Poverty Reduction, Free Trade Loom On LatAm's 2007 Agenda

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After an intensely busy year of elections, Latin American leaders face the crucial challenge of delivering on pledges of improving poverty and wealth distribution.

"Democratic government has to deliver the goods," Thomas Shannon, U.S. Assistant Secretary of State for Western Hemisphere Affairs, said at an event held Tuesday by Council of the Americas.

Council of the Americas President Susan Segal noted that 2006 was the heaviest elections year on record in the Americas, with presidential or legislative votes in countries such as Argentina, Brazil, Chile, Colombia, Ecuador, Mexico and Peru. During the year, many observers spoke of a leftward lurch in the region, as populist candidates such as Andres Manuel Lopez Obrador in Mexico and Ollanta Humala in Peru provided formidable competition for their more moderate rivals.

But the experts who spoke at the Council of the America's year-end event on Tuesday presented a more nuanced view. Shannon said the results of the year's elections are situated "very nicely across the political spectrum...To a certain extent, what we're seeing in the region is a slow coalescence of voters around the center."

The common thread in the region this year was that voters are demanding that their elected officials rectify social inequalities and better the quality of life, Shannon said.

Rep. William Delahunt, D-Mass., added during his remarks that "democracy can only sustain so much poverty."

Both Shannon and Delahunt spoke of engagement in the hemisphere during 2007, with obvious challenges regarding Venezuela and Cuba. On Venezuela, Shannon said the Andean nation's "confrontational relationship (with the U.S.) is a largely contrived one." He later added that the George W. Bush administration is " interested in improving the tone and the texture" of its relationship with Venezuela.

Another pressing concerns for the region, particularly the Andean countries of Peru and Colombia, is the status of bilateral free trade agreements. Peru and Colombia have both signed deals with the U.S., whose Congress needs to approve the accords. Peru's legislature has already ratified its agreement.

The new, Democrat-controlled Congress in the U.S. is expected to be tougher on trade deals, possibly revising the signed agreements with Peru and Colombia. The Andean countries - which also include Ecuador and Bolivia - will enjoy six months of renewed benefits under the Andean Trade Promotion and Drug Eradication Act. The outgoing U.S. Congress passed the ATPDEA extension over the weekend. Meanwhile, the U.S. is also pursuing a free trade deal with Panama.

Delahunt said the concern is "who's getting the incremental benefits of trade liberalization" and whether those benefits will lead to better distribution of wealth.

When asked if Democrats would ask for stricter labor provisions in the free trade agreements, Delahunt said "I think we want those kinds of assurances."

-By Wailin Wong, Dow Jones Newswires; 201-938-5240; wailin.wong@dowjones.com