European & US Policies Converge in Latin America

Europeans have long prided themselves on having a relationship with Latin America that was more progressive and enlightened than that of the United States. US policy toward the region was viewed as more interventionist, ideological, and directive—and often based more on domestic politics than real interests. This essay attempts to test that proposition by comparing and contrasting US-Latin American relations to Europe's ties to the region.

Before starting out, let me disclose that my analysis relies very heavily on Aurea Molto's 2010 article on Spain's links with Latin America in Politica Exterior, the Spanish foreign affairs journal.

I did not start off sharing the European view. My hypothesis at the outset was that the Europe and the US should have important similarities in their relationships with Latin America, simply because the EU and the US are themselves alike in so many ways. Both are rich market economies that have about the same size GNPs and boast comparable per capita income. They also have relatively similar levels of trade and investment in the region. They are also both governed democratically, and are committed to promoting democracy and human rights in their foreign policies.

But I also thought that there were likely to be major differences for a variety of reasons. Geography was one. The US borders on Mexico, Cuba, Central America and the other countries of the Caribbean. It is also relatively close to the northern tier of South American countries, including Venezuela and Colombia. Europe is much further from Latin American, and shares no borders with the region.

The recent historical experiences of Europe and the US in the region have also been very different—during the Cold War and its aftermath. The US was far more involved politically and economically, and intervened militarily on numerous occasions. Europe had a gentler and less intrusive presence.

A third distinction is the US participation with Latin American nations in a number of long-standing Western Hemisphere institutions and treaties, including the Organization of American States (OAS) and the Inter-American Development Bank, while Europe lacks any similar institutional bonds. Finally, unlike the US, Europe (perhaps with the exception of Spain) has never had large, continuing migration flows from Latin America. Today more than 16 percent of the US population is of Latin American origin, amounting to some 52 million people. And over the next quarter century, projections are that the number will grow by another 50 percent. Latin Americans now have a huge influence on US culture and increasingly on US politics and economic prospects.

Despite all these many reasons for divergent approaches to Latin America, the US and EU relationships with Latin America turn out to be strikingly similar, and they are continuing to converge.

Part of the reason for the convergence is the changing nature of the US relationship with Latin America. The notion that the US is joined to the region naturally in a Western Hemispheric community has largely faded away. While US politicians and diplomats frequently employ such terms as community, neighborhood, and partnership to describe the relationship, Latin Americans do so only rarely. Maybe the idea or vision of a Pan-American community has always been exaggerated, but it did inspire some important initiatives. Some of them are of recent vintage—such as efforts to create a hemisphere-wide free trade zone (the so-called Free Trade Area of the Americas) and the historic agreement on the Inter-American Democratic Charter. Both initiatives, however, proved unworkable. The free trade negotiations were halted in 2005 and the Charter, although approved by every country in the Americas except Cuba), has simply never been put into practice.

We are also witnessing the diminished stature of the Summit of the Americas (the periodic meeting of elected presidents in the hemisphere) and the OAS, the bedrock institution of Pan Americanism. New institutions—incorporating only Latin American and Caribbean nations—are assuming a larger presence and taking over some the roles of these organizations.

Paraguay’s recent political crisis is case in point. Two South American organizations—Mercosur (the Southern Common Market) and UNASUR (the Union of South American Nations)—took the initiative in responding to the impeachment and ouster of Paraguay’s president. When the OAS launched an investigation of the events in the country, no South American nation was willing to participate. The US was passive throughout. Witness also the Colombian peace negotiations. Neither the OAS nor the US has assumed any role at all. Cuba and Norway will serve as hosts, and Venezuela and Chile will be observers of the talks.

To be sure, the US maintains a very heavy economic footprint in the region, but so does Europe. The US now has free trade agreements with 11 Latin American nations. These are exactly the same countries that have FTAs with Europe—Mexico, five Central American nations, the Dominican Republic, Panama, Colombia, Peru, and Chile. Only three of ten South American countries have agreements with either the US or the EU, compared to eight of nine of the Northern group of Latin American countries (Cuba is the holdout). Neither the US or Europe have managed to reach trade accords with Argentina or Brazil, which together represent nearly half of Latin America's economic activity. Venezuela's entry to Mercosur this year sharply diminishes the prospect of an EU or US agreement with that key South American trade group.

The US and Europe, moreover, tend to have similar trade disputes with Brazil and the rest of Latin America. The most important involve US and EU subsidies and tariffs protecting agricultural producers, Latin Americas tariffs and other import barriers to manufactured products and services, and intellectual property rights. Neither the US or Europe has found a way to develop a productive relationship (economic or political) with Argentina.

The similarities of US and EU relations with Latin America extend many other issues.

European policy toward Cuba has never been as extreme as that of the US, but the EU common position, approved at Spain’s urging in 1996, did move the EU and US conceptually closer. Both demand that Cuba satisfy human rights and democracy criteria in order to normalize relations—which they require of few other countries. And like the far more severe US policy, the EU’s common position did little, if anything, to encourage Cuba to liberalize its economics or its politics. Indeed, it ended up constraining potentially more creative policies from individual EU nations. Moreover, both the US and EU policies made it impossible to cooperate with other Latin America nations on the Cuba question. Neither was a pragmatic approach to the problems that Cuba presents—and neither had an effect on developments on the island.

Immigration policy is another issue on which the EU and US are converging. Over time the EU and the US have both moved more and more toward restrictive policies, as a result of internal politics that turned immigration into a highly politicized and polarizing issue. Two factors may now change the situation for the US, however. The first is the likely decline in migration from Mexico, where the great bulk of undocumented immigrants originate; the decline reflects lower birth rates and economic progress. The second is the growing political power of the Hispanic population in the US—which, in the coming period, will have substantially increasing political participation and voting numbers, and thus greater capacity to shape immigration legislation.

One more issue, that of drug policy, has long been an irritant in US relations in Latin America. Today US consumption of drugs is viewed in many Latin American countries as responsible for the devastating wave of crime and violence that is affecting so many countries of the region. As European consumption increases, my guess is that Latin America countries may also begin to view Europe through the same lens.

What seems clear is that the US and Europe are increasingly facing similar challenges in Latin America and have been responding to them in remarkably similar ways. The question still is why that should that be the case. What is driving EU and US relations with Latin America?

Four factors have become particularly important in shaping Latin Americas international relations. Two of them represent long-term trends—the growing economic and institutional strength of Latin America, which is reinforced by a second factor, the globalization of political and economic relationships. A third factor, hopefully short term, is the economic crisis facing Europe and the stumbling growth of the US. The fourth, whose timeline is uncertain, is the multiple cleavages that now divide Latin America, and prevent it from pursuing a common approach toward the US, the EU, or the rest of the world.

Latin America today is far stronger economically and more stable politically than ever before. Most of the region’s countries are confident in their future. They are pursuing more assertive, independent policies, no longer looking to the US or EU for guidance or support. According to the World Bank, Latin America is a region of mostly upper middle income countries, with increasing middle class populations. There is no guarantee that they will continue to grow into future, become more prosperous, and join the world’s developed nations. The problems and challenges are well known—deteriorated infrastructure, dismal education systems, deep and pervasive inequalities, public security threats, and widespread corruption, among others. Yet Latin America’s prospects are promising—and they are unlikely to retreat from their independent approach to international affairs.

A second long term driver of Latin American attitudes and policy has been globalization and rising emerging markets, which has opened up a wide range of opportunities for the region. China has now emerged as a major trade partner with the region and a growing source of investment. India and other Asian nations will not be far behind. Latin America is not bound to the US or Europe—it has an extraordinary range of choices and is exercising them. It is hard to imagine a shrinking of its international engagements. The EU and US will remain important, but they can no longer act as a monopoly or oligopoly.

Third, during a period of economic weakness, both the EU and the US have less to offer Latin America—in terms of investment, trade, and direct aid. Perhaps more important, Latin Americans no longer feel they can rely on the EU and US to the extent they had in the past. Their economies and politics now appear vulnerable, even endangered—perhaps even more so than many Latin American countries. Accordingly, Latin American nations are building their own defenses: stronger fiscal and monetary management, large reserves, low debt to GDP ratios, and a diversity of international ties.

Finally, there is the perennial question of Latin American integration. Can Latin American nations find enough common ground to act more collectively in their approach to bilateral, multilateral and global issues? Can they find a way to deal with Europe, the US, and China in a more coordinated fashion? How about with the G20, World Bank and IMF? It does not look promising. Even South America seems unlikely to develop strong coordinating mechanisms. Mercosur has long been viewed as the Latin America’s most significant effort at integration—but even that trade agreement is faltering badly and the recent incorporation of Venezuela is likely to diminish its prospects.

That is too bad. A prospering Latin America that was able to develop a common approach to international economic and political affairs would be in an exceptionally strong position to influence global events—particularly if the regions relations with the EU and the US can be reinvigorated.