Shannon K. O'Neil

Latin America's Moment

O'Neil analyzes developments in Latin America and U.S. relations in the region.

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Open Questions about Latin American Relations During the Trump Administration

by Matthew Taylor
January 25, 2017

U.S. Republican presidential nominee Donald Trump and Mexico's President Enrique Pena Nieto walk out after finishing a press conference at the Los Pinos residence in Mexico City, Mexico, August 31, 2016 (Reuters/Henry Romero). U.S. Republican presidential nominee Donald Trump and Mexico's President Enrique Pena Nieto walk out after finishing a press conference at the Los Pinos residence in Mexico City, Mexico, August 31, 2016 (Reuters/Henry Romero).

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We know very little about who will run Western Hemisphere affairs under the Trump administration. So far, the only named appointees are Homeland Security Secretary John Kelly and National Security Council (NSC) Senior Director Craig Deare. There are as yet no nominees for key Western Hemisphere positions at State, Defense, or Commerce, which is not unexpected for an administration this young. Although the Latin America team is not fully formed, the pressing Latin America agenda – which will get underway in earnest with today’s visit by a Mexican delegation – suggests that it is well worth reflecting on the central questions likely to determine the trajectory of the region during Trump’s presidency:

  1. Mexico: The wall, immigration, and NAFTA may all be on the table when Mexican Foreign Minister Luis Videgaray and Economy Minister Ildefonso Guajardo come to Washington this week, followed by President Peña Nieto at the end of the month. Even after today’s executive order paving the way for a wall, the central question looming over the talks – led on the U.S. side by Reince Priebus, Stephen Bannon, Jared Kushner, Peter Navarro, Gary Cohn, and Michael Flynn – is just how far Trump is willing to go. Is the incendiary campaign rhetoric about NAFTA simply the opening gambit of a negotiating strategy, as some suggest, or is Team Trump really sincere in its desire to sink the most successful hemispheric trade deal of all time? In the meantime, what does this uncertainty do to the Mexican economy, given that 85 percent of Mexican exports are to the United States and the country has already seen a decline in U.S. investment? What are the implications for integrated supply chains throughout NAFTA? What effect does a worsening labor market in Mexico have on migration flows?
  1. The Mexican response to Trump: Peña Nieto’s response so far has been measured, displaying perhaps a disbelief that Washington will allow the bilateral relationship to be scuttled, a recognition that there are elements of NAFTA that deserve renegotiation, and a desire to quickly resolve the uncertainty that is wreaking havoc on business decisions. But Penã Nieto is under considerable pressure to respond forcefully to U.S. pressure. Many Mexican thought leaders – such as Enrique Krauze and Jorge Castañeda – have called for the country to retaliate against any U.S. bullying by easing controls on both Mexican and Central American migration, backing down from the drug war, or building international alliances with China and Russia. The Peña Nieto administration has noted that the “whole relationship” is up for discussion – a subtle hint that the United States has much to lose if Mexico ceases to cooperate on security and migration. Mexican policymakers have also expressed their willingness to perhaps even contemplate dropping NAFTA if the United States pushes too hard. The frontrunner in the July 2018 elections, Andrés Manuel López Obrador (AMLO), seems unlikely to be more conciliatory than Peña Nieto’s Institutional Revolutionary Party (PRI) and, if anything, his electoral prospects seem enhanced by the bullying tone out of Washington. How far will the Mexican response go?
  1. Elections: As the AMLO phenomenon demonstrates, there is likely to be a Trump effect on the electoral landscape of Latin America. The mobilizing effect of Trump’s rhetoric is already being exploited by Corona beer, which has hit back hard against Trump’s vituperative statements with a well-received public relations campaign mocking Trump’s wall-building and America first jingoism. Silly though that may be, it points to the enormous public repercussion of Trump’s words south of the border. The next two years will bring elections in half of Central and South America, and although much has been made of the supposed rightward turn in the region, is it possible that nationalistic appeals responding to perceived American jingoism might provide succor to the left and/or to nationalist forces?
  1. Cuba: How far will Trump turn back the thaw in relations that took place during the second Obama administration? And what will be the practical effect on Cuba’s planned 2018 leadership transition? While some lawmakers are pushing for more pressure on Cuba for human rights, it seems unlikely that the administration would be able to completely unwind U.S. investment on the island, given growing U.S. business interests. Even as he has promised to review Cuba regulations, Secretary of State Rex Tillerson seems to have put some space between himself and the most dramatic Trump campaign oratory. But a harder rhetorical line and the possibility of renewed sanctions from Washington may strengthen hardliners within the Cuban regime and diminish the impetus toward reform; already it has led to nationwide military exercises that belie the Cuban regime’s concern about a return to a more confrontational relation.
  1. Venezuela: Does the country implode slowly or explode catastrophically? And how does Washington respond? The Trump administration has so far adopted a fairly measured tone regarding Venezuela, but recent statements by lawmakers on both sides of the aisle calling for further targeted sanctions against President Nicolás Maduro’s officials may contribute to a ratcheting up of rhetoric against the autocratic chavista It seems unlikely that the Trump administration would continue talks with the regime that had taken place during the late Obama administration. But there are not many good multilateral options for addressing Venezuela’s crisis, nor is it clear that there are many effective unilateral options beyond targeted sanctions. Nevertheless, the deepening economic crisis and the increasing power of hardliners within the regime suggests that Venezuela will soon become a hemispheric hotspot, worsening the already devastating humanitarian crisis in ways that could test the new administration’s capacity to galvanize a regional response.
  1. Colombia: Although the peace deal has now been approved by the Colombian Congress, will the Trump administration commit to funding the peace? Even before Trump’s victory, there was uncertainty about the U.S. Congress’ willingness to fund the peace over the long haul, although it was heralded on both sides of the aisle as a rare bipartisan foreign policy success and a vindication of the huge investment in Plan Colombia. Homeland Secretary Kelly noted before his confirmation that it was “imperative” that the United States remain involved in Colombia, but Secretary of State Tillerson cast doubt on that commitment in his written responses to the Senate Foreign Relations Committee. Given continued lobbying by former president Álvaro Uribe and the isolationist tendencies of some Trump administration officials, it is by no means a certain proposition that the administration will invest in the Colombian peace, especially if Congress’ attention turns elsewhere.
  1. China, investment and trade: The Trump administration’s withdrawal from the Trans-Pacific Partnership (TPP), its promised renegotiation of NAFTA, and its inward-looking rhetoric have begun what looks like a paradigmatic shift of the trade and investment panorama in Latin America toward the east and the south. In the absence of a better deal up north, the Pacific Alliance is the new hot thing in the region. One Brazilian diplomat snidely remarked that Trump’s victory means that “Mexico will have to remember that it is Latin American.” Mexico has already suggested that the Pacific Alliance turn southward to Mercosur, which appears more open than ever to a deal that allows its Atlantic membership to reach Pacific markets. The savings-depleted nations of South America are also happy to turn eastward for increased foreign investment that might enable them to recover from the economic downturn. China is well aware of the opportunity this presents: President Xi Jinping arrived for the Asia-Pacific Economic Cooperation (APEC) summit in Peru only ten days after the U.S. election. Latin American countries are already moving “to put their eggs in a [Regional Comprehensive Economic Partnership (RCEP)] basket,” led eastward by Chilean and Peruvian expressions of interest. Will the end of TPP presage greater hemispheric trade integration, centered around a Mercosur-Pacific Alliance deal? What would be the implications of an even greater Chinese economic role in the region? Would the Chinese be willing to incorporate Latin America into RCEP? Would RCEP complement or weaken the BRICS, and what are the implications for the relative roles of Mexico and Brazil as regional leaders (and sometimes rivals)?
  1. Central America: These countries will likely be squeezed by the United States’ cooling trade relationship with Latin America, the stronger anti-migration rhetoric of the new administration, and the possibility that the US will double down even further on hardline measures in the drug war. The big questions for Central America will be: does the United States maintain the CAFTA-DR trade agreement (which was not mentioned by the Trump team during the campaign)? Where does the Trump administration find the balance between its stated desire to cut foreign assistance budgets and the need to maintain aid programs designed to slow migration and quell security problems? And how will migration and remittances be affected by the Trump administration’s emphasis on illegal workers and the border, amidst already desperate conditions that led to increasing apprehensions of Central Americans in Mexico and the United States in recent years, and a record-breaking 2.7 million deportations under the Obama administration?
  1. Anticorruption: In recent years, the U.S. government has played a largely unheralded role in anticorruption efforts in Latin America, ranging from support for Guatemala’s CICIG (International Commission Against Corruption and Impunity) to indictments and actions against firms and executives accused of corrupting regional officeholders. While it does not seem likely that the U.S. Department of Justice will shut down Foreign Corrupt Practices Act (FCPA) enforcement (given the pipeline of pending cases, the competitiveness arguments that can be made for FCPA, and the investments that have been made by business to ensure compliance), in all likelihood the anticorruption agenda at both State and DOJ will become far less of a priority under a regulation-averse Trump administration. Will the Trump administration actively work to water down anticorruption efforts and cross-border enforcement? If so, what will be the repercussions for countries that have undergone significant anticorruption reforms in recent years, and are seeking to consolidate anticorruption gains, often against powerful domestic opposition?
  1. The Monroe Doctrine: Given the proximity of Latin America to the U.S. homeland, Washington policymakers have long been concerned by the efforts of countries like Iran, Russia, and China to penetrate into the hemisphere. Trump’s Latin America advisor on the NSC, Craig Deare, has written critically of Secretary John Kerry’s 2013 declaration that the “era of the Monroe Doctrine was over,” noting that it served “as a clear invitation to those extra-regional actors looking for opportunities to increase their influence.”[1] He further argued, with reference to China’s growing role in Latin America, that the United States has the right to protect its geopolitical interests in the region, and “if it does not do so, [it] cedes to China its strategic goal of ‘reshaping the current world system in a fashion more to its liking.’” Will the Monroe Doctrine be resurrected? What are the practical implications of this renewed emphasis on U.S. primacy in the region? As the United States turns inward, what tools will policymakers have to prevent perceived meddling by extra-regional forces? How will the Trump administration balance its rapprochement to Putin with concerns about, for example, Russia’s growing role in Venezuela? How will the administration react if Latin America does indeed turn more forcefully to Asia, and particularly China, on trade?

In sum, although Latin America has long been one of the most neglected regions of U.S. foreign policy, the next four years are likely to significantly shift the trajectory of regional relations, regardless of whether the Trump administration adopts an active or passive role. The coming appointments of key Latin America personnel will provide us with a better sense of where the administration hopes to come down on some of the questions raised above.

[1] Deare, Craig A. “Latin America,” in Charting a Course: Strategic Choices for a New Administration, edited by R.D. Hooker, Jr. Washington: National Defense University Press, 2016.

Post a Comment 2 Comments

  • Posted by John C. Vesey

    Your observations are most interesting. I would opine that the Trump posture toward TPP and Mexico will greatly benefit China. Even though we haven’t seen Trump’s policy toward China, his character as well as past statements would suggest he will attempt to bluff it with trade sanctions. The net effect of which will be China taking the key position in TPP as well as making great inroads into Mexico, Central and South America. Trying to imoose the Monroe Doctrine now will lead to great problems for the USA.

  • Posted by Gustavo H. Garrido

    Interesting comments. I would add that more important for Latin America than looking to the East on trade may be looking to Europe. The right wing forces strengthening in Latin America and the EU have the same political interests of reinforcing and defending democracy. With the US internal political convulsions, it could pay off on the long run for the EU and Mercosur to develop trade relations around this bigger political objective. The EU needs to consolidate itself as a stable top dog as the US and China, and Latin America needs to consolidate its democracy. Supporting each other economically could be a useful step in the direction of both objectives.

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