Venezuela Oil Affirmative Pre-Institute - Gonzaga 2013

8/13/2019 Venezuela Oil Affirmative Pre-Institute - Gonzaga 2013

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Gonzaga Debate Institute 2013Venezuela Starter Aff 1

Venezuelan Oil Aff




1AC




Advantage One: Oil

Venezuelan oil production is collapsing quickly — lack of foreign oil investment

guarantees swift collapse of production —that collapses Venezuela’s economy andcauses shocksLadislaw and Verrastro 2013(Sarah, co-director and senior fellow with the Energy and NationalSecurity Program at CSIS, and Frank, senior vice president and James R. Schlesinger Chair forEnergy and Geopolitics at CSIS, March 6, " Post-Chavez Outlook for Venezuelan OilProduction", http://csis.org/publication/post-chavez-outlook-venezuelan-oil-production)

The winds of change are once again blowing in Venezuela. The recent announcement of HugoChavez‘s passing has opened up a host of questions about the future leadership of Venezuela andthe potential impact this leadership transition could have on Venezuelan oil production and globaloil markets. Venezuela is one of the largest oil and natural gas resource holders in the world. It isamong the world‘s largest oil producers (13th) and exporters (10th) and has historically been one

of the United States‘ largest sources of oil imports (4th behind Canada, Saudi Arabia andMexico). Ever since the failed coup and the subsequent strike that brought about a short collapsein oil production in 2002, followed by nationalization of the oil sector, onlookers have beenwaiting for indications that the regime‘s approach to energy production would either fail once andfor all or that some political change would bring about reform and rejuvenation of the energysector. A political transition in Venezuela is now upon us but how it evolves could mean a lot forthe energy sector and global energy markets. Despite its enormous oil resources, Venezuela's oil production (regardless of whose figures you use) has long been in steady decline. In 2011 liquids production was 2.47 million barrels per day (mmbd) , down a million barrels per day since 1999.Some of this is reflects the changing cost and economics of Venezuelan oil production but fielddecline is significant and expertise and reinvestment are questionable and looking harder to come by. The internal technical and managerial capabilities of state run oil and gas company PDVSA

have deteriorated since the 2002 strike and aftermath. Increasingly, PDVSA relies on contractors,as well as other private company partners, to keep the fields in production but reports state thatcontractors have not been paid in months and that the political uncertainty in the country has even

driven routine decision making to a halt. The sustained political uncertainty has also slowed

investment ; Russian and Indian companies were planning to invest in Venezuela's oil fields but

so far have withheld incremental new money. China has not announced a new line of credit orextensions on its development-linked financing since last April. At the same time that productionis dropping, highly subsidized domestic consumption of oil is increasing while revenue fromexports is also declining. The United States remains the largest recipient of Venezuelan oilexports at 950,000 barrels per day in 2011, roughly 40 percent, plus another 185,000 barrels perday from the Caribbean that was Venezuelan sourced but those volumes area down as U.S.

demand has declined and other crudes have become available. Venezuela's next largest exportdestinations are the Caribbean (31 percent) and then China (around 10 percent). Venezuela sellsto many of its Caribbean neighbors at below market rates due to extremely preferential financingrelationships, including additional heavy subsidies for Cuban exports. All of this culminates in anoutlook for continued decline in oil production and a worsening economic outlook for Venezueladuring a politically difficult time. However, conventional wisdom argues that maintaining oil production is in the interest of any regime. Revenue from oil production is such a large part of

Venezuela‘s government balance sheet that no leadership could survive for long without a

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sustained cash flow that oil exports bring . The converse of this argument is that revenues

generated by the energy sector are such an important source of power and influence in Venezuelathat there is potential for infighting over control of the sector. Moreover, the potential for strikesor instability among groups involved in the sector (some of whom have not been paid) could haveadditional negative impacts on production. While oil markets have so far taken the news of

Chavez‘s demise in stride (many claim because the news was largely expected, others because the political outcome is still so uncertain) an actual disruption in Venezuelan production

could add pressure to an already difficult market outlook. The last year has produced a

number of supply disruptions around the world from OPEC, the Middle East North Africa region,as well as non-OPEC sources. If the economic outlook continues to improve and yield an increaseglobal energy demand, if Iran sanctions remain in place, and if Venezuelan production be

compromised, then oil prices would experience much more significant upside pressure from

any new disruptions.

Investment is key to production — U.S. refineries are keyKrauss 2013(Clifford, New York Times Staff, March 8, "Dwindling Production Has Led to

Lesser Role for Venezuela as Major Oil Power",http://www.nytimes.com/2013/03/09/world/americas/venezuelas-role-as-oil-power-diminished.html?_r=0)

Venezuela‘s annual oil production has declined since Mr. Chávez took office in 1999 by roughlya quarter, and oil exports have dropped by nearly a half, a major economic threat to a country thatdepends on oil for 95 percent of its exports and 45 percent of its federal budget revenues.―Venezuela‘s clout on OPEC and on world oil prices has been greatly diminished because of itsinability to exploit its enormous resources,‖ said Michael Lynch, president of Strategic Energyand Economic Research, a consultancy. ―In the 1990s, their production was booming and theycould thumb their nose at Saudi Arabia and get away with it, but now they have become OPEC‘s poor cousin.‖ In a fundamental geopolitical turn, Venezuela now relies far more on the United

States than the United States relies on Venezuela. Venezuela depends on the United States to buy40 percent of its exports because Gulf of Mexico refineries were designed to process low-quality

Venezuelan and Mexican crudes that most refineries around the world cannot easily

handle . But in recent years, the United States has been replacing its imports of Latin American

crudes with oil from Canadian oil sands fields, which is similarly heavy. American imports ofVenezuelan oil have declined to just under a million barrels a day, from 1.7 million barrels a dayin 1997, according to the Energy Department. And while Venezuelan exports of oil are in decline,its dependency on American refineries for refined petroleum products has grown to nearly200,000 barrels a day because of several recent Venezuelan refinery accidents. Experts expectVenezuela to send barrels no longer needed in the United States to China, as payments in kindunder oil-for-loans contracts. Venezuela‘s broken refinery sector has left shortages of gasoline

and diesel in parts of Latin America, opening the door for valuable markets to American refiners.Over his 14 years in power, Mr. Chávez relied heavily on oil revenues to finance his social programs. Energy experts say his gasoline subsidies doubled domestic consumption, cuttingdeeply into exports, but that his hostility to foreign investment and mismanagement of the stateoil company Petroleos de Venezuela were the primary reasons for the steep decline in production.A strike and the firing of management talent and 20,000 workers at the oil company in 2002 ledto a steep decline in the company, which has been underscored by the refinery accidents.―Venezuela is a fraction of what it used to be,‖ said Sadad Ibrahim al-Husseini, a former head ofSaudi Aramco‘s exploration and production division, ―and that‘s really because Venezuela‘s

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technocrats have scattered over the world and are no longer active in Venezuela.‖ Mr. Chávezfurther overhauled oil exploration and production with a nationalization program in 2006 thatordered a renegotiation of contracts with foreign companies, mandating that Venezuela‘s oilcompany get a minimum 60 percent share in all production projects. Sixteen foreign companies,including Royal Dutch Shell and Chevron, went along with the new rules, while Exxon Mobil,Conoco Philips and other companies resisted, and their holdings were nationalized. Venezuela

has huge reserves, including its Orinoco heavy oil belt, which the United States GeologicalSurvey estimates to have 513 billion barrels of recoverable oil — enough potentially to makeVenezuela one of the top three world producers. But foreign oil companies have been wary ofinvesting.

US investment is key —we’re the largest importer, and the only ones who can

process the heavy crude they produce —but we’re transitioning awayLadislaw and Verrastro 2013(Sarah, co-director and senior fellow with the Energy and NationalSecurity Program at CSIS, and Frank, senior vice president and James R. Schlesinger Chair forEnergy and Geopolitics at CSIS, March 6, " Post-Chavez Outlook for Venezuelan OilProduction", http://csis.org/publication/post-chavez-outlook-venezuelan-oil-production)

What about Venezuela‘s relationship with the United States? Over the last ten years the sustainedtrading relationship between the United States and Venezuela has been one of the stabilizingforces in an otherwise contentious and sometimes volatile relationship. U.S. refineries in the GulfCoast are specifically designed to process Venezuela‘s sour and medium to heavy crude andserves as its natural market. Despite oil production being down, the United States still imports just under a million barrels of crude per day from Venezuela (down from a peak of 1.4 mmbd in1997) and, as stated earlier, the government of Venezuela is highly dependent on those revenuesfor their ongoing stability, especially as revenue from other exports and domestic consumptiondecline. As we look ahead to another period of transition in Venezuela it is important to bemindful of the potential for disruption and to look for ways to mitigate the impacts of suchdisruption, but it is equally important to remember the trade ties that bind the two countries forthe time being and to find opportunities to drive change in a positive direction. Time may be

limited in this regard because the U.S. domestic production outlook is changing thanks to tight oildevelopment in the United States and the influx of Canadian oil sands, both of which are givingU.S. refiners more options in terms of the crudes they use and more decisions to make about howthey want to configure their refineries going forward. A future in which Venezuela is no longer ascompetitive in its natural market in the United States would change the outlook for Venezuelancrude marketing decisions. The long-term outlook for Venezuela‘s continued oil market production is changing both in commercial and political terms. The situation has lookedunsustainable for a long period of time but has managed to persist longer than most people thoughit would. Only time will tell if the upcoming leadership changes will bring a new chapter forVenezuela.

Shocks destabilize the economy — causes collapse

Erwin 2012(Sandra, National Defense Magazine Editor, November 1, ―30% Cut in U.S. OilImports Would Avert Future Catastrophe, Study Warns‖,http://www.nationaldefensemagazine.org/blog/Lists/Posts/Post.aspx?ID=577)

Unless the United States curtails its consumption of petroleum, these military greybeards caution,any future crisis that disrupts oil supplies could hamstring the nation‘s economy and cause globalinstability. ―We have seen oil shocks before … But at today‘s level of U.S. consumption, asustained disruption would be devastating – crippling our very freedom of movement,‖ saidretired Army Gen. Paul Kern, chairman of the military advisory board of CNA Corp., a




government-funded think thank. In a report released Nov. 1, a group of 13 generals and admiralsare calling for "immediate, swift and aggressive action" over the next decade to reduce U.S. oilconsumption by 30 percent. Of nearly 88 million barrels of oil consumed worldwide every day,the United States eats up the biggest share, with 20 million barrels. Slightly more than half of the petroleum the United States consumes comes from foreign countries: Two-thirds from the MiddleEast, and the rest from Canada and Mexico. ―You could wake up tomorrow morning and hear that

the Iranians sense an attack on their nuclear power plants and preemptively take steps to shut offthe flow of oil in the Gulf,‖ retired Marine Corps Gen. James T. Conway says in a CNA newsrelease. ―The U.S. would likely view this as a threat to our economy, and we would take action.And there we are, drawn into it.‖ Even a small interruption of daily oil supply can have hugeripple effects, the study contends. Even though just 2 percent of U.S. oil supplies come fromLibya, the military campaign there this summer prompted the U.S. Department of Energy torelease 30 million barrels of oil from the Strategic Petroleum Reserve. A larger crisis coulddisrupt the entire fabric of the U.S. economy, the CNA analysis concludes. If America reduces itscurrent rate of oil consumption by 30 percent and diversifies its fuel sources, the study says, theU.S. economy would be relatively insulated from such upheaval, even in the event of a completeshutdown of a strategic chokepoint like the Strait of Hormuz, the international passageway for 33 percent of the world‘s seaborne oil shipments. The report, titled, ―Ensuring America's Freedom of

Movement: A National Security Imperative to Reduce U.S. Oil Dependence,‖ was sponsored bythe San Francisco-based Energy Foundation, a partnership of major donors interested in solvingthe world's energy problems. CNA analyzed the potential economic impact of a future oildisruption. Under a worst-case scenario 30-day closure of the Strait of Hormuz, the analysis findsthat the U.S. would lose nearly $75 billion in GDP. By cutting current levels of U.S. oildependence by 30 percent, the impact would be nearly zero.

Economic decline causes war – studies proveRoyal 2010 (Jedediah, Director Cooperative Threat Reduction DOD, ―Economic Integration,Economic Signaling and the Problem of Economic Crises‖ in ‗Economics of War and Peace: Economic, Legal and Political Perspectives‘ ed. Goldsmith and Brauer, p. 213-215)

Less intuitive is how periods of economic decline may increase the likelihood of externalconflict. Political science literature has contributed a moderate degree of attention to the impactof economic decline and the security and defence behaviour of interdependent stales. Research inthis vein has been considered at systemic, dyadic and national levels. Several notablecontributions follow. First, on the systemic level. Pollins (20081 advances Modclski andThompson's (1996) work on leadership cycle theory, finding that rhythms in the global

economy are associated with the rise and fall of a pre-eminent power and the often bloody

transition from one pre-eminent leader to the next. As such, exogenous shocks such as

economic crises could usher in a redistribution of relative power (see also Gilpin. 19SJ) that

leads to uncertainty about power balances, increasing the risk of miscalculation (Fcaron.1995). Alternatively, even a relatively certain redistribution of power could lead to a

permissive environment for conflict as a rising power may seek to challenge a declining

power (Werner. 1999). Separately. Pollins (1996) also shows that global economic cyclescombined with parallel leadership cycles impact the likelihood of conflict among major, mediumand small powers, although he suggests that the causes and connections between global economicconditions and security conditions remain unknown. Second, on a dyadic level. Copeland's (1996.2000) theory of trade expectations suggests that 'future expectation of trade' is a significantvariable in understanding economic conditions and security behaviour of states. He argues thatinterdependent states are likely to gain pacific benefits from trade so long as they have anoptimistic view of future trade relations. However, if the expectations of future trade decline,particularly for difficult to replace items such as energy resources, the likelihood for conflict




increases, as states will be inclined to use force to gain access to those resources. Crises could potentially be the trigger for decreased trade expectations either on its own or because it triggers protectionist moves by interdependent states.4 Third, others have considered the link between

economic decline and external armed conflict at a national level. Mom berg and Hess (2002)find a strong correlation between internal conflict and external conflict, particularly during

periods of economic downturn. They write. The linkage, between internal and external

conflict and prosperity are strong and mutually reinforcing. Economic conflict tends tospawn internal conflict, which in turn returns the favour. Moreover, the presence of a

recession tends to amplify the extent to which international and external conflicts self-

reinforce each other (Hlomhen? & Hess. 2(102. p. X9> Economic decline has also been linked

with an increase in the likelihood of terrorism (Blombcrg. Hess. & Wee ra pan a, 2004). which

has the capacity to spill across borders and lead to external tensions. Furthermore, crises

generally reduce the popularity of a sitting government. "Diversionary theory" suggests

that, when facing unpopularity arising from economic decline, sitting governments have

increased incentives to fabricate external military conflicts to create a 'rally around the flag'effect. Wang (1996), DcRoucn (1995), and Blombcrg. Hess, and Thacker (2006) find supportingevidence showing that economic decline and use of force arc at least indirecti) correlated. Gelpi(1997). Miller (1999). and Kisangani and Pickering (2009) suggest that the tendency towards

diversionary tactics arc greater for democratic states than autocratic states, due to the fact thatdemocratic leaders are generally more susceptible to being removed from office due to lack ofdomestic support. DeRouen (2000) has provided evidence showing that periods of weakeconomic performance in the United States, and thus weak Presidential popularity, arestatistically linked lo an increase in the use of force. In summary, rcccni economic scholarship

positively correlates economic integration with an increase in the frequency of economiccrises, whereas political science scholarship links economic decline with external conflict alsystemic, dyadic and national levels.' This implied connection between integration, crises andarmed conflict has not featured prominently in the economic-security debate and deserves moreattention.

And a decline in Venezuelan production causes regional instability

World Trends Watch 2013(Helios Global's World News Site, April 29, " Change in VenezuelaYields Political and Economic Uncertainty", http://www.heliosglobalinc.com/world-trends-watch/?p=152)

Nicholas Maduro‘s narrow electoral triumph over opposition leader Henrique Capriles Radonskiin Venezuela‘s April 14 elections to serve out the remainder of the late president Hugo Chavez‘scurrent presidential term signifies a turning point in Venezuelan politics. Maduro‘s victory hasalso reverberated beyond Venezuela‘s borders. Due to its role as a major source of oil, the courseof political events in Venezuela also has important implications for the world economy. Thedeath of Hugo Chavez has also raised concerns about the prospects of social, political, andeconomic stability in Venezuela. The victory of Chavez‘s heir apparent – Chavez and hissupporters went to great lengths to ensure the survival of the Bolivarian Revolution launched by

Chavez‘s United Socialist Party of Venezuela (known by its Spanish acronym PSUV) – in a politically charged and polarized climate has already resulted in unrest and violence betweenMaduro‘s supporters and his opponents. Venezuela‘s increasingly dire economic predicament hasfurther exacerbated tensions across the country. Despite a contentious bilateral relationship,Venezuela remains the fourth-largest supplier of imported oil to the United States. Given the peculiarities of its oil, namely, the category of relatively low quality heavy crude oil thatrepresents the bulk of its oil capacity, Venezuela relies heavily on U.S. refineries located in theGulf of Mexico that were designed to refine oil from Venezuela (and Mexico). Roughly forty- percent of Venezuela‘s oil exports are delivered to the United States. Consequently, the United






elect to liberalize certain sectors of the Venezuelan economy and institute other economicreforms in a possible bid to cater to his more moderate opponents, undercutting segments of theopposition and bolstering his own credentials in the process.

That causes global warRochlin 1994 (James,Professor of Political Science at Okanagan University College.

―Discovering the Americas: the evolution of Canadian foreign policy towards Latin America,‖ p.130-131)

While there were economic motivations for Canadian policy in Central America, securityconsiderations were perhaps more important. Canada possessed an interest in promoting stabilityin the face of a potential decline of U.S. hegemony in the Americas. Perceptions of declining U.S.influence in the region – which had some credibility in 1979-1984 due to the wildly inequitabledivisions of wealth in some U.S. client states in Latin America, in addition to political repression,under-development, mounting external debt, anti-American sentiment produced by decades ofsubjugation to U.S. strategic and economic interests, and so on – were linked to the prospect ofexplosive events occurring in the hemisphere. Hence, the Central American imbroglio wasviewed as a fuse which could ignite a cataclysmic process throughout the region. Analysts at the

time worried that in a worst-case scenario, instability created by a regional war, beginning inCentral America and spreading elsewhere in Latin America, might preoccupy Washington to theextent that the United States would be unable to perform adequately its important hegemonic rolein the international arena – a concern expressed by the director of research for Canada‘s StandingCommittee Report on Central America. It was feared that such a predicament could generateincreased global instability and perhaps even a hegemonic war. This is one of the motivationswhich led Canada to become involved in efforts at regional conflict resolution, such asContadora, as will be discussed in the next chapter.




Advantage Two: Latin American Relations

U.S.-Venezuelan relations are at a potential reset point — the plan is key to increase

relations and limit outside influenceFillingham 2013(Zachary, contributor to Geopoliticalmonitor.com, March 10, "Post-Chavez US-Venezuelan Relations: Headed for a Thaw?", http://www.geopoliticalmonitor.com/post-chavez-us-venezuelan-relations-headed-for-a-thaw-4790/)

But to take the inevitability of another United Socialist government as proof of a perpetualflatline in US-Venezuelan relations would be premature. It is a short-term consideration, and it‘sonly in the medium term that things will likely get interesting. First off, Maduro will have tograpple with the problem plaguing every political system that favors individual personality overrule of law. A vacuum has opened up at the very top of Venezuelan politics, and it remains to beseen whether Maduro has the charisma, and perhaps more importantly, the personal networkswith which to fill it. The Chavez-era Venezuelan state was one that operated on a complex system

of personal patronage that led all the way to the top; supporters were rewarded and detractorswere marginalized. It remains to be seen whether this system will function smoothly with its headcut off. Political patronage goes hand in hand with Venezuela‘s other pressing issue: anincreasingly dysfunctional economy. Many Chavez-era policies could be described as political patronage on a mass scale, and while these policies did help Venezuela‘s poor, they tended to beinefficient and short-sighted. For example, the Chavez government‘s adult literacy program costanywhere from $543 to $977 per adult learner. Compare that to Brazil‘s program that uses pre-existing educational infrastructure to achieve a cost of $2.50 per learner. In Venezuela‘s case,most of this money went into hiring adult literacy trainers, thus providing people with jobs- butonly for as long as the government‘s finances can hold out. And by all indications, Venezuela‘sfinances aren‘t going to hold out for very long. The country is currently running a deficit of over20 percent, and its national inflation rate fluctuates between 20 and 30 percent. Though it presides

over one of the world‘s largest oil reserves and is a card-carrying member of OPEC, Venezuela‘soil yields have been dropping throughout the Chavez era due to a lack of foreign investment. Thesame is true of Venezuela‘s food industry. A lack of foreign investment, inefficiency, and costlysubsidies have stunted overall output, resulting in food shortages that are now showingthemselves in the huge lineups spilling out of government food depots nationwide. A reoccurringtheme of Chavez‘s economic policy was a willful ignorance regarding the creation ofinfrastructure and social capital that could drive economic growth beyond the era of directgovernment handouts. Given the structural challenges that the Venezuelan economy now faces,challenges that will preclude the government‘s ability to continue Chavez-era patronage adinfinitum, a Maduro government will inevitably be faced with an economic reckoning of sorts. Inthe aftermath of this economic reckoning, there will be an opportunity for both domesticopposition forces within Venezuela, and American foreign policy to make inroads. Just to recap:

what we are likely to see is a Maduro win, followed by a politico-economic crisis that ushers ineither a return to credible multi-party democracy or a descent into conspicuous authoritarianism.But how will this impact US-Venezuelan relations? Given its precarious economic situation,

Venezuela will need outside assistance in the near future. And while some would say that

China is best suited to step up and bail out Caracas, there are a few reasons to question whetherthis will actually come to pass. First of all, The Chinese Development Bank has already provideda huge amount of money to the Chavez government, about $40 billion between 2008 and 2012alone. Thus, if Venezuela were to be faced with a default, it would be Chinese investors with their

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money on the line. Any debt renegotiations would surely include provisions that didn‘t sit wellwith the Venezuelan public. After all, there have already been agreements reached betweenVenezuela and the Chinese state-owned company Citic Group that have raised populist alarm

bells regarding the signing of mineral rights over to foreign companies. In this context, a

limited rapprochement makes sense from a Venezuelan point of view, as it would balance

against a preponderance of Chinese economic influence. Now that the ―Bolivarian Revolution‖ isall but discredited, and countries like Brazil have proven that it‘s possible to alleviate poverty

through trade and keep US influence at arm‘s length, a US-Venezuelan thaw is theoretically

possible . However, authorities in Washington will likely have to endure another round of vitriol

and wait until the dust settles in Venezuelan domestic politics before their window of opportunity presents itself.

Scenario one is China:

U.S. expanding relations in the region is key to prevent China from undermining

influence

Nolte 2013(Dr. Detlef, Ph.D. in Political Science from the University of Mannheim, Professor ofPolitical Science at the University of Hamburg, German Institute of Global and Area Studies,"The Dragon in the Backyard: US Visions of China's Relations toward Latin America",http://www.giga-hamburg.de/dl/download.php?d=/content/publikationen/pdf/gf_international_1305.pdf)

Nonetheless, deepening economic relations between China and Latin American countries mayhave an indirect, negative impact on US-Latin American relations (Ellis 2012a; Farnsworth 2012)

by undermining the ability of the United States to pursue its agenda in the region. These growingrelations with China send the signal to Latin American governments that economic developmentcan be achieved without adhering to Western proscriptions. Regimes hostile to the United Statescan turn their backs on Western lending institutions such as the International Monetary Fund and

World Bank. Thus, countries could side-step the negative consequences of actions deemed hostileto the interests of the United States and US companies – for example, defaulting on loans ornationalizing industries, amongst other things. Conclusions While there are differentinterpretations of the implications of China‘s growing presence in Latin America, neither theBush administration nor the Obama administration viewed/view China as a major threat in LatinAmerica. This is a position shared by the majority of analysts linked to different US think tanks.The United States‘ loss of trade shares and presence in Latin America is more a result of its ownweakness and loss of initiative than of Chinese strength. It is also a result of a changinginternational economic order. In general, there is a prevailing sense of resignation with regard toChina‘s presence in Latin America, which is well captured in a statement by Stephen Johnson, ananalyst from the conservative Heritage Foundation, in a 2005 US Senate hear ing: ―In a globalizedworld, the Monroe Doctrine has declining relevance. Democracies have relations with whom they

wish and nation competitors like China cannot be blocked from visiting the hemisphere.However, the United States can be more proactive in consolidating relations with its neighborsand promoting a truly open, competitive marketplace‖ (Johnson 2005). More recently, R. EvenEllis (2012a: 13) of the Center for Hemispheric Defense Studies said that ―the PRC‘s economic presence in and political impact on Latin America will continue. It will remain a permanentfixture of the hemisphere, alongside that of the European Union, India and a host of other extra-regional actors.‖

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Latin America is a key battleground for hegemony — Chinese influence causes

declineCerna 2011(Michael, China Research Center, Graduate student in International PolicyManagement at Kennesaw State, April 15, "China's Growing Presence in Latin America:Implications for U.S. and Chinese Presence in the Region", http://www.chinacenter.net/chinas-growing-presence-in-latin-america-implications-for-u-s-and-chinese-presence-in-the-region/)

With both the U.S. and China making gains in the region in different sectors, there is seeminglyroom for each side to grow; which implies that, in fact, trade with Latin America is not a zero-sum game. China presents an alternative to the United States, but that is not necessarily a badthing. The U.S. is much more diversified than China at the moment and therefore does not need toenter into direct competition. However, as China responds to calls from Brazil and diversifies itsinvestments, there is increasing worry that China is going to outmatch U.S. trade in the region.These fears may be economically based, but there are potentially harmful political consequences – primarily, providing Latin America with a quasi-world power as an alternative to the U.S. Sincethe Monroe Doctrine, Latin America has been considered a secure sphere of influence for theU.S. The fact that China presents a less democratic alternative to U.S. influence presents a major problem. The third BRICS summit in April provided more insight into the potential consequencesof China‘s growing place in Latin America via its relations with Brazil. One proposal to emergefrom the summit of the five nations (Brazil, India, China, Russia and South Africa) was a broad- based international reserve currency system providing stability and certainty. The idea was to setup a new exchange rate mechanism that would bypass the U.S. dollar as the reserve currency ofthe world. In addition, banks of the five BRICS nations agreed to establish mutual credit lines intheir local currencies, not in U.S. currency. While the chances of such a proposal gaining supportare debatable, it sets a clear example of a possible shift in power away from the U.S. and toward amore global organization, one that is arguably anchored by China. If China becomes a preferred partner in Latin America, it will show that U.S. dominance around the globe also is at risk.ConclusionSo what does China‘s growing place in the region mean for the future? Depending onwhom this question is posed to, there are two probable answers. The first is that China‘s intensifying relations with Latin America offer a clear sign of the end of U.S. dominance in the

region, and in a greater sense, the entire world. There is enough evidence to show that the tideshave changed in favor of China. The other answer is that it means nothing. The U.S. is obviouslystill the more dominant power in the region, and Chinese presence will eventually subside, againleaving the United States as the region‘s premier partner. The real answer probably fallssomewhere in the middle.Is China the preferred partner for Latin America? At this point, thedefinitive answer is no. However, the United States should not take its place in the region forgranted. There is clear evidence of an increasingly symbiotic relationship with China throughoutLatin America. While the U.S. is the most dominant trade partner to the region as a whole, it islosing ground in key countries, namely Brazil, which is blossoming on the world stage and isemerging as the clear leader in the region. Increasing trade and investment can be beneficial forall, but the power that China can derive from its growing economic influence could bringincreased political and ideological influence that the U.S. might find unnerving. China already

has replaced the U.S. as the largest trading partner for Brazil and Chile, and is on pace to do thesame in Peru and Venezuela. At the very least, this should cause the U.S. to pay more attention toits southern neighbors and take steps to make sure that China only benefits economically and not politically at the expense of the U.S. The world will be watching. As it stands, the Chinese are not broadening their relations with the region in a way that directly competes with the United States.China is strictly concerned with commodities, including oil. U.S. President Barack Obamarecently signed an agreement with Brazil‘s Petrobras that will allow the oil company to drill inthe Gulf of Mexico. This symbolic move could cause tensions to increase as the world‘s two




largest oil consumers battle over rights to Brazilian oil. In that regard, the competition may go beyond a race to Latin commodities and move into the realm of fighting for political influence. Itis odd to think that the United States would need to compete for hemispheric dominance with acountry on the other side of the globe, but China‘s actions and increasing integration into theregion tell us that such a scenario may one day arise. Given the proximity and importance ofLatin America to the United States, this region could be the symbolic battle that best measures the

continued hegemony of the U.S. versus China.

U.S. heg key to promote peace and prevent power warsZhang and Shi 2011(Yuhan, researcher at the Carnegie Endowment for International Peace, andLin, Columbia University, consultant for the Eurasia Group and World Bank, January 22,"America's Decline: A Harbinger of Conflict and Rivalry",http://www.eastasiaforum.org/2011/01/22/americas-decline-a-harbinger-of-conflict-and-rivalry/)jn

Over the past two decades, no other state has had the ability to seriously challenge the USmilitary. Under these circumstances, motivated by both opportunity and fear, many actors have bandwagoned with US hegemony and accepted a subordinate role. Canada, most of Western

Europe, India, Japan, South Korea, Australia, Singapore and the Philippines have all joined theUS, creating a status quo that has tended to mute great power conflicts. However , as thehegemony that drew these powers together withers, so will the pulling power behind the USalliance. The result will be an international order where power is more diffuse, American interestsand influence can be more readily challenged, and conflicts or wars may be harder to avoid. Ashistory attests, power decline and redistribution result in military confrontation. For example, inthe late 19th century America‘s emergence as a regional power saw it launch its first overseas warof conquest towards Spain. By the turn of the 20th century, accompanying the increase in US power and waning of British power, the American Navy had begun to challenge the notion thatBritain ‗rules the waves.‘ Such a notion would eventually see the US attain the status of soleguardians of the Western Hemisphere‘s security to become the order-creating Leviathan shapingthe international system with democracy and rule of law. Defining this US-centred system are

three key characteristics: enforcement of property rights, constraints on the actions of powerfulindividuals and groups and some degree of equal opportunities for broad segments of society. Asa result of such political stability, free markets, liberal trade and flexible financial mechanismshave appeared. And, with this, many countries have sought opportunities to enter this system, proliferating stable and cooperative relations. However, what will happen to these advances asAmerica‘s influence declines? Given that America‘s authority, although sullied at times, has benefited people across much of Latin America, Central and Eastern Europe, the Balkans, as wellas parts of Africa and, quite extensively, Asia, the answer to this question could affect globalsociety in a profoundly detrimental way. Public imagination and academia have anticipated that a post-hegemonic world would return to the problems of the 1930s: regional blocs, trade conflictsand strategic rivalry. Furthermore, multilateral institutions such as the IMF, the World Bank orthe WTO might give way to regional organisations. For example, Europe and East Asia would

each step forward to fill the vacuum left by Washington‘s withering leadership to pursue theirown visions of regional political and economic orders. Free markets would become more politicised — and, well, less free — and major powers would compete for supremacy.Additionally, such power plays have historically possessed a zero-sum element. In the late 1960sand 1970s, US economic power declined relative to the rise of the Japanese and WesternEuropean economies, with the US dollar also becoming less attractive. And, as American powereroded, so did international regimes (such as the Bretton Woods System in 1973). A worldwithout American hegemony is one where great power wars re-emerge, the liberal internationalsystem is supplanted by an authoritarian one, and trade protectionism devolves into restrictive,

http://www.cfr.org/publication/23537/belttightening_for_us_foreign_policy.html







anti-globalisation barriers. This, at least, is one possibility we can forecast in a future that willinevitably be devoid of unrivalled US primacy.

Scenario 2 is Iran:

Iran is utilizing Venezuela to gain a sphere of influence in America — Americaninfluence is key check Iranian influenceFite and Cordesman 2012(Brandon, CSIS, and Anthony, Arleigh A. Burke Chair in Strategy atCSIS, April 4, "U.S. and Iranian Strategic Competition: The Impact of Latin America, Africa andPeripheral States", http://csis.org/files/publication/120404_Iran_Chapter_XIII-Peripheral_States-Revised.pdf)

Iran‘s closest relationship is with Venezuela. Although both countries have very different guidingideologies and political structures, they are bound by a common rejection of US leadership in theinternational system and by their significant petroleum exports, signified by their dualmembership in OPEC. The State Department has determined Venezuela to be ―not cooperatingfully United States antiterrorism efforts‖ since 2006. Distinct from the designation of ―state

sponsor of terrorism‖, this classification nevertheless resulted in an US arms embargo, which wasextended in May 201118.In the past decade Tehran and Caracas have engaged in a broadspectrum of commitments ranging from mutual diplomatic support to military exchange.Venezuelan President Hugo Chavez has shown himself to be committed to Iranian sovereignty — supporting Iran‘s nuclear program at the IAEA—and to Iran‘s vision of an anti-Western coalitionof developing states. As long as Venezuelan President Hugo Chavez — or some successor with asimilar ideology and hostility to the US — continues to define his role as one of opposition to theUS, Washington has little hope of bettering its political position with Caracas or diminishingIran‘s close affiliation. That being said, US-Venezuelan commercial ties are strong and providelinks between both countries which help maintain an undercurrent of stability in the relationship.At present, the US need not be too concerned about this Iran-Venezuelan relationship, despite thethreatening language used by both presidents. Mutual US-Venezuelan energy dependence

mitigates the possibility of a more serious breach in relations.

That causes Iran proliferation and terrorismBrookes 2011(Peter, Senior Fellow for National Security Affairs and the Chung-Ju Yung Fellowfor Policy Studies at the Heritage foundation, December 16, " Iran‘s Pernicious Influence in theWestern Hemisphere", http://blog.heritage.org/2011/12/16/iran%E2%80%99s-pernicious-influence-in-the-western-hemisphere/)

There has been a lot of discussion recently of Iranian involvement in Latin America, especiallywith the recent plot involving an assassination attempt against the Saudi ambassador to the UnitedStates. Of course, a lot of people are going to Latin America these days: the Russians, theChinese — and even the Europeans. That‘s because the region is abundant in natural resources,

especially energy, and it offers the potential of emerging markets. Unfortunately, Iran is lookingto make a less-than-friendly mark in Latin America, especially for the United States. Tehran haseconomic ties with Latin America, especially Venezuela, where Iran claims it has invested $4 billion to $5 billion. But according to some analysts, the economic ties are likely a cover-up formore troubling endeavors. For instance, Venezuela is helping Iran evade punitive economicsanctions by providing international banking services for the Iranian regime, which isincreasingly isolated due to its nuclear weapons program. But the Tehran – Caracas axis goesdeeper than this. According to press reports, the two nations also inked a Memorandum ofUnderstanding, pledging full military support and cooperation that likely includes weapons sales




and the exchange of Iranian advisors. One could easily see Tehran using Caracas as a stepping-off point for attacking U.S. or other (e.g. Israeli) interests in this hemisphere — or even the Americanhomeland, especially if there is military action taken against Iran‘s nuclear program. There isconcern that Iran and Venezuela are already cooperating on some nuclear issues. There have beenreports that Iran may be prospecting for uranium ore in Venezuela, which could aid bothcountries‘ nuclear programs, should Caracas proceed with its nuclear program. While still

prospective, of course, there is the possibility that Tehran, which has an increasingly capable ballistic missile program, could sell or help Caracas develop ballistic missiles capable of reachingAmerican shores. It is noteworthy that the distance from Caracas to Miami is about 1,400 miles,which nearly corresponds with the current range of Tehran‘s medium-range Shahab-class ballisticmissile. (Iran, of course, is also developing an intercontinental ballistic missile.)But it is not justVenezuela that Iran is courting. Iran has also enhanced its relations with other elements of theanti-American Latin left in Nicaragua, Bolivia, Ecuador, and Nicaragua, which are countriesrun — not surprisingly — by leaders close to Venezuela. Experts suggest that these relationships arestill managed largely by the Chavistas, who seek to develop an alliance that will serve as acounterweight to Washington in the region. As a gesture to these new alliances, Bolivia, likeVenezuela, has reportedly lifted visa requirements for passengers arriving from Iran, opening thedoor to an influx of troublesome travelers. According to congressional testimony, Iran is

providing ―diplomatic training‖ of 30 to 90 days in Tehran to government workers fromVenezuela, Nicaragua, Bolivia, Ecuador, and the Communist Party of El Salvador. Instead of theart of negotiating, international relations theory, and how to work a room at an embassy soiree,the Latin visitors are reportedly instead being taught intelligence, counterintelligence, and crowdcontrol. The largest base for Hezbollah, the Iran- and Syria-backed terror group, outside theMiddle East was previously concentrated in the tri-border area of Paraguay, Brazil, andArgentina, but experts now say Venezuela has become the largest. Other observers believe theChavistas may be welcoming Hezbollah operatives to assist the narcoterrorist group FARC,which has found refuge in Venezuela and has been fighting U.S. ally Colombia for decades. TheVenezuelan regime would certainly welcome Hezbollah‘s help in dealing with the UnitedStates — and Hezbollah, for its part, would certainly appreciate a secure operating space close toAmerican interests and territory. In fact, Hezbollah is believed to have a growing relationship

with Mexican drug cartels, including benefiting from their smuggling routes into the UnitedStates. The notion that Iranian involvement in this region is not a threat is a foolish one.Revolutionary Iran has had a hand in shedding American blood for more than 30 years, mostrecently in Iraq and Afghanistan. A failure to take measures to check Iran‘s efforts in the WesternHemisphere will only allow anti-American, terror-supporting, oppressive, non-free marketagendas to take root in our neighborhood.

Iran prolif causes cascading prolif and nuclear warCirincione 2007 (Joseph, Fellow at the Center for American Progress, ―The Middle East NuclearSurge,‖ Center for American Progress, August 21, http://www.americanprogress.org/issues/2007/08/nuclear_surge.html)

Iran is still probably five to 10 years away from gaining the ability to make nuclear fuel ornuclear bombs. But its program is already sending nuclear ripples through the Middle East. Therace to match Iran's capabilities has begun. Almost a dozen Muslim nations have declared theirinterest in nuclear energy programs in the past year. This unprecedented demand for nuclear programs is all the more disturbing paired with the unseemly rush of nuclear salesman eager tosupply the coveted technology. While U.S. officials were reaching a new nuclear agreement withIndia last month, President Nicolas Sarkozy of France signed a nuclear cooperation deal withLibya and agreed to help the United Arab Emirates launch its own civilian nuclear program.Indicating that this could be just the beginning of a major sale and supply effort, Sarkozy declared

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that the West should trust Arab states with nuclear technology. Sarkozy has a point: No one candeny Arab states access to nuclear technology, especially as they are acquiring it under existinginternational rules and agreeing to the inspection of International Atomic Energy Agencyofficials. But is this really about meeting demands for electric power and desalinization plants?There is only one nuclear power reactor in the entire Middle East — the one under construction inBusher, Iran. In all of Africa there are only two, both in South Africa. (Israel has a research

reactor near Dimona, as do several other states.) Suddenly, after multiple energy crises over the60 years of the nuclear age, these countries that control over one-fourth of the world's oil suppliesare investing in nuclear power programs. This is not about energy; it is a nuclear hedge againstIran. King Adbdullah of Jordan admitted as much in a January 2007 interview when he said: "Therules have changed on the nuclear subject throughout the whole region. . . . After this summereverybody's going for nuclear programs." He was referring to the war in Lebanon last year between Israel and Hezbollah, perceived in the region as evidence of Iran's growing clout. Otherleaders are not as frank in public, but confide similar sentiments in private conversations. Here iswhere the nuclear surge currently stands. Egypt and Turkey, two of Iran's main rivals, are in thelead. Both have flirted with nuclear weapons programs in the past and both have announcedambitious plans for the construction of new power reactors. Gamal Mubarak, son of the currentEgyptian president and his likely successor, says the country will build four power reactors, with

the first to be completed within the next 10 years. Turkey will build three new reactors, with thefirst beginning later this year. Not to be outdone, Saudi Arabia and the five other members of theGulf Cooperation Council (Bahrain, Kuwait, Oman, Qatar, and the United Arab Emirates) at theend of 2006 "commissioned a joint study on the use of nuclear technology for peaceful purposes."Algeria and Russia quickly signed an agreement on nuclear development in January 2007, withFrance, South Korea, China, and the United States also jockeying for nuclear sales to this oilstate. Jordan announced that it, too, wants nuclear power. King Abdullah met Canada's primeminister in July and discussed the purchase of heavy water Candu reactors. Morocco wantsassistance from the atomic energy agency to acquire nuclear technology and in March sponsoredan international conference on Physics and Technology of Nuclear Reactors. Finally, the ArabLeague has provided an overall umbrella for these initiatives when, at the end of its summitmeeting in March, it "called on the Arab states to expand the use of peaceful nuclear technology

in all domains serving continuous development." Perhaps these states are truly motivated to jointhe "nuclear renaissance" promoted by the nuclear power industry and a desire to counter globalwarming. But the main message to the West from these moderate Arab and Muslim leaders is political, not industrial. "We can't trust you," they are saying, "You are failing to contain Iran andwe need to prepare." It is not too late to prove them wrong. Instead of seeing this nuclear surge asa new market, the countries with nuclear technology to sell have a moral and strategic obligationto ensure that their business does not result in the Middle East going from a region with onenuclear weapon state - Israel - to one with three, four, or five nuclear nations. If the existingterritorial, ethnic, and political disputes continue unresolved, this is a recipe for nuclear war.

Terrorist retaliation causes nuclear war – draws in Russia and ChinaAyson 2010(Robert, Professor of Strategic Studies and Director of the Centre for Strategic

Studies: New Zealand at the Victoria University of Wellington, July, ―After a Terrorist NuclearAttack: Envisaging Catalytic Effects,‖ Studies in Conflict & Terrorism, Volume 33, Issue 7,Available Online to Subscribing Institutions via InformaWorld)

A terrorist nuclear attack, and even the use of nuclear weapons in response by the countryattacked in the first place, would not necessarily represent the worst of the nuclear worldsimaginable. Indeed, there are reasons to wonder whether nuclear terrorism should ever beregarded as belonging in the category of truly existential threats. A contrast can be drawn herewith the global catastrophe that would come from a massive nuclear exchange between two or




more of the sovereign states that possess these weapons in significant numbers. Even the worstterrorism that the twenty-first century might bring would fade into insignificance alongsideconsiderations of what a general nuclear war would have wrought in the Cold War period. And itmust be admitted that as long as the major nuclear weapons states have hundreds and even

thousands of nuclear weapons at their disposal, there is always the possibility of a truly awfulnuclear exchange taking place precipitated entirely by state possessors themselves. But these two

nuclear worlds — a non-state actor nuclear attack and a catastrophic interstate nuclear exchange — are not necessarily separable. It is just possible that some sort of terrorist attack, and especially anact of nuclear terrorism, could precipitate a chain of events leading to a massive exchange of

nuclear weapons between two or more of the states that possess them. In this context, today‘sand tomorrow‘s terrorist groups might assume the place allotted during the early Cold War yearsto new state possessors of small nuclear arsenals who were seen as raising the risks of a catalyticnuclear war between the superpowers started by third parties. These risks were considered in thelate 1950s and early 1960s as concerns grew about nuclear proliferation, the so-called n+1 problem. t may require a considerable amount of imagination to depict an especially plausiblesituation where an act of nuclear terrorism could lead to such a massive inter-state nuclear war.For example, in the event of a terrorist nuclear attack on the United States, it might well bewondered just how Russia and/or China could plausibly be brought into the picture, not least

because they seem unlikely to be fingered as the most obvious state sponsors or encouragers ofterrorist groups. They would seem far too responsible to be involved in supporting that sort ofterrorist behavior that could just as easily threaten them as well. Some possibilities, howeverremote, do suggest themselves. For example, how might the United States react if it was thoughtor discovered that the fissile material used in the act of nuclear terrorism had come from Russianstocks,40 and if for some reason Moscow denied any responsibility for nuclear laxity? Thecorrect attribution of that nuclear material to a particular country might not be a case of sciencefiction given the observation by Michael May et al. that while the debris resulting from a nuclearexplosion would be ―spread over a wide area in tiny fragments, its radioactivity makes itdetectable, identifiable and collectable, and a wealth of information can be obtained from itsanalysis: the efficiency of the explosion, the materials used and, most important … someindication of where the nuclear material came from.‖41 Alternatively, if the act of nuclear

terrorism came as a complete surprise, and American officials refused to believe that a terroristgroup was fully responsible (or responsible at all) suspicion would shift immediately to state

possessors. Ruling out Western ally countries like the United Kingdom and France, and probablyIsrael and India as well, authorities in Washington would be left with a very short list consisting

of North Korea, perhaps Iran if its program continues, and possibly Pakistan. But at what stagewould Russia and China be definitely ruled out in this high stakes game of nuclear Cluedo? In particular, if the act of nuclear terrorism occurred against a backdrop of existing tension inWashington‘s relations with Russia and/or China, and at a time when threats had already beentraded between these major powers, would officials and political leaders not be tempted toassume the worst? Of course, the chances of this occurring would only seem to increase if theUnited States was already involved in some sort of limited armed conflict with Russia and/orChina, or if they were confronting each other from a distance in a proxy war, as unlikely as these

developments may seem at the present time. The reverse might well apply too: should anuclear terrorist attack occur in Russia or China during a period of heightened tension oreven limited conflict with the United States, could Moscow and Beijing resist the pressures thatmight rise domestically to consider the United States as a possible perpetrator or encourager ofthe attack? Washington’s early response to a terrorist nuclear attack on its own soil might alsoraise the possibility of an unwanted (and nuclear aided) confrontation with Russia and/or

China. For example, in the noise and confusion during the immediate aftermath of the

terrorist nuclear attack , the U.S. president might be expected to place the country‘s armedforces, including its nuclear arsenal, on a higher stage of alert. In such a tense environment, when




careful planning runs up against the friction of reality, it is just possible that Moscow and/orChina might mistakenly read this as a sign of U.S. intentions to use force (and possibly nuclearforce) against them. In that situation, the temptations to preempt such actions might grow,although it must be admitted that any preemption would probably still meet with a devastatingresponse.




PlanPlan: The United States federal government should substantially increase its economic

investment in oil infrastructure in Venezuela.




Solvency




A2: Venezuela Says No

Anti-U.S. rhetoric was just a political ploy — Maduro will cooperate with the U.S.Neuman 2013(William, NYT Staff, April 14, "Venezuela Gives Chávez Protégé NarrowVictory", http://www.nytimes.com/2013/04/15/world/americas/venezuelans-vote-for-successor-to-chavez.html?pagewanted=all&_r=0)

Meanwhile, there were also signs that the strident, Chávez-style anti-American message that Mr.Maduro used during the campaign would now be set aside to improve Venezuela‘s strainedrelations with the United States. Venezuela is a major oil supplier to the United States withimmense reserves, and under Mr. Chávez it has also been a major thorn in Washington‘s side,wielding its oil and its diplomatic muscle to oppose American policy everywhere from Cuba toSyria. Mr. Chávez, who succumbed to cancer on March 5, built his political career on flaying theUnited States and its traditional allies in the Venezuelan establishment, and Mr. Maduro followedhis mentor‘s script throughout the campaign with an acolyte‘s zeal. He accused former Americandiplomats of plotting to kill him, suggested that the United States had caused Mr. Chávez‘sillness, and had his foreign minister shut the door on informal talks with the United States that

began late last year. A senior State Department official in Washington said the harsh rhetoric hadmade the possibility of improved relations more difficult. But over the weekend, with his electionvictory looking likely, Mr. Maduro sent a private signal to Washington that he was ready to turnthe page. Bill Richardson, the former governor of New Mexico, who was in Caracas as arepresentative of the Organization of American States, said in an interview that Mr. Madurocalled him aside after a meeting of election observers on Saturday and asked him to carry amessage. ―He said, ‗We want to improve the relationship with the U.S., regularize therelationship,‘ ‖ Mr. Richardson said.

Extending an olive branch is key to resolve relations — Maduro is willing to

cooperateFabian 2013(Jordan, ABC News Staff, March 6, "Hugo Chávez Death: Fixing the U.S.-

Venezuela Relationship Won't Be Easy", http://abcnews.go.com/ABC_Univision/Politics/hugo-chavez-death-fixing-us-venezuela-relationship-easy/story?id=18668275#.UbQrf-vJ9y5)

The former president sparked a passionate and loyal following among Venezuela's poor andlower-classes that's morphed into a strong social movement, known as chavismo. Maduro, whowill lead the country on an interim basis and is considered the front runner, has pledged tocontinue Chávez's work. But experts are divided on whether chavismo can outlive its charismaticnamesake. Some foreign policy observers believe that, even if Maduro wins, ties could improve between the U.S. and Venezuela. "I think it is an opportunity for us to step into a new relationshipwith Venezuela," Former U.N. ambassador Bill Richardson, who met with Chávez in 2008, saidon MSNBC. "The opposition candidate Capriles is pro-U.S. The vice president Maduro is not pro-U.S., but is, I think, going to be more pragmatic than Chávez." Still, the U.S. will have to

work to improve its image and standing in Venezuela following nearly a decade-and-a-half ofanti-U.S. sentiment being imbued into the country's government and political culture.

Maduro is willing to cooperate with the U.S.Ellsworth 2013(Brian, Reuters Staffwriter, May 19. "Venezuela says taking steps to restore U.S.diplomatic ties", http://www.reuters.com/article/2013/05/20/us-venezuela-usa-idUSBRE94J01R20130520)

http://articles.washingtonpost.com/2013-02-22/world/37235564_1_vice-president-nicolas-maduro-diosdado-cabello-chavismo

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http://www.reuters.com/article/2013/03/06/us-venezuela-chavez-idUSBRE92405420130306

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Venezuela's recent designation of an acting head of its diplomatic mission in the United Statesshows the OPEC nation's desire to restore full diplomatic relations, the foreign minister said in aninterview broadcast on Sunday. Disputes between Caracas and Washington were common duringthe 14-year-rule of late socialist leader Hugo Chavez, leaving both nations without ambassadorsin each other's capitals. Foreign Minister Elias Jaua suggested in a televised interview that themove to name government ally Calixto Ortega as charge d'affaires in Washington could be a

prelude to restoring ambassadors. "This is a message for U.S. politicians so they understandVenezuela's desire to normalize relations ... via the designation of the highest diplomaticauthorities," he said. "Why? Because the United States remains our top trade partner."Venezuelan President Nicolas Maduro has in recent months said he wants better ties withWashington as long as the relationship is respectful. But he has also accused the United States ofseeking to destabilize the country.

Venezuela won’t say no— empiricsFabian 2013(Jordan, ABC News Staff, March 6, "Hugo Chávez Death: Fixing the U.S.-Venezuela Relationship Won't Be Easy", http://abcnews.go.com/ABC_Univision/Politics/hugo-chavez-death-fixing-us-venezuela-relationship-easy/story?id=18668275#.UbQrf-vJ9y5)

But on a key economic front, Venezuela's government has taken a pragmatic approach to theUnited States. The South American nation remains one of the top contributors to the U.S.'s oilimports, ranking in the top four last year, according to the U.S. Energy InformationAdministration. "Oil is their political weapon, but with the U.S., they never used it," Richardsonsaid. Eric Farnsworth added that the Venezuelan people have not traditionally been anti-American throughout their history and it may be possible for a leader to eventually bridge the gap between the two nations.

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Venezuelan Production Down Now

Venezuelan oil production is down and declining — new investment is keyClayton 2013(Blake, Fellow for Energy and National Security at CFR, January 17, "Chavez‘sTroubled Legacy for Venezuela‘s Oil Industry", http://blogs.cfr.org/levi/2013/01/17/chavezs-troubled-legacy-for-venezuelas-oil-industry/)

Venezuela was the third-largest producer in OPEC when Chavez took office, its roughly 3.5million barrels per day (mb/d) surpassed only by Saudi Arabia and Iran (see Figure 1). Outputwas on the upswing, +1 mb/d since the start of the decade. But the country‘s production hastrended steadily downward under Chavez — now 30 percent lower than it was in 1998 — fallingvictim to the mismanagement of PDVSA (Venezuela‘s national oil company) to finance otherstate projects, hostility toward foreign investment, and a mature production base where declinerates at existing fields are as high as 25 percent, according to the U.S. Energy InformationAdministration (EIA). The woeful production record under Chavez isn‘t for lack of oil in theground. Venezuela sits on more proved reserves, according to BP‘s estimate, than any other, at297 billion barrels (Figure 2). Saudi Arabia comes closest, at 265 billion barrels, though the

kingdom is also less heavily explored and has a generally higher-quality resource base. OfVenezuela‘s proved reserves, most (some 220 billion barrels, per BP) are extra-heavy crude and bitumen in the Orinoco Belt, but industry estimates suggest that even this low-quality oil can be produced at as low as one-third the cost of its Canadian cousin, due to favorable fluid andreservoir conditions that make for better per-well production rates. While production has fallenunder Chavez, consumption has risen (Figure 3) — up from about 490 thousand barrels per day(kb/d) in 1998 to 850 kb/d today — biting into net exports, which poses a problem for thecountry‘s futur e fiscal health. Crude exports have collapsed since Chavez took power, downnearly 40 percent to roughly 1.5 mb/d (Figure 4). Refined product export patterns are lookingincreasingly shaky as well. Last September saw a sharp jump in U.S. gasoline and other refined product exports to the South American country, some 196 kb/d, and some industry sourcesestimate a reliance on net product imports as high as 300 kb/d. The proximate causes of the

September jump were accidents at the Amuay and El Palito refineries, which knocked out asubstantial portion of the country‘s refining capacity. But the more troublesome underlying factoris the slow deterioration of the country‘s refining complex and oil-specific technical prowess,causing a string of outages and unplanned stoppages in recent years.

The industry is in decline now — investment is key to a reboundGue 2013(Elliot, creator of the Energy & Income Advisor, an online newsletter dedicated toinvestment in the energy sector, March 21, "Venezuelan Oil Production: No OvernightRecovery", https://www.energyandincomeadvisor.com/venezuelan-oil-production-no-overnight-recovery/)

To fund these social programs, Chavez‘s government relied primarily on cash from Petroleos de

Venezuela (PDVSA), the national oil company. According to the BP‘s (LSE: BP, NYSE: BP)most recent Statistical Review of World Energy, Venezuela‘s oil reserves stood at 296.5 billion barrels at the end of 2011 – the largest in the world, eclipsing Saudi Arabia‘s 265 billion barrels. But unlike Saudi Arabia, heavy oil accounts for much of Venezuela‘s resource wealth. Exploitingthese complex deposits requires significant investments in infrastructure and the technicalexpertise of major international oil companies and services firms. Industry observers estimate thatmaintaining production from Venezuela‘s Orinoco Belt and other fields would require annualcapital expenditures of between USD3 and USD5 billion. But Chavez‘s plethora of social programs robbed PDSVA of the necessary capital to fund ongoing development of the nation‘s

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likely outcome: Murado will continue Chavismo until the situation truly becomes untenable andthe requisite foreign investment revitalizes Venezuela‘s neglected oil fields.




Investment Low Now

Lack of investment will crush Venezuela’s oil industry Sanati 2013(Cyrus, CNN Staffwriter, March 6, "Chavez's death won't spur new Venezuela oildrilling", http://finance.fortune.cnn.com/2013/03/06/hugo-chavez-death-oil/)

The death of Venezuelan President Hugo Chavez is no panacea for the nation's dysfunctionalenergy industry. Political and economic uncertainty will likely continue to deter foreign investorsfrom fully committing the necessary cash, resources, and expertise that are desperately needed toeffectively tap the nation's oil wealth. Whoever takes over the reins of the nation will need todismantle the policies, structures, and rhetoric that have made investing in Venezuela a fool'serrand. It is not hyperbole to say that Hugo Chavez's death Tuesday rocked the energy industry.The "Bolivarian" strongman has been the oil industry's biggest villain for over a decade. In histenure as president of Venezuela, Chavez not only trashed contracts and expropriated lands andequipment from foreign oil companies, like ExxonMobil (XOM) and ConocoPhillips (COP); healso managed to crush the national oil company, Petróleos de Venezuela (PDVSA), by using it asa piggy bank to fund the programs and policies associated with his nebulously defined "21st

Century Socialism" experiment. There was a time when Venezuela was seen as a bastion ofliberalism -- an exception to the so-called resource curse, which posits that oil wealth fosterscorrupt and dictatorial regimes. Its democratically-elected governments, while far from perfect,were seen as more stable than other oil-rich nations, such as those in the Middle East. Thisstability attracted foreign investors from around the globe, especially U.S. oil giants likeConocoPhillips and Chevron (CVX).By the 1990s PDVSA and its foreign partners, which at thetime included pretty much all the big U.S. and European oil giants, were pumping around threemillion barrels a day of oil from Venezuelan fields, making it the third-largest oil exporter inOPEC. PDVSA's long-term plan was to gradually increase its production capacity to around eightmillion barrels a day, which would have put Venezuela on par with oil exporting giants likeRussia and Saudi Arabia. But the ineptitude and corruption of the Chavez kleptocracy havecontributed to a decline in overall Venezuelan oil output, which at last count came in at 2.4

million barrels a day, 25% less than what it was when Chavez took power 14 years ago. Thatwould have been excusable if Venezuela's oil reserves were rapidly depleting, but that isn't thecase -- not by a long shot. Indeed, in 2010, OPEC confirmed that Venezuela's Orinoco oil beltcontained tar sand deposits equivalent to around 300 billion barrels of oil, enough to fulfillcurrent world demand for 10 years. That would mean Venezuela would have the largest oilreserves on the planet, outstripping Saudi Arabia's 260 billion barrel oil stash. With today's oil price being 10 times higher than where it was when Chavez took power in 1998, one wouldsurmise that the Orinoco oil belt today would be littered with equipment and workers tryingfuriously to tap its abundant oil wealth. But, of course, that isn't the case. During his reign,Chavez instituted a series of devastating "reforms" to the nation's oil industry, which ended up breaking its back. He ripped up production sharing contracts signed under the previousgovernment, forcing foreign oil companies to hand over more of their profit to the state.

Lows in investment risk collapse of Venezuelan productionMufson 2013(Steven, Washington Post Staff, March 6, "Chavez successors likely to continue touse Venezuela‘s oil as political tool", http://www.washingtonpost.com/business/economy/chavez-successors-likely-to-continue-to-use-oil-as-political-tool/2013/03/06/9220bf4a-8656-11e2-98a3- b3db6b9ac586_story.html)

The state oil company Petroleos de Venezuela SA (PDVSA), once regarded as one of the world‘s best, has become the government‘s social-spending arm while investment in oil fields has lagged.

http://money.cnn.com/quote/quote.html?symb=XOM

http://money.cnn.com/quote/quote.html?symb=COP

http://money.cnn.com/quote/quote.html?symb=CVX

http://money.cnn.com/galleries/2011/fortune/1101/gallery.next_big_oil_finds.fortune/3.html



http://money.cnn.com/quote/quote.html?symb=CVX

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The year before Chavez became president, Venezuela‘s oil production reached 3.5 million barrelsa day. Then it slumped so badly that even after a modest recovery, it averaged only 2.5 million barrels a day last year. Meanwhile PDVSA, even after purging thousands of experiencedengineers and managers during a labor dispute, has grown to about 99,000 employees, accordingto a report from the Eurasia Group consulting firm. And half of its staggering $36 billion in debtis held by China. ―PDVSA is a shadow of its former self,‖ said David Goldwyn, a consultant and

formerly the State Department‘s special envoy and coordinator for international energy affairsunder Hillary Rodham Clinton. ―The refineries are [in] shambles. Fields are in decline. Newinvestment is stagnant.‖ Chavez also raised the state oil company‘s share in production projects to60 percent, and while most companies cut new deals, a couple, including Exxon Mobil, went tocourt. Only historically high crude oil prices of about $100 a barrel have saved the country‘seconomy from ruin. Revenue stayed high even though the heavily subsidized domesticconsumption has jumped 39 percent since 2001 and exports dropped by nearly half to 1.7 million barrels a day.

http://www.washingtonpost.com/politics/hillary-rodham-clinton/gIQA1F624O_topic.html










Now Key — U.S. Shift

And the U.S. is diversifying away from Venezuela now — that independently

collapses VenezuelaMeacham 2013(Carl, Director of the Americas Program at CSIS, April 11, " Venezuela‘sPresidential Election: How Significant is the Outcome for the United States?",http://csis.org/publication/venezuelas-presidential-election-how-significant-outcome-united-states)

A1: Much has been said about the interdependence of the two countries, but recent figures showthis is becoming less and less so. Venezuela, through the state-owned oil company PDVSA, is thefourth largest oil provider to the United States, trailing only Canada, Saudi Arabia, and Mexico.At the end of 2011, Venezuela represented 11 percent of imports for the United States — theworld‘s largest oil consumer. To be sure, 11 percent remains a significant share of the U.S.market, but Venezuela‘s share continues to decline. As recently as 2007, U.S. imports ofVenezuelan oil stood at 1.4 million barrels per day (bpd); by 2012, this number stood at 879,000 bpd, according to preliminary figures released by the U.S. Department of Energy‘s EnergyInformation Administration. Meanwhile, the United States continues to advance on its path ofincreasing energy independence as production of shale gas and tight oil grows. Final approval ofthe 2,000 mile Keystone pipeline, which would bring 700,000 bpd of oil from Canada torefineries in Houston and the Gulf of Mexico, would increasingly delink the United States fromVenezuelan exports. Not to mention the possibility of increasing deep-water exploration inMexico as it begins to enact reforms of its energy sector. For Venezuela, the U.S. market willremain the number one destination of oil exports, with roughly 40 percent of its oil going to theUnited States, followed by the Caribbean and China. The oil sector accounts for 25 percent ofVenezuelan GDP and 80 percent of exports. Less demand from the U.S. market would hit theVenezuelan economy with considerable force. The United States might see adverse effects fromrapidly decreasing Venezuelan supplies, such as higher fuel prices, and growth would slow, butthese effects would likely be transitory. What is more likely in the midterm is a rebalancing of the

U.S. energy basket. This is likely to include less dependence on Venezuelan oil because of thechanging energy scenario described above. If current trends continue, the Venezuelan economy islikely to experience difficulty. Despite tight global supplies of oil, Venezuela may struggle to findnew buyers and to reorient infrastructure used to refine its oil to reach other markets, includingAsia, since today only the United States is well-equipped to refine Venezuela‘s heavy, low-quality oil.




Foreign Investment Key

Foreign investment is key to Venezuelan production — they want us to investGardner and Doggett 2013(Timother and Tom, Reuters Staff, April 15, "UPDATE 3-Venezuelaoil minister seeks U.S. investment", http://www.reuters.com/article/2010/04/15/venezuela-oil-opec-idUSN1523721520100415)

Venezuelan Oil Minister Rafael Ramirez on Thursday welcomed investment by U.S. oilcompanies to help develop his country's vast crude reserves, as he held energy talks inWashington for the first time in six years. Ramirez said Venezuela is signing agreements withcompanies in Russia, China, Europe and Japan to develop its reserves and U.S. companies should be there as well. "This United States cannot miss this opportunity," he told reporters on thesidelines of a two-day conference of Western Hemisphere countries meeting to address energyand climate change issues. Relations between the United States and Venezuela have long beenstrained, hitting a particularly low point in 2006 when visiting Venezuelan President HugoChavez took on then-President George W. Bush at the United Nations, calling him a "devil."Ramirez said foreign oil companies wanting to do business in Venezuela would have to "respect"

the country's energy laws and policies. Venezuela has an estimated 99.4 billion barrels of provenoil reserves, with last year's oil production averaging 2.2 million barrels per day, down 190,000 bpd from the year before. It is the world's eighth largest oil exporter and the fourth biggestforeign oil supplier to the U.S. market. MONEY NEEDED TO TAP "HEAVY OIL" To boost itssagging output from traditional wells, Venezuela needs foreign investment and technology to tapthe heavy oil of the Orinoco belt that requires much upgrading to turn into lighter crude.Venezuela was criticized several years ago when it forced foreign companies to renegotiate theiroil development contracts, reducing their profits. Several companies, including those U.S.-based,sold their stakes instead of following the Venezuelan government's new terms. Leading U.S. oilcompanies Exxon Mobil (XOM.N) and ConocoPhillips (COP.N), left Venezuela in 2007 after being pushed out of multibillion-dollar Orinoco projects. Before Thursday, Ramirez had not heldenergy talks in Washington since 2004. He said Venezuelan-U.S. relations had been hurt by the

Bush administration, which he said had been "hostile" to his country. "There's no reasonwhatsoever for this relationship to have been halted," he said. Ramirez said he expected to have a private meeting with his U.S. counterpart, Energy Secretary Steven Chu, during the conference.Patrick Esteruelas, Latin America analyst at Eurasia Group in New York, said he did not thinkRamirez's comments about U.S. firms was significant because Venezuela has not discriminatedagainst companies from specific countries. "It has just demanded an equally aggressive share ofthe (oilfield) rent from all willing investors...very few U.S. companies have shown muchwillingness to go in and swallow that pill," he said.

No one is investing — that prevents more productionAFP 2013(Agence France-Presse, March 15, Venezuela looks beyond US to China as customer",http://www.rappler.com/world/23924-venezuela-united-states-china-oil)

Venezuela's problems in satisfying its new and traditional markets stem from a lack of investmentto boost production. It is stagnant at about 3 million barrels a day (mbd), Quiroz said, citingofficial figures. OPEC puts it lower, at 2.3 mbd. The government had planned to raise productionto nearly 6 million in 2012, but that goal was changed to 2019. Investment has been delayed toPVDSA and foreign joint ventures that operate as minority partners in the Orinoco Oil Belt, adeposit along the river of the same name in eastern Venezuela which is rich in heavy crude.Analysts say PDVSA, which was the driving force of the Venezuelan government, was forced tofinance Chavez's popular social programs for the poor, to the detriment of investing in the oil






U.S. Investment Key

U.S. investment uniquely key —it’s the only consumer large enough to satisfy needs,

and we control key technologyAFP 2013(Agence France-Presse, March 15, Venezuela looks beyond US to China as customer",http://www.rappler.com/world/23924-venezuela-united-states-china-oil)

But those exports have dropped, from 1.38 million barrels in 2007 to 906,000 in 2012, accordingto figures from the US Energy Department. That poses a problem for Venezuela. The UnitedStates pays cash, unlike countries of the Caribbean and South America which import Venezuelancrude under preferential terms or even trade oil for services like doctors and teachers, said analystDiego Gonzalez. The US is importing less from Venezuela because it wants to diversify itsvendor portfolio, said Rafael Quiroz, former director of the state oil company PDVSA. In 2012,Venezuelan exports to the US dropped 11% to $37.4 billion, amid higher prices for Venezuelancrude and derivatives, according to Venamcham, the Venezuelan-American Chamber ofCommerce. The United States is seeking energy efficiency in consumption and has promotedinvestment and technology in non-conventional oil fields. It will achieve energy independence inaround 2020, when it will be the world's top oil producer, says the International Energy Agency(IEA)."It is not easy to substitute a client like the United States for any old client," said Gonzalez, president of the Center of Energy Orientation. What is harder is to have Venezuelan crude keepgoing to Venezuelan Citgo refineries in the US, as they do not exist in other countries. "That ishard to transfer," said Gonzalez.




Venezuelan Decline Causes Oil Shocks

Venezuelan collapse causes significant oil shocksSullivan 2013(Mark, Specialist in Latin American Affairs for the Congressional ResearchService, January 10, "Venezuela: Issues for Congress",http://www.fas.org/sgp/crs/row/R40938.pdf)

Despite notable frictions in bilateral relations, Venezuela has continued to be a major supplier ofoil to the United States. On numerous past occasions, however, Chávez threatened to stop sellingoil to the United States, although Venezuelan officials maintained that Venezuela would only stopsending oil to the United States if attacked by the United States. Because of Chávez‘s strongrhetoric, however, some observers raised questions about the security of Venezuela as a majorsupplier of foreign oil. In June 2006, the Government Accountability Office (GAO) issued areport, requested by then-Senate Foreign Relations Committee Chairman Richard Lugar, on theissue of potential Venezuelan oil supply disruption. At the time, the GAO report concluded that asudden loss of all or most Venezuelan oil from the world market could raise world prices up to$11 per barrel and decrease U.S. gross domestic product by about $23 billion. 116

http://www.fas.org/sgp/crs/row/R40938.pdf

http://www.fas.org/sgp/crs/row/R40938.pdf




Shocks Cause Collapse

Oil shocks collapse the economyRubin 2012(Jeff, Bloomberg Staff Writer, September 23, "How High Oil Prices WillPermanently Cap Economic Growth", http://www.bloomberg.com/news/2012-09-23/how-high-oil-prices-will-permanently-cap-economic-growth.html)

There are many ways an oil shock can hurt an economy. When prices spike, most of us have littlechoice but to open our wallets. Paying more for oil means we have less cash to spend on food,shelter, furniture, clothes, travel and pretty much anything else. Expensive oil, coupled with theaverage American‘s refusal to drive less, leaves a lot less money for the rest of the economy.Worse, when oil prices go up, so does inflation. And when inflation goes up, central banksrespond by raising interest rates to keep prices in check. From 2004 to 2006, U.S. energy inflationran at 35 percent, according to the Consumer Price Index. In turn, overall inflation, as measured by the CPI, accelerated from 1 percent to almost 6 percent. What happened next was a fivefold bump in interest rates that devastated the massively leveraged U.S. housing market. Higher rates popped the speculative housing bubble, which brought down the global economy.

http://topics.bloomberg.com/interest-rates/

http://topics.bloomberg.com/consumer-price-index/

http://topics.bloomberg.com/consumer-price-index/

http://topics.bloomberg.com/interest-rates/




Venezuelan Relations Advantage




General




Investment Solves Relations

Investment in Venezuelan production provides a new route to increased relationsClarke 2013(Kevin, Associate Editor of America Magazine, March 25, "Chavez Death Brings New Chance For U.S.-Venezuela Engagement", http://americamagazine.org/issue/chavez-death- brings-new-chance-us-venezuela-engagement)

Father Carnes said Chávez‘s passing offers an opportunity for the United States, politically andeconomically, to revive its relationship with Venezuela. Occasionally ―capricious anddoctrinaire,‖ Chávez was ―someone the United States had a hard time negotiating with,‖according to Father Carnes. Whether his designated political heir, Vice President NicholasMaduro, or an opposition candidate, most likely Henrique Capriles Radonski, governor of theVenezuelan state of Miranda, is elected to replace Chávez, Father Carnes expects a more pragmatic and less confrontational leadership to emerge. That could mean improved ties not justwith Venezuela but throughout the region, he said, and a possible opening for renewed U.S.investment and partnership with the Venezuelan state oil industry. Despite Chávez‘s notoriousdistaste for U.S. political leaders, under his leadership Venezuela remained one of the largest

suppliers of oil to the United States. This is likely to continue. Chávez died on March 5 ofcomplications from a respiratory infection nearly two years and four surgeries after his cancerdiagnosis was made public. He was 58. He will be remembered for improving the basic lot ofmillions of Venezuelans, Father Carnes said, but more important, he offered to the traditionally politically and materially impoverished of Venezuela ―an idea of what society could and should be and then in some ways delivered on that.‖ Whether or not his social successes can survive his passing is an open question. Chávez, Father Carnes explained, treated his literary, housing orantihunger campaigns as misiones, popular and well-publicized outreach efforts that did notnecessarily leave behind a bureaucratic or political infrastructure that could perpetuate social progress. The relationship of the Catholic Church in Venezuela with the president wascomplicated, if not at times downright nasty. ―There were years that were difficult, tense,‖ saidAuxiliary Bishop González de Zarate, secretary general of the Venezuelan bishops‘ conference.

―There were attacks and strong responses.... But I feel that there was a calming in the past year.‖He said that in the second half of 2012, the bishops‘ conference held two meetings with topChávez government officials, including Vice President Maduro. Can Venezuelan socialism,Chavismo, survive without Chávez? Certainly his personal charisma will be hard to replicate. ―Hewas always the spokesperson,‖ said Father Carnes, ―He was always the focal point, always theone on TV giving voice to this and, especially behind the scenes, the one pulling the politicalstrings to keep this moving inside of Venezuelan politics, and without that the idea can only go sofar.‖ Father Carnes said the United States should learn a lesson from its choppy history with this polarizing Latin American figure. ―One of the things he‘s pushed us on is how little attention wehave given to our neighbors right here on the southern border,‖ said Father Carnes. ―And that‘ssomething felt quite strongly throughout the region. ‖While a parade of recent U.S. presidentswere diverted from the hemispheric south by engagement with Europe, Asia, conflict in the

Middle East and wars in Iraq and Afghanistan, U.S. relations with its closest neighbors andtrading partners moldered on the sidelines. ―We‘ve ignored some of these really vitalrelationships right here on our borders that really do need more of our attention. That‘s somethingwe can learn from the Chávez experience,‖ said Father Carnes.

Investment would drive U.S.-Venezuelan cooperationNegroponte 2013(Diana, Non-resident Senior Fellow in Foreign Policy at Brookings, March 5, "Hugo Chavez's Death an Opportunity for More Pragmatic Relationship with U.S.",http://www.brookings.edu/blogs/up-front/posts/2013/03/05-chavez-venezuela-negroponte)




The death of Hugo Chavez presents an opportunity for the new Venezuelan leadership to tonedown the rhetoric of anti-Americanism and put our bilateral relations on a pragmatic basis. TheU.S. remains the principal purchaser of Venezuelan oil which is refined in Gulf Coast refineriesfor later export to China and other markets. Food and pharmaceutical products, cosmetics, spare parts and electrical equipment are bought from the U.S. although payment for these goods is

delayed and consumers must wait 4 to 5 months for the new inventory to arrive at Venezuelan ports. Venezuela is in the midst of an economic crisis with shortages of U.S. dollars, adevaluation of 32 percent and the prospect of searing inflation. Furthermore, Venezuela needsforeign direct investment, technical expertise and spare parts from the U.S. Rather thandemonizing Washington, an opportunity exists for Caracas to reframe the relationship to arealistic mode.




Relations Key — Laundry List

Solving Venezuelan relations key to the economy and U.S. soft powerGriffin 2013(John, Crimson Editorial Writer, April 3, "Engage with Venezuela",http://www.thecrimson.com/article/2013/4/3/Harvard-Venezuela-Chavez-death/)

When Venezuelan President Hugo Chávez died in early February, his country was thrown into a period of national mourning as the political equilibrium in Latin America hung in the balance. AsVenezuela chooses its next president, Washington should seek to reverse the current trend ofacrid relations between the two nations and engage with the Venezuelan government in Caracastoward stability and prosperity in the Western hemisphere. While it might seem likely thatrelations between the United States and Venezuela would naturally improve after the death of thecombative Chávez, the opposite now seems more likely. Before passing away, Chávez hadhandpicked a successor in Nicholas Maduro, who has assumed power in the interim before the presidential election in April. As Chávez‘s handpicked successor, Maduro has already continuedwith his mentor‘s trend of using anti-American rhetoric to bring popularity to his government,even declaring that American agents may have infected Chávez with the cancer that killed him.

While Washington has officially declared that it is committed to a more functional relationshipwith Venezuela, its actions have not been consistent with this idea: The United States offered noofficial condolences for Chávez‘s death, and both nations have started expelling diplomats fromthe other. Neither nation, it seems, is steering toward more congenial relations with the other.Admittedly, the United States has good reason to be less than enthused about more Chávez-stylegovernance in Venezuela. Calling himself a 21st-century socialist, Chávez nationalized thelucrative oil industry, developed strong trade and diplomatic relationships with Iran and Cuba, repeatedly decried the United States as an imperialist force, and cooperated with the Iranians indeveloping nuclear technology. Engaging in petty diplomat-expulsion spats, however, is no wayto deal with any of these problems, and it in fact only strengthens the Chavistas‘ hold on theircountry. The diplomatic and economic opportunities that would stem from greater engagementwould far outweigh the meager benefits reaped from our current policies. Diplomatically, positive

engagement with Venezuela would be a major step toward building American credibility in theworld at large, especially in Latin America. Chávez (along with his friends the Castros in Cuba)was able to bolster regional support for his regime by pointing out the United States‘ attempts toforcibly intervene in Venezuelan politics. Soon, a number of populist governments in LatinAmerica had rallied around Chávez and his anti-American policies. In 2004, Bolivia, Ecuador, Nicaragua, and three Caribbean nations joined with Venezuela and Cuba to form the BolivarianAlliance for the Peoples of our America, an organization in direct opposition to the Free TradeArea in the Americas proposed (but never realized) by the Bush administration. Chávezgalvanized these nations — many of whom have experienced American interventionist tactics — byvilifying America as a common, imperial enemy. Unfortunately for the United States, its generalstrategy regarding Venezuela has often strengthened Chávez‘s position. Every time Washingtonchastises Venezuela for opposing American interests or attempts to bring sanctions against the

Latin American country, the leader in Caracas (whether it be Chávez or Maduro) simply gainsmore evidence toward his claim that Washington is a neo-colonialist meddler. This weakens theUnited States‘ diplomatic position, while simultaneously strengthening Venezuela‘s. IfWashington wants Latin America to stop its current trend of electing leftist, Chavistagovernments, its first step should be to adopt a less astringent tone in dealing with Venezuela.Caracas will be unable to paint Washington as an aggressor, and Washington will in turn gain a better image in Latin America. Beyond leading to more amicable, cooperative relationships withLatin American nations, engagement with Venezuela would also be economically advisable. With

http://www.theinternational.org/articles/370-the-rocky-us-venezuela-relationship-wh

http://www.albanyherald.com/news/2013/mar/06/chavez-death-unlikely-improve-us-venezuela-relatio/



http://www.cnn.com/2013/03/11/us/venezuela-diplomats-expelled

http://www.nytimes.com/2005/10/30/international/americas/30venezuela.html?_r=0

http://www.nytimes.com/2009/05/09/world/americas/09venez.html

http://www.reuters.com/article/2012/01/07/us-venezuela-iran-idUSTRE8060DO20120107

http://www.nytimes.com/2010/06/15/world/americas/15venez.html?pagewanted=all

http://www.cnn.com/2006/WORLD/americas/09/20/chavez.un/index.html

http://www.guardian.co.uk/world/2011/dec/20/hugo-chavez-barack-obama-clown


http://www.chinadaily.com.cn/cndy/2013-03/12/content_16300175.htm

http://www.alba-tcp.org/

http://www.forbes.com/sites/greatspeculations/2011/06/13/silly-sanctions-against-venezuela-boost-hugo-chavez/

http://www.forbes.com/sites/greatspeculations/2011/06/13/silly-sanctions-against-venezuela-boost-hugo-chavez/

http://www.alba-tcp.org/

http://www.chinadaily.com.cn/cndy/2013-03/12/content_16300175.htm


http://www.guardian.co.uk/world/2011/dec/20/hugo-chavez-barack-obama-clown

http://www.cnn.com/2006/WORLD/americas/09/20/chavez.un/index.html

http://www.nytimes.com/2010/06/15/world/americas/15venez.html?pagewanted=all


http://www.nytimes.com/2009/05/09/world/americas/09venez.html

http://www.nytimes.com/2005/10/30/international/americas/30venezuela.html?_r=0

http://www.cnn.com/2013/03/11/us/venezuela-diplomats-expelled








the world‘s largest oil reserves, countless other valuable resources, and stunning natural beauty toattract scores of tourists, Venezuela has quite a bit to offer economically. Even now, America cansee the possible benefits of economic engagement with Caracas by looking at one of the fewextant cases of such cooperation: Each year, thousands of needy Americans are able to keep theirhomes heated because of the cooperation between Venezuela and a Boston-area oil company.Engagement with Venezuela would also lead to stronger economic cooperation with the entirety

of Latin America. It was mostly through Venezuela‘s efforts that the United States was unable tocreate a ―Free Trade Area of the Americas,‖ an endeavor that would have eliminated most trade barriers among participant nations, thereby leading to more lucrative trade. In a world where theUnited States and Venezuela were to enjoy normalized relations, all nations involved would benefit from such agreements.

http://www.bloomberg.com/news/2012-06-13/venezuela-overtakes-saudis-for-largest-oil-reserves-bp-says-1-.html


http://abcnews.go.com/ABC_Univision/News/strange-bedfellows-venezuela-low-income-americans-warm/story?id=18650347#.UU9EnlvwJio

http://www.nytimes.com/2005/11/06/international/americas/06prexy.html?_r=0



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China Scenario




Chinese Influence Expanding

China is expanding it’s sphere of influence to diversify oil suppliesSalameh 2011(Mamdouh, international oil economist, consultant to the World Bank on EnergyAffairs, Second Quarter, "China's Oil "Adventure" into Venezuela", International Association forEnergy Economics, 17-20)

China‘s growing involvement in Venezuela is an integral part of its global oil diplomacy. China isvery aware that its robust economic growth would falter without secure oil supplies. China‘sglobal oil diplomacy is, therefore, geared towards ensuring that this never happens. The growingdependence on oil imports has created an increasing sense of ‗energy insecurity‘ among Chineseleaders. The Chinese military argue that China‘s energy security needs to be taken ‗seriously anddealt with strategically‘16 That means less reliance on the Middle East, less transportation of oilvia sea lanes policed by the U.S. Navy, more oil brought in by pipeline across Asia and by tankeracross the Pacific and more capability for the Chinese navy to protect Chinese tankers. HenryKissinger has warned of a potential great-power conflict over oil: this is it. For decades thedoctrine of peaceful rise has meant that China has tried to secure energy and raw materials

without confronting the United States and the West. China‘s long-standing willingness to dealwith states that the West regards pariahs is in part a recognition that dealing with Sudan, Angola,Iran or Uzbekistan allows China to avoid direct confrontation with Western interests. However,the larger China has become, the sheer scale of its energy needs has forced it more and more tointrude into areas that the United States regards as its own sphere of influence such as Venezuela.China‘s penetration into the U.S. backyard could have profound political and economicimplications for the U.S., as it is dependent for one-third of its oil on imports from SouthAmerican oil suppliers that it can‘t afford to lose to China. China‘s global oil diplomacy could bring it into conflict with the United States unless both countries find a constructiveaccommodation that allows them to do business.

China is using oil interests to expand its sphere of interest

Xiaoxia 2013(Wang, Economic Observer Staff, May 6, "In America's Backyard: China's RisingInfluence In Latin America", http://worldcrunch.com/china-2.0/in-america-039-s-backyard-china-039-s-rising-influence-in-latin-america/foreign-policy-trade-economy-investments-energy/c9s11647/)

Over the past five years, Chinese businesses have been expanding their footprint in LatinAmerica in a number of ways, beginning with enhanced trade to ensure a steady supply of bulkcommodities such as oil, copper and soybeans. At this year's Boao Forum for Asia, for the firsttime a Latin American sub-forum was created that included the participation of several heads ofstate from the region. Since 2011, China has overtaken the Netherlands to become LatinAmerica‘s second biggest investor behind the United States. China has signed a series of largecooperation agreements with Latin American countries in such fields as finance, resources and

energy. According to the latest statistics of the General Administration of Customs of China,Sino-Latin American trade grew in 2012 to a total of $261.2 billion, a year-on-year increase of8.18%.This trend risks undermining the position of the United States as Latin America‘s singledominant trading partner. In 2011, the U.S.-Latin American trade volume was $351 billion. Some prominent Chinese have condemned the United States' high-profile Return to Asia strategy, withits intention of ―containing China's front door .‖ Shouldn‘t the United States, which put forwardthe Monroe Doctrine two centuries ago, also question how China is quietly arriving in America‘s backyard?

http://worldcrunch.com/business-finance/in-latin-america-there-039-s-no-business-like-soy-business/soy-agriculture-exports-free-trade-seeds/c2s9634/#.UYOySaJhiSo

http://worldcrunch.com/world-affairs/u.s.-and-japan-teaming-up-to-hold-down-china-a-chinese-viewpoint/c1s3380/#.UYOykKJhiSo



http://www.loc.gov/rr/program/bib/ourdocs/Monroe.html

http://www.loc.gov/rr/program/bib/ourdocs/Monroe.html


http://worldcrunch.com/business-finance/in-latin-america-there-039-s-no-business-like-soy-business/soy-agriculture-exports-free-trade-seeds/c2s9634/#.UYOySaJhiSo




Chinese Influence Undermines Leadership

Chinese influence undermines U.S. leadership — especially in the context of oilNolte 2013(Dr. Detlef, Ph.D. in Political Science from the University of Mannheim, Professor ofPolitical Science at the University of Hamburg, German Institute of Global and Area Studies,"The Dragon in the Backyard: US Visions of China's Relations toward Latin America",http://www.giga-hamburg.de/dl/download.php?d=/content/publikationen/pdf/gf_international_1305.pdf)

As Gonzalo Paz (2012: 20) emphasizes, perceived challenges to hegemonic power are almost asimportant as real ones. Essentially, there are two approaches that can be taken in order to respondto the rise of China (not only in Latin America), and both are linked to major internationalrelations theories. One position starts from the assumption that a conflict between the UnitedStates and China is inevitable and that the United States should be prepared to react in time. Thecounterposition is based on the assumption that conflict can be avoided by integrating China intothe framework of international institutions created by the West. In his theoretical framework of―offensive realism,‖ John Mearsheimer (2001; 2005) postulates that great powers strive for

hegemony in their own region of reference. At the same time, they try to frustrate other great powers‘ efforts to gain hegemony in their respective regions. Great powers do not like peercompetitors; they prefer to ensure that several states compete for regional leadership in otherregions but not in their own. From a US point of view, it has been a great advantage that, in the past, no state in the Western Hemisphere has posed a serious threat to US security or survival. Forthis reason, the United States has been free to interfere in the backyards of other potentialregional hegemonic powers. Therefore, the United States suspects that emerging regional powerscould try to build beachheads in its own backyard. In this context, the growing economic presence of China in Latin America is perceived as a challenge to US security. This is especiallythe case with regard to the access to scarce raw materials, especially oil. On the other hand, thereare suspicions that some Latin American countries, while playing the Chinese card, could take amore independent course in their relations with the United States. The Chinese presence in the

Western Hemisphere is perceived as a sign of the erosion of both the power and the geopolitical position of the United States in the region. One should mention that offensive realism is also quiteinfluential among Chinese international relations scholars and their analysis of US policies(Nathan and Scobell 2012; Noesselt 2012).




Relations Solve Chinese Influence

China is threatening U.S. influence in Venezuela — economic engagement is key to

prevent loss of influenceDaly 2012(John, chief analyst at Oil Price, August 23, "Venezuela Ramps up China Oil ExportsUnsettling Washington", http://www.financialsense.com/contributors/oil-price/venezuela-ramps-up-china-oil-exports-unsettling-washington)

The biggest geostrategic change of the past decade overlooked by Washington policy wonks intheir fixation on their self- proclaimed ―war on terror ‖ is that Latin America has been throwing offthe shackles of the Monroe Doctrine. These ignored developments may well soon refocusWashington‘s attention on the Southern Hemisphere, as Venezuela‘s President Hugo Chavezreorients his country‘s to China. It is not an inconsiderable element of concern for the Obamaadministration. According to the U.S. Energy Administration, the United States total crude oilimports now average 9.033 million barrels per day, with the top five exporting countries beingCanada (2.666 mbpd), Mexico (1.319 mbpd), Saudi Arabia (1.107 mbpd), with Venezuela infourth place at 930 thousand barrels per day. Note that two of America‘s top four energyimporters are south of the Rio Grande. Furthermore, Venezuela‘s reserves according to OPECnow top those of Saudi Arabia, with Venezuela now estimated to have the largest conventional oilreserves and the second-largest natural gas reserves in the Western Hemisphere. Two years agoOPEC reported that of the organization‘s 81.33 percent of the globe‘s known oil reservesVenezuela had 24.8 percent, exceeding Saudi Arabia with 22.2So, why is Chavez inWashington‘s bad books? Well, among other reasons, for the company he keeps, as the RussianFederation, Iran and Cuba are all allies. Note that the first two are also major oil exporters. Worsehowever are the social programs that Chavez has implemented to benefit his people, which notonly smack of socialism but offer an alternative to Washington‘s proscriptions. Case in point -Venezuela‘s health care system. A joint Cuban-Venezuelan medical program, ―Barrio Adentro,‖has made health care free and accessible to all Venezuelans. Founded in 2003, Barrio Adentroexpanded Venezuela‘s national health care system by employing more than 30,000 Cuban

medical professionals as the government equipped clinics and hospitals with advanced hightechnology diagnostic and surgical equipment. Something that Americans might consider as the presidential race heats up, with Medicare on the table. Such alternatives hardly please the powersthat be in Washington, but are increasingly considered in Latin America. But, back to energy.Despite the primacy of Venezuelan oil sales to the U.S. Caracas is shifting gears, and China willsoon to become Venezuela‘s main trade partner , with oil sales surging 60 percent in 2012.Duringa recent interview Oil Minister Rafael Ramirez said, ―We are selling 640.000 barrels of petrol perday to China.‖ This is now equivalent to 2/3 of Venezuela‘s oil exports to the U.S., up from400,000 barrels per day in February. For those with a sense of history, before President Chaveztook office in 1999, Venezuela did not ship oil to China, but Chavez has stated that by 2015 heintends to ramp up Venezuelan oil exports to China to one million barrels of crude per day.According to Ramirez, the rise in exports will come from increased production in the natural

resource-rich Orinoco Oil Belt in the east of the country. It is hard to see this emphasis shift asanything but a short-sighted diplomatic disaster for the U.S. Compounding the degradation ofWashington, which insists that China in Africa in particular exploits poor nations by buyingresources at rock bottom prices, Ramirez said simply, "We are selling oil to China at a better price than what is sold in the U.S. market.'' And, given Washington‘s foreign aid stinginess, lastweek President Chavez announced that China Development Bank will bankroll $4 billion dollarsin development projects, to include housing, energy and industrial growth. Again, those with asense of history might note that the year Chavez took office, Venezuela exported to the U.S.

http://www.opec.org/opec_web/en/data_graphs/330.htm






market 1.5 million bpd.So, where does Washington go from here? If it wants to preserve itsincreasingly tenuous foothold in a nation with the world‘s largest oil reserves, it might begin byengaging in some honest diplomacy.




Iran Scenario






Energy Industry Key

Energy cooperation is key — it allows Iran to generate leverageBailey 2012(Dr. Norman, President of the INstitute for Global Economic Growth and AdjunctProfessor of Economic Statecraft at the Institute of World Politics, February, "Iran's VenezuelanGateway", American Foreign Policy Council Publication)

Cooperation in energy lies at the heart of the economic ties between Caracas and Tehran. TheVenezuelan state oil company PDVSA and Iranian state oil company PetroPars, for example,have formed a joint venture for the exploration of a block in Anzoategui state.16 Likewise, theVenezuelan petrochemical company PEQUIVEN and the National Petrochemical Company ofIran have formed a joint venture to manufacture plastics in Zulia state and construct a new petro-chemical plant in Iran, supposedly with Venezuelan technical advice.17 Most significantly,Venezuela has announced that it will ignore international sanctions and supply Iran withgasoline — a move that weakens U.S. efforts to pressure Iran by leveraging its deep dependenceon foreign refined petroleum.18






A2: Relations Will ThawIran will try to continue the relationship despite the transitionDavidovich 2013(Joshua, Times of Israel Staff, March 10, "Iran vows ties with Venezuela toremain firm", http://www.timesofisrael.com/iran-vows-ties-with-venezuela-to-remain-firm/)

But Ahmadinejad, who is to step down later this year, said Tehran and Caracas would continue tosupport each other no matter who was in charge. ―The Iranian nation has strong bonds withrevolutionary nations and we do help to the strengthening of these ties so that no one can imaginethat a vacuum will be created in our relations due to the death of Chavez,‖ the Iranian presidentsaid, according to the semi-official Fars News agency. Annual bilateral trade between the twocountries is estimated to be in the hundreds of million of US dollars, and Chavez andAhmadinejad were frequent visitors to each other‘s countries. However, some Iranian punditshave said that the two countries, who share little in common other than an anti-Western attitude,could not continue to be such strong allies.




Impact — Terrorism

Iran-Venezuelan relations drive terrorismBailey 2012(Dr. Norman, President of the INstitute for Global Economic Growth and AdjunctProfessor of Economic Statecraft at the Institute of World Politics, February, "Iran's VenezuelanGateway", American Foreign Policy Council Publication)

The second purpose is to facilitate the funding of radical organizations and guerrilla movementsin the Hemisphere. This includes, first and foremost, Hezbollah, the radical Lebanese militia thatserves as Iran‘s princi pal terrorist proxy. Over the past three decades, the Iranian regime has fa-cilitated the establishment by Hezbollah of a major regional presence throughout the Americas,and aided and abetted the organization‘s involvement in a range of illicit activities, from drugtrafficking to money laundering.4 (In 2008, for example, the Bush Administration accusedVenezuelan diplomat Ghazi Nasr al Din and Venezuelan-Arab businessman Fawzi Kanan oflaundering money as well as facilitating the travel of Hezbollah members from Iran to Ven-ezuela.5) In the last few years, scholarly analysis has also revealed the use of radical mosques inCaracas and elsewhere in Venezuela as a hub for Hezbollah fundraising activities, and more

notably the existence of Hezbollah ―support cells‖ on Margarita Island.6 Hezbollah likewise isknown to have opened numerous military camps inside Venezuela, as well as in South Lebanon,with the express purpose of training young Venezuelans to attack American targets.7 Iraniansponsorship is not limited to Hezbollah, however; Hamas and even al-Qaeda have also benefitedfrom Iranian/Venezuelan sponsorship, especially in fundraising from the Islamic communities invarious regional states.8 Locally, Iran has also aided the Colombian FARC guerillas through the provision of arms and training in both Iran and Syria, conducted by the Iranian RevolutionaryGuard Corps and its elite paramilitary unit, the Quds Force.9

Iranian influence in Latin America allows them to launch a terrorist attack on the

U.S.Liana 2013(Sara, CSM Staff writer, January 7, "Is Iran's presence in Latin America a threat? The

White House says yes.", http://www.csmonitor.com/World/Americas/2013/0107/Is-Iran-s- presence-in-Latin-America-a-threat-The-White-House-says-yes)

Iran is increasingly isolated as it forges ahead with a nuclear program that has raised alarm acrossthe globe. Iran says its nuclear development is for civilian purposes, like energy, while manyinternational observers believe it is working toward creating a nuclear weapon. In the same time period, Iran‘s growing influence in Latin America, especially within Venezuela, Bolivia, andEcuador, has generated suspicion among those who worry that, at worst, Lebanon- basedHezbollah and supporters in Iran seek to attack the US from south of the American border. Manyhave called on the US to prioritize this new international threat.

http://www.csmonitor.com/tags/topic/Venezuela


http://www.csmonitor.com/tags/topic/Bolivia

http://www.csmonitor.com/tags/topic/Ecuador

http://www.csmonitor.com/tags/topic/Lebanon

http://www.csmonitor.com/tags/topic/Hezbollah

http://www.csmonitor.com/tags/topic/Hezbollah

http://www.csmonitor.com/tags/topic/Lebanon

http://www.csmonitor.com/tags/topic/Ecuador

http://www.csmonitor.com/tags/topic/Bolivia





Impact — Iran Prolif

Iran-Venezuelan relations allow Iran to develop nuclear weapons — U.S. relations

solveDiehl 2009(Sarah, Research Associate, Monterey Institute of International Studies, May 7,"Venezuela's Search for Nuclear Power - or Nuclear Prestige",http://www.nti.org/analysis/articles/venezuelas-search-nuclear-power/)

Venezuela's close ties with Iran and the resulting U.S. disapproval seem to have discouragedBrazil and Argentina from aggressively pursuing nuclear cooperation with Venezuela. As ClaudioMendoza, the former head of physics research at the government-run Instituto Venezolano deInvestigacion Cientifica said, "Chávez's support for Tehran's nuclear ambitions has likelyundermined his government's chances of foreign co-operation with the exception of Iran."[31]Venezuela, the fifth largest oil exporter, and Iran, the second largest oil exporter, began to buildstronger ties after Venezuela hosted the 2000 OPEC meeting in Caracas.[32] Iran and Venezuelashare an interest in maintaining the price of oil, developing Venezuela's oil-rich areas, and moreimportantly in rejecting U.S. dominance and interference around the world.[33] As the UnitedStates and other Western powers intensified their questioning of Iran's intention given itsincomplete reporting to the IAEA and evidence that it might be pursing nuclear weapons,Venezuela came to Iran's defense and supported its policy of enriching uranium for peaceful purposes.[34] The relationship between the two countries intensified as Chávez became avociferous supporter of Iran's nuclear program and critic of Western countries that have soughtUN Security Council resolutions requiring Iran to stop enriching uranium for power plant fuel. Inreturn for Venezuela's support at the IAEA and UN Security Council, Iran has entered into over150 energy, development, commercial, and financial agreements with Venezuela and allegedlyhas invested billions of dollars in joint projects.[35]In February 2006, when the IAEA Board ofGovernors voted to refer Iran to the UN Security Council for sanctions, only Venezuela, Cuba,and Syria opposed the decision.[36] At that time, the Iranian media hinted that Venezuela mightreceive Iranian nuclear technology, and Chávez's opponents suggested that Venezuela might

export uranium in return.[37] An April 4, 2006 Washington Post story heightened concern aboutthe uranium mining rumor: "One serious question that needs to be posed is why would Iran,which already has a uranium mining operation be interested in uranium deposits in Venezuela?Potential answers all smack of nuclear proliferation." [38] However, both the VenezuelanDefense Minister Raul Salazar and a U.S. State Department official denied that there wasevidence that Venezuela had cooperated with Iran on uranium mining activities.[39] Chávez hascalled allegations concerning nuclear co-operation with Iran "part of a US-inspired campaign totaint his government...." [40]While Venezuelan officials have generally denied nuclearcooperation with Iran, they have intensified military, commercial, and political ties with theIslamic Republic. In January 2007, Venezuelan Defense Minister Raul Isais Baduel announcedthat Venezuela was working on technical military cooperation with Iran, which included plans to build unmanned aircraft and refurbish the U.S.-made F-5 fighter jets that Washington will no

longer maintain because of a May 2006 ban on arms sales to Venezuela.[41] In 2007, Venezuelasigned several new agreements in different fields including agriculture, economic cooperation,energy and oil development, heavy machinery factories, and mining.[42]Accounts vary on thevalue of the trade between the two countries. According to Iran's Deputy Minister for Industryand Mines, in 2007 the value of trade between Venezuela and Iran amounted to $17 billion. [43]However, a year later, Venezuelan officials reportedly stated that Iran had "invested more than $7 billion in their country — in plants to assemble cars, tractors, farm machinery and bicycles, aswell as oil and that bilateral trade has reached $4.6 billion."[44] According to one journalist, these




amounts may be too high as Venezuelan newspapers reported that many joint projects have beendelayed and local officials have skimmed off some of the funds.[45]In November 2007, the U.S.House of Representatives took note of Iran's growing ties with Venezuela and approved aresolution (H.Res 435) "expressing concern about Iran's efforts to expand its influence in LatinAmerica, and noting Venezuela's increasing cooperation with Iran."[46] Of particular concern toU.S. representatives is Iran's dogged pursuit of a uranium enrichment capability despite UN

sanctions, and its support for Islamic militant groups like Lebanon's Hezbollah. In March 2008,following a Colombia-led raid on a Revolutionary Armed Forces of Colombia (FARC) camp thatreportedly linked the Venezuelan government to the terrorist organization, Congressman ConnieMack (R-FL) reintroduced a bill (H.Res. 1049) calling for Venezuela to be designated as a statesponsor of terrorism.[47] The draft bill pointed to President Chávez's "strong relationship" withIran as demonstrated by: Venezuela's "200 bilateral agreements with Iran"; Iran's reported offer tohelp Venezuela with a nuclear program; and Chávez's strong support for Iran's controversialnuclear program. The bill also noted the possibility that Iran could use Venezuela to smuggleterrorists, drugs, and weapons into the United States. The Venezuelan Embassy in the UnitedStates posted a point-by-point denial of the resolution's charges, arguing that Chávez had"emphatically condemned any kind of terrorism" and Venezuela had ratified 10 anti-terrorismaccords. With regards to Iran, the embassy stated: "Venezuela and Iran also have discussed

cooperation on nuclear energy, but we are not aware of any significant developments as a resultof these discussions."[48] While denying any plans to work with Iran on nuclear energy or toexploit the country's uranium reserves for military purposes, the embassy did reiterateVenezuela's position that "every country has the sovereign right to develop nuclear energy for peaceful purposes."[49]Congress did not pass a resolution finding that Venezuela is a statesponsor of terrorism. However, in August 2008, the Department of State under theIran, NorthKorea, and Syria Nonproliferation Act imposed sanctions on the Venezuelan Military IndustriesCompanies (CAVIM), along with 12 other foreign companies, for the transfer of items either barred by multilateral export control lists or otherwise "having the potential to make a materialcontribution to the development of weapons of mass destruction of cruise or ballistic missilesystems."[50] Two months later in a further measure to stop WMD proliferation, the U.S.Treasury Department designated the Export Development Bank of Iran (EDBI) as providing

financial services to Iran's Ministry of Defense and Armed Forces Logistics that allow this entityto develop Tehran's alleged WMD programs. The Treasury Department, acting pursuant toExecutive Order 13382, also designated three other businesses owned or acting on the behalf ofEDBI, including Banco Internacional de Desarollo, C.A., a financial institution in Venezuela.[51]These U.S. actions point to a concern that Venezuela will help Iran circumvent UN and U.S.sanctions designed to prevent Iran and Syria from developing WMD and ballistic missile programs. In December 2008, media reports stated that an Iranian firm, Shahid Bagheri, underUN sanctions for furthering Iran's ballistic missile program had "used the Venezuelan airlineConviasa to ship computers and missile engines" to Syria in exchange for elite Iranian militaryforces providing law enforcement and intelligence training to Venezuelan troops.[52] While thesereports raise concerns about Venezuela's assistance to a possible WMD proliferator, April 2009meetings between Chávez and new U.S. President Barack Obama suggest a rapprochement

between Venezuela and the United States that could lessen Chávez's interest in cooperating withIran.[53]




Impact — U.S-Iranian Conflict

That causes US-Iran warBerman 2012(Ilan, Forbes Staff, December 4, "Confronting Iran's Latin American Ambitions",http://www.forbes.com/sites/ilanberman/2012/12/04/confronting-irans-latin-american-ambitions/)

Over the past year, policymakers in Washington have woken up to a new threat to U.S. security.Since October of 2011, when law enforcement agencies foiled a plot by Iran‘s RevolutionaryGuards to assassinate the Saudi ambassador in the nation‘s capital, U.S. officials have begun to pay attention in earnest to Iran‘s growing activities and influence in the Western Hemisphere.What they have found has been deeply worrisome. The Islamic Republic, it turns out, has madeserious inroads into Latin America since the mid-2000s, beginning with its vibrant strategic partnership with the regime of Venezuelan strongman Hugo Chavez. Today, Iran enjoys warmdiplomatic ties not only to Venezuela, but to similarly sympathetic governments in Bolivia andEcuador as well. It has begun to exploit the region‘s strategic resource wealth to fuel its nuclear program. And it is building an operational presence in the region that poses a direct danger toU.S. security. Exactly how significant this threat is represents the subject of a new study released

in late November by the U.S. House of Representatives Homeland Security Committee. Thatreport, entitled A Line In The Sand, documents the sinister synergies that have been created inrecent years between Iran and Hezbollah on the one hand, and radical regional regimes andactors — from Venezuela to Mexican drug cartels — on the other. Some of these contacts, the studynotes, are financial in nature, as Iran seeks to leverage Latin America‘s permissive political andfiscal environments to skirt sanctions and continue to engage in international commerce amidtightening Western sanctions. But these contacts could easily become operational as well. Thereport suggests that ―the standoff with Iran over its nuclear program, and the uncertainty ofwhether Israel might attack Iran drawing the United States into a confrontation, only heightensconcern that Iran or its agents would attempt to exploit the porous Southwest border forretaliation. ‖The U.S. response, meanwhile, is still nascent. To date, only one piece ofCongressional legislation — the Countering Iran in the Western Hemisphere Act of 2012 — has

seriously taken up the issue of Iran‘s penetration of the Americas, and the potentially adverseimplications for U.S. security. Fortunately, the Act has found a receptive ear among many inCongress, and is now likely to pass the Senate with only minor modifications during the currentlame duck session of Congress. Yet, in and of itself, the Act does not constitute a comprehensivestrategy for competing with Iran in the Americas — or for diluting its influence there. To thecontrary, America‘s strategic profile in Latin America is now poised to constrict precipitously. Asa result of looming defense cuts, and with the specter of additional, and ruinous, ―sequester‖ provisions on the horizon, the Pentagon is now actively planning a more modest global profile.To that end, back in May, General Douglas Fraser, the outgoing head of U.S. SouthernCommand, the combatant command responsible for the Americas, told lawmakers that it plans toretract to Central America and focus predominantly on the threats posed by the region‘s rampantdrug and arms trades. In other words, the United States is getting out of the business of competing

for strategic influence in Latin America, and doing so at precisely the time that Iran is gettingserious about it. That could end up being a costly mistake. As the findings of the HomelandSecurity Committee‘s study indicate, Iran‘s presence south of the U.S. border represents morethan a mere annoyance. It is, rather, a potential front for Iranian action against the UnitedStates — one that could well be activated if and when the current cold war between Iran and theWest over the Islamic Republic‘s nuclear program heats up in earnest. Washington needs to be prepared should that happen. Better yet, it needs to craft a proactive approach to confronting Iran

http://www.forbes.com/places/dc/washington/

http://www.forbes.com/places/iran/


http://www.afpc.org/files/getContentPostAttachment/213

http://www.thedailybeast.com/articles/2012/05/20/iran-woos-bolivia-for-influence-in-latin-america.html

http://shadow.foreignpolicy.com/posts/2011/02/15/irans_man_in_ecuador

http://online.wsj.com/article/SB10001424052970203440104574400792835972018.html

http://latino.foxnews.com/latino/politics/2012/02/18/joseph-humire-irans-informal-ambassadors-to-latin-america/

http://homeland.house.gov/sites/homeland.house.gov/files/11-15-12-Line-in-the-Sand.pdf

http://www.forbes.com/security/

http://www.forbes.com/places/venezuela/

http://www.forbes.com/places/israel/

http://www.gpo.gov/fdsys/pkg/BILLS-112hr3783eh/pdf/BILLS-112hr3783eh.pdf

http://www.southcom.mil/newsroom/Documents/SOUTHCOM_2012_Posture_Statement.pdf

http://www.southcom.mil/newsroom/Documents/SOUTHCOM_2012_Posture_Statement.pdf

http://www.gpo.gov/fdsys/pkg/BILLS-112hr3783eh/pdf/BILLS-112hr3783eh.pdf

http://www.forbes.com/places/israel/

http://www.forbes.com/places/venezuela/

http://www.forbes.com/security/

http://homeland.house.gov/sites/homeland.house.gov/files/11-15-12-Line-in-the-Sand.pdf

http://latino.foxnews.com/latino/politics/2012/02/18/joseph-humire-irans-informal-ambassadors-to-latin-america/

http://online.wsj.com/article/SB10001424052970203440104574400792835972018.html

http://shadow.foreignpolicy.com/posts/2011/02/15/irans_man_in_ecuador

http://www.thedailybeast.com/articles/2012/05/20/iran-woos-bolivia-for-influence-in-latin-america.html

http://www.afpc.org/files/getContentPostAttachment/213


http://www.forbes.com/places/dc/washington/




influence and activity south of our border. That, after all, is the surest way for us to avoid havingto face Iran and its proxies here at home.




Topicality




Counter-Interpretation — Investment is Economic Engagement

Economic engagement is investment, trade, and development of overseas business

operationUSAEngage 1997(Organization to promote U.S. economic engagement, Last date cited, "Economic Engagement Promotes Freedom",http://archives.usaengage.org/archives/studies/engagement.html)

III. Economic Engagement Advances Freedom, Democracy and Human Rights American valuesand institutions are attractive throughout the world not because of our power, but because of our prosperity and the appeal of freedom. While the shape of a nation's political and economicinstitutions ultimately reflects the choices of its own people, American policy can support, orhinder, such choices. Through engagement we advance economic growth and transmitfundamental American values. The United States now has the ability to engage countries that foryears were closed to it. The opening of many of the world's economies has created a tremendousopportunity. Poles, Chinese, Slovenes, and Indians all seek American trade, investment, andtechnology, even though their markets for years were effectively closed to Americans. The WorldBank estimates that over 5 billion people -- 87 percent of the world's population -- now live ineconomies driven by market forces. Just ten years ago the number was only 1 billion.13 Byexporting, by investing and operating overseas -- engaging -- American businesses, workers andfarmers promote freedom. Trade and the acceptance of democracy and free enterprise worldwidehas given hundreds of millions of people a chance to grow, prosper and build free institutions andthe rule of law. Through engagement, the United States has a rare opportunity to help build thelong term foundations for a better world. Change will not be rapid, and there will be reverses.Oppression will continue for years in many parts of the world. But by engaging, the United Statescontributes significantly to peace, freedom and the rule of law.

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