No time for dithering

A fortnight ago, we reported that the Economic Commission for Latin America and the Caribbean (ECLAC), in a study released last month, ‘Latin America and the Caribbean in the World Economy 2010-2011,‘ had called for “a new alliance” with the United States of America in order to facilitate the “better integration” of the region into the world economy. This view was posited mainly against the backdrop of the decline in trade and economic links between the USA and Latin America and the Caribbean and the relative dynamism in relations with China and the Asia-Pacific region.

This argument is consistent with that contained in a March 2011 analysis of trade and investment relations between the USA and the region, on the occasion of the visit of President Barack Obama to Brazil, Chile and El Salvador. ECLAC believed then and still maintains that the USA “can and should be an active partner of the region” to promote growth and development through increased trade and investment, in order to confront “some formidable structural challenges,” including “the highest indices of inequality in the world, as well as serious lags in technology, innovation and competitiveness.”

However, there is currently no sign of any ambitious initiative for regional cooperation coming out of the USA. This is especially ironic as this year marks the 50th anniversary of the Alliance for Progress, the vision of President John F Kennedy – the president to whom Mr Obama is most often compared – to promote social justice and economic development in Latin America

President Obama’s participation in the 5th Summit of the Americas in Trinidad in April 2009 had given rise to high expectations regarding a new fillip to US relations with Latin America and the Caribbean, following the indifference of the George W Bush administration. However, some three years later and with a 6th Summit of the Americas looming next year in Colombia, it is difficult to say what exactly has been done by the Obama White House to fulfil these expectations.

Mr Obama had promised “a new of partnership” with the region, but distracted by domestic political and economic concerns, the imbroglios in Afghanistan and Iraq, and the continuing global economic crisis, he has been unable to deliver on this commitment. Moreover, US foreign policy towards the region seems incapable of taking the long view beyond security, narcotics and immigration issues, particularly as they affect Mexico, Central America and the Caribbean, and there is a perception of benign neglect with regard to South America. Meanwhile, free trade agreements with Colombia and Panama are still to be presented to the US Congress by the administration.
With the next presidential election due in November 2012, there is not much hope of any dramatic change in the relationship, even if the Colombia Summit provides the opportunity for a major statement of intent.

But Latin America, at least, is not standing still. The region, led by Brazil, Chile, Colombia and Peru, has generally benefited from high commodity prices and increased exports, to register acceptable levels of growth. ECLAC expects though that the crisis of the developed countries will begin to affect Latin America trade, with growth revised slightly downwards to 4.4 per cent in 2011. The Caribbean, by contrast, is only expected to register growth of 1.9 per cent, although the Dominican Republic, Guyana and Haiti are predicted to do comparatively well.

What this all means is that with the rise of Brazil as a regional power and global player, the so-called swing to the left, the emergence of alternative alliances, strengthened linkages with the European Union and the Asia-Pacific region, and the increasing presence of China, Latin American and Caribbean countries, for the most part, recognise the need to diversify their trade and economic relationships and may even be keen to step out of the shadow of the USA.

Nevertheless, it would not do to underestimate the continuing influence of the global superpower. The USA is still the world’s largest economy, the biggest destination market for the region’s exports – although its share in the region’s trade has been shrinking – and the most important investor country in Latin America and the Caribbean. But all this could change by the middle of the next decade if things remain the same and China and the Asia-Pacific region continue to grow in economic clout.

However, geographic proximity, geopolitical considerations and the movement of people should ensure that the ties between the colossus of the north and Latin America and the Caribbean continue to be strong and that the fortunes of north and south in the American continent continue to be intertwined. The USA can and should remain a force for good in the region. But the new dynamics in the region mean that this is no time for dithering.

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