RGE - Latin America: A Long Way from Denver?

Latin America: A Long Way from Denver?
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Thomas Trebat | Aug 27, 2008
The ongoing Democratic convention with all its high-tech hoopla and homey patriotic spirit would at first glance have little relevance for Latin America, but in fact this is not the case. A Democratic president, if Obama is elected in November, would have a rare opportunity to recast U.S.-Latin American relations in ways that could be transformative for the region and a boost to the economic growth prospects of the Western hemisphere over the long-run. Along the way, the US could secure major foreign policy advances in (mostly) friendly territory at a time when its global hegemony is increasingly being challenged.
The case for re-engaging with Latin America is made cogently in an article entitled “Morning in Latin America” by the Mexican intellectual and politician Jorge Castañeda in the latest issue of Foreign Affairs. He reminds us that “Latin America is living in a moment that combines the best and worst aspects of its history: growing at a pace unheard of since the 1970s, democratic and respectful of human rights…., with poverty and inequality at long last diminishing.” At the same time, the region is beset with all sorts of internal conflict (crime, drug violence, large-scale migrations, ethnic conflicts) and even the threat of cross-border conflict.
The most recent IMF report on the region (RGE Monitor, August 27, 2008) reinforces the “morning in Latin America” theme in terms of the economic outlook. Yes, the region does seem to be slowing along with the rest of the world, but nothing seems tremendously out of whack compared to previous global slowdowns. If anything, Latin America is in much better shape to wait out this global financial crisis. Economic growth is only 4.3% in 2008 (from 5.6% in 2007), but the slowdown is not raising alarm bells. Mexico is among the slowest growers, but even the Mexicans are relieved that the damage from the U.S. seems manageable. Meanwhile, some of the eye-popping growth rates of recent years continue in places such as Peru (growth up more than 9% in Q1) and Argentina (8.4%, although slowing recently.) Growth remains solid and sustainable in Brazil, has picked up slightly in Chile, and remains strong in Uruguay and the Dominican Republic. Trade positions are sound, even with natural resource prices easing; international reserve levels in Latin America are generally at record levels; inflation is on the rise, but likely to be held in check in most places.
What difference does encouraging picture in Latin America make to a President Obama? Why should he even care about a region so far from Tbilisi or Baghdad, so much less challenging to the US than Beijing or Islamabad, and apparently so much less needy of US assistance than the struggling societies of the African subcontinent?
A strong part of the argument for re-engagement is that the issues that are of greatest concern to Latin America are going to impose themselves on the Obama agenda whether the new President places a priority on them or not. The U.S. is going to have to deal with drugs and immigration, trade disputes, and authoritarian challenges to democracy, whether it chooses to or not. A much more compelling and positive argument for greater US involvement is that it is in the long-term interests of the US to consolidate shared economic prosperity and democracy in Latin America which is as close to being its geostrategic hinterland as any region in the world.
In fact, I would argue that the U.S. is being presented with a once in a lifetime opportunity to “re-introduce” itself to the region, much as FDR did in the Good Neighbor era of the 1930s and JFK did with the Alliance for Progress initiative in the 1960s. The good will resulting from these U.S. policies toward Latin America has had positive effects on U.S.-Latin relations that are visible even to the present day. What a shame no other U.S. presidents learned from these examples.
What are the greatest areas for rapid and transformative changes in the U.S. approach to Latin America? Following Castaneda’s arguments, at least four policy initiatives should be possible within the first six months of the Obama administration.
The first would be to make good the campaign pledge to re-establish dialogue with Cuba without insisting on free elections as a pre-condition, but rather as an outcome of a dialogue with the U.S. Latin Americans have long believed, and still believe, that the Cuban trade embargo is not only cruel, but counterproductive to U.S. strategic interests. Abandoning this anachronistic stance on trade while liberalizing family contacts and remittances and encouraging US travel to Cuba, would only accelerate the democratic transition in Cuba while reintegrating a vital component of the Caribbean and North American economy.
Second, Obama has a unique chance to revive the failed Bush initiatives on immigration which died of so much mismanagement and neglect. Resolving the issue of undocumented Latin workers in the U.S. (perhaps some 15 million or more) is a huge issue to Mexico and to almost a dozen other sending nations in Latin America, including Ecuador and El Salvador. Resolution of the immigration mess means two things: a path to citizenship (or legality) for those already in the U.S. and some sort of temporary worker program to restore circularity to Latin American migrant flows. As President Oscar Arias reminds us in a recent op-ed, Latin American sending nations need a hand from the U.S., not a wall which is what they are getting.
Third, the U.S. should and must work with Latin American nations to answer the intellectual and political challenge of the “hard left” in Latin America, led by Chavez, whose voice is growing and not diminishing. When we reach the point that Honduras, perhaps the longest-standing ally of the U.S. in the entire region, decides to join ALBA while criticizing trade agreements with the U.S., it is time for the U.S. to respond to the challenge posed by resource nationalism and short-sighted populism in Venezuela and Nicaragua, Ecuador and Bolivia, and possibly Argentina as well. This “hard left” has an export strategy, Casteñeda reminds us, while the more moderate and more successful leftist leaders in Brazil, Mexico, Chile, and Uruguay are strangely quiet in their response to Chavez and ever so reluctant to tout their own strategies. The U.S. response must run along the lines of providing greater support to those successful economies and leaders whose economic strategies and commitment to democracy offer the greatest hope to the continent. Calderon in Mexico is in danger of losing his war on drugs. Where is the U.S. on this issue? Brazil is seeking closer relationship with the U.S. in energy and agriculture and in its geopolitical objectives. Why is the U.S. engagement with Lula so low key and listless? At the same time, the U.S. can do much to neutralize tensions with Latin nations that are apparently critical through constructive re-engagement with Ecuador, for example, and helping to mediate festering regional disputes in Bolivia before these boil over.
Fourth, the issue of trade is of vital importance to Latin America. Obama has brought this issue to forefront through careless blaming of NAFTA for the economic problems of Ohio, so this issue cannot be avoided. The Colombia-US FTA will still be pending in January when the new congress reconvenes. These trade deals are hardly a panacea for Latin America, but they do symbolize a shared commitment to economic growth. On the surface, it is alarming to think that Obama wants to renegotiate NAFTA and that Democrats are running against the Colombia accord, but there is a way to resolve these issues to the benefit of all. The trade agreements, including NAFTA, can be re-opened and even strengthened to the advantage of all through greater provision of legal, environmental, and human rights protections. The trade agreements can be broadened to include social and economic infrastructure finance for the signatory countries. The important point is that the U.S. serves its most fundamental national interests by deepening its trade relations with Latin America, not with carelessly tossing out the window agreements that have tied the hemisphere much closer than ever before.
You may think that a broad initiative on this order is out of the question for a new president faced with so many intractable problems in Iraq and elsewhere. It is also tempting to think that Latin America is a very long way from Denver. I am willing to wager that every Democratic delegate in that Pepsi Center is hearing Spanish spoken in the elevators, in the restaurants, in their hotels as Latin American migrants (many undocumented) perform the daily chores that keep the convention moving. These Latin citizens in our midst are daily reminders that Latin America poses challenges and also opportunities for the U.S. that cannot be ignored, no matter how much the politicians try.
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Comments
Tom,
Great piece as always.
I agree with the absence of responses from the US to both: hard and soft lefts. In my view, this absence of responses from the US might trigger (and has already triggered) a response from Venezuela, for example. Do you think the US/Latam relationship can get worse than it is now?
Thanks
Written by Vitoria Saddi on 2008-08-27 11:35:52
Hello Vitoria,
I guess relations can always get worse, especially if the next President decides - for security reasons or whatever - to meddle or intervene in Latin America. President Bush has sort of ignored the region for the last seven years, but he really has not intervened or meddled in ways that used to be common for US presidents. Continued neglect would be better than the wrong type of U.S. engagement in the region. One scenario that would concern me would occur if Russia decided to enhance its security relationships with Venezuela and Cuba in order to punish the US for Georgia and expanding NATO. That could be dicey.
Written by Tom Trebat on 2008-08-27 16:50:22