The Future of Inter-American Relations

Agencia Brasil / CC BY 3.0 BR.

In the 1990s, following the end of the Cold War, there emerged for a time what appeared to be a relatively wide agreement in the United States and much of Latin America regarding the direction hemispheric relations should take. The convergence focused on renewed efforts to achieve inter- American cooperation and integration along three axes—economic, political, and institutional.

Most nations welcomed the 1990 proposal of President George H.W. Bush to build toward an integrated economic bloc, a hemisphere-wide trade area that would allow for the free flow of capital and goods among all the countries of the Americas. The new bloc, later named the Free Trade Area of the Americas (FTAA), was intended to improve the competitiveness of the hemisphere’s economies, and enable them to keep up with the economically integrated nations of the European Union and with Japan and the fast growing “tigers” of East Asia. The increasingly market-oriented Latin American economies had begun to unilaterally reduce their trade barriers, and saw the value of joining a regional free trade arrangement effectively led by the United States.

Second, the idea that democracy was the only valid form of government was taking firm root across the Americas. Free and fair elections were widely accepted as the only legitimate way to secure power. By 1991, every country in Latin America except for Cuba could boast an elected government.

Moreover, the hemisphere’s governments approved Organization of American States (OAS) resolutions requiring collective action to protect and strengthen democratic governance in all nations of the Americas. This commitment to collective responsibility was subsequently codified in 2001, when every country of the hemisphere (except Cuba) signed the Inter-American Democratic Charter (IADC).

Third, the OAS was seen as providing the crucial institutional framework for regional governance and cooperation. It was supplemented in 1994 by the newly launched Summit of the Americas process, which was designed to regularly assemble the hemisphere’s heads of state. This three-pronged convergence, which represented more of an aspiration than a firm commitment from the governments, has mostly evaporated.

While its relative economic significance will continue to diminish in the coming period, the United States will surely sustain a robust commercial and financial relationship with Latin America.

Negotiations toward a hemispheric trade bloc were halted in 2005 after several years of limited progress, largely because the United States and Brazil could not find common ground on several key issues. The Democratic Charter has hardly ever been invoked, despite many notorious violations of democratic practice. And, after many setbacks, the OAS and Summit of the Americas are both weakened institutions. Today, there is a lack of anything near a consensus on hemispheric relations.

Diminishing Ties Between Latin America and the United States

The United States and Latin America have been drifting apart for a decade or more. Still, the United States remains the most important external economic presence in Latin America—even though it has been steadily losing ground to Europe and China, which is now the leading commercial partner of several Latin American countries. The United States is the first or second largest trade partner for nearly every country in the region. No other nation invests more in Latin America, transfers more technology, or is the source of more remittances and overseas aid (although the latter is focused mainly on public security and drug-related issues). While its relative economic significance will continue to diminish in the coming period, the United States will surely sustain a robust commercial and financial relationship with Latin America.

U.S. capacity to shape the region’s agenda or affect specific decisions has diminished considerably—and its interest in doing so has shrunk as well.

U.S. political engagement in Latin America has suffered a faster decline. Washington no longer has much influence on most issues and decisions in the region, particularly in South America. U.S. capacity to shape the region’s agenda or affect specific decisions has diminished considerably—and its interest in doing so has shrunk as well. Washington has sharply reduced its involvement in conflict and crisis resolution in Latin America, both within or between countries. The Latin Americans themselves have taken on these tasks, often making use of new regional and sub-regional institutions in which neither the United States nor Canada participate.

The United States today has no unifying vision or common approach to Latin America. U.S. policy is largely directed to Mexico and Central America, driven by geographical proximity, economic and demographic integration, and concerns about security and drug trafficking. Brazil—because of its size, economic potential, and regional and global influence—also commands U.S. attention. The two countries, however, have not identified any clear path toward a closer, more cooperative relationship, either political or economic.

Diverging Trajectories in Latin America

Economically, Latin America has divided itself into two blocs. One includes the eleven countries that have free trade agreements with the United States, virtually all of which are seeking even stronger U.S. commercial ties. The other bloc consists of the five members of Mercosur and two aspirants. Nearly all of them enjoy substantial economic relations with the United States, but few have shown much interest in developing more formal commercial ties. There is currently no overlap between the two blocs. Of twenty Latin American countries, only Haiti and Cuba belong to neither.

Regional politics are even more divisive. Among Latin American countries, there is no agreement on (a) what norms have to be satisfied for a government to be considered democratic; (b) what should be viewed as a violation of democratic practice, to be corrected and possibly sanctioned; (c) how persistent violators should be dealt with; (d) who should be the judge of whether violations are taking place; and (e) what role the OAS should play in preventing, judging, and responding to violations.

Other trends are also evident. Perhaps the most important is Brazil’s assumption of a more active and important regional leadership role, particularly in South America—although it does not yet appear fully comfortable in that role or certain of its objectives. Venezuela is in a transition. During the Chávez years, the Venezuelan government was time and again a disruptive force in inter-American relations. The new government of Nicolás Maduro remains hostile to the United States, but Venezuela’s significance in the post- Chávez era is in question.

Latin American countries are diversifying and strengthening their ties outside the Western Hemisphere. China’s presence is expanding almost everywhere in Latin America, including countries that still do not officially recognize the Beijing government. Chinese trade, investment, and land purchases have all exploded in the last ten years, particularly in commodity exporting nations. It is reasonable to expect growing political influence in the region as well, even as the Chinese government has insisted on its only limited interest beyond economics and commerce.

Looking Ahead

The critical question, however, is not where inter-American relations stand today, but where they are headed in the coming decades. What follows are four possible scenarios for the evolution of hemispheric affairs. They should not be viewed as predictions. Indeed, the most likely outcome is probably some unexpected combination of several of the scenarios.

Scenario I: The Drift Continues

The most likely scenario is that inter-American relations remain on their present course. The United States continues gradually to disengage politically from most of the region. Economic relations expand with many countries, but the U.S. share of total trade and investments keeps falling as China and other extra-hemispheric nations increase their share.

The most likely scenario is that inter-American relations remain on their present course. The United States continues gradually to disengage politically from most of the region. Economic relations expand with many countries, but the U.S. share of total trade and investments keeps falling as China and other extra-hemispheric nations increase their share.

Reflecting evolving political forces, social changes, and national aspirations, hemispheric ties may become less structured and perhaps less coherent. Relations among the countries of Latin America could become more tense and divisive. For the United States, the scenario involves increasingly selective engagement, directed to specific issues, countries, and events—without much attention to developing a broader strategy for U.S. relations with Latin America. U.S. interest in issues of regional scope will continue to recede. U.S. engagement remains strong only in Mexico and Central America, but even there it will be less intrusive as the countries become more independent and assertive. Latin America’s foreign relations grow increasingly diverse as globalization opens up new opportunities and weakens hemispheric ties. Within Latin America, countries continue to diverge and disagree; in some cases their differences may intensify in the absence of a significant U.S. presence. The distancing of the United States and Latin America combined with the divisions within the region will likely continue to diminish the importance of the OAS and Summits of the Americas.

Scenario II: A Return to the Pan-American Vision

With Chávez gone, the anti-U.S. alliance, ALBA, loses what is left of its drive, direction, and determination. Venezuela faces deeper political and economic challenges and no longer has the money or unity to play much of international role. No effective replacement for Chávez and Venezuelan resources emerge, and what is left of extreme opposition to U.S. engagement in Latin America fades in importance.

There is broad movement towards the center—regarding relations with the United States and political and economic issues generally. This shift may already be occurring in many countries and should lead to an easing of tension and division between Atlantic and Pacific nations, and between North and South American countries. Most Latin American countries increasingly adopt orthodox macroeconomic policies, their economies become more closely aligned, and they expand attention to issues of equality and social justice. The continued emergence and strengthening of the middle class helps to sustain a pragmatic centrism in most countries, and allows for an increasingly shared understanding of democratic principles and the rule of law.

Mexico and Brazil recognize the value of closer bilateral ties and more regional and global cooperation. For its part, Brazil—whose differences with the United States have frustrated hemispheric economic integration efforts— becomes increasingly concerned about its long-term economic prospects. It recognizes the Mercosur trade bloc as mainly consisting of unstable, economically hobbled partners. Brazil is also painfully aware that other Latin American nations (Peru, Chile, Colombia, Panama, Costa Rica, and Mexico) show greater dynamism and brighter economic futures than the Mercosur group. If U.S. negotiations with Europe and Asia are successful in creating new trade agreements, Brazil knows that its global competitiveness will shrink further. Meanwhile, its expanding middle class presses for faster growth and improved government performance. All of these factors should push Brazil toward greater economic pragmatism and openness, and toward stronger commercial ties with the United States and the higher performing Latin American nations.

The appeal of the Pan-American vision increases as the United States decisively emerges from slow growth and high unemployment, and manages to overcome its current political hyper-polarization. A more prosperous and unified U.S. modifies policies that have long caused friction with Latin America in the past, including Washington’s approaches to drugs, immigration, and Cuba. The United States is viewed as a more responsible and more respectful neighbor.

In this scenario, hemispheric economic cooperation becomes more viable, perhaps opening the way for resumed negotiations toward a hemispheric free trade arrangement. The OAS takes on a more forceful role in regional affairs, and progress toward economic integration allows enhanced political cooperation.

Scenario III: Latin American Solidarity

Exactly as in the previous scenario, a broad movement towards the center leads to improved relations among Latin American nations. Most Latin American governments pursue similar economic and social policies, solid (not spectacular) growth rates are attained across the region, middle classes the future of inter-American relations continue to expand, and a shared understanding of democratic practice emerges. The left and right extremes are rarely able to win elections. Latin America’s two giants, Mexico and Brazil, recognize the value of closer economic ties, and greater international coordination.

During this period of Latin American convergence around centrist politics and economics, the United States remains unable to regain an adequate trajectory of economic growth, the country’s politics remain dysfunctional, and it finds itself overextended internationally. After conservative triumphs in presidential and congressional elections in 2016, 2018, and 2020, immigration legislation becomes more restrictive and exclusionary, harsher sanctions are imposed on a post-Castro Cuba, and U.S. policy in Latin America focuses mostly on drug and security issues and trade disputes.

Under this scenario, political and diplomatic relations remain cordial but the United States’ importance in the region declines sharply. The United States no longer plays a major role in regional affairs. Conflicts between countries or crises within them are addressed by Latin American governments.

The United States remains an important economic partner for many nations in Latin America, although a weak U.S. economy leads Latin America to focus increasing attention on other trade partners and investors. The OAS and Summits lose most of their role in hemispheric affairs. Latin American institutions take on many of their responsibilities.

Scenario IV: A Hostile Relationship

There remains a possibility that Latin American nations could become increasingly hostile or antagonistic toward the United States. Some variant of the anti-U.S. sentiment promoted by Hugo Chávez could take hold in a significant number of countries in the region. Developments in the United States would be the same as those outlined in the previous scenario—a continuing U.S. economic slump combined with highly polarized politics and increasingly isolationist foreign policies.

At the same time, Venezuela and Argentina unexpectedly rebound from their economic setbacks, Cristina Fernández de Kirchner takes firm control of Argentina politics, and Maduro or a Chavista successor does the same in Venezuela. Brazil and Mexico, along with several other countries, enter a period of slow or zero growth again, leaving both their low-income populations and what had been expanding middle classes vulnerable and frustrated. Populist, authoritarian leaders win elections in many countries.

Although extensive economic ties remain in place, neither the United States nor Latin America retains much interest in collaborating with the other. Regional organizations, like the OAS and the Summits of the Americas become moribund, if they survive at all.

Some Final Observations

Interestingly, of the four scenarios, only the last (by far, the least likely) would necessarily be damaging to long-term U.S. interests, and probably to Latin American interests as well.

The Pan-American scenario (Scenario II) is most appealing—in part because we are long accustomed to hearing it portrayed as an ideal model for inter-American relations, but also because it would likely lead to most productive outcomes for both the United States and most countries of the region. But the factors responsible for the already attenuated U.S.-Latin American relationship may have sunk any prospects of a return to the Pan-American framework, at least anytime soon. Since neither the United States nor the countries of the region seem willing to do very much at this point to rebuild vibrant, collaborative relations the best that is hoped is a continuation of some form of selective engagement (see Scenario I). This allows for countries, including the United States, to choose the partners and allies with which it wants to work, and establish appropriate distance from others. It does mean, however, that there will be only limited commitment to any common set of norms or hemispheric institutions.

The United States and Latin America might even benefit from a period of disengagement—rather than trying to sustain what has increasingly become, at least for most countries, a largely empty rhetoric of partnership and community.

Latin American solidarity (Scenario III) should not be considered a particularly intolerable outcome, particularly if it leads to improved and more constructive relations among the countries of Latin America, and enables them to develop joint approaches to critical domestic, regional, and international issues and needed institutional arrangements to put them into practice. The United States and Latin America might even benefit from a period of disengagement—rather than trying to sustain what has increasingly become, at least for most countries, a largely empty rhetoric of partnership and community.

Published in Latin American Security: Canadian and International Perspectives, ed. Monique Greenwood Santos and Stephen J. Randall (Calgary: Centre for Military and Strategic Studies at the University of Calgary, 2013).