International Relations of the Americas
(Spring 2002)

INTRODUCTION
ICONS simulations cast students as high-level negotiators on issues of international importance. Working together on "country-teams," students model real-world interactions between states. The simulations are conducted on two levels: deliberations within country-teams and negotiations between country-teams. Within a team, students perform research on their assigned country and on the specific negotiation issues highlighted in this scenario. Working as a group, the country-team formulates positions on these issues in preparation for multilateral negotiations. It then communicates its policies to the other country-teams over an Internet-based communications system. In addition, country-teams "meet" during real-time, on-line conferences to discuss proposals. While the focus of the simulation is multilateral, country-teams should keep in mind that bilateral dialogues are also a central component to the negotiations.

To facilitate the research process, ICONS has provided links to a number of sites that house documents, treaties, and other information that is relevant to this case study. Students can access these sites by clicking on the Research Center link at the left.

NEGOTIATION FRAMEWORK
Diplomacy represents an alternative to the use of force in the settlement of potential or actual disputes between nations. International negotiation is a phased process, predicated on expectations of reciprocity and the search for mutually satisfactory outcomes. The parties to a negotiation must prepare their positions carefully, looking for a balance between national strategic considerations and international realities. In this negotiation, country-teams will engage in the following stages:

Phase 1: Pre-Negotiation. Each country-team will prepare an internal policy paper to help guide it in the negotiations. The paper should include background on the issues, country interests, negotiation goals, and negotiation strategies.

Phase 2: Opening Positions. On the first day of negotiations, each country-team will summarize and present its positions in on-line messages for the benefit of the other parties.

Phase 3: Dialogue. The talks will proceed during Week 1 with an exchange of comments on the individual positions/proposals.

Phase 4: Negotiations. During Week 2, country-teams will participate in on-line, multilateral conferences, during which they will work to formulate common positions. During Week 3, second rounds of the conferences will be scheduled.

NEGOTIATION PARTIES

Argentina, Brazil, Colombia, Cuba, Mexico, and the United States

ISSUE SYNOPSES
As the region of the Americas embarks on the 21st century, contradictory impulses abound. On the economic front, the exclusivity of the North America Free Trade Agreement (NAFTA) stands in stark contrast to the proclamations that a Free Trade Area of the Americas (FTAA) is truly the goal for the new era. All eyes are on United States President George W. Bush, who strongly supports such a pan-American trade vision. The recent passage of Trade Promotion Authority (fast-track) legislation by the U.S. House increases the likelihood of a deal being made pending approval of the legislation by the U.S. Senate. In the area of democracy and human rights, long an area of great concern in South and Central America, the past few years have represented a mixed bag of limited progress. Former Chilean dictator Augusto Pinochet was sentenced to seventeen months in Britain for crimes committed during his reign. However, he was ultimately released for health reasons, and currently is a free man. The case has been hailed by human rights advocates around the world as providing a crucial precedent in international law, as charges were brought against him in the international justice system. Meanwhile in Mexico, the Institutional Revolutionary Party, dominant for 70 years, lost power to opposition leader Vicente Fox bringing about a smooth transition of power. And in Peru, Alberto Fujimori claimed victory in a controversial presidential election, only to be driven from office months later by scandals involving his intelligence adviser. These signs that democracy is alive and well, however, stand in stark contrast to the dangerous state of affairs in places such as Colombia, where drug cartels, paramilitaries and guerilla groups all vie for power, making kidnappings, extortion and blackmail part of everyday life. Indeed, in most of Latin America, weak central states remain the norm rather than the exception. Partial democratization and a serious lack of political space for opposition groups (e.g. labor, ethno-cultural) contribute to gross economic and social inequalities, endemic violence in many areas, as well as forced migration flows.

Three specific issues will be featured on the agenda of the Americas negotiations for Spring 2002: the future of economic integration in the region; narco-terrorism, drug trafficking and the future of the "war on drugs;" and issues of environmental degradation. What is unclear at this juncture is who will lead in the establishment of a regional agenda following the most recent Summit of the Americas, held in Quebec City, Canada in 2001? Overall, it has been extremely difficult to recapture the momentum of the 1994 Miami Summit, where the U.S. vowed that there would be "real progress by the end of the century" toward a Free Trade Area of the Americas (FTAA) and broader regional coalescence on a range of issues.

Achievement of a single Americas region is dependent on the bridging of the gap between "north" and "south," an often bitter divide that characterizes the political history of the region. Indeed, suspicions that the North Americans have treated them as less than equal partners permeate South American reactions to many of the initiatives in the economic, environmental and narco-trafficking policy areas. The desire for a southern path has lent momentum, over time to the growth of sub-regional trade groups, including Mercosur, the Andean Pact, and the Group of Three (Mexico, Colombia, Venezuela). Many in Central and South America question their northern neighbors' commitments to concerted international action on climate and energy issues. There are often complaints that the notion of "sustainable development" is a northern construct that does not fit the reality of contemporary South America. And in the narco-diplomacy realm, debate rages between those who believe that the emphasis must be on the "supply" states of the south and those who argue that it is the "demand" states of the north that must change to counter the flow of illegal narcotics trafficking.

This simulation brings together many of the key players in the Americas for discussions on these important issues. They must address whether the momentum of the Miami summit can be recaptured after the tumultuous events at the Quebec meeting. What is clear is that the countries of the Americas are at a critical juncture. They must decide whether progress on key issues will be sought on a hemispheric basis, thereby cementing the hemisphere as a key bloc in the international system; or whether they will pursue bilateral agreements and sub-regional integration as an alternative to this vision.

Economic Integration in the Americas
When the 34 democratically elected heads of state in the Western Hemisphere came together in Miami in 1994,1 they signed off on a document proclaiming their common intent to have a free trade area spanning the Americas by 2005. This widening of the North American Free Trade Agreement (NAFTA) would be called the Free Trade Area of the Americas (FTAA). A commitment to produce results was evident in Miami by the creation of a timetable of high- level follow-up meetings to map out the creation of the FTAA. To demonstrate their resolve on the widening of the North American pact, Canada, Mexico and the U.S. announced at Miami that they would begin a process to bring Chile into the agreement by mid-1996. Yet, when the next Summit of the Americas in Santiago, Chile wrapped up in April 1998, no progress had yet been made on this front. Now it is Canada and Chile, proceeding on a bilateral basis, that have taken the only true steps forward.

Not surprisingly, many countries in the South have looked elsewhere to expand trade. Chile and Bolivia became associate members of Mercosur, the trading bloc and customs union that includes Brazil, Argentina, Paraguay, and Uruguay. Brazil, for its part, has said it is in no hurry to join the FTAA, and has proposed the idea of a SAFTA, or South American Free Trade Area. In such a pact, Brazil would be the Southern Hemispheric counterweight to the United States in building a free trade area. Such a move, which Brazilian President Cardoso has indicated should come by 2002, would demonstrate the lack of confidence many have in the ability of the U.S. to lead economic integration. But, it might also further fuel the rivalry between Brazil and other southern states that would like to assume the primary leadership role. Many of the states in the Americas prefer to see a hemispheric trade plan be put back on track. There had been high hopes that NAFTA, already the largest free trade area in the world, would become a model for "developed" and "developing" state economic integration, but debate over the economic, social, and environmental effects of NAFTA on Mexico has relegated this effort to back-seat status. The recent passage of fast-track legislation by the U.S. House (pending Senate approval) may provide the leverage and momentum for the Bush administration to push through a deal.2

Now NAFTA advocates can only look on as the countries of Mercosur expand their economic base. Mercosur – a Spanish contraction of the Common Market of the South – includes more than 240 million people, has a total annual output of $1 trillion, and is the world's fourth- largest unified market. Mercosur is deep in negotiations with the European Union and with neighboring groups in Latin America. In fact, Mercosur and the Andean Group (a common market union involving Venezuela, Colombia, Peru, Ecuador, and Bolivia) began negotiations in September 1996 on the possibility of a merger, and though a full agreement has not yet been reached, the markets maintain bilateral agreements. In Central America and the Caribbean a similar process is under way, with countries in that area seeking bilateral trade agreements with Canada and Mexico, as well as with Mercosur.

Critics of economic integration have also raised some important points. Recent events in Argentina, for example, demonstrate once again that high levels of debt and structural adjustment policies have created very fragile economies in Latin America. The utter collapse of Argentina's economy, once hailed as a model of proper free market development strategies by economists and bankers, has encouraged caution within the region about the market reforms that the FTAA would require. In addition, the experience of Mexico in the NAFTA agreement has also been used to illustrate the broader social effects that free trade pacts can have on developing economies. While Mexico has improved its balance of exports, wages have remained stagnant, the migration of workers to the free trade zones (maquiladoras) has created significant social problems, and environmental quality in and around the maquiladoras has plummeted. Without adequate protections for workers and the environment, these critics contend that the effects of the FTAA will prove to be much more negative than positive.

In sum, the NAFTA states will have to take concerted action in the near future if they hope to stay in the integration race in the Americas. Many nations in the region consider total eradication of the Helms-Burton Act to be of paramount importance before FTAA talks can resume. This controversial legislation extends to third countries the U.S. economic embargo on Cuba by allowing American citizens to bring suits in U.S. courts against foreign companies that have dealt in properties seized in Fidel Castro's 1959 revolution. Canada has shown itself to be clearly aligned with the southern nations on this issue and has urged the United States to move further in the direction of a political "thaw" with Havana. Again, all eyes are on U.S. President Bush, with serious doubts about his intentions to build on the Clinton-Castro handshake of 2000. A recent waiver allowing food sales to Cuba by U.S. companies has been hailed as a first step in this direction, although detractors criticize it as too narrow, and as benefiting large agricultural corporations rather than Cuba or small farmers.

The most recent economic slowdown in Latin America, brought about by the global financial ramifications of the so-called "Asian Flu" of 1998-99, raised a number of important questions. First, with Latin America so clearly in a different economic orbit from its neighbors to the north, is a regional integration strategy truly going to benefit all of the nations of the Americas? Or, is this "open regionalism" destined to be another failed panacea, along with state intervention, import substitution, debt rescheduling, and so on. A related point has to do with the ability of the United States to work with its neighbors in Central, South America and the Caribbean as partners. Past hegemonic behavior, persistent "fortress America" rhetoric, and abiding dislike of World Bank and IMF economic mandates have produced many doubters. Indeed, the political momemtum in recent Latin American elections seems to be with the Left, casting doubt on the existence of a unified political/economic vision for the Americas.

Issues for Negotiation

1. Is the best approach for the states of the Americas to move towards the hemispheric integration vision of the free trade area of the Americas(FTAA), or should they pursue instead bilateral, sub-regional or global paths?

2. How will the states of the Americas respond to the challenges of globalization? Is the commitment to a free market economic model strong in the South or is it faltering amidst the turmoil in Argentina and electoral gains by the Left?

The Environment
There was a time, several decades ago, when problems of environmental quality were widely regarded as being unique to the heavily industrialized regions of Europe and North America. Industrial development was associated with air and water pollution, over-reliance on chemicals, overcrowding, and so on. Developing countries, on the other hand, were thought to have fewer environmental problems because their low reliance on technology was more environmentally benign, and because they had not yet committed themselves to a materialistic style of life, with the accompanying negative trade-offs for the environment.

In recent years, however, it has become clear that massive environmental degradation has in fact occurred in the developing world. Rural areas have seen large-scale soil erosion and water quality deterioration, deforestation, and declining soil productivity. Urban areas have experienced seriously diminished air and water quality. Moreover, this environmental deterioration in developing countries is not just a matter of aesthetics or quality of life, but a serious issue involving the diminishment of economic productivity and the acceleration of social dislocation. Out of this realization has grown the idea of "sustainability" as a guide to decisions affecting the natural resource system.

Sustainability is fundamentally a matter of renewable resources. When non-renewable resources are used, they automatically become unavailable to future generations. Sustainable development refers to policies of economic growth that do not reduce the long-run productivity of the natural resource assets on which a country's income and development depend. The strategic imperatives for sustainable development include:

• Growth sufficient to meet human needs and aspirations.
• Policies to increase equity within nations and between developed and developing countries.
• Policies to reduce high rates of population growth.
• Policies to conserve and enhance the resource base.
• Policies to ensure a rapid reduction in the energy and resource content of growth.
• Institutional change to integrate environmental issues in economic decision-making.

In June 1992, nations of the world gathered in Rio de Janeiro for the "United Nations Conference on Environment and Development," also known as the Earth Summit. A major outcome of the Rio Conference was Agenda 21, an action plan that elaborates strategies and measures to halt and reverse the effects of environmental degradation and to promote environmentally sound and sustainable development in all countries, as well as international conventions on bio-diversity, climate change, and ozone-depleting substances.

After Rio, the Americas again tackled environmental issues in 1994 at the Miami summit. The summit countries agreed to a principle guaranteeing sustainable development and conservation of the environment for future generations. Governments were called on to pursue least-cost energy strategies that use non-conventional renewable energy, e.g., solar, wind, geothermal, and small hydro energy sources. They were also called on to increase funding for bio-diversity research, and to work toward pollution prevention by focusing on the misuse of pesticides and lead contamination. However, how these measures would be funded has been only vaguely addressed at the Summits of the Americas.

A recent report by the World Wide Fund for Nature indicates that the acceleration in environmental degradation shows governments have only been paying lip service to the idea of sustainable development. The report also notes that while increasing population is part of the problem, it is increasing individual consumption that has been the main obstacle. International negotiations on the 1997 Kyoto Climate Protocol proceeded on this principle, that the "richest" countries of the world, where individual consumption rates are the highest, should go first in reducing fossil fuel emissions. For developing countries, economic turmoil has probably presented the main barrier to fulfilling commitments to international environmental treaties, although the difficult economic tradeoffs that sustainable development implies affect public opinion, and hence governmental action, everywhere.

Some of the problems with international cooperation on sustainable development are illustrated in the case of the Commission for Environmental Cooperation, the North American Free Trade Agreement's environmental watchdog organization, which has been essentially impotent since its creation in 1994. NAFTA's member governments have narrowed the Commission's scope to make its agenda more manageable, but the lack of a clear strategy and accompanying powers remains problematic. In addition, this Commission has no real enforcement power, but is rather an advisory panel that looks to the Directorship for action. Furthermore, observers claim the Commission is politicized, and that any larger attempt at environmental cooperation would reflect the same power struggles.

There is increasing evidence of a link between environmental degradation and magnified effects of natural disasters. In Central America, Hurricane Mitch of 1998 nearly destroyed the infrastructures of Nicaragua, Honduras and some of their neighbors. And in January 2001, the disastrous mudslides which accompanied the earthquake in El Salvador were blamed on widespread deforestation practices (required by international lending institutions to repay debt) in the areas surrounding San Salvador. The tradeoff of the environment to provide income versus conservation strategies creates tensions between short-term needs and long-term goals for developing nations in the region.

Issues for Negotiation

1. What are the costs/tradeoffs of so-called sustainable development? What are the roadblocks and can they be lifted? Who should shoulder the burden?

2. What should be the environmental action agenda for FTAA negotiations? What environmental issues should take priority in the debate? How can emergency response systems be improved?

Drug Trafficking in the Americas
The worldwide drug trade has come to symbolize the downside of globalization. Involving a dizzying array of global actors, including governments, multinational banks and professional firms, transnational criminal networks, subversive groups, and urban gangs, the narcotics industry continues to grow in scope and complexity, defying all international efforts to thwart it. In 2000 alone, worldwide activities related to the production and distribution of illegal drugs generated more than $700 billion in profit. The drug industry has become entrenched not only in the global economy, but also in the economies of individual states. Few societies in the world have been untouched by drugs as its global ripple effects draw in producer, processing, transit, laundering, and consumer countries alike. There is also a growing body of evidence linking the narcotics industry to insurgency movements, international terrorist networks, and the illegal arms trade.

The Americas is one of the regions most affected by drug trafficking. The United States is estimated to spend $30 billion annually on cocaine alone, consuming one third of the global cocaine market, with heroin consumption and the use of "designer drugs" on the rise among American youth. While Peru and Bolivia continue to be important growers of coca, Colombia now dominates the cocaine market, accounting for 80% of the world's total production of refined cocaine, having successfully consolidated control over both production and processing in one national territory during the 1990's. Colombia also supplies nearly 20% of the North American heroin market. 60% of all illegal drugs produced in Latin America pass through the Caribbean corridor, with Mexico a crucial staging point for the crossborder delivery of cocaine and heroin into the North American market.

The illegal drug business is a complex economic, social and political dynamic throughout the Americas, with its consequences being most felt by the region's developing states. On the one hand, narcotics stoke the domestic economies in producer and processing countries, providing, in the cases of Colombia, Peru and Bolivia, between 5 and 10% of annual GDP. The drug industry places tremendous pressure on state structures in weak Latin American democracies, constraining state authority and capacity, eroding public institutions, and lowering standards of justice. The corruption that accompanies the drug industry is pervasive, as drug traffickers routinely buy official protection of their activities or bribe their immunity. In recent years a number of high-profile bribery cases have been uncovered at all links in the drug food chain, from elected government officials in Peru and Colombia to DEA officers in the United States. The previous Colombian President Ernesto Samper finished his term in disgrace after having been accused of accepting campaign funds from local drug traffickers. The Robin Hood image that the drug lords briefly enjoyed in poorer countries in the Americas in the 1980's has been shattered by the rampant violence, criminality, human rights abuses, and victimization of the rank and file that inevitably accompany drug cultivation and trafficking.

The newest and most pernicious effect of drug trafficking in the Americas is its link with violent subversive groups and terrorists. The post-Cold War political economy of internal conflicts, both in the Americas and elsewhere, increasingly involves drugs as one of the principal financing sources of nonstate armed actors. That the internal war in Colombia continues to grow in intensity fully a decade after other conflicts in the Americas have been successfully resolved is largely explained by the staggering amounts of income drugs generate for the FARC, the largest and oldest guerrilla group in Colombia. FARC forces have grown 16 times in the last two decades through a policy of controlling vast areas of the country under coca and poppy cultivation and taxing lucrative narcotics production and trafficking. FARC expansion has led to a proportionate growth in paramilitary forces that also depend on drugs for survival. Both groups violently compete for partnerships with narco-mafias and for territorial control of strategic regions where the state has effectively been replaced by warlord politics. Social fragmentation in drug countries is also on the rise, as urban youth adopt an easy money culture, and poor rural families are caught up in the endless cycles of violence and internal displacement within drug territories as they turn to one of the few crops with a guaranteed market so as to be able to eke out a precarious existence. The global drug industry is directly related to the persistence of Colombia's internal conflict, to the weakening of its institutions, and to the most appalling human rights violations in the Americas.

The United States has largely adopted a militarized approach to the drug issue, taking its war against drugs to Colombia through a strategy of combating this problem on the supply side. The U.S. poured $1.1 billion into Colombia during 2000-2001, 80% of which went to military spending related to its campaign to forcibly eradicate coca fields. The U.S. has recently acknowledged that its traditional distinction between an anti-drug strategy and an anti-insurgency strategy is probably meaningless, given that the guerilla organizations are deeply involved in the drug business. This confirms long held suspicions that the U.S. may be getting dragged into a complex insurgency war that could become its next Vietnam, especially in light of U.S. frustrations with the stalled peace talks between the FARC and the Colombian government and the new post-September 11 global context in which the FARC are considered international terrorists. In spite of these concerns, Congress recently approved the $1.5 billion Andean Regional Initiative as a way of continuing its anti-drug military strategy within the entire region.

U.S. drug policy throughout the Americas is not without controversy. Critics point out that the strategy is flawed because it hasn't made a dent in domestic availability of cocaine and heroin. Coca eradication in one area tends to simply shift crops to safer areas either within Colombia or to Peru, and pressures on coca can result in diversification to heroin. Paradoxically, eradication efforts have resulted in an increase in areascultivated with coca. Short-term reductions in supply generate temporary price fluctuations of cocaine on the international market, providing increased monetary incentives to cultivate yet more coca. This is part of the reason that Colombia's 22,000 hectares of coca in 1985 had increased to 134,000 hectares by 2000. The U.S. eradication campaign is also highly criticized by environmentalists who charge that the chemicals used in fumigation have produced devastating environmental and health consequences. They charge that the chemical defoliants destroy not only food crops, but also contaminate soil and ground water, causing widespread human displacement and decreasing the chances that the rural populations will ever be able to successfully switch to legal crops. The U.S. military campaign is also accused of aggravating the internal conflict in Colombia.

Legal efforts to freeze assets and confiscate proceeds from money laundering have also been unsuccessful. Drug networks have become highly efficient at insulating themselves from the law. Their recent decentralization strategies from powerful cartels to small local cells have not only made it more difficult for international justice to pursue them, but also have permitted them to effectively adapt to changing global conditions related to distribution and consumption.

The war on drugs has introduced an ongoing, and seemingly unresolvable, "chicken-egg" debate about whether suppliers from poor countries or consumers in the developing north are the fundamental cause of the global narcotics industry. U.S. spending on the drug effort is inconclusive: alongside heavy investment in a militarized approach to drug eradication and interdiction in Colombia and the Andean nations, $80 of every $100 earmarked for the campaign against drugs is spent domestically on law enforcement, prevention, and treatment. It is increasingly argued that this discussion is largely irrelevant, however, and that by contrast the only solution is to legalize drugs, providing governments the necessary regulatory controls on production and distribution. In some countries such as Colombia a personal dose of marijuana is allowed, and in Bolivia, indigenous people enjoy privileges related to traditional coca products. Surveys show that for American residents drug trafficking is no longer the priority it once was, and drug prohibition policies are tolerated only to the extent they don't impinge on civil liberties.

Many believe that eliminating international drug trafficking altogether is not an attainable goal. Drug consumption appears to be a permanent cultural fixture in the global north, the number of potential drug suppliers is virtually unlimited, and few geographical, organizational, or technological barriers exist to obstruct drug production and trafficking. Still many others in the region feel that the war on drug trafficking can be justified as a moral imperative even if it has proved itself to be a practical failure.

Issues for Negotiation

1. Given the ineffectiveness, and the high costs for countries such as Colombia, of the U.S. war on drugs, what are the alternatives to fight the drug menace in the Americas? Are consumer nations willing to provide economic incentives to encourage producing nations to adopt viable substitute crops as a way of driving out the drug traffickers and achieving sustainable development?

2. Should countries such as the U.S. and Canada, largely on the demand side of the drug issue, focus more of their efforts (and funds) on drug education and prevention programs rather than supply-side programs? Is it time to consider drug legalizations as the best way to fight the drug threat, and indirectly the terrorist threat that drugs finance?

¹Cuba's Fidel Castro was not invited to the Miami Summit.

² "Fast Track" is the authority to negotiate international trade pacts that the U.S. Congress must consider quickly and then either accept or reject, without amending.

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