By IPS Correspondents
SANTIAGO, Jan 25 2006 (IPS)

Strengthening Chile’s ties with Latin America without harming its privileged relationship with the United States appears to be the main foreign policy challenge for the future government of Michelle Bachelet. However, analysts disagree as to how the president-elect will deal with the test.

Chile has an ongoing dispute with Bolivia, which wants to recover its outlet to the Pacific Ocean. This South American country also needs to straighten out both political and economic relations with its other two neighbours, Argentina and Peru.

As well as having signed a free trade agreement with the United States, Chile is the oldest associate member of the Southern Common Market (Mercosur), made up of Argentina, Brazil, Paraguay and Uruguay as full members. Venezuela is on the way to becoming a full member, and Bolivia hopes to do the same.

The first positive sign in the century-old border conflict between Santiago and La Paz was the presence of outgoing Chilean President Ricardo Lagos, and his son Ricardo Lagos Weber as Bachelet’s representative, at Evo Morales’s inauguration Sunday as Bolivia’s first-ever indigenous president.

Although Chile and Bolivia broke off diplomatic relations in 1978, Lagos and Morales met and talked on Sunday in a dialogue that will no doubt become more specific when the Bolivian president travels to Chile as a guest at the Mar. 11 handover ceremony for Bachelet.

Teodoro Ribera, an analyst at the Instituto Libertad (Liberty Institute), linked to the rightwing National Renewal Party, and rector of the private Autonomous University of the South, told IPS that “we still have structural problems with Peru and Bolivia, which originated in the 18th century” and later triggered the War of the Pacific (1879-1883) in which Chile defeated those two countries.

To prevent a “permanent relapse (into these conflicts), the main challenge is to reaffirm Chile’s rights in our relations with Peru and Bolivia and, at the same time, to create better conditions for trust, so that in future we can achieve a shared agenda,” he recommended.

Meanwhile, “Chile must recognise that it is linked to Argentina by common interests, mainly due to the Peace and Friendship Treaty (of May 2, 1985), mediated by Pope John Paul II,” Ribera added.

The analyst considered the rationing of Argentine supplies of natural gas to Chile since 2004 to be purely a circumstantial problem, due to the fall in production because of lack of investment in the energy sector after Argentina’s late 2001 financial collapse.

As for economic ties, Ribera said Mercosur is not the right option for Chile, which “has taken a much more open approach to international integration, both politically and economically, based on a free-market strategy and a positive view of modernity and globalisation.”

Chile has been an associate member of Mercosur since 1996, five years after the free trade bloc was founded in Asunción, Paraguay. But it has not sought full member status because successive governments have decided not to modify the country’s tariff structure to bring it into line with that of the bloc.

For his part, journalist and international analyst Raúl Sorh told IPS that “a real understanding is possible between Bachelet, the first woman to be elected (president) on her own merit in South America, and Evo Morales, who is the first indigenous person to be elected (president) in the region.”

In addition, he ruled out serious ongoing problems between Santiago and Buenos Aires as a result of the reduction in natural gas supplies. “Argentina has a natural gas shortfall which has had an impact on Chile, but our country is not being intentionally victimised out of ill-will,” he commented.

In Sorh’s opinion, the unknown quantity among Chile’s neighbours is Peru, where elections will be held in April, because “one of the candidates with the highest poll ratings, (nationalist retired army officer) Ollanta Humala, belongs to a movement which has taken hostile stances towards Chile.”

Sohr also remarked that Lagos had taken office “with great enthusiasm for integration in South America and Mercosur,” but that deep economic crises in Brazil and Argentina had a negative impact on the bloc and slowed down the process of reducing the common external tariff.

The “economic rhythms of Chile and other countries in the region did not coincide, because Chile’s open economy is virtually tariff-free, and this made it very difficult to reach an agreement,” he explained.

On the political front, Ribera commented that although the centre-left Coalition for Democracy will continue to govern Chile under Bachelet, the coalition “is light-years away from the position of the Latin American left which lives off the romanticism of the past.”

He suggested that “our country should achieve a high level of economic growth through more international integration,” which would generate greater public revenues “to reduce social inequality.” Chile is among the countries with the most unequal distribution of income in Latin America, in spite of boasting one of the region’s highest economic growth rates.

Ribera said “the big problem” facing Bachelet’s government would be the tendency in Latin America to support Morales, which would be expressed as “pressure for the country to be more ‘agreeable’ towards Bolivia’s claim (for an outlet to the sea), and to make us sacrifice our geopolitical and territorial interests.”

Given this context, he recommended “not just maintaining but actually strengthening our relations with the United States and Europe.”

“Chile must commit itself even more fully to trade liberalisation, to the process of economic integration, and to political and legal stability,” he said.

Sorh, on the other hand, felt that the most important thing was to “improve our relations with Brazil, which are good, but could be even better.” Brazil, the region’s giant, has reserves about the U.S.-promoted Free Trade Area of the Americas (FTAA), and has been in favour of multilateral negotiations including the greatest possible number of countries. Thus, it “was not pleased by Chile’s unilateral signing of a free trade treaty with the United States (in June, 2003),” he added.

Sohr is delighted with the leftwing leanings of many of the current governments in Latin America. “People have every right to make the choices that they find best for them, and if they decide that the free-market model has not fulfilled its promises, and they want a stronger state and better income redistribution in their countries, good for them!” he remarked.

Neither are there reasons for Bachelet to “cool down” relations with Washington, because “in economic terms, Chile has benefited tremendously from its close relationship with the United States, and I don’t see how it could damage our relations with other countries in Latin America,” the analyst said.

Jorge Insunza, a member of the Chilean Communist Party’s international committee, believes that the Lagos administration’s problems with the rest of Latin America have been “a result of his extreme subordination to the policies of the U.S. government (of George W. Bush) in encouraging, or not, processes of integration in the region.”

“There were absurd pretensions about being a first world country, and despising, in fact, relations with the nations of Latin America,” and this was shown by the signing of a free trade deal with the United States, “in conditions that were detrimental to the interests of the people of Chile, and to those of the people of Latin America in general,” Insunza told IPS.

Lagos’s presence at the inaugural ceremony in Bolivia was “an encouraging sign, if it means that the next government will take its Latin American calling more seriously and express it more strongly in Chilean foreign policy,” he remarked.

The communist leader hoped that the Bachelet administration “will be more determined to promote Latin American integration in general, and to strengthen Mercosur.”

However, he noted that within Mercosur “there are aspirations to supreme power that are in conflict with the integration of countries, which should participate on an equal footing and not try to win advantages at the expense of others. Mercosur should allow harmonious development of each one of the countries.”

“The victories of Evo Morales in Bolivia, (socialist President) Tabaré Vázquez in Uruguay, and previously of (Néstor) Kirchner in Argentina and (Luiz Inácio) Lula (da Silva) in Brazil, are a good sign for the strengthening of Latin American integration, which should be the first priority,” Insunza emphasised, while calling on Bachelet to review relations with Washington.

“Bush is the plague of the beginning of this century, and everything that can contribute to isolating him and preventing his brutal policies of using pressure and the armed forces to impose his will must be done. But it will require exercising a much stronger degree of popular sovereignty, and of the national sovereignty of every one of our countries,” Insunza added.

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