Likely top stories this week: Argentine opposition gains influence in midterms; Brazil and Germany lead a UN anti-spying initiative; lobbyists push for U.S. immigration reform; Paraguay to represent Mercosur in negotiations with EU; hostage Kevin Scott Sutay is released by the FARC.
Argentines Vote in Midterm Elections: With 72 percent of the votes counted in Argentina's Sunday midterm elections, the governing party of Argentine President Cristina Fernández de Kirchner retains a narrow majority in Congress, but Fernández de Kirchner’s chance of running for a third presidential term appears to be gone. In the face of rising consumer prices and a weakening currency, the opposition has won a key House of Deputies race in Buenos Aires province, with a convincing victory by opposition leader Sergio Massa, the former mayor of Tigre. Massa is seen as a potential presidential contender in 2015. Sunday’s elections also marked the first time that 16 and 17 year-old Argentines were allowed to vote.
21 Countries On Board for UN Anti-Spying Resolution: Twenty-one countries, led by Brazil and Germany, have agreed to meet for talks to draft a UN resolution that would condemn and monitor electronic surveillance. Brazil and Germany proposed the resolution last week after leaked reports that the U.S. National Security Agency (NSA) was spying on heads of state, including Brazilian President Dilma Rousseff and German Chancellor Angela Merkel. According to the Wall Street Journal, the White House ordered an end to the eavesdropping on foreign leaders this summer after a wiretapping program targeting about 35 leaders was disclosed to the White House. The NSA said Sunday that its director never notified Obama about the program. On Monday, El Mundo reported that the NSA monitored 60 million Spanish phone calls in one month.
Immigration Lobbying Intensifies in Washington DC: A major lobbying effort is expected to intensify in Washington DC this week, targeting Republican members of Congress to take action on immigration reform. Approximately 600 business, religious and agricultural leaders—most of them conservative—are expected to put added pressure on 80 Republicans from the House of Representatives to pass one of four immigration reform measures approved by the House Judiciary Committee. The Senate passed a comprehensive immigration reform bill in June.
Paraguay to Represent Mercosur in Brussels: Paraguay appears to have made progress in its quest to rejoin Mercosur after a meeting between Paraguayan President Horacio Cartes and Uruguayan President José Mujica on Friday in Montevideo. Upon returning to Asunción this weekend, Cartes said that Paraguay was prepared to represent Mercosur in negotiations with the European Union in December, though the country has not yet officially rejoined the trade bloc after being suspended in June 2012 following the controversial impeachment of former Paraguayan President Fernando Lugo.
FARC Releases U.S. Citizen: The Fuerzas Armadas Revolucionarias de Colombia (Revolutionary Armed Forces of Colombia—FARC) released former U.S. soldier Kevin Scott Sutay on Sunday after he was kidnapped by the rebels in late June. Scott appeared to be in good health after he was released to the International Committee of the Red Cross and representatives from Colombia, Cuba and Norway.
Four of Argentina’s main farm associations announced on Tuesday a five-day commercial strike that will begin this weekend to protest the Argentine government’s market regulations. Argentine farmers, one of the largest global providers of food, will stop selling livestock and grain from Saturday, June 15, through Wednesday, June 19.
The strike is motivated by rising production costs, export restrictions, high inflation, and high export taxes—up to 35 percent in the case of soybeans—and aims to get the attention of President Cristina Fernández de Kirchner just months before the midterm elections. Currently, the Argentine government restricts the export of wheat, corn and meat to ensure a low domestic price.
The relationship between the Argentine government and agricultural workers has been strained for years, beginning with a four-month strike in 2008 that protested Fernández de Kirchner’s attempt to raise taxes on corn and soybeans. The strikes caused food shortages throughout Argentina and eventually halted the planned tax increase after the public showed broad support for the farmers.
Since exporting firms have had advance notice of the strike and will have several days to acquire the goods they need, the strike is not expected to affect commercial exports. Next Thursday and Friday are public holidays, so the strike will only affect the market for three days next week. According to a source from the export sector, “the effect on exports won’t be large, they’ll be relative. [The strike] is more a political move than anything else.”
Subway workers in Buenos Aires on Monday temporarily ended a strike that had paralyzed the capital and left 1 million commuters stranded per day for the past 10 days. The strike was called off last night after the Subway and Premetro Workers’ Union Association (Asociación Gremial de Trabajadores del Subte y el Premetro—AGTSyP) and Metrovías, the private company that operates the Uquiza Line commuter rail in Buenos Aires, reached an agreement over workers’ salary increases.
The strike, which was the longest in the subway’s 100-year history, began on August 3, when 2,500 subway workers, represented by the AGTSyP, demanded a 28-percent salary increase. Both parties agreed to a 23-percent increase, but union leaders maintain that it’s a temporary solution. “The conflict continues, but we’ve decided to make a gesture towards commuters and workers,” said Roberto Pianelli, secretary general of the AGTSyP in a press conference on Monday.
Some among the Argentine media are framing the strike as a stand-off between the administration of President Cristina Fernández de Kirchner and Buenos Aires Mayor Mauricio Macri, an opposition politician who is expected to run for president in 2015.
The Argentine Senate approved a bill early Thursday morning that would nationalize Yacimientos Petrolíferos Fiscales (YPF), the country’s biggest oil and gas producer. Sixty-three out of a total of 72 senators voted in favor of the expropriation—more than the majority required to pass the bill—versus three against and four abstentions. President Cristina Fernández de Kirchner’s coalition party Frente para la Victoria (Front for Victory—FPV) has strong influence over both houses and the bill is widely expected to also pass the Chamber of Deputies next week.
The senate vote comes a week following Fernández announcement that the government intended to seize a 51-percent stake in YPF from its Spanish parent company Repsol, which currently ownes 57.4 percent of the company. Fernández blamed energy companies like Repsol for their lack of adequate investment in the energy sector and for Argentina’s energy trade deficit, which reached almost $3 billion in 2011. The government contends that YPF takeover will help solve Argentina’s short-term energy needs.
Shale gas may in the future offer new solutions to Argentina’s energy challenges, as the country is believed to have the world’s third-largest shale-gas reserves after China and the United States. But in a recent article “Argentina’s Shale Gas Revolution,” published in the Spring 2012 issue of Americas Quarterly, Francisco Resnicoff and Gabi Huesca warn that the Kirchner Administration does not have the financial means to exploit these resources and will likely have trouble attracting the level of foreign investment required to exploit its shale-gas reserves.