Obama and Latin America
July 2, 2008
Alvaro Vargas Llosa
WASHINGTON—Barack Obama recently gave a major speech on Latin America in which he sought to contrast his ideas with President Bush’s record in the region. Saying that Washington has “stuck to tired blueprints on drugs and trade, on democracy and development,” Obama proposed talking to adversaries, increasing foreign aid, being more picky when it comes to trade deals, boosting the Peace Corps and setting up partnerships to reduce oil dependency.
Throughout the 20th century, U.S. policy toward Latin America oscillated between interventionism—military or political—and condescension, best exemplified by the Good Neighbor Policy and the Alliance for Progress. After that, a form of neglect set in, except on the drug war. Occasionally, the neglect was interrupted by efforts to sort out a financial or political crisis in the region or the signing of a trade deal.
A measure of neglect is not a bad thing with regard to a foreign policy toward neighbors who in some cases harbor old resentments and think development will result from international altruism. In any case, the capacity of the United States to influence the region’s politics is no longer great. Chile and Mexico, two of Washington’s closest allies, resisted efforts in the U.N. Security Council to support the invasion of Iraq, and Washington’s preferred candidate to lead the Organization of American States was defeated by a socialist. The International Monetary Fund, through which the U.S. used to exercise some pressure on Latin American governments, is totally focused on Africa because Brazil and Argentina have paid their IMF debts and an export-led boom has boosted fiscal revenue in much the region.
But the United States can still, through its policies, encourage or slow down the current trends south of the border. Obama is right to say that Latin Americans are mostly to blame for their troubles, but wrong to state that increasing foreign aid will improve the region’s economy and pre-empt the emergence of Hugo Chavez-type populists. That was the philosophy of the Good Neighbor Policy, which was intent on undermining the influence of the fascist powers in the 1930s, and of the Alliance for Progress, aimed at halting the spread of communism in the 1960s. Latin American populism actually reigned supreme from the end of the 1920s until the beginning of the 1990s. Its current resurgence confirms that foreign aid will not pre-empt populism: Under George W. Bush, aid to Latin America has doubled to $1.6 billion—the largest increase since World War II.
Obama, numerous Democrats and some Republicans have distanced themselves from the free trade agreements pursued by both Bill Clinton and Bush. Although bureaucratic pacts are less efficient than the unilateral elimination of trade barriers of the kind that Estonia undertook in the early 1990s, they are better than outright protectionism. Increasing the flow of goods and services across the region is not a “Bush policy” but an ideal that can be traced back to the Pan-American Conference held in 1889, which failed to secure a continentwide customs union. Even Franklin Roosevelt and John Kennedy, whose idealistic-sounding policies serve as inspiration for Obama, emphasized trade almost as much as they did aid.
The likely nominee of the Democratic Party favored the trade deal with Peru but opposed the Central American Free Trade Agreement and the pact with Colombia. On Cuba, he has promised to lift restrictions on trips and cash remittances to the island. In matters of commerce, Obama should be consistent with his position on Cuba—which seeks to increase exchanges between the U.S. and the Caribbean nation.
The combined trade between the U.S. and Latin America amounts to nearly $600 billion, and sales south of the border directly support more than 2.5 million American families and many more indirectly. Were it not for the benefits of expanded trade, which in the case of Mexico has grown by 400 percent in the last 15 years, migration to the north would be greater.
Speaking of immigration, Obama’s policy differs little from the one espoused by Bush and McCain, who have better instincts on this than their party. A sensible immigration policy that seeks to legalize millions of hard-working immigrants will improve the perception of the United States across the border.
Ideally, U.S. policy toward Latin America should be an exercise in atmospherics—high on photo ops and very friendly rhetoric, and low on intricate policies. Intricate policies inevitably veer toward interventionism or condescension, and Latin Americans need to continue to move toward self-reliance.
Alvaro Vargas Llosa
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Alvaro Vargas Llosa is Senior Fellow and Director of The Center on Global Prosperity at The Independent Institute. He is a native of Peru and received his B.S.C. in international history from the London School of Economics. He is widely published and has lectured on world economic and political issues including at the Mont Pelerin Society, Naumann Foundation (Germany), FAES Foundation (Spain), Brazilian Institute of Business Studies, Fundación Libertad (Argentina), CEDICE Foundation (Venezuela), Florida International University, and the Ecuadorian Chamber of Commerce. He is the author of the Independent Institute books The Che Guevara Myth and Liberty for Latin America.
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