Paulson heads south

US Treasury Secretary Henry Paulson will make his first trip to South America, beginning on Monday, but his whistle-stop tour will not include the countries in Washington's ‘bad books’.  

Paulson will visit Brazil, Uruguay and Chile on the weeklong visit, which is designed to expand business opportunities, reduce poverty and help build a middle class in the region.  It follows President George Bush's March visit, which also included Brazil and Uruguay, and will involve meetings with the three heads of state and relevant cabinet ministers. 

Paulson's visit, which rather pointedly excludes Argentina and other countries seen as more closely tied to Venezuelan President Hugo Chavez, appears to reflect an increased awareness in Washington that failure to respond to economic and social concerns in the region has led to a sharp fall in US influence in recent years. 

However, it also appears designed to reward governments seen as allies and as 'prudent' policymakers, a strategy that could backfire and reinforce efforts to create a regional alternative to the US economic and trade model.