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TradeTalk: Jet setter Gutierrez, ALBA Fashion

This week we look at Brazil-US relations, US-Colombia FTA, jet setter Carlos Gutierrez, Ecuador oil and ALBA fashion code.


More Delays

The US-Colombia FTA may be further delayed thanks to the latest parapolitica scandal in Colombia, argues Credit Suisse analyst Carola Sandy in a commentary today. President Alvaro Uribe this week claimed that an investigator for Colombia's Supreme Court had tried to get Jose Moncada, a jailed paramilitary leader, to tie Uribe to a 2003 plot ot kill another paramilitary leader. The Supreme Court, in turn, denounced Uribe's questioning of the investigator.  "Uribe’s strong popularity among Colombian voters will not be hurt by these new allegations," Sandy says. "However, this new scandal will probably hurt the image of the Uribe government abroad (for example, this may make it more difficult to get support in the US Congress for the approval of a Colombia-US free trade agreement)."

Frequent, Frequent Traveler
We don't know how much time US Commerce Secretary Carlos Gutierrez spends in his Washington, D.C. office, but it can't be much. The Cuban-born former CEO of Kellogg Company is apparently on the road most of the time these days. After starting this week by spending a little over a day in Uruguay, he travelled on to Brazil for a three-day trip. Now he is scheduled to lead a U.S. delegation to Colombia from October 12 to 14. That comes after Gutierrez led a four-day congressional trip to Colombia, Panama and Peru last month.

Brazil & the US: Strategic Ties... and Disagreements
While the Bush Administration criticized Brazil at the World Trade Organization on Tuesday for refusing to open up their manufacturing markets, the US House of Representatives passed a resolution recognizing the expanding strategic relationship between the United States and Brazil. The resolution, which passed unanimously, was authored by Representative
Eliot L. Engel (D-NY) who is the chairman of the House Foreign Affairs Subcommittee on the Western Hemisphere. The U.S. criticism against Brazil came after the South American country joined Argentina, Venezuela and other developing countries in asking the Geneva-based WTO to grant new exceptions for  manufacturing products. "This is a gigantic step backward," Sean Spicer, a spokesman for U.S. Trade Representative's Office, told AP.  "Are they trying to find a successful outcome or are they trying to light a fuse to blow up this round?" Brazil has been a vocal critic of US farm subsidies. However, last month the Bush Administration said it would accept a WTO proposal to limit subsidies to $16.4 billion. The U.S. congressional resolution also recognizes the importance of the March 2007 U.S.-Brazil memorandum of understanding to promote greater cooperation on ethanol and biofuels in the Western Hemisphere. "Many argue that for too long, the U.S. has focused its agenda in the hemisphere on ‘trade and drugs’ at the exclusion of other elements," Engel said in a statement Tuesday. "The deepening of our energy cooperation with our friends in the hemisphere – particularly Brazil – is helping us to develop a positive agenda that I hope will continue to grow in the coming years." Engel will head a bipartisan congressional delegation to Brazil next month - on November 25 - that will focus on bilateral energy cooperation, the Doha round of global trade talks, the environment and Brazil’s broader role in hemispheric affairs.

Ecuador's Oil Climate
Barely a few days after Ecuador's president Rafael Correa - a wannabe Hugo Chavez who praises Fidel Castro - announced a hike in government royalties for oil from 50 to 99 percent, Chevron - the second-largest US oil company - filed a motion in a superior Ecuador court to dismiss a $6 billion lawsuit against it from a group claiming the US company had contaminated parts of the Amazon (See Chevron: Ecuador Tests Flawed). Although the lawsuit goes back to 1993 (originally in the United States before being thrown out and moving to Ecuador), Chevron officials are increasingly concerned about the bias of Correa in the case. He has publicly blamed Chevron for contamination, as the plaintiffs claim, despite the lack of any evidence by independent Ecuadorian and U.S. investigators. Meanwhile, Ecuador's oil industry is decaying further. Ecuador's oil exports in August fell despite prices being higher, the Central Bank reports.

ALBA Dress Code
And speaking of Rafael Correa. Although he hasn't yet formally joined ALBA - the political-economic group aimed at being a radical alternative to U.S. free trade pacts in Latin America - his government has clearly boosted ties with the group, especially ALBA's founder, Hugo Chavez. And Correa is also preparing for what appears to be one of the key requirements to join ALBA - an untraditional dresscode. Leaders of ALBA members Bolivia, Cuba, Nicaragua and Venezuela have all shown a predisposition for unique attire replacing the traditional suit and tie favored by Latin America's political and business class.  Admittedly, the ALBA leaders don't have a unified dress code yet. Chavez prefers red shirts, Cuba's ailing leader Fidel Castro (and his brother Raul) prefer green uniforms, Nicaragua's president Daniel Ortega prefers collarless white shirts and Bolivia's president Evo Morales prefers colorful, locally-made collarless shirts and vests. But Correa, who long was known for his suit and ties, is increasingly wearing a combination of Ortega and Morales - collarless white with some colorful decorations. 


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