Congressional Update: CODEL to Brazil, Colombia, and Mexico

Amid predictions of election-year legislative gridlock, the second session of the 112^th Congress convened following a rare high-level visit to Latin America, led by House Speaker John Boehner (R-OH).

The congressional delegation stopped in Brazil, Colombia, and Mexico for discussions on “jobs, energy, and economic security,” according to Boehner’s statement. The selection of three of the region’s four largest economies reflected the priority given to export markets for U.S. goods. Joining Boehner on the visit were Ways and Means Committee Chairman Dave Camp (R-MI), Natural Resources Committee Chairman Doc Hastings (R-WA), Education and the Workforce Committee Chairman John Kline (R-MN), and Reps. Dan Boren (D-OK), Devin Nunes (R-CA), and Greg Walden (R-OR).

In Brazil: Focus on Energy Security

In Rio de Janeiro on January 9, the delegation toured Vidigal favela, a shantytown that Boehner praised as an example of the city’s efforts to foster economic renewal and reverse a history of crime and neglect. The following day in Brasilia they met with President Dilma Rousseff and cabinet members, as well as representatives of U.S.-based energy companies operating in Brazil.

The delegation’s focus on energy issues was closely tied to a political agenda back home, as the House prepares for action on the American Energy and Infrastructure Jobs Act, a Republican initiative to remove barriers on U.S. offshore energy production while providing revenue for infrastructure projects, among other measures. In an op-ed for The Hill published after the delegation trip, Chairman Hastings called for the United States to adopt a “Brazilian approach to energy policy” that aims for energy independence. While praising Brazil as a model for development of offshore energy resources, he lamented that U.S. companies are investing abroad because, in his view, they are prohibited from expanding domestic production. 

The energy discussions were also preceded by the expiration of U.S. tax credits and tariffs that had protected corn-based ethanol production and, for nearly three decades, stemmed imports of Brazilian sugarcane-based ethanol. The end of this legislation removes a source of friction in U.S.-Brazil relations at a time when bilateral trade continues to grow. With total goods traded between the two countries reaching $59 billion in 2010, the United States is Brazil’s second largest trading partner behind China, and Brazil is the United States’ tenth largest trading partner.

In Colombia: U.S.-Colombian Trade Ties

As the second congressional delegation to visit Colombia since the 2011 passage of the free-trade agreement (FTA), the group of pro-trade legislators assessed implementation of the new pact, which they touted as a vital tool for U.S. job creation. They also discussed security issues and Colombia’s progress in tackling drug trafficking during a meeting with President Juan Manuel Santos in Bogotá. At a January 12 dinner in Cartagena, Panamanian President Ricardo Martinelli joined the delegation members and President Santos for a discussion on implementation of both the Panama and Colombia FTAs.

Although no date has been set for implementation of the FTAs, Boehner said that he was impressed with the steps Colombia has taken. Colombia’s lead negotiator on the FTA, Hernando José Gómez, has described these steps as adjustments to the country’s regulatory frameworks and customs procedures, as well as coordination of sanitary requirements on agricultural products. Meanwhile, the Office of the U.S. Trade Representative continues to review material from both Colombia and Panama—a task viewed as urgent by the U.S. business community, which had strongly advocated for the FTA’s benefits to export growth.

In Mexico: Economic Integration and Security Cooperation

During the stop in Mexico City on January 13, the meeting with President Felipe Calderón revolved around key issues in the bilateral relationship, from economic growth to security challenges. Calderón’s statement cited his message of continuing to deepen bilateral cooperation on the basis of “shared responsibility.” The delegation members heralded Mexico’s importance as the second largest export market for U.S. goods and third largest trade partner overall. U.S. sales to Mexico are larger than all U.S. exports to the BRIC countries (Brazil, Russia, India, and China) combined, and many goods rely on joint supply chains with the NAFTA production platform.

Upon completion of the three-country mission, the speaker’s office noted the irony of the trip’s timing; the congressional delegation coincided with the Latin American tour of Iranian President Mahmoud Ahmadinejad, who visited Cuba, Ecuador, Nicaragua, and Venezuela. Iranian influence in Latin America is likely to be among the major hemispheric issues to draw congressional attention in 2012.