Good Neighbors Again on Issues Ranging from Free Trade and Economic Cooperation to Peacemaking, the US and Latin American Nations Are Drawing Closer

Article excerpt

THROUGHOUT the 1980s, the United States and Latin America clashed on many issues - Central America, the debt crisis, drug trafficking, and the Malvinas-Falklands war. These conflicts are today mostly resolved or muted, and the US and Latin America have begun to enjoy an "era of good feeling." Consider these developments:

* The US is negotiating a free-trade arrangement with Mexico to accelerate the economic integration of the two countries.

* George Bush has proposed a Western Hemisphere free-trade system, and virtually every Latin American nation has responded enthusiastically.

* The US is cooperating with Latin American nations to restore a leftist, populist president to power in Haiti.

* Latin American leaders have been pressing President Fidel Castro of Cuba to join the world trend toward free politics and open markets.

* The US is being praised in Latin America for its efforts to promote peace in El Salvador.

This positive turn in US-Latin American relations should not be exaggerated. Disagreements and frustrations remain. But the discourse of US-Latin American relations has changed. It is increasingly rare for Latin American leaders to confront Washington or to seek political advantage at home by denouncing the US. Just the opposite: Most Latin American governments say they want stronger ties with the US.

President Bush, almost surely without fully realizing it, captured the new mood of hemispheric affairs when he announced the Enterprise for the Americas Initiative in June 1990. The Initiative offered to reduce the $12 billion debt Latin American countries owe the US Treasury, and proposed creation of a $300 million a year fund in the Inter-American Development Bank to promote private investment.

To be sure, the Initiative was not conceived as an economic recovery program for Latin America. It is, in fact, hard to point to any immediate and tangible economic gains from the proposal. Bilateral debt reduction will cut Latin America's yearly interest bill only by about 1 percent. The investment fund is very small. Despite the current enthusiasm in Washington and Latin America, hemisphere-wide free trade will be a long time in coming.

What the Enterprise Initiative does is establish a new structure of incentives to reinforce the region's own reform efforts. Providing no substantial resource transfers, this is a "self-help initiative" that promises Latin America an eventual economic partnership with the US once the region gets its economies in shape.

In the past 18 months, the Initiative has become the centerpiece of US policy toward Latin America, replacing Washington's waning interest in Central America. …