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Feb 11, 2009 | 12:12 GMT

13 mins read

Part 3: The Obama Administration and Latin America

To download a PDF of this piece click here. Editor's Note: This is the third piece in a series that explores how key countries in various regions have interacted with the United States in the past, and how their relationships with Washington will likely be defined during the administration of U.S. President Barack Obama. The United States has long had a rocky relationship with Latin America. Having declared itself the determinative power of the Western Hemisphere with the Monroe Doctrine of 1823, Washington's primary concern has been keeping the powers of the Eastern Hemisphere out — and thus an ocean away from the U.S. mainland. Washington has wielded its power in the region to prompt the rise and fall of governments, to promote growth-generating trade cooperation and to fight the growth and transport of illegal drugs, among many other policy initiatives. Despite its proximity to the United States, Latin America is only rarely at the forefront of U.S. foreign policy efforts. In Washington's eyes, it falls far behind Eurasian states in importance. It is fair to say that the United States pays the most attention to Latin America when there is a problem — the War on Drugs and the Iran-Contra affair come to mind — but that the region and its priorities are easily back-burnered when matters are more stable. The end of the Cold War signaled the end of serious Russian involvement in Latin America, which had been the most important focus of U.S. policy in the region since World War I. During the last years of the Clinton administration and throughout the Bush years, the relationship between Latin America and the United States fell flat. While Bush pushed for free trade agreements, toured the region and even formed a close relationship with former Mexican President Vicente Fox and current Brazilian President Luiz Inacio "Lula" da Silva, there was a distinct lack of coherent policy toward Latin America. With pressing concerns around the world, the Obama administration may not be able to establish a comprehensive policy for Latin America; a diplomatic dialogue might be the all that is possible for the Obama administration to accomplish. And that is assuming the Obama administration even sees a need to engage the region, for which it may not have the time or resources. One challenge to creating a coherent policy is the diversity within the region. Mexico is part of North America and closely linked to the United States; Central America and the Caribbean have their own historical peculiarities and regional challenges. In South America, Brazil is the continent's largest state but is historically and culturally distinct from the rest of the region, and with its population concentrated on the coast, the vast majority of Brazilian territory is completely unpopulated. Whereas the heart of North America is open, fertile territory traversed by an extensive river system, in South America the Amazon rain forest and the Andes Mountains effectively divide the continent in half, making economic and political integration difficult. Crafting a coherent set of policies that addresses the needs of every state in the region is a difficult task. To make things more challenging, the Obama administration will also need to evaluate a political landscape that has begun to shift significantly. After years of only limited engagement by Washington, the region has begun to act independently of the United States in a way that has not been possible for a century. Not only is Latin America pretty sure that it does not need U.S. leadership, but regional heavyweight Brazil appears to be shaping up to serve as a possible regional counterbalance to the United States.

U.S. Interests in Latin America

Despite the vast diversity in Latin America, there are a few things that most Latin American states have in common, and issue areas that the Obama administration might seek to address. On the whole, however, there might be very little that will change, particularly in the first couple of years of the administration. The first issue (and the most important from Latin America's perspective) is trade. Economic development and opportunities are critical for most Latin American countries, which rely on access to major markets to fuel their export industries. However, the Colombia and Panama free trade agreements (FTAs) remain stuck in the U.S. Congress — which, under the control of the more protectionist-inclined Democratic Party, is going to move very slowly, if at all, on trade initiatives with Latin America. For the United States, security is perhaps the primary concern in Latin America, and it is the one issue that has the potential to shift Washington toward a more engaged role in the region. In addition to the increasing violence along the U.S.-Mexico border, there is the issue of the rising influence of states like Russia and Iran in Latin America. Iranian influence is growing in many Latin American countries, including Nicaragua and Venezuela, and concerns that Iranian activities are serving as cover for increasing terrorist operations in the region could force the United States to focus more heavily on security there. Russian influence in Latin America is unlikely to take the form of heavy investments — Russia cannot really afford major investments so far from home — and so it is unlikely that a state such as Cuba will return to the Cold War strategy of allying firmly with Moscow. Nonetheless, Russia certainly has the potential to be a destabilizing force in the region. But the nature of the threat is murky, and it is not at all clear that Washington will be orienting itself to face Russian influence in Latin America directly. In the end, the single most important thing the Obama administration can do for Latin America has nothing to do with Latin America per se — and that is to lead the U.S. economy out of recession. The United States is the largest or second-largest trading partner for most Latin American countries, and a kick start to U.S. consumption along with a loosening of international capital markets would do wonders to help Latin America pull out of its economic slump. In addition, remittances from the United States comprise a significant portion of many Latin American states' gross domestic products (GDPs), and a weakened U.S. economy is having a negative impact on these countries.

Key Latin American States

Within Latin America, there are four key countries in which the United States has a particular interest: Mexico, Brazil, Venezuela and Cuba.


Looking past the obvious characteristics it shares with other Latin American countries — colonial experience, developing-nation status and language — Mexico is more economically and culturally tied to the United States than to its neighbors in Latin America. Mexico's long, largely unprotected shared border with the United States is very porous, and Mexico's fortunes are tied intrinsically to those of the U.S. economy, which is the destination for 80 percent of Mexico's legitimate exports. It is the illegitimate exports, however, that pose a greater problem for both the Mexican and U.S. governments. Mexico's lightly populated northern deserts and mountains, coupled with the jungles and mountains to the South, mean that the Mexican government has a very difficult time controlling its own territory. This lack of control, along with the country's proximity to the world's largest drug-consuming market, makes Mexico the perfect thoroughfare for drugs produced in South America. The result is a state that not only is divorced politically from the rest of Latin America, but also has difficulties functioning as a state at all, despite its relative wealth. Mexican President Felipe Calderon was the only president to meet with Obama prior to his inauguration, highlighting the close relationship between their two countries. Myriad issues — including energy cooperation — lie on the table between the two countries, but the single most important issue for the Obama administration will be security. Try as it might, the Mexican government has been unable to shut the door on the drug market, and violent clashes resulting from the war against drug cartels left 5,700 people dead in 2008. Concern that the rising violence will spill over into the United States is very real, and this is an issue the Obama administration will need to address. However, it is not clear that there is much the United States can do. The issue has (so far) stayed on the south side of the border, and Mexico is determined to face the problem on its own terms. Because inherent corruption plagues the Mexican government, the United States faces limitations on its ability to share information with Mexican law enforcement, and unless something catastrophic changes, Mexico will not allow the United States to operate independently on Mexican territory. What Washington can achieve, and what the Obama administration might seek to accomplish, is an increase in border security, with a focus on keeping illegal arms trafficking from the United States to Mexico under control.


Brazil is the heart of the South American continent. In terms of land area, population and economic power, it far outstrips any other state in South America. Yet despite Brazil's overwhelming potential for dominance, the country has long been trapped inside itself, with an inward focus that is largely a product of the enormous geographic buffer of the Amazon basin, which makes infrastructural links to Brazil's neighbors very difficult. This limits potential frictions among South American states, but it also limits trade and economic opportunities. No matter how earnest the Obama administration is about opening up a dialogue with Latin America, the fact of the matter is that the domestic political climate in the United States will not allow for compromises on the most important issue for Brazil: trade. A U.S. Congress dominated by the Democratic party will have a difficult time justifying loosening import rules on key goods, particularly agricultural commodities. (Also, one of the most important areas for expansion in Brazil's economy, ethanol, is heavily protected on the U.S. market.) If the Obama administration should try to forge a new relationship with Brazil, it would be unable to offer the major shifts in economic relations that Latin America, and Brazil in particular, would demand. The upside for Brazil is that Washington's lack of capacity to lead a new push on economic integration, coupled with the pressures of the global economic downturn, opens an opportunity for the country to push forward as a leader in the region. This is by no means a certainty, and it is not a role Brazil would fill naturally, having been very inwardly focused for the duration of its history. But with the recent collapse of Brazil's trade relationship with Argentina, Brasilia might have no other choice than to seek openings in new markets. A broad initiative to renegotiate trade relationships could be exactly the impetus the country needs to break out of its shell.


Venezuela is a country that revolves around a single commodity: oil. Oil is the state's main economic driver, its single most vital export and the sole reason Venezuela has risen to the level of being geopolitically important. Venezuela's imposing jungles and mountains have forced most of the population to concentrate on the coast. These geographic barriers also isolate Venezuela from much of the rest of South America. This isolation, along with Venezuela's proximity to the United States, makes it imperative that whoever rules the country either forms a close relationship with the United States — the largest and closest consumer of oil — or completely cuts Venezuela off from the United States in order to assert independence. But asserting independence has its political and economic costs. Venezuelan President Hugo Chavez rose to power on promises of redefining the Venezuelan state in such a way as to distribute evenly the oil wealth that Venezuelans consider to be a birthright. He also has begun to divert shipments of oil to far-flung consumers, like China, where high shipping costs mean lowered profits for Venezuela. In pursuing these policies, the country has begun to outspend its resources, crippled its oil industry and built an antagonistic relationship with the United States. But despite Chavez's spitfire attitude, is not clear that there is much of an incentive for the Obama administration to improve relations with Venezuela. Oil can be purchased from other sources, and with oil prices having fallen so drastically, it is not certain whether Chavez can afford to ship oil anywhere but to the United States. Because Chavez relies politically on whipping up revolutionary fervor by using Washington as the international bogeyman, it will be up to him to re-ally with the United States — a shift he is not likely to make.


For a small island nation of just over 11 million people, Cuba has had a remarkably rough-and-tumble relationship with the world's major powers. Cuba straddles the main shipping routes out of the Gulf of Mexico — which is to say, the route for U.S. exports coming down the Mississippi River — making the island's position at the mouth of the Caribbean Sea critically important for the United States. If a power with some military heft (e.g., the Soviet Union) is able to secure an alliance with it, Cuba can represent a serious threat to U.S. interests. Cuba by itself, however, is unable to threaten much of anything. After 47 years of an economic embargo, the end of the Cold War and the retirement of former Cuban President Fidel Castro, Cuba and the United States might finally be preparing to open up to one another, however slowly. The Obama administration undoubtedly will loosen the restrictions imposed on travel and remittances for Cuban Americans, and even more opening of relations and trade might be possible. But Obama is not likely to risk expending his political capital on fighting the embargo. If it wants rapprochement with the United States, Havana will need to take the initiative and make some sort of gesture that will give the new U.S. administration the momentum it would need to make more than just small changes.
Part 3: The Obama Administration and Latin America

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