US must rethink Latin America relationship

By Richard Lapper in Mexico City

Published: May 14 2008 15:46 Last updated: May 14 2008 15:46

A new US administration should embrace a comprehensive immigration reform and promote greater co-operation with Latin American energy producers, according to a report published on Wednesday by a prominent foreign policy think tank.

The New York-based Council on Foreign Relations said the sweeping rethink of US policy towards the region was necessary, because the existing framework – based since the end of the Cold War on free trade, democratic consolidation and the crack-down on illegal drugs – had become ”obsolete”.

Latin America’s growing recent economic success, based on greater financial stability and growing trade and investment links with Europe and Asia, meant that that the US was is no longer ”the most important actor”.

Policymakers had to ”engage with Latin America on its own terms and change the way they think about the region. If there was an era of US hegemony in Latin America, it is over.”

The report – prepared by a task force chaired by Charlene Barshefsky, the former US trade representative, and General James T Hill, the former commander of the US Southern Command - also advocated the eventual lifting of the embargo of Cuba.

Despite growing trade, investment and social ties between the US and Latin America, Washington’s standing in the south of the hemisphere is at a relatively low ebb.

Growing nationalism, especially in relation to energy resources and immigration, has been a bone of contention. US relations with the radical left-wing government of Venezuela, the region’s biggest oil producer, have been especially tense. And US measures to restrict illegal immigration, including the erection of a barrier along parts of the Mexican border, have provoked outrage.

But the report said that both issues represented ”opportunities”. ”Mutual co-operation towards alternative energy is a win-win proposition” said the report, pointing to the prospects for investments in traditional and alternative energy resources, such as Brazilian ethanol. The US currently obtains about 30 per cent of its oil from Latin America, and the discovery of significant new reserves in Brazil has opened up the prospect that exports could be increased.

Immigration reform too offered benefits for both halves of the hemisphere. The US’s demographic profile and growing need for labour meant that the US has much to gain from providing a more stable legal framework for migrant workers, including temporary worker schemes promoting ”circular migration”.

The report also urged Congress to approve two outstanding free trade agreements for Colombia and Panama but said the US should do more to free up its own markets in sectors, such as agriculture, where Latin America enjoyed comparative advantages.
Copyright The Financial Times Limited 2008