Interview with Peter Hakim

Peter Hakim is President of the Inter-American Dialogue Center

1) Which relevant Latin American issues have featured prominently in the 2008 U.S. presidential campaign? Why?

The fact is that Latin America has really not been part the US presidential campaign this year. True, three issues that are centrally important to Latin America have emerged in the campaign--NAFTA and other free trade agreements; US immigration policy; and Cuba. But none of them have been seriously debated in the context of their affect on Latin America or on US relations with the region.

Both Clinton and Obama have been harshly critical of NAFTA and other "free trade deals," but neither of them has said anything about whether the deals are good or bad for Latin America, or about their importance for US relations with the region. All three surviving candidates (Clinton, Obama, and McCain) largely agree about the migration issue, but none of them discusses how US immigration policy affects US relations with Mexico and other countries, or how the US might cooperate with Latin American governments to address the issue. Cuba is treated in isolation from the rest of Latin America and from US policy toward the region. For the US, Latin America is neither a region of special urgency (like the Middle East) or great economic opportunity (like China). And there is frankly not much demand in Latin America for a sharp change in US policies in the region. Latin America is doing quite well on its own.

2) What choices do Latin American countries have with regard to their evolving relationship with the US?

Latin America, particularly South America, has a wide range of choices regarding relations with the US. Chile has shown that it is possible to be a robust partner of the US while developing a diversity of other economic and political links worldwide. Brazil is also pursuing a diverse, independent, and global foreign policy. Brazil, however, has avoided any strong partnership with the US, although relations remain friendly and warm. Chavez is an aggressive adversary of the US, while neighbouring Colombia is one of the US's strongest ally. From an enthusiastic effort to embrace the US during the “sexenio” of Fox, Mexico has now lowered its expectations and seeking a correct but cool relationship with Washington.

Most Latin American countries, largely because their economies and politics are stronger than ever, and because they have developed a variety of global links, have more choices than ever in the kind of relationship they pursue with the US.   

3) What relevant economic opportunities and political risks are posed to Latin America countries?

In the short term, Latin American countries, although they are less vulnerable to external shocks than at any time in their history, face considerable risk that the turmoil in US and global financial markets could produce a sharp downturn in the region's economies. Over the longer term, there are two other economic risks. One is that reform process will remain stalled and incomplete, and such problems as erratic tax and expenditure policies, inflexible labor legislation, ineffective regulation, inadequate infrastructure, and poor quality education will severly hamper growth.

The other risk is that Latin America countries will fail to take full advantage of the potential for expanded trade with and investment from the US. On both counts, these risks also represent opportunities. Further progress on reform will make Latin America's economies stronger and more dynamic. So will increased attention to expanding trade and investment flows to and from the US.

Substantial political challenges will emerge from an economic slowdown in Latin America reinforced by continuing widespread poverty and inequality. Risks may also emerge from the continuing conflicts among the countries of the region and the grave inability to deal with domestic problems of crime and violence.