 'business as usual' projections, which actual emissions have been matching, the range of likely warming runs from 3.1--7.1°C. Even keeping emissions at constant 2000 levels (which have already been exceeded), global temperature would still be expected to reach 1.2°C (O'9""1.5°C)above pre-industrial levels by the end of the century." Without early and severe reductions in emissions, the effects of climate change in the second half of the twenty-first century are likely to be catastrophic for the stability and security of countries in the developing world - not to mention the associated human tragedy. Climate change could even undermine the strength and stability of emerging and advanced economies, beyond the knock-on effects on security of widespread state failure and collapse in developing countries .' And although they have been condemned as melodramatic and alarmist, many informed observers believe that unmitigated climate change beyond the end of the century could pose an existential threat to civilisation ." What is certain is that there is no precedent in human experience for such rapid change or such climatic conditions, and even in the best case adaptation to these extremes would mean profound social, cultural and political changes.

US and Brazil competition is not zero-sum
Sweig, 10 – Nelson and David Rockefeller Senior Fellow and Director for Latin America Studies and the Global Brazil Initiative at the Council on Foreign Relations (Julia E., “A New Global Player: Brazil's Far-Flung Agenda,” Foreign Affairs, Nov/Dec 2010, [])//HAL Proximity and interests have likewise compelled the new Brazil to learn to live with this changed political environment. It is unlikely that either Brazil or the United States will succeed in dominating diplomacy in Latin America. Old multilateral institutions such as the Organization of American States are struggling to recover from the distortions of U.S. hegemony and the ambivalence and outright defiance of some member countries. Without appearing to desire leadership over institutions in the region, which could possibly induce an anti-Brazil backlash from lesser powers, Brazil is proceeding gingerly to maximize its interests and minimize conflict. On some issues, real conflict will continue to exist between the United States and Brazil. But on balance, Brazil is neither fundamentally anti-American nor pro-American. While Brazil was challenging the United States from Honduras to Colombia to Iran, for example, it was simultaneously negotiating the first defense cooperation agreement with the United States since 1977, working with the Obama administration to resolve a dispute over the cotton market, and maintaining an open channel of communication on climate change and international economic institutions. The bilateral relationship is likely to hover in this undefined space of neither friend nor adversary. The Obama and Lula governments have coined the term "global partnership dialogue ," a fuzzy way of acknowledging some interest in building up layers of scaffolding around a house in the very early stages of construction. The missed opportunity and mixed signals of the Iran episode reflect strategic differences between the two countries. But global issues still provide fertile ground for them to cooperate, especially on climate change, in the G-20, through modest joint efforts in alleviating poverty, and in treating infectious diseases in Haiti and Africa. The biggest and most immediate test for president-elect Rousseff will be to balance an ambitious domestic agenda with the need to secure Brazil's international position. Indeed, Brazil is in the catbird seat of global powers: it can afford to modernize its defense and security establishment without being forced to make wrenching guns-versusbutter choices. To substantially deepen the investments in its people -- on which its new social contract is based -- Brazil may well have to lower its near-term sights regarding global leadership. Ultimately, the outcome could be the same: a strong, self-confident Brazil that makes a sizable contribution to peace and prosperity, not just in the region but globally. Perhaps the single most important way theU nited S tates can influence Brazilian foreign policy is to make clear, in word and deed, that //Washington regards Brazil's rise not// as //a zero-sum game that threatens U.S. interests// but ratherastheemergence of a not-quite-natural, albeit sometimes necessary, global partner.

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