Buenos Aires Times

Iran eyes opportunity amid another vacuum in Latin America

The Iranian foreign minister’s visit to two South Cone capitals found little echo in the local media.

Saturday 14 April, 2018
President Donald Trump decided to turn his back to Latam.
President Donald Trump decided to turn his back to Latam. Foto:AFP - SAUL LOEB

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Parallels in opposite directions. While Donald Trump turns his back on the Summit of the Americas in Lima, on the pretext that he needs to work out his strategy for Syria and the Middle East, a representative from that selfsame region in the form of Iranian Foreign Minister Mohammad Javad Zarif arrived in Latin America to fill the vacuum left by the US president (at least figuratively).

Mr Zarif and a 50-strong delegation of businessmen and politicians spent one day in Brasilia and the following in Montevideo this week as part of a flash tour which also took in the African countries of Senegal and Namibia. Both in Brazil and Uruguay the Iranian foreign minister was received by the nation’s respective presidents Michel Temer and Tabaré Vazquez, apart from other ministerial colleagues.

The visit to the two Southern Cone capitals found little echo in the local media, however, even though the most repeated explanation for his tour offered by the Iranian minister during his visit was that a “lack of banking relations is one of the major obstacles to the development of mutual ties” with Brazil and Uruguay.

Not too far off the mark. Especially considering that what Iran came to talk about in this South American swing was a Plan B for a fast-approaching key date in its calendar: the May 12 deadline, when the White House will either renew the 2015 nuclear deal approved by Congress or withdraw from it, re-imposing financial and trade sanctions on Teheran.

The latter is the most probable move. The reason? There has been a major turning-point in the Trump administration in the last couple of weeks. The US president has selected two of the most hawkish Republicans for his top foreign policy positions: John Bolton as his new national security advisor and Mike Pompeo as his secretary of state respectively. Both were and are are harsh critics of former US president Barack Obama’s soft-power policies toward Iran.

Returning to Foreign Minister Zarif’s tour, at the Rio Branco Diplomatic School in Brasilia he stressed that in order to develop mutual ties, “the use of local currencies in commercial transactions, in the form of a currency swap and the creation of a joint bank committee with the Bankers Association of the two countries is a good solution.”

Mr Zarif added that Iran was also welcoming “the Brazilian government’s impressive move to supply a US$ 1.2-billion credit line for Iranian and Brazilian companies to implement projects.” Although there were no official statements on this issue on the part of the Temer administration, Mr Zarif’s assessment is in line with what Italian, German, French, Austrian and Belgian banks have been doing lately. That is, working on mechanisms to protect or shield local companies investing in Iran from the risk of US sanctions (current and future – that is why transactions are in euros, avoiding exposure to US investors and with no footprint in the United States).

It was Foreign Minister Zarif’s second tour to Latin America. The first came in August, 2016 when he visited Chile, Nicaragua, Cuba, Ecuador, Bolivia and Venezuela.

Times have changed in the meanwhile. In October, 2017, the Trump administration included Iran’s Islamic Revolutionary Guard Corps on the list of terrorist groups (together with the Islamic State and Hezbollah, they are considered “regional security threats” by the US House of Representatives Subcommitte on the Western Hemisphere). So this Iranian military force has not only been added to the other Middle–East exports of terror to Latin America, but Teheran has been held up by both Mr Trump and Mike Pence as the worst of evils. Even worse than the demonised Kim Jong-un, it seems.

Perhaps, vis-à-vis this new scenario, it is notable that US Vice-President Mike Pence announced this week that he will be back in Latin America almost immediately after the Summit of the Americas in Lima. He will return in May, US officials confirm, and he will head to… guess where? Brazil.

America for the Americans? Certainly not today. But if one considers the foreign affairs mess that Mr Trump creates by scribbling each minute on his Twitter account, and the international zig-zags and U-turns in his stances (in this week alone, namely with China, then Russia and this Thursday with the Trans-Pacific Partnership he apparently wants to rejoin after pulling out from it in early 2016), it is not unbelieveable to think that the forgotten Americas may be back on Washington’s agenda some time soon. Especially if Iran is involved.

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