U.S. foreign policy toward Latin America… in the Trump era
Since the election results were announced proclaiming Donald Trump president of the United States in November 2016, experts, pundits, business executives and others working in Latin American affairs have been eagerly contacting their sources to get a sense of what the new administration’s foreign policy toward Latin America would look like. The disorientation in the region following Trump’s victory has resulted in negative projections about what his administration means. However, it is still not clear how U.S. foreign policy shifts will impact the region, and analysts have learned by now that trying to predict President Trump’s moves is a risky business. Therefore, rather than overreact, it is advisable to step back and think strategically on how a Trump presidency might shift the United States’ regional approach and how its impact might be different for various countries.
LATIN AMERICA IS NOT A PRIORITY…AGAIN!
Let’s face it: the fall of the Berlin wall caused a shift in U.S. global geostrategic interests, and after the terrorist attacks on September 11, 2001, Latin America ceased to be a foreign policy priority for its northern neighbor. Former President George W. Bush began his presidency in 2000 with intentions of strengthening ties with the region, but the terrorist attacks on U.S. soil, the ensuing wars in Afghanistan and Iraq, the battle with al-Qaeda and the clash with Iran shifted the focus of his foreign policy. Meanwhile, President Obama relegated the region to the back from the beginning, in large part for the same geostrategic reasons mentioned earlier. Additionally, his own foreign policy initiative was focused on a strategic pivot toward Asia. The United States’ neighbors to the south took a back seat during his presidency.
Latin America’s lack of strategic importance for the United States is not likely to change under Trump’s presidency given the number of pressing foreign policy issues currently facing the White House in other parts of the world. This will only change if an unprecedented situation that could endanger U.S. security takes place in the region. While the president has not yet nominated the person who will permanently fill the top diplomatic position for the region, it is worth noting that the administration has named individuals with strong Latin American expertise to key government positions, although primarily in security and defense.
U.S. FOREIGN POLICY PILLARS REGARDING LATIN AMERICA…WHERE WILL THE TRUMP ADMINISTRATION STAND?
From the late 1980’s to the present, U.S. foreign policy toward Latin America has mostly rested on three main pillars: free trade, democracy & governance (soft power) and security. From Republican presidents like Ronald Reagan, George H. W. Bush and George W. Bush to Democrats such as Bill Clinton and Barack Obama, U.S. administrations have all supported these three areas, albeit with slightly different approaches.
Free trade is perhaps the one foreign policy area where this White House has demonstrated the most clarity in its position. President Trump has remained true to his electoral discourse, despite the views of those who felt his campaign was more of a show to attract voters than an explanation of his own administration’s policies. As soon as he assumed the presidency, he withdrew the U.S. from the Trans-Pacific Partnership (TPP) free trade agreement, which focused on Asia but also included three Latin American countries (Chile, Mexico and Peru). He has also reiterated his willingness to renegotiate the North American Free Trade Agreement (NAFTA), as well as all treaties that “do not benefit” the United States.
The major players in trade and foreign investment connecting the United States and Latin America will maintain a close economic relationship. The U.S. is currently the main trading partner and first foreign investor in Latin America. In 2016, U.S. exports to Latin America reached $353.4 billion, while Latin American exports to the United States totaled $397.1 billion. Meanwhile, U.S foreign direct investment in the region reached $46 billion in 2015.
Trump and his economic advisors have expressed skepticism toward multilateral agreements, instead favoring bilateral deals. Regardless of the structure, the trade treaties that will be most scrutinized are those deals where the United States shows large deficits. When dissecting the numbers, it becomes evident that, when separating Mexico from the equation, the United States shows an overall trade surplus with Latin America. This is of course, a very simplistic approach to looking at trade, but given the nationalist undercurrent sweeping the U.S. domestic political scenario, trade with Mexico became an easy target on the campaign trail and into the presidency.
The trade treaties that will be most scrutinized are those deals where the United States shows large deficits. (…)When separating Mexico from the equation, the United States shows an overall trade surplus with Latin America.
Revisions of NAFTA will surely top the trade agenda. Trump won on a strong discourse of defending jobs in the United States that have disappeared because of “bad trade deals,” and he is not about to backtrack on one of his cornerstone positions. The question becomes then, to what degree will NAFTA be modified? In 2016, the U.S. trade deficit with Mexico was $63 billion, with U.S. exports at $231 billion and imports at $294 billion. Trump’s election and the rhetoric surrounding it have already caused double-digit devaluation in the peso, significantly impacting Mexico’s growth projections for 2017 and 2018. However, a revision of NAFTA could also have negative repercussions for U.S. companies doing business there. Mexico is also a close U.S. ally in matters of security, playing an important role in controlling narcotrafficking and immigration flows. These are sensitive high-priority matters to the United States, and cooperation with Mexico in these areas is crucial. Changes will undoubtedly be made to the NAFTA agreement, but we will have to read the fine print to assess the severity of its impact.
The other multilateral free trade agreement in the region, the Dominican Republic-Central America FTA (CAFTA-DR), between the United States, Central America and the Dominican Republic, which may also come under review, may not likely suffer many changes given the U.S. trade surplus of $5.5 billion in 2016.
In bilateral free trade agreements with Chile and Peru, the United States also boasts a trade surplus of $4.1 billion and $1.8 billion, respectively. In the case Colombia, the Trump administration is likely to look beyond trade numbers and use the United States—Colombia Trade Promotion Agreement (TPA) as a tool for broader negotiations.
The U.S. trade deficit with Colombia reached $696.3 million in 2016, but in this case the bilateral trade agreement might come into play in the overall negotiations with a key ally in efforts to curtail drug trafficking. This includes talks regarding Peace Colombia, which received a $450 million aid package in 2017 from the Obama administration to provide development, military and security assistance, as well as support for building institutions. The 2018 outlook for U.S. aid for Peace Colombia under Trump’s budget, decreases the aid amount by 21 percent when compared to FY 2016 funding. Additionally, Colombia’s cooperation with the United States regarding Venezuela’s unfolding political crisis, may also be a factor in new discussions impacting Colombia-U.S. relations.
Trade with the United States will continue to be important to other countries in Latin America. After Mexico, Brazil remains the most important trading partner in the region. In 2016, the U.S. trade surplus with Brazil was $4.1 billion, with U.S. exports at $30.3 billion and imports at $26.2 billion. With no free trade deals in place or expected, they are not likely to experience any major shake-up. In fact, having good relationships with Trump and his team, as is the case for Argentine President Mauricio Macri, can lead to positive results, especially when the issue is away from the media’s bright lights and does not cause the president political backlash. Following Macri’s visit to the White House, the U.S. Department of Agriculture announced it would lift the ban on Argentine lemon imports. This enabled the United States to import lemons from the South American country, one of the biggest producers in the world, despite opposition from California growers, notably a state where the president did not receive much support during the elections. President Macri has been actively working to establish a close relationship with Washington, positioning Argentina as a reliable partner in the region and leveraging his personal relationship with Trump from past real estate deals. In adittion, the United States had a trade surplus of $3.9 billion with Argentina in 2016.
Having good relationships with Trump and his team, as is the case for Argentine President Mauricio Macri, can lead to positive results, especially when the issue is away from the media’s bright lights and does not cause the president political backlash.
Democracy & Governance (Soft power)
The term “soft power” was defined by Harvard University Professor Joseph S. Nye as the “ability to affect others to obtain the outcomes one wants through attraction rather than coercion or payment.” Over the last several decades, it has been a strong focus for U.S. foreign policy around the world and a cornerstone of U.S. relations with Latin America. The United States has made great use of this approach to build good relations with other countries and strengthen its position as a world leader. It propagates U.S. culture, language, traditions and values to the world, popularizing the “American Way” and influencing opinions and policies. This trend has increased exponentially due to the advancement of new technologies, the media, the information age and social media networks.
Promoting democracy and governance has been at the center of this effort. Its main vehicle has been the United States Agency for International Development (USAID), founded in 1961 to promote economic development and social programs via international assistance. Since the 1990’s, USAID’s focus in Latin America has turned to promoting democracy and good governance, with notable programs in Mexico, Central America, the Caribbean and the Andean region. Colombia specifically has been a key country, given that the military assistance through Plan Colombia was closely accompanied by programs aimed to strengthen the rule-of-law and good governance in areas the government was recovering from guerilla forces during its decades of civil war.
This area will probably experience the largest reversal regarding foreign policy in the region. The Trump administration has clearly signaled its disinterest in promoting democratic governance or imposing U.S. values of freedom and democracy.
The Trump administration’s 2018 budget calls for cutting the State Department and USAID budgets by 32 percent, including U.S. aid to Latin America by 36 percent. The proposed cuts would affect a number of assistance programs globally, with areas like educational and cultural exchanges being reduced by more than 50 percent. The budget will surely be modified by Congress, although to what extent is not known. Nevertheless, it signals shifting U.S. policy in this area.
Despite these significant policy adjustments, key issues regarding democracy and human rights important to U.S. Republican legislators will still gain some traction, as President Trump will need support from these legislators to carry out his domestic agenda. For example, the president will likely have to get involved, whether he wants to or not, on issues like Cuba and Venezuela—hot button regional cases where key senators such as Marco Rubio and John McCain will play influential roles in formulating U.S. policy.
In fact, this has already led to Trump rescinding parts of Obama’s executive orders related to travel and trade and travel with Cuba, arguing that Havana has received too many concessions from Washington without reciprocating, especially in the area of human rights. This is something the president can pursue quickly with few political consequences at home. While some U.S. politicians and companies would like greater access to the Cuban market, the reality is that few of them would incur losses if travel and trade regulations with the island were tightened once again.
The security pillar has consistently been a top priority for U.S. administrations when it comes to Latin America. To be sure, the United States’ highest security matters will continue to come from the Middle East, occupying President Trump and his team’s security agenda. Yet, geographic proximity to Latin America means turmoil in the region can translate into potential security threats for the United States.
High crime levels in Mexico have a direct impact on the fight against narcotrafficking and U.S. border control, with the challenge of transnational criminal organizations operating on both sides of it. This is compounded by mounting violence in Central America’s Northern Triangle—El Salvador, Honduras and Guatemala—where an expanded wave of gang violence is also facilitating drug trade routes into the United States. Drug production is once again on the rise in Colombia. A long peace process that resulted in a landmark deal between the Colombian government and Revolutionary Armed Forces of Colombia (FARC) has been inadvertently accompanied by record-high coca cultivation and cocaine production, as well as expansion of criminal gangs. The narco-corridors found in Peru, Bolivia and Paraguay, extending to parts of Argentina and Brazil, continue to be a challenge in the region, as do the expanding drug flows in parts of the Caribbean, which could also have consequences for Washington.
Geographic proximity to Latin America means turmoil in the region can translate into potential security threats for the United States
A focus on security will remain a top priority for the Trump administration, but the focus will likely be on “hard” initiatives, such as enforcement programs and interdiction. When it comes to stemming the flow of drugs, the United States recognizes it is part of the problem, given the high rate of consumption within its own borders. Yet, administration officials will continue to press its Latin American counterparts to increase their anti-drug efforts.
Another factor receiving attention in the security area is identifying and neutralizing potential terror group cells in Latin America, with the aim of disrupting their relations with drug cartels and organized crime. Recent news reports unveiled that between 100 and 130 citizens from Trinidad and Tobago have left to join ISIS in Syria and Iraq since 2013. This puts the island nation of 1.3 million as the country with the highest percentage of ISIS recruits in the Western Hemisphere. Meanwhile, Homeland Security Chief, General John Kelly, has voiced concerns regarding Iran’s establishment of more than 80 “cultural centers” in Latin America, a region with a small Muslim population. “Iran’s involvement in the region and these cultural centers are a matter for concern, and its diplomatic, economic and political engagement is closely monitored,” Kelly said. The homeland security chief has also warned that between 100 and 150 people from Latin America and the Caribbean travel to Syria to join ISIS every year. Others question the level of this threat, pointing to these potential sleeper cells being dormant since the issue came to light after the 9/11 attacks.
The issue of security is very intertwined with domestic issues, and this administration will heighten that link. The White House budget requested $44.1 billion for the Department of Homeland Security, destined for border infrastructure and immigration enforcement. Of that amount, $1.6 billion is set aside for the construction of the physical wall along the U.S.-Mexico border Trump promised in his campaign, which continues to generate controversy between Washington and Latin America. This funding would also be utilized to increase the number of border patrol agents and immigration, as well as customs enforcement personnel. The U.S. Congress will have the final say in appropriating the funds.
While it is still too early to tell what U.S.-Latin America relations will look like under the Trump administration, historical cues—as well as a closer look at the initial actions and messages from key members of the new cabinet—give us some insight into what to expect for the next four years. Under the “America First” vision, free trade, democracy & governance, and security—the three pillars that have shaped U.S. engagement in Latin America since the late 1980’s—are likely to shift to a more pragmatic approach considered by this administration to favor U.S. economic and national security interests above all others. In the case of trade, the upcoming revision of NAFTA is likely to make waves and establish new parameters for the U.S. – Mexico relationship. Treaties like CAFTA-DR, as well as existing bilateral agreements with countries such as Peru, Chile and Colombia are unlikely to suffer major shake-ups, while new alliances with countries like Argentina could be on the rise. Meanwhile, American values such as democracy, governance and support for human rights, are likely to take a back seat to initiatives that promote economic prosperity and boost security at home.
Under the “America First” vision, free trade, democracy & governance, and security (…) are likely to shift to a more pragmatic approach considered by this administration to favor U.S. economic and national security interests above all others
Yet, as American aid for development assistance, governance and education efforts is likely to suffer significant cuts compared to the previous fiscal year, security programs focused on hard initiatives, such as enforcement and interdiction, will most likely experience fewer changes—a strong signal that security will remain a top priority under the Trump administration. A significant level of uncertainty remains regarding the future of U.S.-Latin America relations under Trump, but foreign policy toward the region is likely to reflect the overall pragmatic priorities set forth by this U.S. administration.
This text is an extract of “U.S. Foreign Policy Toward Latin America Under Trump: Beyond Business as Usual” by the same author, which is to be published on the LLORENTE & CUENCA’s Developing Ideas platform