Search Penny Hill Press

Loading...

Thursday, February 25, 2010

Chile: Political and Economic Conditions and U.S. Relations

Peter J. Meyer
Analyst in Latin American Affairs


Following a violent coup against democratically elected Marxist President Salvador Allende in 1973, Chile experienced 17 years of military rule under General Augusto Pinochet before reestablishing democratic rule in 1990. A center-left coalition of parties known as the Concertación has governed Chile over the two decades since the end of the dictatorship. In addition to addressing human rights violations from the Pinochet era, the coalition has enacted a number of constitutional changes designed to strengthen civilian democracy. Chile has made significant economic progress under the Concertación's free market economic policies and moderate social programs, which have produced notable economic growth and considerable reductions in poverty.

Current President Michele Bachelet enjoys widespread popular support despite having faced a number of challenges since taking office in 2006. Throughout her term, Bachelet has been confronted by student demonstrations against the education system, increased militancy by indigenous groups, and opposition in the legislature. The global financial crisis is President Bachelet's latest challenge, though the government's timely decision to save recent fiscal surpluses has allowed Chile to pursue counter-cyclical policies and minimize the effects of the economic downturn. 

On January 17, 2010, Sebastián Piñera of the center-right Alianza coalition was elected president in a second-round runoff vote, defeating former President Eduardo Frei (1994-2000) of the Concertación. Piñera's election was the first for the Chilean right since 1958, and will bring an end to 20 years of Concertación governance. Throughout his campaign, Piñera pledged to largely maintain Chile's social safety net while implementing policies designed to boost the country's economic growth. He will need to work with the Concertación to enact his policy agenda, however, as his coalition will not enjoy absolute majorities in either house of Congress. Piñera is scheduled to take office on March 11, 2010. 

Chile has enjoyed close relations with the United States since its transition back to democracy. Both countries have emphasized similar priorities in the region, designed to strengthen democracy, improve human rights, and advance free trade. Chile and the United States have also maintained strong commercial ties, which have become more extensive since a bilateral free trade agreement between them entered into force in 2004. Additionally, U.S. officials have expressed appreciation for Chile's leadership and moderating influence in a region increasingly characterized by political unrest and anti-American populism. 

This report provides a brief historical background of Chile, examines recent political and economic developments, and addresses issues in U.S.-Chilean relations. 
.


Date of Report: February 18, 2010
Number of Pages: 19
Order Number: R40126
Price: $29.95

Document available electronically as a pdf file or in paper form.
To order, e-mail congress@pennyhill.com or call us at 301-253-0881.

Wednesday, February 24, 2010

U.S. Trade Policy and the Caribbean: From Trade Preferences to Free Trade Agreements

J. F. Hornbeck
Specialist in International Trade and Finance


For over 40 years, the United States has relied on unilateral trade preferences to promote exportled development in poor countries. Congressionally authorized trade preferences give market access to selected developing country goods, duty free or at tariffs below normal rates, without requiring reciprocal trade concessions, although their extension is conditioned on extensive eligibility criteria and the use of U.S. inputs in many cases. The Caribbean Basin has benefitted from multiple preferential trade arrangements, the first being the Caribbean Basin Initiative (CBI), passed by Congress in the Caribbean Basin Economic Recovery Act of 1983. Other programs include the Caribbean Basin Trade Partnership Act (CBTPA) of 2000, which provides tariff preferences for imports of apparel products, and the Haiti HOPE Act of 2006 (amended in 2008), which gives even more generous preferences to imports of Haitian apparel. 

Since the preferences have been implemented, U.S.-Caribbean trade has grown, but evaluations of the early programs suggest that their effects were not as robust as originally hoped. Benefits tended to be concentrated in a few countries and products, limiting export promotion and deterring product diversification. Over time, benefits have been "eroded" by multilateral trade liberalization and other regional U.S. preference programs. Bilateral free trade agreements, particularly the CAFTA-DR, have actually replaced unilateral preferences with permanent, more attractive tariff reductions and trade rules for former CBI countries such as the Dominican Republic and Central American countries. As the main exporters of apparel in the Caribbean Basin, they were among the primary beneficiaries of the Caribbean trade preference programs. 

In recent years, Congress has decided on only short-term extensions of the Caribbean and other preference programs. A number of Members seek a comprehensive review of these programs with an eye on harmonizing and revamping their various provisions. Congressional concern over eligibility criteria, simplifying rules of origin, targeting the least developed countries, and standardizing benefits are among a number of broad issues being debated as part of the preference reform agenda. In the 111th Congress, the discussion of extending the Caribbean programs may be part of a broader reauthorization effort for all preference arrangements. In addition, there are a number of issues and circumstances converging that may suggest the need for reorienting U.S. trade policy in the Caribbean region. The most effective trade preferences are the apparel provisions provided under the CBTPA, which expire on September 30, 2010. But, they are sparsely used by the smaller Eastern Caribbean countries, now the main beneficiaries in the region after CAFTA-DR was implemented, because they have largely services-based economies. Also, there is a reluctance by these countries to make the transition to an FTA without some guarantee of a "development component" to the agreement. These concerns persist, despite the promise of permanent market access and increased investment that an FTA holds out. The Caribbean countries, long involved in dependent economic relationships, appear content to take a cautious path toward any new trade arrangement with the United States. 

For U.S. trade policy, any thoughts of achieving broader regional integration are challenged by these circumstances. Broader integration may be difficult to reconcile with the needs of very small developing countries, which are highly vulnerable to the vicissitudes of global economic trends and may require new and creative solutions, particularly if U.S. policy is still driven by the historical focus on development and regional security issues in addition to trade liberalization. In the context of continuing with trade preferences in similar or altered form, or opting for an FTA, the solution is not immediately obvious.



Date of Report: January 28, 2010
Number of Pages: 26
Order Number: RL33951
Price: $29.95

Document available electronically as a pdf file or in paper form.
To order, e-mail congress@pennyhill.com or call us at 301-253-0881.

Honduran-U.S. Relations

Peter J. Meyer
Analyst in Latin American Affairs


On January 27, 2010, Porfirio "Pepe" Lobo Sosa was inaugurated President of Honduras. Lobo assumed power after seven months of domestic political crisis and international isolation that had resulted from the June 28, 2009 ouster of President Manuel Zelaya. The political crisis has left Lobo with a number of challenges, including considerable domestic political polarization, a lack of international recognition, and a faltering economy. Nonetheless, the strength of Lobo's National Party in the legislature and the weakness of his opposition will likely allow the new president to implement his policy agenda. 

The Honduran economy has undergone a number of changes in recent years. While traditional agricultural exports of coffee and bananas are still important, nontraditional sectors, especially the maquiladora, or export-processing industry, have grown significantly over the past decade. Substantial economic growth (6.3% in 2007 and 4% in 2008) and considerable debt reduction by international financial institutions have freed government resources to finance poverty-reduction programs. Nonetheless, Honduras continues to face a poverty rate of nearly 70%, in addition to widespread crime, high infant mortality, and a significant HIV/AIDS epidemic. Moreover, Honduras experienced an estimated 4.4% economic contraction in 2009 as a result of the political crisis and global economic downturn. 

Although relations have been strained recently as a result of the political crisis, the United States has traditionally had a close relationship with Honduras. Overall U.S. policy goals include a strengthened democracy with an effective justice system that protects human rights and promotes the rule of law, and the promotion of sustainable economic growth with a more open economy and improved living conditions. In addition to providing Honduras with substantial amounts of foreign assistance and maintaining significant military and economic ties, the United States cooperates with Honduras to deal with transnational issues such as illegal migration, crime, narcotics trafficking, trafficking in persons, and port security. 

With respect to the political crisis, several resolutions were introduced during the first session of the 111th Congress. These ranged from condemning Zelaya for his "unconstitutional and illegal" actions (H.Res. 619, Mack) to condemning the "coup d'état" in Honduras (H.Res. 630, Delahunt) and calling upon the Micheletti government to end its "illegal seizure of power"(H.Res. 620, Serrano). Another resolution (H.Res. 749, Ros-Lehtinen) called on the Obama Administration to recognize the November 2009 elections "as an important step in the consolidation of democracy and rule of law in Honduras." 

This report examines current political and economic conditions in Honduras as well as issues in Honduran-U.S. relations. For a more detailed examination of the Honduran political crisis, see CRS Report R41064, Honduran Political Crisis, June 2009-January 2010.



Date of Report: February 1, 2010
Number of Pages: 23
Order Number: RL34027
Price: $29.95

Document available electronically as a pdf file or in paper form.
To order, e-mail congress@pennyhill.com or call us at 301-253-0881.

Tuesday, February 23, 2010

Mexico-U.S. Relations: Issues for Congress

Clare Ribando Seelke
Specialist in Latin American Affairs

Mark P. Sullivan
Specialist in Latin American Affairs

June S. Beittel
Analyst in Latin American Affairs


The United States and Mexico have a close and complex bilateral relationship, with extensive economic linkages as neighbors and partners under the North American Free Trade Agreement (NAFTA). Bilateral relations are characterized by strong commercial and cultural ties and cooperation on a range of bilateral and international issues. In recent years, security issues have dominated the bilateral agenda, as the United States has supported Mexican President Felipe Calderón's campaign against drug trafficking organizations (DTOs) and organized crime. 

Halfway through his six-year term, President Calderón of the conservative National Action Party (PAN) is focused on dealing with two major challenges: restarting the Mexican economy, which contracted by 7% in 2009 (largely as a result of the U.S. recession), and combating DTOs. In addition, Calderón submitted a wide-ranging political reform proposal to the Mexican Congress in December 2009, which, if enacted, would introduce run-off presidential elections, permit legislators to run for re-election, and reduce the size of the Congress. As the 2012 presidential elections approach, the Congress, which is now dominated by the Institutional Revolutionary Party (PRI), could be reluctant to give President Calderón any major legislative victories or to take up difficult issues such as reforming the declining oil sector.In recent years, U.S.-Mexican relations have grown stronger as the two countries have worked together to combat drug trafficking and secure their shared border. President Obama met with President Calderón in Mexico on April 16-17, 2009, to discuss counterdrug cooperation, immigration reform, and climate change. The leaders met again in August 2009 alongside Canadian Prime Minister Stephen Harper at the North American Leaders Summit in Guadalajara to discuss how to coordinate their responses to the global economic crisis, climate change, and security issues. They pointed to North America's successful response to the H1N1 "swine flu" outbreak as a model for future collaboration. One challenge for Mexico-U.S. relations has been how to resolve an ongoing dispute involving the implementation of NAFTA trucking provisions. In March 2009, Congress terminated a pilot project for Mexican-registered trucks to operate beyond the border commercial zone, and Mexico responded by imposing import tariffs on more than 90 U.S. agricultural and industrial products. 

During its second session, the 111th Congress is likely to maintain an active interest in Mexico with counternarcotics, border, and trade issues dominating the agenda. To date, Congress has appropriated some $1.3 billion in assistance for Mexico under the Mérida Initiative, an anti-crime and counterdrug package first funded in FY2008, including $210.3 million in the FY2010 Consolidated Appropriations Act (P.L. 111-117). Congress is likely to maintain a keen interest in how implementation of the Mérida Initiative and related domestic initiatives to improve border security are proceeding, particularly as it considers the President's FY2011 budget request, which includes at least $341 million in assistance to Mexico, including $310 million in assistance accounts that have funded the Mérida Initiative. Congress may also be interested in how the Obama Administration moves to resolve the current trucking dispute with Mexico now that P.L. 111-117 would permit the resumption of a U.S.-funded pilot program for Mexican trucks. Congress may also consider proposals for comprehensive immigration reform. For more information, see CRS Report R40135, Mérida Initiative for Mexico and Central America: Funding and Policy Issues; CRS Report R40582, Mexico's Drug-Related Violence; CRS Report RL32934, U.S.-Mexico Economic Relations: Trends, Issues, and Implications; and CRS Report RL31738, North American Free Trade Agreement (NAFTA) Implementation: The Future of Commercial Trucking Across the Mexican Border
.


Date of Report: February 3, 2010
Number of Pages: 38
Order Number: RL32724
Price: $29.95

Document available electronically as a pdf file or in paper form.
To order, e-mail congress@pennyhill.com or call us at 301-253-0881.

Friday, February 19, 2010

Agriculture in Pending U.S. Free Trade Agreements with Colombia, Panama, and South Korea

Remy Jurenas
Specialist in Agricultural Policy

The 111th Congress could consider free trade agreements (FTAs) signed by the Bush Administration with Colombia, Panama, and South Korea under trade promotion authority, or fast-track rules, designed to expedite congressional consideration of these agreements. Liberalizing trade in agricultural products, particularly the pace of expanding market access for the more sensitive agricultural commodities, was one of the more difficult areas that trade negotiators faced in concluding each of these FTAs. In each instance, issues dealing with food safety and animal/plant health matters (technically not part of the FTA negotiating agenda) were not resolved until later. 

While U.S. negotiators sought to eliminate high tariffs and restrictive quotas imposed on U.S. agricultural exports to these three country markets, they also faced pressures to protect U.S. producers of import-sensitive commodities (beef, dairy products, and sugar, among others). FTA partner country negotiators faced similar pressures. One Bush Administration policy objective was for FTAs to be comprehensive (i.e., cover all products). For the more import-sensitive agricultural commodities, negotiators agreed on long transition periods, temporary additional protection in the case of import surges, or indefinite protection of a few commodities. To illustrate the latter, because of political sensitivities for the United States or its partners, negotiators agreed to retain in perpetuity quantitative import limits and prohibitively high tariffs on some of the most import-sensitive commodities. In one exception, though, the United States agreed to Korea's insistence that rice be completely excluded from their FTA. 

Of these three, the FTA with South Korea would be the most commercially significant one for U.S. agriculture since the North American Free Trade Agreement (NAFTA) took effect with Mexico in 1994. Because Colombia is a large market that imposes a high level of border protection on agricultural imports, the Colombia FTA has the potential to significantly increase U.S. agricultural exports. Though Panama represents a relatively small market, U.S. exporters would have numerous opportunities for additional sales. 

Conversely, each pending FTA partner would have additional access to the U.S. market for those agricultural commodities that are now protected by restrictive U.S. import quotas. Of these, the U.S. sugar sector would face some competition from increased imports of sugar from Colombia and Panama. The small increase in additional imports from South Korea would likely be in the form of primarily ethnic foods. Also, because these three countries consume most of the beef and dairy products that they produce, any additional export sales to the United States would likely be accommodated by the large U.S. market with little effect. 

The Obama Administration has signaled its intent to address outstanding issues of concern to some Members of Congress before submitting these FTAs to Congress for consideration. Officials during 2009 stated their intent to work with Members of Congress to develop "benchmarks" to use to determine when these agreements might be sent to Capitol Hill for debate, but little apparent movement occurred. With the White House pursuing health care and financial sector reforms (among other issues) as its legislative priorities, indications are that these FTAs might not be submitted to Congress until after the 2010 fall elections or sometime during 2011. 



Date of Report: February 4, 2010
Number of Pages: 21
Order Number: R40622
Price: $29.95

Document available electronically as a pdf file or in paper form.
To order, e-mail congress@pennyhill.com or call us at 301-253-0881.

Thursday, February 11, 2010

Cuba: U.S. Restrictions on Travel and Remittances

Mark P. Sullivan
Specialist in Latin American Affairs

Restrictions on travel to Cuba have been a key and often contentious component in U.S. efforts to isolate Cuba's communist government since the early 1960s. Under the Bush Administration, restrictions on travel and on private remittances to Cuba were tightened. In March 2003, the Administration eliminated travel for people-to-people educational exchanges unrelated to academic coursework. In June 2004, the Administration further restricted family and educational travel, eliminated the category of fully-hosted travel, and restricted remittances so that they could only be sent to the remitter's immediate family. Initially there was mixed reaction to the Administration's June 2004 tightening of Cuba travel and remittance restrictions, but opposition to the policy grew, especially within the Cuban American community regarding the restrictions on family travel and remittances. 

Dating back to 2000, there have been numerous legislative efforts to ease restrictions on travel to Cuba in various ways. The Bush Administration regularly threatened to veto legislation if it contained provisions weakening Cuba sanctions. In the 110th Congress, several House and Senate committee versions of appropriations bills had provisions that would have eased restrictions on travel to Cuba, but no final action was taken before the end of the Congress. 

During the 2008 electoral campaign, Barack Obama pledged to lift restrictions on family travel to Cuba as well as restrictions on Cuban Americans sending remittances to Cuba. In the aftermath of that election, the 111th Congress took action to ease some restrictions on travel to Cuba by including two provisions in the FY2009 omnibus appropriations measure (P.L. 111-8), which President Obama signed into law on March 11, 2009. The first provision eases restrictions on family travel, which the Treasury Department implemented by issuing a general license for such travel as it existed prior to the Bush Administration's tightening of family travel restrictions in June 2004. Family travel is now allowed once every 12 months for an unlimited length of stay to visit a close relative who is no more than three generations removed from the traveler. The second provision eases travel restrictions related to the marketing and sale of agricultural and medical goods to Cuba, and requires the Treasury Department to issue a general license for such travel. In April 2009, President Barack Obama announced that his Administration would go further and allow unlimited family travel and remittances; regulations implementing these changes were issued in September 2009. 

Several legislative initiatives have been introduced in the 111th Congress that would further ease Cuba travel restrictions: H.R. 874 /S. 428 and H.R. 1528 would prohibit restrictions on travel to Cuba; H.R. 188, H.R. 1530, and H.R. 2272, which would lift the overall embargo on Cuba, would also lift travel restrictions; H.R. 1531/ S. 1089, which would facilitate the export of U.S. agricultural products to Cuba, would also prohibit Cuba travel restrictions; H.R. 332 would ease restrictions on educational travel; S. 774, H.R. 1918, and S. 1517 would allow for travel related to hydrocarbon exploration and extraction activities. In contrast, H.Con.Res. 132 would call for the fulfillment of certain democratic conditions before the United States increases trade and tourism to Cuba. 

For additional information on Cuba, see CRS Report R40193, Cuba: Issues for the 111th Congress



Date of Report: January 25, 2010
Number of Pages: 32
Order Number: RL31139
Price: $29.95

Document available electronically as a pdf file or in paper form.
To order, e-mail congress@pennyhill.com or call us at 301-253-0881.

Tuesday, February 9, 2010

Latin America: Terrorism Issues

Mark P. Sullivan
Specialist in Latin American Affairs

Since the September 2001 terrorist attacks on New York and Washington, U.S. attention to terrorism in Latin America has intensified, with an increase in bilateral and regional cooperation. In its April 2009 Country Reports on Terrorism, the State Department maintained that terrorism in the region was primarily perpetrated by terrorist organizations in Colombia and by the remnants of radical leftist Andean groups. Overall, however, the report maintained that the threat of a transnational terrorist attack remained low for most countries in the hemisphere. Cuba has remained on the State Department's list of state sponsors of terrorism since 1982 pursuant to Section 6(j) of the Export Administration Act, which triggers a number of economic sanctions. Both Cuba and Venezuela are on the State Department's annual list of countries determined to be not cooperating fully with U.S. antiterrorism efforts pursuant to Section 40A of the Arms Export Control Act. U.S. officials have expressed concerns over the past several years about Venezuela's lack of cooperation on antiterrorism efforts, its relations with Iran, and President Hugo Chávez's sympathetic statements for Colombian terrorist groups. The State Department terrorism report noted, however, that President Chávez publicly changed course in June 2008 and called on the FARC to unconditionally release all hostages, declaring that armed struggle is "out of place" in modern Latin America. 

In recent years, U.S. concerns have increased over activities of the radical Lebanon-based Islamic group Hezbollah and the Sunni Muslim Palestinian group Hamas in the tri-border area of Argentina, Brazil, and Paraguay. The State Department terrorism report maintains that the United States remains concerned that Hezbollah and Hamas sympathizers are raising funds among the sizable Middle Eastern communities in the region, but stated that there was no corroborated information that these or other Islamic extremist groups had an operational presence in the area. Allegations have linked Hezbollah to two bombings in Argentina: the 1992 bombing of the Israeli Embassy in Buenos Aires that killed 30 people and the 1994 bombing of the Argentine-Israeli Mutual Association (AMIA) in Buenos Aires that killed 85 people. Concerns about Iran's increasing activities in Latin America center on the country's ties to Hezbollah and the terrorist attacks in Argentina. 

In the 111th Congress, the House approved H.R. 2410 (Berman), the Foreign Relations Authorization Act for FY2010 and FY2011, on June 10, 2009, with a provision calling for a report on Iran's and Hezbollah's actions in the Western Hemisphere. On July 17, 2009, the House approved H.Con.Res. 156 (Ros-Lehtinen), which, among other provisions, condemns the 1994 AMIA bombing in Buenos Aires, and urges Western Hemisphere governments to take actions to curb the activities that support Hezbollah and other such extremist groups. On July 23, 2009, the Senate approved its version of the FY2010 defense authorization bill, S. 1390 (Levin), which included reporting requirements on Venezuela and Cuba, but the provisions were not included in the final enacted measure. Other introduced measures include H.R. 375 (Ros-Lehtinen) and H.R. 2475 (Ros-Lehtinen), which, among their provisions, would place restrictions on nuclear cooperation with countries assisting the nuclear programs of Venezuela or Cuba; H.R. 2272 (Rush), which includes a provision that would remove Cuba from the state sponsors of terrorism list; and H.Res. 872 (Mack), which calls for Venezuela to be designated a state sponsor of terrorism. 



Date of Report: January 25, 2010
Number of Pages: 16
Order Number: RS21049
Price: $29.95

Document available electronically as a pdf file or in paper form.
To order, e-mail congress@pennyhill.com or call us at 301-253-0881.

Brazil’s and Canada’s WTO Cases Against U.S. Agricultural Direct Payments

Randy Schnepf
Specialist in Agricultural Policy

In 2007, Brazil and Canada, independently of each other, requested consultations with the United States under the auspices of the World Trade Organization's (WTO's) Dispute Settlement process concerning similar grievances regarding U.S. domestic agricultural support programs and the U.S. export credit guarantee program. After consultations failed to resolve their concerns, both countries (again acting independently) requested the establishment of a WTO panel to rule on their complaints. The WTO's Dispute Settlement Body, on December 17, 2007, established a single panel to consider both cases. In late April 2008, Brazil and Canada informally agreed to postpone proceeding with their joint World Trade Organization (WTO) dispute settlement case challenging certain U.S. agricultural subsidies. At the time of the postponement, the three parties involved in the dispute had been unable to agree on panel membership. 

The postponement was thought to be provisional based on success in achieving further disciplines on domestic support in the current Doha Round of WTO trade negotiations. However, the Doha Round negotiations failed to complete an agreement in 2009. As of early 2010 there are no prospects for revival of Doha Round negotiations. Nor have Brazil and Canada given any indication that they will revive their pursuit of their joint case. It is not clear how long the postponement will persist. If resumed, the first order of business will be the formation of a panel. 

The joint case combines two separate but similar cases: DS357, brought by Canada, and DS365, brought by Brazil. Both cases make two charges against U.S. farm programs—first, that the United States has exceeded its annual WTO commitment levels for total aggregate measurement of support (AMS) for agriculture in each of the years 1999, 2000, 2001, 2002, 2004, and 2005, and second, that the U.S. export credit guarantee program for agricultural commodities operates as a WTO-illegal export subsidy. Both charges stem, in large part, from a previous negative ruling against U.S. farm programs in a case (DS267) brought by Brazil against the U.S. cotton program. In that case, a WTO panel ruled (the ruling subsequently was upheld by a WTO Appellate Body), first, that direct payments made under U.S. farm programs do not qualify for green box exemption status because of a restriction prohibiting the planting of fruits, vegetables, or wild rice on payment acres; and second, that the U.S. export credit guarantee program operates as a prohibited export subsidy program because the financial benefits returned by these programs failed to cover their long-run operating costs. As a result of the ruling, U.S. export credit guarantees became subject to previously scheduled export subsidy commitments. For more information, see CRS Report RL32571, Brazil's WTO Case Against the U.S. Cotton Program, by Randy Schnepf. 

Canada and Brazil claim that, since they fail to qualify for inclusion in the green box, U.S. direct payments should be added to its AMS when calculating total domestic support. In addition, they also charge that the United States has improperly notified several of its farm support programs as exempt from the AMS limit, while several other programs were improperly excluded from U.S. notifications. Canada and Brazil claim that when all of the outlays from these allegedly misnotified programs are included, then the U.S. AMS total exceeds its WTO commitment level. 

Should a panel be formed and eventually rule on this case, any changes in U.S. farm policy needed to comply with a WTO ruling against the United States would likely involve action by Congress to produce new legislation.This report provides background and details, as well as the current status of the two WTO dispute settlement cases. In addition, it discusses the role of Congress in responding to developments.


Date of Report: January 27, 2010
Number of Pages: 16
Order Number: RL34351
Price: $29.95

Document available electronically as a pdf file or in paper form.
To order, e-mail congress@pennyhill.com or call us at 301-253-0881.

Sunday, February 7, 2010

Latin America and the Caribbean: Fact Sheet on Leaders and Elections

Julissa Gomez-Granger
Information Research Specialist

Mark P. Sullivan
Specialist in Latin American Affairs


This fact sheet tracks the current heads of government in Central and South America, Mexico, and the Caribbean. It provides the dates of the last and next elections for the head of government and the national independence date for each country.


Date of Report: January 28, 2010
Number of Pages: 6
Order Number: 98-684
Price: $29.95

Document available electronically as a pdf file or in paper form.
To order, e-mail congress@pennyhill.com or call us at 301-253-0881.

Friday, February 5, 2010

Honduran Political Crisis, June 2009-January 2010

Peter J. Meyer
Analyst in Latin American Affairs


On June 28, 2009, the Honduran military detained President Manuel Zelaya and flew him to exile in Costa Rica, ending 27 years of uninterrupted democratic, constitutional governance. Honduran governmental institutions had become increasingly polarized in the preceding months as a result of Zelaya's intention to hold a non-binding referendum and eventually amend the constitution. After the ouster, the Honduran Supreme Court asserted that an arrest warrant had been issued for Zelaya as a result of his noncompliance with judicial decisions that had declared the non-binding referendum unconstitutional. However, the military's actions halted the judicial process before a trial could be held. The Honduran National Congress then adopted a resolution to replace Zelaya with the President of Congress, Roberto Micheletti. 

Micheletti insisted that he took power through a "constitutional succession" throughout the seven months between Zelaya's forced removal and the inauguration of new President Porfirio "Pepe" Lobo Sosa. He also maintained tight control of Honduran society, severely restricting political activity that opposed his government. President Lobo, who won a November 2009 election that had been scheduled prior to the ouster, took office on January 27, 2010. Some Hondurans declared the election illegitimate, however, as a result of the conditions in the country at the time it was held. The political crisis has left Lobo with a number of challenges, including considerable domestic political polarization, a lack of international recognition, and a faltering economy. 

The United States and the rest of the international community universally condemned Zelaya's ouster. They leveled a series of diplomatic and economic sanctions against the Micheletti government and pushed for a negotiated agreement to end the crisis. Although an accord was signed roughly one month before the November 2009 election, it quickly fell apart. The unity of the international community crumbled along with the agreement, as some countries—such as the United States—agreed to recognize the results of the election despite Zelaya never being restored to office, while others refused to do so. 

Members demonstrated considerable interest in the Honduran political crisis during the first session of the 111th Congress. A number of resolutions were introduced regarding the situation. On July 8, 2009, H.Res. 619 (Mack) and H.Res. 620 (Serrano) were introduced in the House. H.Res. 619 condemned Zelaya for his "unconstitutional and illegal" actions and called for a peaceful resolution. H.Res. 620 called upon the Micheletti government to end its "illegal seizure of power." On July 10, 2009, H.Res. 630 (Delahunt) was introduced in the House. It condemned the "coup d'état" in Honduras; refused to recognize the Micheletti government; urged the Obama Administration to suspend non-humanitarian aid; and called for international observation of the November 2009 elections. On September 17, 2009, H.Res. 749 (Ros-Lehtinen) was introduced in the House. It called for the Secretary of State to work with Honduran authorities to ensure free and fair elections and for President Obama to recognize the November elections "as an important step in the consolidation of democracy and rule of law in Honduras." 

This report examines the political crisis in Honduras, with specific focus on the events between June 2009 and January 2010. It concludes with the inauguration of President Lobo. For more information on the current political situation in Honduras, see CRS Report RL34027, Honduran- U.S. Relations
.


Date of Report: February 1, 2010
Number of Pages: 23
Order Number: R41064
Price: $29.95

Document available electronically as a pdf file or in paper form.
To order, e-mail congress@pennyhill.com or call us at 301-253-0881.

Paraguay: Political and Economic Conditions and U.S. Relations

June S. Beittel
Analyst in Latin American Affairs


Paraguay, a landlocked nation in the center of South America, has friendly relations with the United States and has been a traditional ally. Paraguay's turbulent political history and tradition of political authoritarianism have resulted in international isolation that the country is seeking to overcome. The population of 6.9 million people is one the most homogenous mestizo populations in the hemisphere. Paraguay's largely agrarian economy has grown well in recent years on the strength of global commodity prices. However in 2009, a severe drought and the impact of the global economic recession sharply reduced growth, but a recovery is anticipated in 2010. 

The April 2008 election of Fernando Lugo, a former Roman Catholic bishop and leader of the Patriotic Alliance for Change, as President ended 61-years of one-party rule by the still dominant Colorado Party. The United States has encouraged the strengthening of democracy in Paraguay, and hailed the peaceful transition of power. Known as the "bishop of the poor" after a decade of work in an impoverished rural diocese, Lugo pledged to introduce land and agrarian reform, improve education and health services to better serve Paraguay's poor majority, and combat widespread corruption. Yet, as he entered his second year in office, there were more frequent calls for his impeachment. His loose electoral alliance had splintered, and he faced broad opposition in the opposition-dominated Paraguayan Congress that had stymied his center-left agenda at nearly every turn. At the end of 2009, polls indicated that Lugo had one of the lowest popularity ratings of any leader in the region. 

The United States and Paraguay cooperate in a number of areas but especially in the fight against corruption, and on anti-drug, counterterrorism and anti-smuggling initiatives. In 2006 and 2009, the United States and Paraguay signed two Millennium Challenge Corporation threshold agreements totaling more than $60 million dollars to combat corruption and strengthen the rule of law. Paraguay is a major transit country for cocaine and produces the largest crop of marijuana in South America. The United States remains concerned about illegal activities in the loosely controlled tri-border region with neighboring Brazil and Argentina, such as money-laundering, drugs and arms trafficking, and trade in counterfeit and contraband goods. 

The 111th Congress has expressed growing interest in Paraguay. In April 2009, two bills were introduced entitled the "U.S.-Paraguay Partnership Act of 2009" (H.R. 1837 and S. 780). On September 14, 2009, the ATPDEA Expansion and Extension Act of 2009 (S. 1665) was introduced in the Senate. Each of these bills would amend the Andean Trade Promotion and Drug Eradication Act (Title XXXI of the Trade Act of 2002, P.L. 107-210) to extend unilateral trade preferences to Paraguay. Indicating additional interest in Paraguay, the House Democratic Partnership (formerly the House Democratic Assistance Commission) made a study trip to Paraguay in August 2009. Members of the 8-member delegation had discussions with the bicameral Congress and the Executive about the need to work together to support democracy in Paraguay. 

This report examines recent political and economic developments in Paraguay and issues in U.S.- Paraguayan relations.



Date of Report: February 1, 2010
Number of Pages: 16
Order Number: R41067
Price: $29.95

Document available electronically as a pdf file or in paper form.
To order, e-mail congress@pennyhill.com or call us at 301-253-0881.

Thursday, February 4, 2010

Proposed Colombia Free Trade Agreement: Labor Issues

Mary Jane Bolle
Specialist in International Trade and Finance


This report examines three labor issues and arguments related to the pending U.S.-Colombia free trade agreement (CFTA; H.R. 5724 and S. 2830): violence against trade unionists; impunity (accountability for or punishment of the perpetrators); and worker rights protections for Colombians. For general issues relating to the CFTA, see CRS Report RL34470, The Proposed U.S.-Colombia Free Trade Agreement: Economic and Political Implications, by M. Angeles Villarreal. For background on Colombia and its political situation and context for the agreement, see CRS Report RL32250, Colombia: Issues for Congress, by June S. Beittel. 

Opponents of the pending U.S.-Colombia free trade agreement (CFTA) argue against it on three points: (1) the high rate of violence against trade unionists in Colombia; (2) the lack of adequate punishment for the perpetrators of that violence; and (3) weak Colombian enforcement of International Labor Organization (ILO) core labor standards and labor laws. 

Proponents of the agreement argue primarily for the proposed Colombia FTA on the basis of economic and national security benefits. Accordingly, they argue, the CFTA would: support increased exports, expand economic growth, create jobs, and open up investment opportunities for the United States. They also argue that it would reinforce the rule of law and spread values of capitalism in Colombia, and anchor hemispheric stability. 

Proponents specifically respond to labor complaints of the opponents, that (1) violence against trade unionists has declined dramatically since President Álvaro Uribe took office in 2002; (2) substantial progress is being made on the impunity issue as the government has undertaken great efforts to find perpetrators and bring them to justice; and (3) the Colombian government is taking steps to improve conditions for workers. 

If Congress were to approve the Colombia FTA, it would be the second FTA (after Peru) to have some labor enforcement "teeth." Labor provisions including the four basic ILO core labor standards would be enforceable through the same dispute settlement procedures as for all other provisions (i.e., primarily those for commercial interests.) Opponents argue that under CFTA, only the concepts of core labor standards, and not the details of the ILO conventions behind them, would be enforceable. 

Proponents point to recent Colombian progress in protecting workers on many fronts. They argue that approval of the FTA and the economic growth in Colombia that would result is the best way to protect Colombia's trade unionists. They also argue that not passing the agreement would not resolve Colombia's labor issues. 

Opponents argue that delaying approval of the proposed CFTA further would give Colombia more time to keep improving protections for its workers.



Date of Report: January 22, 2010
Number of Pages: 14
Order Number: RL34759
Price: $29.95

Document available electronically as a pdf file or in paper form.
To order, e-mail congress@pennyhill.com or call us at 301-253-0881.

Panama: Political and Economic Conditions and U.S. Relations

Mark P. Sullivan
Specialist in Latin American Affairs


With five successive elected civilian governments, the Central American nation of Panama has made notable political and economic progress since the 1989 U.S. military intervention that ousted the regime of General Manuel Noriega from power. The current President, Ricardo Martinelli of the center-right Democratic Change (CD) party was elected in May 2009, defeating the ruling center-left Democratic Revolutionary Party (PRD) in a landslide. Martinelli was inaugurated to a five-year term on July 1, 2009. Martinelli's s Alliance for Change coalition also captured a majority of seats in Panama's National Assembly that will increase the chances that the President will be able to secure enough votes to enact his legislative agenda. 

A significant challenges facing the Martinelli government has been dealing with the economic fallout stemming from the global economic recession, but while the growth of Panama's servicebased economy has slowed, it has avoided the economic contraction experienced by many Latin American economies. The Panama Canal expansion project has played a large role in stimulating economic growth. During the presidential campaign, Martinelli pledged to simplify the tax system by the introduction of a flat tax in order to discourage tax evasion. He also has called for a number of large public infrastructure projects, but these and other expenditures could prove difficult as the country continues to feel the impact of the global economic recession. 

The United States has close relations with Panama, stemming in large part from the extensive linkages developed when the canal was under U.S. control and Panama hosted major U.S. military installations. The current relationship is characterized by extensive counternarcotics cooperation, assistance to help Panama assure the security of the Canal, and a proposed bilateral free trade agreement (FTA). U.S. bilateral assistance amounted to an estimated $6.5 million in FY2009, and an estimated $9.6 million in FY2010. This does not include additional FY2008 and FY2009 assistance that Panama is receiving under the Mérida Initiative to assist Mexico and Central American countries in their efforts to combat drug trafficking, gangs, and organized crime; in addition, for FY2010 Panama will receive assistance under a new Central America Regional Security Initiative (CARSI) instead of under the Mérida Initiative. 

In June 2007, the United States and Panama signed a proposed bilateral FTA, and Panama's National Assembly overwhelmingly approved the agreement in July 2007. The U.S. Congress had been likely to consider implementing legislation in the fall of 2007, but the September 1, 2007 election of Pedro Miguel González to head Panama's legislature for one year delayed consideration. González is wanted in the United States for his alleged role in the murder of a U.S. serviceman in Panama in 1992. His term expired September 1, 2008, and González did not stand for re-election. As a result, the 111th Congress may turn to consideration of implementing legislation for the FTA. Final issues being worked out relate to worker rights and to Panama's bank secrecy laws. H.Res. 987, introduced in December 2009, would express the sense of the House that the FTA with Panama should be implemented immediately. 

For more, see CRS Report RL32540, The Proposed U.S.-Panama Free Trade Agreement, CRS Report R40622, Agriculture in Pending U.S. Free Trade Agreements with Colombia, Panama, and South Korea, CRS Report R40135, Mérida Initiative for Mexico and Central America: Funding and Policy Issues, and CRS Report RL34112, Gangs in Central America.



Date of Report: January 22, 2010
Number of Pages: 29
Order Number: RL30981
Price: $29.95

Document available electronically as a pdf file or in paper form.
To order, e-mail congress@pennyhill.com or call us at 301-253-0881.

Trafficking in Persons in Latin America and the Caribbean

Clare Ribando Seelke
Specialist in Latin American Affairs


Trafficking in persons (TIP) for the purpose of exploitation is a lucrative criminal activity that is of major concern to the United States and the international community. According to the most recent U.S. State Department estimates, roughly 800,000 people are trafficked across borders each year. If trafficking within countries is included in the total world figures, official U.S. estimates are that some 2 to 4 million people are trafficked annually. While most trafficking victims still appear to originate from South and Southeast Asia or the former Soviet Union, human trafficking is also a growing problem in Latin America. The International Organization for Migration (IOM) has estimated that sex trafficking in Latin America generates some $16 billion worth of business annually. 

Countries in Latin America serve as source, transit, and destination countries for trafficking victims. Latin America is a primary source region for people trafficked to the United States. As many as 17,500 are trafficked into the United States each year, according to State Department estimates. In FY2007, victims from Latin America accounted for 41% of trafficking victims in the United States certified as eligible to receive U.S. assistance. In FY2008, Mexico alone accounted for 23% of the foreign TIP victims who were certified. 

Since enactment of the Victims of Trafficking and Violence Protection Act of 2000 (P.L. 106- 386), successive Administrations and Congress have taken steps to address human trafficking. The 110th Congress passed The William Wilberforce Trafficking Victims Protection Reauthorization Act of 2008 (P.L. 110-457, signed into law on December 23, 2008). The Act, among other provisions, authorizes TIP appropriations for FY2008 through FY2011. Obligations for U.S.-funded anti-TIP programs in Latin America totaled roughly $13.7 million in FY2008, down from $17.5 million in FY2007. 

On June 16, 2009, the State Department issued its ninth annual, congressionally mandated report on human trafficking. In addition to outlining major trends and ongoing challenges in combating TIP, the report categorizes countries into four "tiers" according to the government's efforts to combat trafficking. Those countries that do not cooperate in the fight against trafficking (Tier 3) have been made subject to U.S. foreign assistance sanctions. While Cuba is the only Latin American country ranked on Tier 3 in this year's TIP report, seven other countries and one territory in the region—Argentina, Belize, Dominican Republic, Guatemala, Guyana, the Netherlands Antilles, Venezuela, and St. Vincent and the Grenadines—are on the Tier 2 Watch List. Unless those countries make significant progress in the next six months, they could receive a Tier 3 ranking in the 2010 report. 

The 111th Congress may continue to exercise its oversight of TIP programs and operations, including U.S.-funded programs in Latin America. Congress may consider increasing funding for anti-TIP programs in the region, possibly through the Mérida Initiative, or through other assistance programs. Congress may also monitor new trends in human trafficking in the region, including the increasing involvement of Mexican drug trafficking organizations in TIP. Another issue of interest may be whether sufficient efforts are being applied to address all forms of TIP in Latin America, including not only sexual exploitation, but also forced labor. For more general information on human trafficking, see CRS Report RL34317, Trafficking in Persons: U.S. Policy and Issues for Congress, by Liana Sun Wyler, Alison Siskin, and Clare Ribando Seelke.


Date of Report: January 20, 2010
Number of Pages: 22
Order Number: RL332000
Price: $29.95

Document available electronically as a pdf file or in paper form.
To order, e-mail congress@pennyhill.com or call us at 301-253-0881.

The MS-13 and 18th Street Gangs: Emerging Transnational Gang Threats?

Celinda Franco
Specialist in Crime Policy

Two predominantly Latino gangs, Mara Salvatrucha (MS-13) and the 18th Street gang (M-18), have raised concern among policy makers for a number of reasons, including (1) membership in these gangs has spread from the Los Angeles area to other communities across the United States; (2) these gangs are considered "transnational," primarily because MS-13 and M-18 cliques are being established in Central America and Mexico; (3) there are reports suggesting that these gangs are engaged in criminal enterprises normally associated with better organized and more sophisticated crime syndicates; and (4) MS-13 and M-18 gang members may be involved in smuggling operations and, by extension, could potentially use their skills and criminal networks to smuggle terrorists into the United States. To date, however, no evidence exists establishing a link between MS-13 and M-18 members and terrorists. 

Nevertheless, some observers maintain that these two gangs may develop the capacity to become organized criminal enterprises capable of coordinating illegal activities across national borders. Yet, others find them to be no more criminally organized or sophisticated than other street gangs. At issue for Congress is whether the MS-13 and M-18 gangs constitute an emerging transnational criminal threat. 

The federal response to the MS-13 and M-18 gang problem has largely involved the enforcement of criminal and immigration laws, including the deportation of alien gang members. More recently, federal efforts have focused on prosecuting gang members under the Racketeer Influence and Corrupt Organizations (RICO) statute. Deported alien gang members have established MS-13 and M-18 gang cliques in their home countries, and some experts suggest that U.S. deportation policies have effectively transported U.S.-styled gang culture to parts of Central America and Mexico. Moreover, evidence shows that deported alien MS-13 and M-18 gang members have established a "revolving door" migratory pattern of repeat illegal reentry into the United States, raising concerns that these "migratory" alien gang members may become involved in narco-trafficking, smuggling, and other criminal activities along the U.S.-Mexico border. 

This report will be updated periodically. 


Date of Report: January 22, 2010
Number of Pages: 20
Order Number: RL34233
Price: $29.95

Document available electronically as a pdf file or in paper form.
To order, e-mail congress@pennyhill.com or call us at 301-253-0881.

Gangs in Central America

Clare Ribando Seelke
Specialist in Latin American Affairs


During its second session, the 111th Congress is likely to maintain an interest in the effects of crime and gang violence in Central America, and on the expanding activities of transnational gangs with ties to that region operating in the United States. The violent Mara Salvatrucha (MS- 13) and its main rival, the "18th Street" gang (also known as M-18) continue to threaten citizen security and challenge government authority in Central America. Gang-related violence has been particularly acute in Honduras, El Salvador, and Guatemala, which have among the highest homicide rates in the world. Governments in those countries appear to have moved away, at least on a rhetorical level, from repressive anti-gang strategies. However, they have yet to implement effective anti-gang policies that include an emphasis on prevention and rehabilitation of former gang members. 

U.S. officials have expressed concerns about the expanding presence of the MS-13 and M-18 in cities across the United States, as well as reports that these gangs may be evolving into more sophisticated transnational criminal enterprises. Between February 2005 and September 2009, U.S. officials arrested some 2,572 alleged MS-13 members in cities across the United States, many of whom were subsequently deported. Evidence suggests, however, that previously deported members of both the MS-13 and the M-18 often reenter the United States illegally across the U.S.-Mexico border. 

Several U.S. agencies have been actively engaged on both the law enforcement and preventive side of dealing with Central American gangs. An inter-agency committee worked together to develop a U.S. Strategy to Combat Criminal Gangs from Central America and Mexico, first announced at a July 2007 U.S.-Central American Integration System (SICA) summit on security issues. The strategy, which is now being implemented, states that the U.S. government will pursue coordinated anti-gang activities through five broad areas: diplomacy, repatriation, law enforcement, capacity enhancement, and prevention. 

In recent years, Congress has increased funding to support anti-gang efforts in Central America. Congress appropriated roughly $7.9 million in FY2008 and $5 million in FY2009 in global International Narcotics Control and Law Enforcement (INCLE) funds for anti-gang efforts in Central America. Congress provided additional support for anti-gang efforts in the region through the Mérida Initiative, including, by CRS calculation, at least $22 million in FY2008 supplemental assistance and close to $19 million in FY2009 funding. On December 13, 2009, Congress passed the FY2010 Consolidated Appropriations Act (H.R. 3288/P.L. 111-117), which provides $83 million for combating gangs and drug trafficking in Central America under a new Central America Regional Security Initiative (CARSI). P.L. 111-117 also includes $8 million in global INCLE for gang programs in the region. 

This report describes the gang problem in Central America, discusses country and regional approaches to deal with the gangs, and analyzes U.S. policy with respect to gangs in Central America. For more information on the Mérida Initiative, see CRS Report R40135, Mérida Initiative for Mexico and Central America: Funding and Policy Issues. For information on Central American gangs in the United States, see CRS Report RL34233, The MS-13 and 18th Street Gangs: Emerging Transnational Gang Threats?, by Celinda Franco.



Date of Report: January 11, 2010
Number of Pages: 22
Order Number: RL34112
Price: $29.95

Document available electronically as a pdf file or in paper form.
To order, e-mail congress@pennyhill.com or call us at 301-253-0881.

Tuesday, February 2, 2010

ATPA Renewal: Background and Issues

M. Angeles Villarreal
Specialist in International Trade and Finance


The Andean Trade Preference Act (ATPA) extends special duty treatment to certain U.S. imports that meet domestic content and other requirements from designated countries in the Andean region. The purpose of ATPA is to promote economic growth in the Andean region and to encourage a shift away from dependence on illegal drugs by supporting legitimate economic activities. The countries originally designated to qualify for trade preferences under ATPA were Bolivia, Colombia, Ecuador, and Peru. However, trade preferences for Bolivia were suspended on December 15, 2008, by the Bush Administration because Bolivia failed to meet ATPA eligibility criteria. In his June 2009 report to Congress, President Obama extended the Bush Administration's determination that Bolivia failed to meet eligibility criteria. Bolivia may only be reinstated as a beneficiary country under ATPA if Congress approves legislation to do so. 

ATPA (Title II of P.L. 102-182) was enacted on December 4, 1991. It was renewed and modified under the Andean Trade Promotion and Drug Eradication Act (ATPDEA; Title XXXI of P.L. 107- 210) on August 6, 2002, extending trade preferences until December 31, 2006. Since that time, Congress has favored short-term extensions of ATPA. The most recent extension of ATPA continued trade preferences for Colombia, Ecuador, and Peru until December 31, 2010 (P.L. 111- 124). On December 14, 2009, the U.S. House of Representatives passed the bill to extend trade preferences for the three countries by unanimous consent (H.R. 4284). On December 22, 2010, the U.S. Senate passed the measure, also by unanimous consent. The bill was signed into law by President Obama on December 28, 2009. Without this extension, the program would have expired on December 31, 2009. 

The previous extension of ATPA (P.L. 110-436) extended preferences for Colombia and Peru until December 31, 2009, and until June 30, 2009, for Bolivia and Ecuador, with possible six-month extensions for Bolivia and Ecuador under certain conditions. For Ecuador, preferences were to be automatically renewed unless the President found that Ecuador was in violation of the eligibility criteria. On June 30, 2009, President Obama issued a report to Congress continuing Ecuador's eligibility for ATPA trade benefits through the end of 2009. For Bolivia, ATPA trade preferences were to be extended only if the President determined that Bolivia had met program eligibility criteria. However, President Bush suspended Bolivia's designation as a beneficiary country in late 2008 because of its failure to meet the eligibility criteria. In June 2009, President Obama extended the Bush Administration's determination that Bolivia failed to meet ATPA criteria. 

In the second session of the 111th Congress, policymakers may reevaluate the extension of ATPA trade preferences for Ecuador, Colombia, and Peru, and could decide to reconsider the suspension of preferences for Bolivia. Policymakers may also consider broader reform of U.S. trade preference programs, including the Generalized System of Preferences. Some Members of Congress believe that if ATPA trade preferences are not extended, the United States and the Andean countries risk losing some of the economic progress that has been achieved over the eighteen-year life of the program. Supporters of ATPA argue that the program should continue to reinforce the U.S. commitment to the "alternative development" counternarcotics strategy. Critics of ATPA argue that unilateral trade programs are ineffective; that the ATPA has forced U.S. producers to compete with lower-cost Andean imports; and, in the cases of Bolivia and Ecuador, that trade preferences should not be extended to countries that do not support U.S. foreign and trade policies.



Date of Report: January 21, 2010
Number of Pages: 15
Order Number: RS22548
Price: $29.95

This CRS report can be ordered over the phone at (301) 253-0881 or by email at Penny Hill Press (congress@pennyhill.com). Be sure to include the document number for the fastest possible service. Please specify whether you want electronic delivery (pdf file or postal delivery).

Peru Trade Promotion Agreement: Labor Issues

Mary Jane Bolle
Specialist in International Trade and Finance

M. Angeles Villarreal
Specialist in International Trade and Finance

On April 12, 2006, the United States and Peru signed the proposed U.S.-Peru Trade Promotion Agreement (PTPA). On June 25, 2007, the Administration released a revised text with new labor, environment, and other provisions. This "final text" language reflected a Congress- Administration "New Trade Policy for America" announced on May 10 that incorporated key Democratic priorities. Supporters of the agreement argue that Peru has ratified all eight International Labor Organization (ILO) core labor standards and that the PTPA would reinforce Peru's labor reform measures of recent years. Critics are concerned about the potential for enforcement of the standards. Peru PTA implementing legislation (H.R. 3688) passed the House on November 8, 2007, by a vote of 285 to 132; passed the Senate on December 4 by a vote of 77 to 18; and was signed by President Bush on December 14 (P.L. 110-138). It went into effect on February 1, 2009. See also CRS Report RL34108, U.S.-Peru Economic Relations and the U.S.- Peru Trade Promotion Agreement, by M. Angeles Villarreal, and CRS Report RL33864, Trade Promotion Authority (TPA) Renewal: Core Labor Standards Issues, by Mary Jane Bolle.


Date of Report: January 21, 2010
Number of Pages: 9
Order Number: RS22521
Price: $29.95

This CRS report can be ordered over the phone at (301) 253-0881 or by email at Penny Hill Press (congress@pennyhill.com). Be sure to include the document number for the fastest possible service. Please specify whether you want electronic delivery (pdf file or postal delivery).

Mérida Initiative for Mexico and Central America: Funding and Policy Issues

Clare Ribando Seelke
Specialist in Latin American Affairs

Increasing violence perpetrated by drug trafficking organizations (DTOs) and other criminal groups is threatening citizen security in Mexico and Central America. Drug-related violence claimed more than 6,500 lives in Mexico in 2009, and several Central American countries have among the highest homicide rates in the world. Mexican DTOs dominate the illicit drug market in the United States and are expanding their operations by forming partnerships with U.S. gangs. As a result, some of the drug-related violence in Mexico has spilled over into the United States. 

On October 22, 2007, the United States and Mexico announced the Mérida Initiative, a proposed package of U.S. counterdrug and anticrime assistance for Mexico and Central America that would begin in FY2008 and last through FY2010. Congress appropriated roughly $1.3 billion for Mexico and Central America, as well as Haiti and the Dominican Republic, in the FY2008 Supplemental Appropriations Act (P.L. 110-252), FY2009 Omnibus Appropriations Act (P.L. 111- 8), and the FY2009 Supplemental Appropriations Act (P.L. 111-32). Each of these Acts contained human rights conditions on 15% of certain law enforcement and military assistance provided. Throughout 2009, drug-related violence in Mexico and the potential threat of spillover along the Southwest border focused congressional concern on the pace of implementation of the Mérida Initiative. On December 3, 2009, the Government Accountability Office (GAO) issued a preliminary report for Congress on the status of funding for the Mérida Initiative. By the end of September 2009, GAO found that $830 million of the $1.3 billion in Mérida funds appropriated for Mexico and Central America had been obligated by the State Department, but only $26 million of the funds had actually been spent. The pace of implementation has accelerated since that time, particularly in Mexico, but implementation challenges remain. 

For FY2010, the Obama Administration requested $450 million in Mérida funding for Mexico and $100 million for Central America. On December 13, 2009, Congress passed the FY2010 Consolidated Appropriations Act (H.R. 3288/P.L. 111-117), which allows for $210.3 million for Mexico and $83 million for Central America under a new Central America Regional Security Initiative (CARSI). These Mexico (Mérida) and Central America (CARSI) funds are subject to the same human rights conditions as those provided in P.L. 111-8. Congress also provided $37 million in P.L. 111-117 for a new Caribbean Basin Security Initiative (CBSI). 

During its second session, the 111th Congress is likely to maintain a strong interest in how well U.S. agencies and their foreign counterparts are implementing the Mérida Initiative and the degree to which the nations involved are fulfilling their domestic obligations under Mérida. Congress may also monitor enforcement of Mérida's human rights conditions, particularly with respect to Mexico. Congress is likely to play a role in the design of post-Mérida security cooperation with Mexico, Central America, and the Caribbean Basin during its consideration of the Obama Administration's FY2011 budget request. This report provides an overview of the funding provided for the Mérida Initiative, the status of Mérida implementation, and a discussion of some policy issues that Congress may consider as it oversees the Initiative. For related information, see CRS Report RL32724, Mexico-U.S. Relations: Issues for Congress, and CRS Report R40582, Mexico's Drug-Related Violence.


Date of Report: January 21, 2010
Number of Pages: 31
Order Number: R40135
Price: $29.95

This CRS report can be ordered over the phone at (301) 253-0881 or by email at Penny Hill Press (congress@pennyhill.com). Be sure to include the document number for the fastest possible service. Please specify whether you want electronic delivery (pdf file or postal delivery).