America and Latin America
Time for a new strategy
George W. Bush is not the first president to make Latin America a personal priority. Nor is he the first to drop the region from his agenda when more urgent issues arise. Latin Americans are not sure whether they prefer presidential attention or neglect. Sometimes presidents can work wonders: FDR's Good Neighbor Policy, Eisenhower's late push for an Inter-American Development Bank, the short-lived bright side of Kennedy's Alliance for Progress, Carter's Panama Canal Treaty, and the vision of free trade in the Americas proposed by the first Bush. Other presidential moves damaged friends, destroyed relationships, and broke treaties: Teddy Roosevelt's Corollary, Wilson's promiscuous use of military force in the Caribbean and Central America, Dollar Diplomacy in the 1920s, and the excesses of the Cold War.
Before the September 11 attacks on New York and Washington, Latin America (especially Mexico) was getting a lot of the president's time. Since that fateful date, Latin America has disappeared from Washington's agenda.
Too bad. U.S. policy toward Latin America needs the kind of thoroughgoing and decisive break with the past that only strong presidential leadership can accomplish. The three stated goals of our Latin America policy are: to preserve peace and minimize potential threats to our security; to raise living standards both at home and abroad through greater economic integration (including freer trade); and to promote human rights and democratic institutions, because it's easier to deal with governments that treat their citizens decently.
These goals can be achieved only with a U.S. strategy that aims at strengthening the rule of law and building stronger inter-American institutions. Unfortunately, much of what we are doing now makes our goals harder to achieve.
Four big changes top my wish list for the policymakers. First, the United States needs to overcome an historic legacy of unilateralism and intervention that keeps inter-American institutions weak, underfunded, and ineffective so that they can be ignored and circumvented whenever convenient. Second, the United States must make a credible, and therefore massive, commitment to human development in Latin America--without which constructive policies of freer trade, deregulation, and fiscal discipline will fail. Third, the United States should open its borders to a freer flow of labor from its NAFTA partners and offer similar advantages to future Western Hemisphere free-trade partners. Finally, the United States should abandon its hopeless and counterproductive war on drug trafficking and substitute a targeted policy of preventing drug use, protecting children, and rehabilitating addicts.
Economic growth in the twenty-first century will mean greater inter-American, as well as global, economic integration. That promises to bring enormous benefits from freer flows of information, technology, capital, labor, goods, and services across national borders. Achieving these benefits, however, will require a more predictable, efficient, and secure institutional environment. This means more powerful international legal and judicial institutions, new or better mechanisms for coordinating monetary and financial policies, new taxation and enforcement mechanisms, and new regulatory standards for labor, health, and the environment. All this will be easier to accomplish in contiguous areas where cross-border transactions are thickest and where political and cultural affinities make negotiating easier, such as in North America and the rest of the Western Hemisphere.
Unilateralism is the unspoken but politically rewarding--at home, at least--practice of pursuing apparent U.S. interests in ways that circumvent or subvert inter-American and international organizations or, in extreme cases, violate treaty obligations and international legal norms. Unilateralism became the hallmark of U.S. policy in Latin America, particularly in the Caribbean, more than a century ago. During the twentieth century, the United States invaded and occupied all or parts of nine sovereign nations (Cuba, Dominican Republic, Grenada, Haiti, Honduras, Guatemala, Mexico, Nicaragua, and Panama) and intervened militarily either directly or through armed proxies to compel submission to U.S. policy or ideological preferences at least 40 times. U.S. policymakers actively sought the overthrow of another two dozen governments, seven of them installed by popular vote in competitive elections.
This is an appalling record. Although U.S. policymakers have always cited various laudable motives to justify each decision, historians have been hard pressed to find any real threats to U.S. security of the sort that treaties and international legal norms require for such actions. The long-term effect of unilateralism has been to condemn inter-American institutions--which the United States often helped create--to irrelevance or extinction. The U.S. preference for a free hand to deal with mostly hypothetical dangers has closed off real opportunities to promote economic growth through more powerful and effective inter-American legal, judicial, regulatory, and financial institutions.
The United States today faces no serious strategic challenges, and nonstrategic threats such as terrorism cannot be diminished or averted by pre-emptive unilateral acts of war. In this context, it should be easy to make a pledge of nonintervention--and make it credible through treaty language that includes an ironclad commitment to refer all decisions on military action, economic embargoes and sanctions, or other warlike interventions to some body we do not control, like the United Nations Security Council. Such a pledge would produce two benefits right away. First, it would require the United States to end its 40-year embargo on trade and travel to Cuba and begin looking for constructive ways (à la China) to engage Cuba within the framework of a revitalized inter-American system. Second, it would protect U.S. policymakers from domestic political pressures to intervene militarily in hot spots like Colombia.
With the clutter and resentments generated by past interventions behind us, the next step should be a dramatic presidential commitment to create jobs and improve education and health throughout the hemisphere. If the U.S. government can learn how to make development its top priority, free trade will be much easier to achieve.
The United States now exports more to Latin America than to the European Union or to China. Two-thirds of this trade is with Mexico. The greatest potential for future growth during the next decade or two may lie farther south. Brazil, for example, has the largest economy in the region, but its trade with the United States is tiny in comparison to Mexico's. Talks are now underway to produce a Free Trade Agreement in the Americas (FTAA) that can be signed and implemented by 2005. This would be good news, except for the danger that the FTAA that emerges could be too superficial and limited to energize new trade and investment.
The two main obstacles to a deeper and better FTAA are political opposition and lingering protectionism, both here and in Latin America. If the political problem can be addressed effectively, protectionism will be easier to negotiate away. Unfortunately, resistance to free trade and market-oriented economic strategies is rising in Latin America. Recession is already intensifying the protests. If the United States is to reap the benefits that will come from freer trade in this hemisphere, it will have to help its allies convince their fellow citizens that free trade is not just a trick concocted by Washington to exploit them. (Washington will have to develop a domestic strategy to support free trade as well, but that's another story.)
The European Union suggests a solution to this problem. Its wealthier members, like France, Germany, and the United Kingdom, routinely provide billions of dollars every year to Ireland, Portugal, Spain, and other poorer members for investment in infrastructure and education. These investments have promoted development and made the recipients better trading partners. The United States has increased its funding to the Inter-American Development Bank in recent years, but the magnitude of the U.S. commitment is still far too low to be visible to most people in the region. The place to start is Mexico, where major investments in infrastructure (highways, bridges, border facilities, the rail system, cleaning up the environment) and human capital (education, health) would not only help reduce unemployment and promote more trade and investment, but also help link freer trade with real improvements in living conditions.
Our policy toward Mexico will serve either as a model for relations with other Latin American countries or as an example of what should be avoided. This is one reason why it is so important to develop a sensible and humane immigration policy. The United States admits roughly 150,000 legal immigrants from Mexico each year and forces the other 300,000 or so who don't get documents to crossing points far away from politically sensitive areas of high population density where border controls are concentrated. In a U.S. labor force of roughly 140 million, the annual flow of Mexican immigrants is tiny and readily absorbed in a growing economy and tends to diminish in recessions. With a rapidly aging native-born population, the United States needs immigrants to pay taxes, especially Social Security taxes. Legalizing the flow of Mexican labor into the United States makes good economic and fiscal sense.
Limiting freer immigration initially to our NAFTA partners Mexico and Canada would have three additional advantages. First, it would provide an incentive to induce other countries to agree to freer trade. Second, gradual extension of new guest-worker programs would allow the United States to monitor flows and adjust to unexpected surges, should they occur. Third, Mexican authorities have said that they are willing, for the first time in their history, to help the United States control its land border from the Mexican side in exchange for an expanded guest-worker program for Mexican citizens. Since the cost of completely militarizing the 2,000-mile U.S. border with Mexico would be prohibitive, this is a deal worth making. Only with the full and willing cooperation of the Mexican government and the otherwise law-abiding Mexican citizens who cross the border every day will the United States ever be able to gain control of its border.
The gravest threat to our strategic and economic objectives in the Western Hemisphere may be the "war" on drugs, which imposes high costs not only on the United States, but on nearly every country from Mexico south to Bolivia. At the moment, Colombia suffers most, because the cartel wars of the 1980s--precipitated by U.S. demands that Colombia extradite drug traffickers for trial in the United States--undermined the nation's military, police, and justice systems and provoked both a spectacular rise in crime and an increase in the strength of two otherwise containable guerrilla movements. Both those movements, according to the U.S. government, support themselves largely through income from taxing or participating in drug trafficking. With the war on terrorism added to this volatile mixture, the U.S. government is already stepping up its involvement in Colombia's civil conflict with additional military aid and advisers. The end is nowhere in sight.
If the United States were to undertake a series of carefully calibrated steps to decriminalize sales to adults and the adult consumption of drugs, focus law enforcement and prevention on children and adolescents, and develop better treatment programs, it would mark a big step forward in facing an important domestic social problem. It would also make a huge difference to many Latin American governments struggling to contain drug wars and to rescue their criminal justice systems from the massive corruption and breakdowns that have been the main by-product of the prohibition regime.
A year after the inauguration of George W. Bush, it is still too early to tell what kind of Latin American policy, if any, his administration will be remembered for. The good news is that the president's instincts appear to be moderate and enlightened, especially toward Mexico. The bad news is that few if any of his appointees match his interest in Latin America or his knowledge and policy preferences. Stay tuned.
Gutman professor of Latin American affairs John H. Coatsworth is director of the David Rockefeller Center for Latin American studies.