Let’s stop the hyperventilating about Hugo Chavez

Earlier this week Clay Risen wrote an alarming story for TNR Online about Hugo Chavez's threat to the liberal world order: Far from being a pariah, Venezuela is increasingly in step with the world. Thanks to deep wells of anti-Americanism and Ch?vez's dogged diplomacy among the developing world, he's managed to build a large, loose coalition of states aligned not just against the United States, but against the liberal world order that is the real bedrock of American hegemony. Ch?vez's goal is not to destroy the American economy--cutting off our supply of oil from Venezuela would do more harm to Caracas than to us--so much as to replace the structures by which we hold sway over the world economic community. And while it makes headlines to talk about Ch?vez's military (and paramilitary) aspirations, his real successes--and his real threats--exist in the economic, rather than the military, realm.... too many parts of the world are seeing uneven internal growth (benefiting the elite but not the general public) or no growth at all, even as they make painful budget reforms and market concessions. This breakdown has given rise to a powerful challenge to the liberal economic order--at the center of which sits Hugo Ch?vez. The most significant challenge, arising from the slow collapse of the WTO's Doha Round of trade negotiations, is Venezuela's plan to replace the international trade structure with a series of trading blocs. Many of its efforts have been the banal sort of bilateral deals that would go unnoticed--if they weren't with an eyebrow-raising set of partners: Vietnam, Nicaragua, Russia, Libya, and other countries at the edges of the liberal economic order. Just days before his U.N. appearance, Ch?vez signed some 20 trade accords with Iran, totaling more than $200 million. Iranian tractors are already under production in Venezuela, and the Iranian national oil company has spoken of investing up to $4 billion there. Ch?vez has promised a $500 million oil refinery in Uruguay, a country the United States has been courting for its own trade deal. And he has pursued countless oil-related deals with China--with the expressed goal of disengaging his country's oil sector from the United States. Alongside his bilateral efforts, Ch?vez has pursued a set of multilateral trade agreements with the intention of displacing American economic hegemony in the western hemisphere. In 2005 Cuba and Venezuela created the Bolivarian Alternative for the Americas (ALBA), also known as the People's Trade Agreement, which sets up zero-tariff trade among members. The ALBA has since expanded to Bolivia, and Nicaraguan presidential candidate Daniel Ortega has promised to join if he wins in November. Ch?vez has also signed onto Mercosur, the pact among several South American countries designed to challenge NAFTA and the EU. Mercosur is, for now, a fairly innocuous group, but Ch?vez has spoken frequently of transforming it into an anti-U.S. regional bloc. Trading blocs such as these, especially in light of the Doha collapse, not only undermine the structure and spirit of the liberal trading regime, but they also push the world back to the era in which politics, rather than growth-oriented national interest, determined trade policy, with all the economic and political instability that went with it. Look, I can doom-and-gloom the demise of freer trade with the best of them, but in the thinking about existential threats to the world trading system, Hugo Chavez does not come to mind. The key facts about Chavez's policy initiatives are as follows: 1) Sure, Chavez has signed a lot of trade deals -- but most of them are of the pissant variety. $200 million? Big whoop. 2) Sure, Chavez wants to diversify his imports and exports away from the United States -- but he's not going to succeed. 3) Sure, Chavez wants Mercosur to do his bidding -- but he can't, since Brazil is the key veto player in that trading bloc. Lula might not be America's biggest fan, but he's not really anti-American either. 4) For all of Chavez's wheelings and dealings, his foreign and economic policies alienate more politicians that they attract. Hugo Chavez is an irritant, but it's silly to paint him as the big bad wolf of the global political economy.