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Statement of Peter Hakim
President of the Inter-American Dialogue before the
Subcommittee on the Western Hemisphere of the
House Committee on Foreign Affairs
U.S. Policy Towards Latin America
March 1, 2007

A little more than a year ago, I published an article that started with the sentence: "US relations with Latin America have reached their lowest point since the end of the Cold War." The change in the State Department's leadership on Latin America has since then clearly improved the tone of the relationship and eased its surface tension. And there is other good news to report. The Central American Free Trade Agreement (CAFTA) was approved by the US Congress and negotiations were completed for similar agreements with Colombia, Peru, and Panama. But important setbacks have also occurred. The failure of the Administration and Congress to put in place a comprehensive reform of US migration legislation was a blow to our relations with Mexico and most countries of Central America and the Caribbean. The governments of Peru, Colombia, and Panama are increasingly anxious about whether their free trade agreements will gain US congressional approval. Washington's relations with Hugo Chavez's Venezuela have grown more and more fractious, as the country has become less and less democratic and has gained some new allies in its anti-US campaign. The fact is that US ties with Latin America have deteriorated further in past year and a half, as has the United States' standing in the region. US policy is only partly to blame, however. The unabated problems in Iraq are also contributing to the strains.

In a few days, President Bush will be departing for a week-long visit to five countries of Latin America. Although this will be his most extensive trip to the region ever, it has so far been greeted by little enthusiasm and minimal expectations. Still, it should make clear that Washington is hardly indifferent to Latin America and demonstrate US's continuing relevance to the region. Three specific objectives can be accomplished.

• The first priority for President Bush must be to establish a solid relationship with new Mexican President Felipe Calderon and begin to set out a shared agenda for action, particularly on the issue of immigration reform, which is central to both countries. No nation in Latin America, and few in the world, is more important to the United States than Mexico.

• The President's visit will also be an opportunity to reaffirm the quality and resilience of US ties with Latin America's largest nation, Brazil. These have taken on increasing significance as US relations in the region have become more generally contentious. The US and Brazil may differ on more issues than they agree-but they accept and tolerate their difference (even on such core issues as trade, relations with Venezuela, and the war on terror) and cooperate when they do agree (in Haiti, for example). It is expected that the two governments will launch an ambitious new initiative to collaborate on the production, marketing, and research on biofuels-an area in which the countries are both world leaders.

• The strongest US ally in South America, Colombia, is going through a difficult period, and needs reassurance that the US will sustain its support for a new phase of Plan Colombia. Although progress has been uneven, the Administration of President Uribe has made important headway toward establishing government authority and the rule of law, reducing criminal and guerrilla violence, and improving security in the country. These are all reasons the US should continue assisting Colombia, but President Bush should also make it plain to Uribe that more must be done to do clean up the country's corrupt political system and prosecute human rights violations. The US President might also seek to allay concerns of Colombia's neighbors about US military involvement in that country, perhaps by encouraging the Uribe government to consult and coordinate more closely with Ecuador and other countries on police and military activities in range of their borders.

The President's visit, however, cannot, by itself, do much to advance the US agenda, restore US influence in the region, or bring an end to widespread anti-American sentiment. Progress will mostly depend on what President Bush does on his return to keep the US constructively engaged with Latin America. In the coming months, what will be most important is that the United States does no further harm to the already damaged relationship. Latin American governments will be watching with particular interest how Washington deals with three pending issues:

• The first is whether the US Congress will overcome partisan wrangling and ratify three free trade treaties that have been negotiated and signed with Peru, Colombia, and Panama. Failure to approve the accords would be a distressing blow to each of the three countries, which have gone through extremely tough negotiations with the US, have made politically and economically painful concessions to get US agreement, and are willing, even now, to accept substantial changes to assure the treaties' approval. The message to the rest of Latin America would be clear. The US cannot be counted on as a reliable partner even on an issue that Washington has long been advocating.
• A second is whether the US will, once again, renew the special trade preferences enjoyed by Bolivia and Ecuador when they terminate in July. There are arguments for ending the preferences. Extending them, according to Senator Grassley, is "rewarding bad behavior." Both countries, for example, have rejected US overtures to conduct free trade talks. They also have forged close ties with Venezuela's Hugo Chavez and often echo his anti-US polemics. Still, renewal of preferences will keep the US importantly involved in the two countries. Their denial will put people out of work, make two poor countries somewhat poorer, deepen their antagonism toward the US, and help consolidate their alliances with Venezuela. Other Latin American countries will view the cut off as unjust and high-handed.
• The third issue is whether the US will actually build a "wall" or "fence" on its border with Mexico to stop illegal crossings. No action by the US government would be more offensive to the people of Mexico and the rest of Latin America. Regardless of its intent, the erection of this barrier-which is often compared to the Berlin Wall-would make it plain to most Latin Americans that Washington no longer views the region as a serious partner or collaborator, but mainly as a source of unwanted problems. In contrast, a forceful White House campaign to secure the comprehensive migration reform long advocated by President Bush would be reassuring to nearly every government in the region.

The actions outlined above are needed soon to avoid further damage to the US-Latin American relationship. There are several other initiatives that could contribute positively to rebuilding cooperation between the US and Latin America. None of them is guaranteed to produce results, but they will signal continuing US interest in the region-and show that Washington is attuned to its problems and aspirations.

• The US should not hesitate to criticize Venezuelan leader Hugo Chavez, especially for practices that restrict democracy or violate human rights, such as assuming the right to rule by decree and curbing press freedom. But the US should avoid open confrontations with Chavez, which are mostly counterproductive. They give him the enormous media attention he craves, makes him appear more powerful than he is, and encourages him to continue his attacks. Chavez's influence in the region will fade only when Washington is once again effectively involved in hemispheric affairs, and when the countries in Latin America are more successful in combating the social injustices that he justifiably spotlights. Pressing other nations to act against Chavez is equally counterproductive. Washington will mostly end up irritating friendly governments and making it harder for them to cooperate with the US. The political and economic costs of tangling with the Venezuelan leader are just too high for most countries of the region.

• Even a modest shift toward dialogue and engagement in US Cuba policy could open the way for greater cooperation with Latin American and European governments. No one can offer assurances that this would speed up a transition to democratic rule, but it might well make the transition more successful when it does occur. It would also remove a sharp bone of contention from US -Latin American relations.

• The most daunting challenge for most Latin American nations is the social agenda-which includes high and persistent rates of poverty; an egregious scale of income and wealth inequality; discrimination against indigenous and African descendant populations; the dismal performance of public services available to low income groups; and rampant crime and violence that mainly affects poor people. More than anything else, it is the failure to advance on the social agenda that is unsettling politics in many countries of Latin America, and helping to fuel Chavez's appeal in the region. Aside from its development assistance to a handful of Latin America's poorest countries, the US is largely viewed as irrelevant to this set of problems. Trade agreements, which can be helpful in lifting growth rates and expanding employment, are not enough; they need to be complemented with more direct contributions of greater immediate impact.

• There are ideas worth pursuing. The Millennium Challenge Account is helping the region's poorest countries and could be expanded to assist middle income nations with large concentrations of low-income families. Senator Bob Menendez is developing a creative program to help confront Latin America's social needs. Washington could probably do more to encourage and support the multilateral development banks' use of concessional loans and debt relief to finance anti-poverty initiatives. By providing greater financial and technical assistance to its free trade partners in Latin America, Washington could make the trade pacts more productive and promote a fairer sharing of the benefits. The US could contribute to efforts in Mexico and other countries to increase the benefits of their large remittance flows, for example by supporting programs (directed to both recipients and banks) to get more remittance recipients to open and use bank accounts.

• Finally, the US might also begin to rethink its anti-drug policy in Latin America, which absorbs an important share of all aid to the region, but has done little to stem the flow of narcotics into the United States. Replacing Washington's current emphasis on eradication and interdiction with support for developing alternative sources of employment and livelihood could produce real social gains in several countries and, at the same time, prove to be a more effective strategy for combating the drug trade. Certainly, by showing flexibility in its approach to illicit drugs and a willingness to take seriously different Latin American views, the US could reduce frictions with several of the region's governments.

Despite the strains in US-Latin American relations and the loss of US influence in the region in recent years, the United States is still far from being irrelevant to the region. The US is the first or second largest trading partner of nearly every Latin American country; it is the major source of investment capital for the region; most countries want free trade arrangements with the US; and even those that do not, have lobbied hard for Washington to keep their trade preferences. US support has been crucial to the Colombian government as it battles to restore its authority in the country and end Colombia's nightmare of insecurity. Other governments, some of whom are intensely critical of the US war against drugs, continue to seek Washington's support to battle trafficking. And Latin American governments are deeply aware of the vital importance to their countries of migration to the United States and the remittances that flow back. Today, US policy in the Americas is not adequately serving the interests of the United States or the nations of Latin America. Washington needs a different set of policies and approaches to take advantage of the opportunities for mutually beneficial cooperation with the region.