The Next U.S. President and Latin America

Since the end of the Cold War, Latin America has hardly featured in U.S. presidential campaigns. The waning 2012 campaign has not been an exception. That said, Gov. Mitt Romney made a few references to Latin America in the debates but Obama let them pass without the slightest hint of curiosity.

In the foreign policy debate, Romney said that there are “opportunities for us in Latin America, we have just not taken advantage of fully.” He went as far as to suggest there was a high opportunity cost in focusing so much on China to the detriment of the southern neighbors.

Thank God that, for once, a presidential candidate has highlighted, at least in passing, the unrealized potential in the relationship as opposed to the national security threats that are all U.S. politicians seem to care about with regard to Latin America.

Although the U.S. economy is three times larger than that of Latin America, the dynamism these countries are exhibiting indicates that those proportions will not remain so for long. The growth of the middle class and the rise of the Latin American consumer has meant that U.S. exports to those countries have more than doubled since 2000—increasing at an average annual pace two percentage points higher than the growth of U.S. exports worldwide.

As the source of 40 percent of the region´s foreign investment and of ninety percent of the remittances it receives from its expats, the U.S. clearly matters immensely south of the border. But its preeminence as a partner is slowly waning as other economic powers, established or emerging, begin to perceive the opportunities that a region where several countries are increasingly behaving as first-world rather than third-world countries has to offer. A decade ago, 55 percent of Latin America´s imports originated in the U.S.; today less than one third do so. The U.S. buys about a third of the region´s exports but several countries now have China as their main destination and trading partner, and the blatant effort on the part of Beijing to expand its footprint in that part of the world can be seen in the various deals it has struck with several governments, including a line of credit for a total of $75 billion and arrangements to pay for the hydrocarbon imports in advance.

The issue here is not that it is a bad thing for Latin America to expand its commercial and financial horizons, but that the U.S. seems to have given up on removing obstacles to enhancing its dealings with Latin America further. Apart from the six free trade deals in existence between the U.S. and Latin American countries, the last two of which (with Colombia and Panama) it took forever to approve, not much has happened. There ought to be a powerful push at the highest echelons of government for the removal of the many remaining obstacles to the free circulation of goods, services, capital and, yes, people. Whatever growth there has been in exchanges between the north and the south has mostly taken place despite, not thanks to, government action. It is as if Obama had been content with letting things stay as they are because his own instinct and his party´s protectionist bent are not in tune with the notion of a continent-wide free trade area (a real, not a bureaucratically defined, one.)

Unfortunately, Latin Americans have not helped. Every time there is a Summit of the Americas, what comes out of the loudest mouths is political theater, lectures on history and calls for inviting Cuba rather than efforts to secure an agenda for progress. To be sure, the last two summits produced juicy headlines and little else. The one held in Port of Spain in 2009 saw Hugo Chavez approach Obama to hand him a book that blames the U.S. for the region´s ills. The last one, held in Cartagena earlier this year, ended in a prostitution scandal involving the president´s secret service. This at least had the virtue of overshadowing the usual suspects´ rants against the north.

So, is Romney really interested in re-engaging Latin America with a view to pushing towards a much deeper type of relationship based on free exchange? Or was he just trying to appeal to Hispanic voters who are distrustful of the Republicans because of tradition and immigration policy (despite the fact that Obama has deported more people than Bush)? Will Obama, once freed of the constraints of an upcoming reelection campaign, finally decide to embrace opportunity down south?

I don´t know, but at least talking about great opportunities for the U.S. in Latin America has provided a breath of fresh air to a topic—i.e. relations between the United States and Latin America—that is usually reduced to matters more relevant to the U.S. Southern Command than to visionary politics.