High hopes for Obama's Latin America swing

Trade opportunities and strengthened ties top the agenda as President Obama flies to Brazil, Chile, and El Salvador over the next five days.

The hosts of President Obama's first tour of Latin America may appear to share little. Yet look more closely at Brazil, Chile, and El Salvador and you find three nations with intriguing business opportunities and respected presidents who can serve as interlocutors for the United States.

And perhaps most symbolically, in a region where erratic and authoritarian leaders are still common, all three nations have eschewed political extremism and adopted a diet of fiscal conservatism and social progressiveness.

"All have institutions in place that function and he [Mr. Obama] will endorse that mixture of social policy and fiscal probity," says Riordan Roett, director of the Latin American studies program at Johns Hopkins University. Unsurprisingly, Obama is not stopping by any members of Hugo Chávez's eight-nation Bolivarian Alliance for the Americas.

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Brazil's economy is powerful magnet

Obama previously visited the Caribbean in 2009 for the Summit of the Americas in Trinidad and Tobago, but this is his first regional tour. Although the White House has revealed scant details of the trip with his family, scheduled for March 19-23, the main focus will undoubtedly be Brazil, which is becoming known for more than just sun, samba, and soccer. One of the most buoyant nations outside Asia, Brazil grew its economy by 7.5 percent last year to become the world's seventh-biggest.

That growth is a powerful magnet. China may have surpassed the US as Brazil's biggest trading partner in 2009, but Brazil's expertise in agriculture, deep-sea oil exploration, and clean fuels provides keen incentives for the US to ink deals.

Smaller US businesses – such as franchises – are already coming south to grab a piece of the action, while larger US firms could get involved in building or funding the infrastructure needed for the 2014 World Cup and 2016 Olympics. And with Brazil looking to purchase 36 new fighter jets, Obama may try to talk up US maker Boeing.

"With Brazil, which has a substantial industrial base and a large domestic market, the United States could propose collaboration in the aeronautical, nuclear, and energy [ethanol] fields," Sergio Bitar, a former Chilean minister and now visiting senior fellow at the Inter-American Dialogue, said in a report about Obama's trip.

Shoring up political ties

Key to landing any deals will be shoring up political ties. US-Brazilian relations have been strained because of former President Luiz Inácio Lula da Silva's proximity to pariah leaders in Cuba, Venezuela, and Iran. President Dilma Rousseff has distanced herself from her political patron since taking office Jan. 1, a shift Obama may encourage, considering Brazil's clout as a developing world leader, perhaps especially in taking on China, whose overvalued currency is hurting Brazil and the US.

"President Obama's visit will be incredibly important to our efforts to establishing a strong working relationship with President Rousseff and her government," says Arturo Valenzuela, the US assistant secretary of State for Western Hemisphere affairs.

Obama is expected to continue shopping for deals in Chile, which in 2003 became the first South American country to sign a free trade agreement with the US. "The country is facing a major dilemma regarding its energy future," says Sébastien Dubé, a political scientist at Santiago's Diego Portales University. "Whatever decision the government takes regarding the energy sources, it is going to exploit could represent a major opportunity for US firms."

Neglected backyard?

While El Salvador appears to provide fewer prospects for trade deals, Obama's visit is seen as tacit recognition that El Salvador has gone from civil war in the 1980s to a vibrant democracy today that even sent troops to Iraq. Obama may use this stop to highlight new programs that seek to curtail Mexico's widening drug war and channel more remittances – Latin American workers send home more than $60 billion each year – into long-term saving and investment.

Whatever the outcome, the fact remains that it took two years for Obama to visit his own backyard – evidence to some of how low the region ranks on his priority list.

"The thing about Latin America is that it's very far away from the global hot spots and there is no really crucial issue that strongly affects the US," says Oliver Stuenkel, a visiting professor in international relations at the University of São Paulo in Brazil. "There is not much to worry about compared to all the other problems the US has."

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