international analysis and commentary

Trump’s “America First” approach towards Latin America

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Latin Americans have not particularly appreciated Donald Trump’s administration. According to a Pew Research survey, while in 2015 42% of people in those countries said that they had no confidence in US President Barack Obama to do the right thing regarding world affairs, under Trump’s presidency, the share rocketed up to 77%. Also in Brazil, where Jair Bolsonaro’s government has been praising Trump’s presidency, the confidence on the current US administration is very low, dropping from 69% in 2013 to 28% in 2020.

Latin America’s low confidence in Trump can be understood, quite simply, as a result of his lack of foreign policy towards the region. Already during the electoral campaign, Trump used an extremely aggressive rhetoric against Central American immigrants, having at the core of his discourse the construction of a wall on the border between the US and Mexico. The majority of people in Latin America (83%) strongly opposed such project.

Trump’s approach towards Latin America appears to be just a tool for achieving his domestic objectives and rhetoric rather than for pursuing long-term strategic goals. A few pillars have led his Latin America policy: slowing down migration to the US, reforming free trade agreements (NAFTA), mitigating China’s power and increasing pressure on Venezuela, Cuba and Nicaragua.

 

From NAFTA to USMCA: mixed results

Trump withdrew the US from the Obama-era Trans-Pacific Partnership free trade agreement – yet to be ratified – which also included three Latin American countries – Chile, Mexico and Peru. His administration also renegotiated the North American Free Trade Agreement, replacing it with the United States-Mexico-Canada Agreement (USMCA). Despite the new trade agreement being a political victory for Trump, the USMCA contains only a few important changes in the trade conditions between the three countries. The USMCA has confirmed most of the open market measures, implementing, however, new rules to incorporate better protection for workers as well as to provide new provisions that reflect a new stage of the digital economy.

Mexico’s Enrique Pena Nieto, US’ Donald Trump and Canada’s Justin Trudeau sign the USMCA on Nov. 30, 2018, in Buenos Aires

 

Trump’s most relevant political gain was, however, in the automotive industry where the new agreement includes clauses aimed at protecting the domestic US industry, establishing barriers to further delocalize production in Mexico. These changes imply, for example, that to qualify for preferential treatment, at least 40% of the value of a car must be produced in a facility where workers make at least an average of $16 per hour. One should consider that a Mexican autoworker’s average salary is $3.14 per hour, which was, according to a study carried out by El Colegio de Mexico, nine times less than their US colleagues in 2016.

Nevertheless, according to some experts, the new protectionist measures implemented by the USMCA could ultimately negatively affect US enterprises, undermining their competitiveness. Other authors fear that the USMCA could produce short-term benefits for specific industries in the US, but it could lower overall GDP and welfare in the three countries.

 

Aid to Central America: funds as a bargaining chip

In March 2019, the Trump administration decided to suspend most aid for Central American countries, more specifically for Honduras, El Salvador and Guatemala – the so-called Northern Triangle. While the Obama administration considered financial support to promote domestic economic and social development in those countries as US national interests, Trump has had a different opinion. The current administration has used aid funds as a bargaining chip with the Northern Triangle governments. Trump threatened to suspend US funds indeterminately until those governments implemented further actions to stop the flow of migrants and asylum-seekers from their countries.

In 2019, the US reprogrammed around $405 million of aid appropriated to the Northern Triangle region to other initiatives while negotiating with the governments of Honduras, Guatemala and El Salvador. In October 2019, the parts reached migration agreements. Washington committed to re-allocate $705 million of new and previously suspended funds to the region. A similar bargaining took place with Mexico. Trump threatened to impose tariffs on Mexican imports, unless Mexico City acted to reduce the migration flows from Central America to the US – which practically means keeping migrants at risk in Mexico. Several human rights activists and lawmakers have denounced that this agreement violates the international refugee laws.

This strategy could have helped to achieve only short-term objectives without solving the deep roots of migration. In fact, cutting funds could have counter-productive effects as people flee to the US because of their domestic conditions. US funds were allocated to those countries with the purpose of mitigating the lack of opportunity and violence, which are widely acknowledged to be the key driving factors of migration.

 

“Troika of tyranny”

The Trump administration has increased US pressure against the authoritarian governments of Venezuela, Cuba and Nicaragua, failing, however, to produce a regime change in any of them.

Cuba’s Raul Castro, Nicaragua’s Daniel Ortega and Venezuela’s Nicolas Maduro have been labelled “the Troika of Tiranny” by the Trump Administration

 

The US has been a strong supporter of Juan Guaidò since his self-proclamation as interim President of Venezuela in early 2019. Washington has also implemented strict sanctions against the Maduro regime. Despite implementing a ban on the export of Venezuelan oil and gold and prohibiting Caracas from accessing the US financial market, Maduro is still in power. Even though most Western allies have backed Guaidò’s presidency, Washington has failed to lead a multilateral effort to ensure a democratic transition in Caracas, for example refusing to support the International Contact Group, promoted by the EU, or the Oslo Dialogue. On March 30th, US Secretary of State Mike Pompeo announced a new plan for Venezuela, the Democratic Transition Framework, tying humanitarian assistance with domestic political change. Not surprisingly, this latest proposal has also been another unilateral initiative of the US, not coordinated with its European allies. The lack of a coordinated and multilateral approach has undermined any attempt to efficiently support a transition in Venezuela.

Trump has also unilaterally intensified US pressure on Cuba, reversing Obama’s opening to Havana. The current administration has imposed travel and trade restrictions. In 2017, it implemented a restriction on American citizens travelling to Cuba as tourists and on enterprises doing business with around 180 Cuban companies tied to the military. However, some fear that these measures are negatively impacting small Cuban businesses, undermining a nascent form of small-scale capitalism on the island. A further step to increase pressure was decided in 2019. Whereas previous presidents suspended the “Title III” provisions of the 1996 Helms-Burton Act, Trump decided to allow Americans to file suit in US courts against companies “trafficking” in properties confiscated in Cuba. This choice was, however, opposed by the EU and other Western allies. More recently, in a bid to attract Cuban-American voters, Trump also announced that he is planning to strengthen the economic ban imposed on Cuba.

This tougher unilateral approach towards Cuba makes it harder for the US to capitalize from the Cuban political transition that occurred in October 2019 when Miguel Diaz-Canel was chosen as the first non-Castro President. Many fear that Trump’s actions are a strategic mistake that will ultimately push Havana into the arms of China and Russia.

 

Covid-19: no pan-American solidarity

US indifference to international cooperation since the start of the Covid-19 crisis has strengthened the perceived distance between the two American hemispheres, stressing Trump’s lack of strategic thinking towards Latin America. The region has been hardly impacted by the pandemic. The social and economic structures of Latin American countries – such as a high informal economy, low public investments in health and economic dependency on external factors – make them extremely vulnerable. However, the US seems to have disengaged with Latin America during the Covid-19 emergency. Trump has suspended funding for the Pan American Health Organization – around $110 million – as a consequence of halting funds to the World Health Organization.

This US approach has also opened a door to China’s further consolidation in the region. Since the 2000s, China has developed important economic ties with the region, becoming the largest trading partner for many countries and a major investor. During the pandemic, China has efficiently exploited the opportunity to strengthen its soft power in the region, sending masks, testing kits and ventilators.

China’s “coronavirus diplomacy” has strengthened ties between Beijing and Latin America

 

Four years later

In 2019, Trump’s former National Security Advisor, John Bolton proclaimed that the 1823 Monroe Doctrine was “alive and well”. If true, it would have been a disaster for Latin America. However, rather than a return to the Monroe Doctrine, the four years of the Trump administration seem to have been driven by the “America First” approach, ultimately producing a sort of US estrangement from the region – a worse outcome than disengagement.