Mexican president Andrés Manuel López Obrador has confirmed that representatives of Venezuela’s government and opposition are meeting again at the negotiating table. This would be straight after Washington DC and Caracas could have reached an agreement late last month in Doha, Qatar—according to a source with information on the matter. It is not yet clear whether this is a limited or comprehensive deal.
President López Obrador confirmed this in his morning press conference this Friday. Venezuelan government and opposition delegates had already met a year ago in Mexico City, and agreed on a “humanitarian fund”, but its execution was stalled and negotiations stopped.
The 2022 deal involved unfreezing up to $3bn of Venezuelan overseas assets and using them for education, healthcare, and infrastructure under UN supervision. The main obstacle was US-side worries that assets could be seized by creditors if they were unlocked. José Ignácio Hernández, an opposition lawyer, whipped up these fears despite assurances by creditors that it would not happen.
We have just seen some results of negotiations between the Biden administration and President Nicolás Maduro, notably the deportations deal. Most details of the agreement are yet to be made to the public. However, the same source said that this was a “comprehensive” deal, where electoral conditions and sanctions relief would have been discussed.
The three parties—government, opposition, and the US—were under pressure to reach a deal before primaries due to take place on October 22nd. Fresh negotiations in Mexico would be considering the ban on the opposition’s frontrunners, the most popular of which seems to be María Corina Machado.
According to a source with access to the US side, the White House is reluctant to announce the full scale of the deal before the primaries. They would be fearing that President Maduro could intervene in some way in the vote. Instead, the Biden administration would be more comfortable unveiling the agreement after, even in case the primaries fail to succeed.
The reason why the opposition’s vote could fail is that it could be lacking enough resources. It does not have access to the state’s electoral infrastructure, and some candidates are not running: Benjamín Rausseo, Henrique Capriles, and Manuel Rosales. Capriles, who polled second behind Machado, pulled out just on October 8th. In such a potential scenario, the primaries would only serve to vindicate Machado’s supporters and drive a wedge between them and other parties.
Big incentives
Beyond elections, the key issue seems to be sanctions relief. This point has taken precedence in Washington DC due to migration and energy concerns. While broad economic sanctions are talked of as a “leverage” instrument in the US, many figures in the White House and Capitol Hill see the US could benefit from granting relief.
In a Face the Nation interview on September 24th, House Representative Alexandria Ocasio-Cortez said that economic sanctions have contributed to the mass migration of Venezuelans. This has led to pressure on not just the US, but also its strategic allies across Latin America and the Caribbean. It is estimated 7.7 million Venezuelans have left the country, 2 million of whom are in Colombia.
Add that Saudi Arabia and Russia are colluding to drive up oil prices. Global oil prices are near $90 a barrel, on track for over $100. The renewed hostilities around Gaza are only contributing to further fears of an energy crisis—relations with Persian Gulf friends and foes have just become more difficult for Washington DC.
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On another front, foreign policy experts and officials believe that economic sanctions have thrown Venezuela deeper into the arms of US rivals, such as Russia, China and Iran. The bonds trading ban contributed in this direction: when the sovereign debt is renegotiated, non-western funds will own a sizeable proportion of bonds, to the dismay of the US.
Interviewed by the Financial Times, Hans Humes, CEO of Greylock Capital, said “We know [talks] could fall apart at any time but the interests [of the two governments] have been aligned for a long time.” However, the Biden administration needs to get something from President Maduro to showcase as a prize, to not be seen as caving in.
Other issues remain in the air. Most notably, Venezuela’s crown jewel Citgo Petroleum is in danger of being seized by creditors. The corporation could otherwise be a key asset in Venezuela’s future economic recovery, under any president, chavista or otherwise.
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