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Executive Summary #1201es on Latin America

July 6, 1998

Clinton's Latin America Policy:  A Legacy of MissedOpportunities

By

The second Summit of the Americas, held in Santiago, Chile, on April 18-19, 1998, showcased how much influence and leadership the United States has lost throughout Latin America during the Administration of President Bill Clinton. His attendance at the summit without fast-track trade negotiating authority was symptomatic of the creeping paralysis in U.S. trade policy that has damaged U.S. relations with Latin America since the collapse of the Mexican peso in December 1994. Many Latin American governments today fear that President Clinton has given up on the region. Their concern may be justified.

The Clinton Administration's missteps in Latin America constitute a legacy of missed opportunities. Since 1994, for example, President Clinton has missed the opportunity to:

  • Expand the North American Free Trade Agreement (NAFTA) to Chile. In December 1994, President Clinton pledged that Chile would become NAFTA's fourth member. At the Santiago summit, however, President Clinton and Chilean President Eduardo Frei agreed to abandon the expansion effort.

  • Set the structure and pace of the negotiations to create a Free Trade Area of the Americas (FTAA) by 2005. Since 1994, the United States had sought accelerated negotiations with NAFTA as the benchmark trade agreement. In Santiago, Brazil succeeded in imposing a "go-slow" timetable on the FTAA negotiations and became (with the United States) an officially designated "co-leader" of the negotiations.

  • Include Caribbean and Central American democracies in NAFTA. Fast-track authority is not needed to upgrade the existing trade agreement between the United States and the democracies of the Caribbean Basin Initiative (CBI). The Clinton Administration, however, never has made a strong push in Congress to win NAFTA trading parity for these countries.

  • Create a real democracy in Haiti. After the United States spent over $2.8 billion to restore democracy in Haiti, the island is bankrupt economically and unstable politically.

  • End Fidel Castro's communist regime in Cuba. In 1993, Castro was isolated internationally, and the United States was in a position to weaken Castro's regime in Cuba by tightening the trade embargo. Today, Castro's case against the U.S. embargo has been taken up by Canada, Mexico, and the European Union.

  • Negotiate a continued U.S. presence in Panama after the Panama Canal is handed over to Panama's government on December 31, 1999. Panama does not have the military capability to guarantee the security of the Panama Canal, nor does it have the ability to resist the spread into Panamanian territory of Colombia's escalating civil war.

  • Slow the spread of international drug trafficking in Latin America. On President Clinton's watch, U.S. drug policy and the annual U.S. drug certification process have lost credibility throughout the Americas, hurting U.S. prestige and leadership.

The erosion of U.S. relations with Latin America and the Caribbean is happening at a bad time for the region. The pace of economic reform is slowing throughout Latin America, and doubts are growing in many countries about the political sustainability of free-market policies. The region's fragile democracies also are under growing assault from pervasive political corruption, weak and ineffectual courts, the absence of rule of law, the relentless spread of international organized crime, and drug trafficking.

REPAIRING THE DAMAGE IN U.S.-LATIN AMERICA RELATIONS

To win back Latin America's waning trust and restore U.S. leadership and credibility throughout the region, the United States should:

  • Renew the President's fast-track negotiating authority immediately. Without fast-track authority, the United States cannot lead or even participate fully in the FTAA negotiations.

  • Negotiate bilateral free-trade agreements, using fast-track authority, with countries like Chile, Argentina, Costa Rica, and Trinidad and Tobago.

  • Launch a "Millennium Round" of global trade liberalization talks within the World Trade Organization.

  • Approve NAFTA parity for Caribbean and Central American democracies. Granting the CBI countries the same trade status that Mexico enjoys under NAFTA would help to counter the region's economic and social problems.

  • Accelerate NAFTA's implementation. NAFTA has been a major commercial success in its first four years. Mexico now is the world's second largest buyer of U.S. merchandise goods exports, after Canada and before Japan.

  • Enforce the Helms-Burton Act. President Clinton should adopt a carrot-and-stick policy that combines full enforcement of this law, which toughens the U.S. trade embargo against Cuba, with an outreach effort to the Cuban people that bypasses Castro's communist regime, much as President Ronald Reagan did with the peoples of the Soviet Union during the final years of the Cold War.

  • Rethink U.S. drug policy in Latin America. The United States should place greater emphasis on reducing domestic demand through a combination of law enforcement and education programs and increase counter-drug security at the U.S.-Mexico border, in Puerto Rico, and in other U.S. ports of international arrivals.

  • Negotiate a continued U.S. military presence in Panama. Although nearly a century old, the Panama Canal still is vitally important to U.S. commercial interests.

John Sweeney is a former Policy Analyst for Latin America and Trade Issues in The Kathryn and Shelby Cullom Davis International Studies Center at The Heritage Foundation.

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