Brazil Joins CELAC, a Non-US LatAm Bloc

By Ben Tavener, Senior Contributing Reporter

RIO DE JANEIRO, BRAZIL – Brazil has joined a new political-economic regional bloc that unites 33 countries from across Latin America and the Caribbean, but significantly does not include the United States or Canada. Known by its Spanish or Portuguese initials “CELAC”, the Community of Latin American and Caribbean States was inaugurated at its first meeting in Caracas, Venezuela, last weekend.

Venezuelan President Hugo Chávez – who has led the formation of the new group – said that he hoped Celac would allow Latin America to stand up to the United States and leave behind the OAS, Organization of American States, which he said was “dominated by the U.S.” and “worn-out”.

Brazil’s president Dilma Rousseff tried to shift focus from anti-U.S. sentiment towards group unity, saying that Latin American countries would need to rely more on their neighbors to continue thriving amid ongoing global economic turmoil.

“The financial crisis should be at the heart of our concerns,” she said, adding that, to guarantee Latin America’s current cycle of growth, “every politician must be aware that our countries need each other.”

Carlos Caicedo, Head of Latin America Forecasting at Exclusive Analysis, says that, although still far from being a well-structured regional grouping, CELAC reflects in part Latin America’s growing awareness of its global importance.

“Latin America has done particularly well over the last decade in terms of sustaining economic growth and regaining macroeconomic stability. The benign environment created has resulted in record Foreign Direct Investment (DFI) inflows,” he said speaking to The Rio Times.

Caicedo says the group will likely not benefit from overtly shunning the U.S. and Canada, adding that “what is clear is that OAS will become increasingly irrelevant and the U.S. will therefore need to put more emphasis on bilateral relations to do business with Latin American countries.”

However, the U.S. has downplayed the significance of the group: “The U.S. will continue to work through the OAS as the preeminent multilateral organization speaking for the hemisphere”, U.S. State Department spokesman Mark Toner said.

Cuba – not a member of the OAS – has accepted its invitation to join CELAC, begging the question whether the U.S. would accept an invitation for the group, were one issued.

Pointedly, the formation of CELAC was welcomed with open arms by Chinese President Hu Jintao, who congratulated the new group, promising to “deepen cooperation with CELAC” and emphasizing the fast-growing, mutually-beneficial relationship between China and Latin America.

Many of the leaders, including Rousseff, alluded to Venezuelan hero Simón Bolívar’s 200-year-old vision for a strong, independent Latin America.

Analysts say Brazil appears keen not to be left out of CELAC, despite it not offering any concrete benefits, but whether Rousseff will position herself as a leading figure in the new group is yet to be seen.

The world first heard about the creation of the group at the 2010 Rio Group summit, at which time Brazil’s former president Luiz Inácio Lula da Silva said the group would act as the main forum for political dialogue in the region and was a “historic fact of great significance.”

The bloc’s joint GDP is around US$6 trillion – just a third of the combined output of the U.S. and Canada. However, the region has weathered the financial crisis well, so far achieving continued growth at a time when European and North American economies have faced major setbacks.

Brazil is CELAC’s largest country in both in terms of population and territory size – accounting for 34 percent of the bloc population of nearly 600 million people.