U.S.-Latin American Relations: Recommendations for the New Administration

By Michael Shifter
University of Virgina Miller Center Forum, October 27, 2008

Click here for video and audio recordings of Mr. Shifter's presentation and audience questions at the Miller Center Forum on October 27, 2008.

As if any further proof were needed, the ongoing financial crisis highlights the already diminished capacity of the United States to shape developments in the rest of the world. With its own house in disorder, the United States will struggle to get back on track as a responsible member of the international community.

Still, though the United States may be considerably chastened, it remains a superpower, whose decisions and actions have a huge global impact. When it falls to the next US administration to deal with the rapidly changing situation in the Middle East, Europe, Asia, or even Africa, it will likely reassess US interests and frame strategic choices in light of new realities.

But if the United States seriously undertakes such an effort for neighboring Latin America, it will mark the first time it has done so. For reasons of geography, history and power disparity, Latin America has typically been treated as a discrete compartment, separate from interest-based foreign relations.

Regardless of how one comes down on the issues of Cuba, immigration, drugs, and trade, the paternalistic impulse on the part of the United States has been unmistakable. Latin Americans find this tutorial attitude extremely irritating, and their objections have prompted a more collegial tone from the United States in certain cases. Unfortunately, it is still manifest in a variety of ways, from the overall diplomatic style to specific policies like drug cooperation decertification or suspending military training for countries that do not sign agreements that exempt US soldiers from prosecution under the International Criminal Court.

While domestic politics is never completely divorced from foreign policy, it has an inordinate and particularly distorting influence on Latin American policy. Hardliners and liberals alike rarely consider the effects policies and statements will have on US-Latin American relations or the ultimate impact for US interests. The decision to build a “wall” along the US-Mexico border, for example, may have been politically expedient but was deeply insulting, not only to Mexico, but to the entire region.

This ingrained reflex to dismiss Latin America as the “backyard” of the United States may have been understandable in a distant era, but today the region is wildly varied and defies lazy, superficial generalizations (e.g. “inflation is out of control” or “democracy is starting to take root”). Whether or not the United States recognizes it, the fact is that different parts of Latin America are moving in markedly different directions simultaneously.

Even sophisticated analysts continue to invoke outdated left-right ideological labels, which should be abandoned as they tend to obscure more than they illuminate. Instead, it is crucial for senior policy officials responsible for looking South in January 2009 to take a fresh and honest look at the divergent tendencies unfolding in Latin America. Tired notions about an area long regarded in the United States as its strategic prerogative should give way to a nuanced appreciation of the marked regional differentiation.

Within the region’s varied political geography, several currents stand out and merit special attention:

• The first is the striking interconnectedness of the United States with its closest neighbors, including Mexico, Central America, and the Caribbean. The linkages are evident and intense in all spheres – from trade to migration to culture. In particular, the economic impact of the US financial crisis and the resulting drop in remittances reveals the profound interdependence within this group of countries.
  
  
• The second feature is the strong and varied international alliances that some countries, notably Brazil and Chile, have forged across the globe. Such countries are certainly not immune to what happens in the United States, but they are chiefly driven by their own independent dynamics, including deepening relationships with key global players like China and India.
  
  
• The resource-based, nationalist movements, especially in Venezuela and Bolivia, are another distinctive trend in this varied regional mosaic. Favorable energy markets and newly mobilized groups are defining another discrete slice of Latin American reality that is often sustained by confrontational postures towards the United States.

These categories are largely structural, rather than ideological, reflected in the tenor of international relations as well as political stability, trade alliances and geography. The government of Nicaragua has close ties to Venezuela, for example, but its propinquity and sustained connections to the United States leave it closer to the first group of countries cited above.

To be sure, these features overlap with one another and change over time. Countries such as Argentina, Peru, and Paraguay exhibit mixed or even contradictory tendencies and thus do not fit easily in any single category. Peru, for example, has been registering impressive growth and is on a path toward global integration yet remains socially precarious and politically uncertain.

Cuba is another distinctive piece of this changing hemispheric outlook. Though modest, the economic changes under Raul Castro suggest that Cuba will now seek to expand and diversify its trading relationships with the rest of Latin America and other global partners. After nearly five decades under the Castro regime, Cuba is still in a category of its own but nonetheless forms part of the region’s new geopolitical scene.

The next president will be hard-pressed to formulate sound policy without recognizing the fundamental distinctions among these three regional currents, which warrant a closer look.

So Close to the United States.....

Close to the top of the list of foreign policy priorities for the next US administration should be addressing the security challenge in Mexico. President Bush was right when he said at the White House on September 5, 2001 that Mexico was “our most important relationship.” The reasons for Mexico’s significance are obvious: the country’s 2,000 mile border with the United States, the robust trade relationship under the 1994 North American Free Trade Agreement, the high levels of tourism and immigration, the environment, and an array of other important bilateral issues. These deepening connections are the product of dramatic shifts of technology and capital, reduced trade barriers, and remarkable cultural intermingling.

The interplay of global forces and national trends has shaped two other central traits in Mexico. The first is its increasingly open, competitive and democratic politics. It has been nearly a decade since Mexico witnessed the alternation in power to the National Action Party (PAN) after seven decades of rule by the Institutional Revolutionary Party (PRI). As in all such situations, the country is a blend of the old and the new, but the overall tendency is toward greater give-and-take and less authoritarian control.

The second trait is markedly less benign, an example of a far darker side of globalization. Mexico has increasingly become a main locus of organized crime, principally fueled by drug trafficking, with deadly consequences. Because of this pernicious phenomenon, there are now nearly 3,000 murders per year in Mexico, more than in Iraq. The rule of law is at serious risk as many towns are being overtaken by mafias that penetrate all realms of the state and society. The Mexican government is having difficulty asserting its authority. Sensing growing frustration amid a deterioration of the situation, President Felipe Calderon has turned to the country’s army to address the problem, though this approach involves considerable risks and has yielded limited results thus far.

Fragile and often corrupt institutions like the Mexican police and courts help account for the dire situation. Displacement of the drug trade and the brazen conduct of agile criminal networks also form a large part of the explanation. With its high demand for drugs and stubborn unwillingness to control the flow of small arms, the United States is hardly an idle bystander in Mexico’s security crisis. Through the Mérida Initiative, the United States has offered $1.4 billion in training and equipment over the next three years, which may help mitigate the deleterious effects and help avert the worst-case scenario. A long-term solution to overcome this profound and pervasive problem, however, will require deeper cooperation along with more systematic and imaginative policies.

Mexico is being overwhelmed by threats to its democratic governance, but the situation in much of Central America and the Caribbean may be even more combustible. Many states in this vulnerable sub-region have scant capacity to contend with the organized crime and drug trafficking contributing to enormous insecurity. In Guatemala, Central America’s largest country, conditions are particularly unsettling, as mafias operate largely unchecked. They are similarly active in much of the Caribbean, where governments are at a great disadvantage compared to well-organized and well-financed criminal gangs. Transnational forces have strengthened in recent years, thanks to the unencumbered transportation accompanying globalization. Street crime is also rampant in such countries as El Salvador, which registers the highest homicide rate per capita of any country in the world. Indeed, there are an estimated 100,000 maras or gang members operating in Central America.

Making matters worse, Central America and the Caribbean are being battered by the current financial and economic crisis in the United States, including sharp declines in remittances, tourism and investment. Higher fuel and food costs have also put tremendous strain on already tight fiscal situations, contributing to a “perfect storm” of economic vulnerability. As a major oil producer, Mexico is better equipped to absorb such shocks. The 2005 Central American Free Trade Agreement (CAFTA), which also includes the Dominican Republic, opened up markets and facilitated greater investment flows but also failed to stem mounting economic pressure and social dislocation. As a result, governments in the region are seeking to maintain the benefits of ties to the United States while trying to take advantage of alternative trading arrangements. Nicaragua, a signatory of CAFTA, is also a founding member of the Bolivarian Alternative of the Americas (ALBA), inspired and organized by Venezuela. Honduras decided to join in 2008. Costa Rica, hardly ideologically sympathetic to Venezuela, has become a member of Petrocaribe, an arrangement in which Venezuela provides discounted oil to some 19 cash-strapped governments.

For Mexico, Central America and much of the Caribbean, the United States remains the central reference point and the dominant actor. The sub-region is highly sensitive to what happens in the United States, benefiting in good times and suffering during economic downturns. The United States is the main trading partner, and despite ebbs and flows in remittances and migration, it is doubtful that the shift towards deeper economic and cultural integration will be reversed over time.

Such underlying, long-term trends, however, do not necessarily translate into political subordination and control. On the contrary, those countries geographically closest to the United States are joining the rest of Latin America in increasing their distance and independence from decisions made in Washington. Many countries of Central America and the Caribbean are pursuing economic and political relationships with Venezuela, an adversary of the United States. Despite being so inextricably intertwined, Mexico has become an influential global player far more autonomous from the United States.

Mexico’s opposition as a non-permanent member of the United Nations Security Council to the US decision to take military action in Iraq in 2003 was perhaps the clearest and most publicized departure from Washington’s line. Even in working out the details of the Mérida Initiative and immigration policy, growing distance has been evident. Whether it recognizes it or not, the United States has been forced to deal with Mexico on far more equal terms, a salutary development that is unlikely to be reversed.
 
Even Colombia, despite being perhaps the closest South America ally of the United States over last decade, is likely to pursue more diversified political relationships in coming years. No country better exemplifies the negative impact of transnational forces – in this case, the narcotics trade – than Colombia, which witnessed a dramatic deterioration at the turn of the century but has since reduced violence and restored a measure of state authority. Through Plan Colombia, the United States has given over $5 billion in assistance to Colombia since 2000, a reflection of its shared responsibility. After all, consumption in the United States and elsewhere fuel the drug problem, which remains largely unchecked.

Even these deep connections – along with trade, migration and cultural integration – have not translated into unconditional political support. The free trade agreement between the United States and Colombia negotiated in 2005 awaits approval by the US Congress, delayed due to concerns about continued violence against union members. While Colombia will continue to look to the United States as a source of support, it is likely to resist any sign of political subordination and expand relationships with governments in Latin America, Europe and Asia.

Ascendant and Globalized

In marked contrast, for such Latin American countries as Brazil and Chile, the United States is hardly the main point of reference. It is an important actor, of course, but does not have nearly the primacy as it does for Mexico and Central American countries. Brazil and Chile have increasingly pursued independent courses and developed a wide range of economic and political relationships throughout the world. They are distinguished by their profound links to the global community and their focus on enhancing their positions by selecting the most advantageous alliances.

Brazil is particularly striking because of its sheer size and undisputed role as a regional power. It also stands out because its sharp break from its not so distant past, when analysts pointed to the country’s occasional moments of greatness but mostly unrealized potential. Under the effective stewardship of the two-term presidencies of Fernando Henrique Cardoso and Luis Inacio “Lula” da Silva, Brazil has established the underpinnings of what long eluded it: economic and political stability. The tenth largest economy in the world, Brazil has benefited greatly from competent management. In recent years it has registered modest but sustained growth while effective social programs have reduced poverty levels. Even Brazil’s Achilles heel, inequality, has declined.

To be sure, progress at home has been far from uniform. The Lula administration has been wracked by corruption scandals and drug-fueled violence poses a serious obstacle to democratic governance. Such problems, however, have been largely eclipsed by the country’s continued economic buoyancy and political consistency. The advances are not irreversible, but Brazil has laid the foundation for long-term stability.

They have also enabled Brazil to credibly play the sort of international role to which it has long aspired, and which is reflected in its being designated one of the so-called “BRIC” countries (along with Russia, India and China) that seem bound for global preeminence in coming years. Brazil has deepened its economic and political relationships with regional powers like China, where bilateral trade expanded to over $23 billion last year.

While it has not yet achieved its goal of gaining a seat on the UN Security Council, Brazil increasingly demonstrates its clout at international gatherings on a variety of central global issues, from the Doha round of World Trade Organization negotiations to environmental agreements. For many years it has led the push for sugar-based ethanol, a choice that has been widely praised given the move away from fossil fuels. Petrobras, the Brazilian national petroleum enterprise, has proved extremely productive and earned plaudits for its efficient management. Perhaps most auspiciously, the recent discovery of the very substantial Tupi oil reserves might, when fully developed, transform Brazil into one of the top ten global energy producers. That happy prospect has further lifted spirits in an already upbeat country.

By fits and starts, Brazil has also moved reluctantly to balance its increasingly global profile with a leadership role in the region. While it primarily focuses on South America, it is also deeply involved in the UN peacekeeping mission in Haiti. A more assertive strategy was reflected by the launching the South American Community of Nations (CSN) under Cardoso and the Union of South American Nations (UNASUR), an attempt to integrate various sub-regional trade groups, under Lula. Brazil also led the “Group of 20” developing countries that objected to trade deals because of their failure to address US and European farm subsidies.

Following a cross-border incursion in 2008, Brazil performed a constructive role in defusing tensions between Colombia on one side and both Venezuela and Ecuador on the other. Brazil has also sought to be an honest broker in Bolivia’s fierce internal conflict, applying pressure to both sides. With the withdrawal of the United States from South America, Brazil has moved to fill the vacuum and avert destabilization in its wider neighborhood. To be sure, inherent in being a regional power are inevitable disagreements with its neighbors. Nationalist sentiments and policies in such countries as Ecuador and Bolivia, for example, have complicated Brazil’s investments in the region.

Rather than lamenting its own inevitable decline, the United States should be cheering the assertion of Brazilian leadership, regionally and globally. To its credit, the Bush administration has developed a cordial and constructive relationship with Lula despite some profound disagreements on such topics as trade policy. Brazil’s ascendancy on various fronts, especially as an emerging energy producer, helps offset the influence exercised by Washington’s chief adversary in the region, President Hugo Chávez of Venezuela. Lula has skillfully pursued a foreign policy that differs from that of the United States without succumbing to nihilistic anti-Americanism. Lula has been uneasy about Chávez’s extra-hemispheric relationships, particularly arms purchases from Russia that risk dividing and unsettling the region.

The case of Chile proves there is no contradiction between being both intensely globalized and enjoying a productive relationship with the United States. Chile seems determined to exercise as many options as possible on the global stage, as evidenced by its 28 trade agreements, notably including one with China. Unlike Brazil, Chile has long enjoyed solid economic performance and, with the prominent exception of the Pinochet years, an extensive democratic tradition. A non-permanent member of the UN Security Council in 2003, Chile voted against the US authorization of the war in Iraq, but the Bush administration put aside its initial disappointment and approved the US-Chile free trade agreement a few months later. The Chile example – balancing trade linkages and occasional political disagreements – presages the kind of relationships the United States will need to forge in an increasingly globalized and independent region.

Nationalism and Confrontation

Aside from Brazil, the only other South American government that clearly aspires to play a wider leadership role in the region is Venezuela, where President Hugo Chávez is determined to carry out a revolution in honor of the 19th century independence hero Simón Bolívar. Chávez has been in office for a decade, and the United States has been a key reference point throughout, for both political and economic reasons.

Politically, Chávez has taken advantage of the resentments and frustrations of his mostly poor constituency in Venezuela to defy the superpower and thereby enhance his own agenda. Though he is certainly a modern 21st century leader, he resembles a classic caudillo or strongman in some respects, relentlessly pursuing political power. Most crucially, Chávez has relied on substantial revenues from oil production to consolidate his power at home and attempt to extend influence abroad. His chief customer has been the United States, the destination for well over half of Venezuela’s oil exports.

The confluence of a favorable energy market and the desperate straits of Venezuela in the 1980s and 1990s, when the country lost some 40 percent of its income, help account for Chávez’s longevity. Also central to understanding Chávez and his movement are the collapse of the traditional political establishment and the inability of the fractured opposition to offer a viable alternative. Many chavistas, or Chávez supporters, have taken advantage of the benefits of globalization like greater access to information and communications technology, which has helped engender a sense of involvement and inclusion. Popular demands and expectations have increased, but so far Chávez has been able to use oil revenue to underwrite social programs that help keep any signs of discontent in check. His authoritarian and autocratic measures – Chávez exercises a tight grip over all key institutions – also limit any potential challenge to his power.

As a military man who is a stranger to the give-and-take of democratic politics, Chávez has continually thrived on battle and confrontation. For him the “rancid oligarchy” of the traditional Venezuelan political class and the “empire” of the United States are one in the same. He is on a mission to forge an alliance in Latin America and globally to challenge US power and interests. His attacks on the United States after it undertook military action in Afghanistan in 2001 and tacitly supported the coup against him in 2002 resulted in a severe deterioration in the relationship. It reached a low point when Chávez expelled the US ambassador from Caracas in September 2008, leading the United States to reciprocate.

Chávez does not want to be vulnerable to a US military action or decision to stop buying Venezuelan oil. As a result, he has stepped up military cooperation efforts, primarily with Russia, which has undertaken joint training exercises with Venezuela and sold the government over $4 billion in military equipment. Chávez is also attempting to diversify oil exports, chiefly to China, the destination of more than 330,000 barrels of oil per day, up from 12,000 in 2004. These relationships, along with a growing alliance with Iran, are aimed at needling the United States while curtailing its influence in the region.

In Latin America, Chávez has been tireless in unveiling new initiatives backed by petrodollars. Though these projects are all undertaken in the name of regional solidarity, they are also designed to bolster his political position. ALBA, a clear challenge to the now stalled Free Trade Area of the Americas (FTAA), today consists of Venezuela, Cuba, Nicaragua, Bolivia, and Dominica, with Honduras slated to join pending congressional approval. Also central to Chávez’s political mission are Petrocaribe and the Bank of the South, an effort to diminish the regional influence of Washington-based international financial institutions. In addition, Chávez has bought nearly $7 billion worth of Argentine and Ecuadoran debt. Many of his grandiose schemes, like the $20 billion Gas Pipeline of the South, make little technical or economic sense and are unlikely to materialize.

Other political experiments in the region have some parallels to the Venezuelan experience with the collapse of the political establishment, mobilization of long-marginalized social groups, emergence of authoritarian tendencies, and reliance on energy resources. Bolivia is perhaps the most apt analogue to Venezuela. President Evo Morales, elected with a convincing mandate in 2005 and ratified overwhelmingly in a 2008 referendum, is using his indigenous identity, popular appeal, and natural gas revenue to construct a new governance model. Morales’s effort is based on tight executive control, which has led to fierce resistance from opposition sectors. A new constitution aimed at “refounding” the nation – reminiscent of the processes in Venezuela in 1999 and in Ecuador in 2008 – has not yet been approved in Bolivia.

Moreover, President Rafael Correa of Ecuador, also a beneficiary of inheriting a fragmented political system, widespread popular frustration, and oil reserves, is determined to engineer a new political framework. After years of weak, short-lived presidencies, the country’s new 444-article magna carta concentrates power in the executive and allows for greater state control in the economy.

Lumping all of these cases together is tempting but mistaken. Each derives from its own particular set of circumstances. While it is true that Venezuela has served as an appealing model for some leaders and Chávez does exert some regional influence, the differences among the countries in this category are pronounced. Ecuador has refused to join ALBA, for example, and nationalist demands for sovereignty are aimed not only at the US, but at Venezuela as well.

In addition, these leaders display different shades of anti-Americanism, but Chávez’s ambition and money put him in a separate category. To be sure, Morales has had a conflictive relationship with the United States, including his expulsion of the US ambassador that prompted Chávez to follow suit. Correa has also employed aggressive rhetoric and followed public opinion in declining to renew the US lease for a space at Ecuador’s Manta military base to use for drug monitoring flights.

Yet both the Bolivian and Ecuadoran governments want to continue to receive US trade preferences, which the Bush administration suspended for Bolivia following the expulsion of the ambassador. Such punitive measures may make some US officials feel good, but they play into the hands of regional leaders who already rely on anti-US rhetoric. They further undermine US standing in the region and alienate globalizers like Brazil and Chile, allies that are essential for Washington to play a constructive role in the region.

Despite some heartening features of the political experiments being pursued in Venezuela, Bolivia and Ecuador, there are a number of “soft spots” and vulnerabilities that may well grow more serious over time. In Venezuela, for example, crime and public security, soaring inflation and widespread corruption have emerged as serious concerns. It is doubtful these countries are laying the foundations for a sustainable model that combines concerns for greater social justice with democratic politics.

Special Cases

There is considerable overlap among these currents running through Latin America. The categories are far from mutually exclusive, and some countries exhibit such contradictory or uncertain tendencies that they do not fit easily in any one of them. These unique permutations are often the result of global forces mixing with national trends, some of which are quite instructive and worth noting:

• Argentina is geographically contiguous to both Brazil and Chile and has made important progress on some aspects of democratic governance, such as human rights. At the same time, the government of Cristina Fernandez has shown some authoritarian elements and been notably confrontational toward both the domestic opposition and the international community, particularly the United States. Moreover, according to polls, anti-US sentiment in Argentina is higher than in any other Latin American country. In a 2007 Chicago Council on Global Affairs survey of 22 countries, in only two cases – Argentina and Palestine – did the majority of respondents prefer that the United States be disengaged from world affairs. Saddled with a real inflation rate second only to Venezuela’s in Latin America, an unpopular administration, and a heavy reliance on soy exports, Argentina will struggle to cope with the current financial and economic crisis.
  
  
• Peru can fit in various categories of the regional landscape, depending on which aspect or which part of the country is being examined. The country has enjoyed impressive macroeconomic performance, registering an average of 6.5 percent GDP growth over the past five years and has securing investment grade marks from the Standard and Poor’s and Fitch rating services. Despite an uptick in inflation, the rate remains among the lowest in Latin America. Peru has also seen a reduction in poverty levels and a deepening relationship with countries in Asia, especially China. The free trade agreement with the United States was approved in 2008 and relations between Washington and Lima are excellent. Though this economic integration with the United States and other global partners points to similarities with Mexico and Colombia on the one hand and Brazil and Chile on the other, Peru also shares some traits with its other Andean neighbors. The political volatility is reflected in Alan Garcia’s approval rating, which has dipped below 20 percent. The considerable social unrest in Peru reflects widespread frustration and anger, particularly in the indigenous communities in the southern highlands. Few other countries exhibit such a sharp contradiction between macroeconomic performance and sociopolitical satisfaction.
  
  
• Paraguay has Latin America’s newest president following the electoral repudiation of the longtime rule of the Colorado Party. It is still too soon to know what political or economic course will be pursued by the government of Fernando Lugo, the first former priest to reach the presidency in Latin America. Still, because of its geographic position and membership in MERCOSUR, Paraguay will doubtless be particularly influenced by Brazil, but also by Argentina and Uruguay. Lugo is likely to fulfill a campaign pledge to review with Brazil the terms of the Itaipu hydroelectric dam, negotiated during the Stroessner dictatorship. For Lugo, Brazil is far more important than the distant United States. At the same time, Lugo has promised to also carry out a constitutional assembly along the lines of what has taken place in Venezuela, Bolivia and Ecuador, which has caused some analysts to predict Paraguay would join this group. To date, however, there are few indications that Lugo intends to move in such a direction. Rather, he seems likely to define his own path based on how his external options fit with the particular conditions Paraguay.

Finally, Cuba has been a special case for the last half century, and the passing of control from Fidel to Raul Castro leaves big questions about what course it will pursue. All signs point to political stability, with political and economic openings coming about only gradually. While a real “transition” is not imminent, some cautious but pragmatic economic changes are already being carried out, such as leasing land to private entities or lifting restrictions on cell phones, appliances, hotels and cars.

Cuba receives an estimated $2 billion subsidy in oil from Venezuela that it can ill afford to cut off given its limited economic options. In fact, Venezuelan support to Cuba has only increased since Fidel has stepped aside. But it is reasonable to expect Cuba to attempt to assert is national interests and diversify its economic and political relationships. In fact, Lula has already extended $1 billion in credit to Cuba, while China and Russia factor heavily in Cuba’s foreign policy priorities. These and other global partners will not hesitate to help Cuba develop the significant oil reserves recently discovered in its waters, possibly catapulting it into the top tier of energy producers. Investors worldwide, including from the United States, will want to be involved. Still, an abrupt end to the embargo is highly unlikely under the next US administration. Even under the best case scenario of modest political progress in Cuba, any moves toward liberalization in US policies will probably be gradual and cautious.

Overcoming Old Habits

Latin America is undergoing profound and complex changes, simultaneously moving at different speeds in divergent directions. Various tendencies can be discerned, each one reflecting the intersection of global forces and domestic pressures. The result is a landscape in considerable flux, no longer amenable to outdated ideological labels from a bygone era. Recognizing the currents described above naturally leads to some broad conclusions about the directions for US policy.

The next US administration would be wise to eschew paternalistic reflexes towards Latin America in favor of a pragmatic, serious review of the region’s challenges and how they affect US interests. This exercise could lead to an environment in which decisions on issues with enormous consequences for the region – such as trade, immigration, drugs, and Cuba – are not merely the product of domestic political pressures and priorities.

This task requires particular urgency given the financial crisis in the United States, the worst since the Great Depression. Whatever the eventual fallout from the deteriorating economy, it is likely to lead to a turn inward, an understandable preoccupation with domestic priorities as the United States tries to get its own house in order. Even before the crisis, the 2007 Pew Global Attitudes survey revealed higher levels of anxiety about globalization and free trade in the United States than any other country in the hemisphere. The financial crisis will also necessarily mean fewer resources for global affairs, particularly for a region that has long been low on the policy agenda.

To the extent that any attention has been devoted to Latin America in the 2008 campaign, the ideas seemed borrowed from a previous period, grafted on to today’s reality. The Republicans have advanced a platform with echoes of the 1980s, when Ronald Reagan saw the region sharply divided between our friends and Cold War adversaries. The logical conclusion of this mindset is to punish our adversaries (Cuba, Venezuela and Bolivia) and reward friends (Colombia, Mexico). Yet, this posture ignores how punitive measures like the embargo against Cuba have proven counterproductive and how our current and potential partners reject such polarizing approaches.

The Democrats have expressed a broader and more sophisticated vision, but it, too, seems too anchored in previous eras, either the 1960s of John F. Kennedy or the 1990s of Bill Clinton. In those periods, however, the United States was able to achieve more because it held a much stronger position than it does today. The capacity of the United States to affect the course of events regionally and globally has notably diminished. At the same time, Latin America itself has transformed, now encompassing serious global players as well as potential volatility, often in the same countries.

To be sure, it is hard to argue with increasing the numbers of Peace Corps volunteers, expanding consulate offices, or reestablishing the special envoy for the Americas. These are not responsive, however, to the challenges the region is grappling with or the role it hopes for from the United States. There is broad support for Plan Colombia and the Mérida Initiative in both US political parties and they are doubtless necessary, but these projects are hardly sufficient to deal seriously with a deteriorating and destabilizing drug problem.

Though the United States would benefit from an overall vision of its relations with the Americas, it is increasingly difficult to find many commonalities throughout the region. A nuanced and differentiated analysis of the trends in Latin America should prompt policies and approaches tailored to each situation, rather than opposing camps or blocs. In the Andes, for example, the United States can diminish its role in Venezuela by refusing to provoke or respond to broadsides from President Chávez, depriving him of his chief rallying cry domestically and regionally. While containing Venezuela, the United States can remain engaged in Bolivia and Ecuador, where it still has key economic ties and there are possibilities for productive dialogue.

Given the nature of the region’s challenges and the scarcity of resources available to the next US administration, more intense and imaginative cooperation with allies will be essential. Some of that is already taking place, but most of it has been bureaucratic and perfunctory, lacking political energy or strategic thinking. Fortunately, there are low-cost, high-reward policies that the United States can pursue and have a significant impact on the region. Brazil, for example, deserves to be a high priority and should be encouraged in its ethanol policy and push for global leadership. Modest efforts on these fronts will be rewarded with a deeper relationship with a key ally in the region and an emerging global power. Combining a change in diplomatic style with an effort to be an active and reliable partner in inter-American and global multilateral institutions could go a long way towards building the hemispheric confidence that has eroded in recent years.

Despite the high level of mistrust in inter-American affairs, most Latin Americans and their governments would welcome more engagement from the United States on a shared agenda. They understand that diminished US capacity does not mean US irrelevance. What they are hoping for is a middle ground approach that treats the region seriously without being heavy-handed, reflecting a realistic understanding of US interests and the new political geography in the region. This much the United States should be able to deliver.