Newspaper article The Christian Science Monitor

Bush's Latin American Initiative: A Reassuring Move

Newspaper article The Christian Science Monitor

Bush's Latin American Initiative: A Reassuring Move

Article excerpt

THE United States invitation to Latin America to forge a new relationship based on economic self-interest rather than strategic concerns is a positive, reassuring move toward a much troubled region.

President Bush announced the Enterprise for the Americas Initiative June 27 as the cornerstone of a new, post-cold-war, economic partnership with Latin America. The proposal is noteworthy in several respects.

First, it gives a much needed boost to the morale of Latin Americans who feel that events in Eastern Europe have overshadowed the equally profound political and economic transformations under way in Latin America and who fear that the support the region needs to consolidate those reforms might be diverted elsewhere.

Second, it recognizes the complexity of the problems confronting Latin America and the fact that the cycle of recessive adjustment and inflationary growth can only be broken by supplementing domestic efforts with external support on a broad range of issues, including trade, debt, and finance.

Third, while it offers only limited tangible, short-term benefits, the initiative does set an agenda for future US-Latin American economic relations, with potentially larger mutual benefits down the road.

The initiative rests on three pillars: trade, debt, and investment.

In the area of trade, the proposal sets as a long-term objective the establishment of a hemispheric free-trade zone. The US would enter into free-trade agreements with countries ready to engage in reciprocal trade liberalization and negotiate more limited bilateral accords with other countries.

On debt, the key proposal is to reduce the region's $12 billion official debt to the US. A sizable share of the concessional debt (currently about $7 billion and spread among the smallest, poorest countries in the region) would be written off on a case-by-case basis. In addition, a portion of the outstanding official nonconcessional debt would be sold at a discount, to be used for debt-for-equity and debt-for-nature swaps. …

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