Welcome back to Foreign Policy’s Latin America Brief, and Feliz Año Nuevo.
The highlights this week: The major stories we’re watching in 2022, including the lithium rush, a big summit in the United States, and how increased regional cooperation could change Latin America.
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As 2021 ends, a handful of new, small-scale cooperation agreements have cropped up in Latin America. In October, Argentina and Brazil proposed a joint framework for lowering customs tariffs within the Mercosur trade bloc, despite their current presidents’ icy relationship. In November, the stock exchanges of Chile, Colombia, and Peru agreed to merge. That same month, Colombia, Costa Rica, Ecuador, and Panama also created a joint ocean conservation zone off their Pacific coasts.
This burgeoning minilateralism, as former FP editor in chief Moisés Naím called it, may be foreshadowing something bigger: 2022 could see the revival of large-scale regional cooperation in Latin America. That could affect policies from migration policy to vaccine manufacturing.
Latin America’s fragmentation has been visible in countries’ disjointed responses to the COVID-19 pandemic. But the current front-runners in the region’s two biggest presidential elections next year—Gustavo Petro in Colombia and Luiz Inácio Lula da Silva in Brazil—say they favor stronger interstate coordination, especially on economic development. If they are elected, it would also mean that leftists rule the region’s six largest economies.
A period of heightened regional integration in the 2000s and early 2010s brought advantages as well as problems. Health ministries cooperated on disease surveillance and jointly purchased medicines to drive drug prices down. Landmark agreements that are still in force also gave residents of Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Paraguay, Peru, and Uruguay the right to live and work in any of those countries.
But Venezuela was a champion of that integration, and some regional leaders stayed silent on the country’s illiberal moves as it slid into what has become a long-running political, economic, and humanitarian crisis. The region fractured in the late 2010s amid disagreements over how to handle Venezuela’s crisis and the election of several right-wing leaders. None of them paralyzed cooperation as much as Brazilian President Jair Bolsonaro, elected in 2018.
Now, a new stab at regionalism could offer a more robust, coordinated response to the myriad challenges Latin America faces at the outset of 2022.
These include heightened levels of intra-regional migration unlikely to abate anytime soon. Countries could introduce measures to keep migrants safe as well as policies to improve their well-being in destination countries—lest they choose to leave those as well. Many of the Haitian migrants who appeared at the U.S. border this year had first migrated to Chile, which in 2018 hardened regulations to make it more difficult for them to be in the country legally.
As the rapid spread of the omicron variant has made soberingly clear, the pandemic, too, is ongoing. Moving forward, Latin American countries could aim to increase and coordinate their production of COVID-19 vaccines. The Pan American Health Organization, for one, is currently advising projects to manufacture mRNA vaccines in Brazil and Argentina, and lab efforts in at least five other countries are also partially or fully producing shots. Group efforts could focus on purchasing and potentially manufacturing COVID-19 pills as they become more common.
When it comes to economic development, countries could try to strengthen regional value chains in industries that they aim to grow, especially renewable energy. Lithium-rich Bolivia, Chile, and Argentina could explore trade with countries that plan to increase electric car production, such as Colombia. The same goes for Ecuador, a leading exporter of balsa wood for wind turbines, and Brazil, a leading regional turbine manufacturer.
While Latin American countries have not coordinated much on green development policies to date, environmental policy advisors for Chilean President-elect Gabriel Boric’s campaign participated in Our Green America, a movement that has proposed a blueprint for a post-pandemic Green New Deal for the region.
On human rights, Boric departed from the previous generation of Latin American leftist leaders in vocally criticizing abuses by the governments of Nicaragua, Cuba, and Venezuela. It’s possible that a new chapter in regional cooperation could do more than the previous one to jointly hold those governments accountable for illiberalism, though it is far from guaranteed.
Of course, Petro and Lula may lose their elections. But even so, Boric’s presidency and this year’s string of new international deals suggest the coming year will see more regional cooperation than the last. It is hardly exclusive to left-wing governments, as the recent agreements by Colombia’s and Ecuador’s conservative presidents shows.
Here at Latin America Brief, we’ll be keeping tabs on whether new integration takes the form of just another acronym in the region’s already long list or becomes an effective toolkit to approach its many ongoing challenges.
More 2022 Stories We’re Following
Washington takes the mic. Sometime midyear, the United States is due to host the Summit of the Americas, a meeting of Western Hemisphere heads of government that has been held around every three years since 1994. The last such event was held in Lima, Peru, in 2018. Next year’s edition is the Biden administration’s biggest chance yet to lay out a proactive strategy toward Latin America.
Though a firm date for the summit has not yet been set, themes from U.S. President Joe Biden’s diplomacy with the region so far—such as denouncing democratic backsliding—are sure to reappear. Latin American countries will also be watching for concrete U.S. commitments of investment, as the White House suggested were on the way when it announced its Build Back Better World infrastructure initiative in June.
The Atlantic Council, a Washington-based think tank, has partnered with the State Department for a series of “Road to the Summit” virtual events organized around four pillars: democracy and governance, pandemic and disaster preparedness, equitable and green economic recovery, and digitalization.
Lithium rush. Lithium prices rose some 240 percent this year, according to an index from Benchmark Mineral Intelligence (BMI). Latin America’s three most lithium-rich countries—Chile, Bolivia, and Argentina—have so far taken different approaches to extracting the mineral, which is key to producing batteries for cars and other electronics. Together, they are home to nearly 60 percent of the world’s known lithium reserves, according to the U.S. Geological Survey.
Chile defines lithium as a strategic resource, and the national government grants companies contracts requiring royalty payments as high as 40 percent. In Argentina, individual provinces have the freedom to grant mining contracts to firms. The two countries produced an estimated 134,000 and 36,000 metric tons of lithium this year, respectively. Argentina is expected to rival Chile’s production levels by the end of the decade, according to the Economist.
Bolivia has yet to produce any lithium but considers it a strategic resource, and the government had authorized eight companies to carry out pilot projects by Dec. 16. It also has a nationalized lithium company, and Argentine and Chilean officials have floated the idea of establishing their own.
The rush is in full swing as companies from around the world flock to South America. But they won’t see instant results: BMI says lithium factories take an average of seven years to reach full capacity. The new year, as well as those that follow, will show how the governments’ different approaches to mining translate into local and regional economic gains.
Maduro’s lifeline. A September deal to obtain diluent from Iran helped Venezuela increase its daily oil output by nearly 90 percent between November 2020 and November 2021, shoring up leader Nicolás Maduro’s political survival. Many analysts have argued that current U.S. sanctions policies toward both Caracas and Tehran have drawn them closer together.
The question of how much Iran—as well as other countries such as China, Turkey, and Russia—will continue to support Venezuela in the year ahead is fundamental to Maduro’s future. The Financial Times editorial board argued on Dec. 16 that the “only realistic option” for a political solution in Venezuela is “a great power bargain” that Washington and Brussels negotiate not with Maduro but with his more powerful backers abroad.
Gridlock in Mexico. Mexico’s plans to increase state control over its electricity grid moved slowly this year in the face of domestic and international opposition. If the plans accelerate in 2022, it could cause one of the biggest confrontations yet with Washington under the U.S.-Mexico-Canada Agreement (USMCA), which came into force in 2020.
Such a confrontation appeared possible in October and November, when U.S. lawmakers from both parties appealed to federal officials. Republicans said the proposed reform would “discriminate against American energy producers,” while Democrats argued that a “strong response” was needed to a violation of USMCA.
U.S. Ambassador to Mexico Ken Salazar said this month that he was working to mediate a solution. In addition to grating on U.S. companies, the plan put forward by Mexican President Andrés Manuel López Obrador stands to reduce the amount of renewable energy in Mexico’s power grid. The country is Latin America’s second-largest greenhouse gas emitter, after Brazil.
Art meets politics. The Cuban anti-government protest anthem “Patria y Vida” won the 2021 Latin Grammy for song of the year, a testament to the song’s—and protest movement’s— effectiveness at reaching beyond a hyperpoliticized crowd. The fact that several of today’s most prominent Cuban dissidents are singers and rappers helped the song soar. And its popularity helped keep international attention on the continued government repression of activists after July’s nationwide protests.
Latin America’s other top political song of the year was a partnership between the Brazilian health research institute Butantan and the funk singer MC Fioti that has now been watched more than 14 million times on YouTube. In 2017, Fioti had recorded one of Brazil’s biggest hits of the year, which has a repeating lyric that sounds similar to “Butantan.” In the original version, Fioti raps to admiring women. In the 2021 edition, he and Butantan employees dance together through a research center, encouraging Brazilians to get vaccinated.
It appears to have helped. At least 67 percent of Brazilians are fully vaccinated. The Fioti rerelease was one of several messaging campaigns organized by Brazilian public health officials who contradicted COVID-denialist and anti-vaccine President Jair Bolsonaro.
Art and culture will surely continue to intertwine with Latin American politics in 2022, and we’ll cover all of it here.
In the meantime, thank you for reading along this year and for your thoughtful comments. May 2022 bring you health and joy. Feliz Ano Novo!