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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.

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"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.

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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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