The overlooked Americas

President George W. Bush attends a press conference with Mexican President Vicente Fox (left) and Canadian Prime Minister Paul Martin (right) in Waco, Texas on March 23, 2005. (Rod Aydelotte/Getty Images)

The United States and some 60 other countries will hold elections in 2024. As Republicans and Democrats establish their foreign policy objectives for 2025 and beyond, neither party is paying enough attention to the United States’ closest neighbors. At a moment when the U.S. foreign policy conversation is being dominated by the conflicts in Ukraine and the Middle East, as well as concerns about China, Taiwan, and North Korea, one thing we haven’t heard is a thoughtful discussion of Latin America.  

Such disregard isn’t new. In fact, it follows years of neglect by the United States, as Washington’s role in the Western Hemisphere has grown increasingly modest. But continuing to overlook our most proximate partners would be a mistake. Not only does the United States have strong geopolitical reasons to deepen its engagement with the region, but by virtually ignoring it, Washington is also missing out on promising economic opportunities as well as a strong alignment of interests. Should the United States continue to fail to support the growth of democracy and enterprise among its neighbors to the south, moreover, more malign actors will surely take its place.

Why wait for a crisis?

The root of the problem lies in how U.S. policymakers and private investors perceive Latin America. The Elcano Royal Institute, a think tank funded in part by the Spanish government, recently published a report titled: Why does Latin America matter? The study shows that Latin America is broadly seen as a region of poor governance and limited economic opportunity – but that this view is out-of-date and misguided.  

Take security. Many Latin American countries are committed to democracy, there are no active interstate conflicts in the region, and no Latin American countries are major geopolitical rivals of the United States. Mexico, much of Central America, and South America are now relatively stable and secure. Rather than encourage U.S. involvement, however, that stability may be having the opposite effect, since it often takes a crisis to get Washington’s attention. 

That is the wrong approach. The United States shouldn’t limit its involvement in Latin America to jumping from crisis to crisis. It should view the region as a series of opportunities, not just problems to solve or fires to extinguish. For one thing, Latin America is becoming fertile ground for investment: The region’s percentage of global debt has dropped significantly in the last 40 years, and companies based in the region, especially midmarket companies, are making money. While it might be naive to expect this White House or the next to get deeply involved in Latin America, the U.S. private sector and civil society should step up and begin laying the groundwork for a more proactive approach. 

What should this proactive U.S. approach look like? It should start with building mutually beneficial partnerships with like-minded countries in the region. U.S. engagement with Latin America must center on encouraging a commitment to strengthening rule of law, confronting corruption, fostering economic prosperity, promoting human rights, and supporting democratic institutions. But the region is diverse in language, history, culture, and politics, and U.S. policy should reflect that diversity. There is no single blueprint for the entire region; each country deserves and needs its own tailored set of plans with the United States.  

U.S. Treasury Secretary Janet Yellen speaks during a news conference at the G-20 summit in Sao Paulo, Brazil, on February 27, 2024. (Tuane Fernandes/Getty Images)

A strong foundation and a promising youth

A good place to start would be expanding the U.S. alliance with Mexico and imbuing it with a more strategic vision driven by the recognition that North America is well positioned to drive global growth. In July 2023, Mexico passed China to become the United States’ top trading partner for the first time in 20 years, yet the bilateral relationship has recently been dominated by narcotics and the border. With migrant crossings close to an all-time high and the opioid crisis as bad as ever, these issues remain serious challenges; just recently, after months of bipartisan negotiation, new border legislation in the U.S. Congress succumbed to election-year politics, once more demonstrating how critical but divisive these problems are.  

While they will continue to be core issues for both the United States and Mexico, however, they should not be allowed to overshadow other important priorities. Washington should bring the same level of urgency to attempts to improve U.S.-Mexican collaboration on energy, water, technology, infrastructure, labor mobility, and North American competitiveness. But strong partnerships are driven by strong partners, and Mexico needs to bring more clarity and certainty to its plans for and investments in the energy sector, for example.  

A stronger U.S.-Mexico partnership should build on the vision of opening markets and fostering closer cooperation among Mexico, the United States, and Canada that paved the way three decades ago to the creation of the North American Free Trade Agreement (NAFTA). The pandemic made it clear to businesses how important it is to de-risk and diversify their supply chains. For North America to remain economically prosperous and secure, it must intensify the nearshoring process.  

 Later this year, the United States and Mexico will both hold elections. Mexico will almost certainly elect its first female president. Regardless of who wins that election, we can likely expect relative continuity on these economic issues. The anticipated outcome in the United States is not yet as clear, and depending on who wins the elections, U.S. priorities with Mexico may shift. The one thing that is certain, however, is that achieving a more prosperous North America is not possible unless Mexico is central to the process. 

Not-so-near-shoring

The United States should expand its trade and nearshoring efforts further south as well. Due to Central America’s smaller population and economic heft, and the limited presence of multinational companies there, the prospects for the region may be more modest than those of Mexico. It is, however, still worth Washington making an effort, given the region’s proximity to the United States and its political stability, at least in relative terms. At the moment, U.S. policy toward the region is focused only on the negative, especially the exodus of migrants from El Salvador, Guatemala, and Honduras, and the authoritarian tendencies of the Nicaraguan and Salvadoran governments. But Central America is more promising than U.S. policymakers seem to realize. Plenty of countries there, such as Costa Rica, Guatemala, and Panama, are committed to democracy and fighting corruption and would make good partners for the United States in promoting these efforts. Among other benefits, prioritizing rule of law and good governance would limit the pressures that currently drive many people in the region to move north.  

Guatemala is a good example of the potential for cooperation. While a return of major anticorruption efforts like the International Commission Against Impunity in Guatemala (which ran from 2006 to 2019) is unlikely, the United States can and should work to strengthen its relationship with the country’s newly inaugurated President Bernardo Arévalo. After years of his country backsliding, Arévalo has taken anticorruption, pro-democracy, and pro-business stances. In Panama, meanwhile, the United States should focus on promoting more economic and political cooperation – not only because the country will elect a new leader on May 5, but because Panama continues to play a critical role in global trade through the canal.  

Brazilian President Luiz Inacio Lula da Silva meets with Chinese President Xi Jinping in Beijing on April 14, 2023 (Photo by Ricardo Stuckert/Flickr)

The good news is that the United States is already taking some promising steps in the right direction. In August 2023, Intel announced that it would invest $1.2 billion in Costa Rica after Washington committed to include the country in U.S. efforts to bolster semiconductor manufacturing. Despite this positive sign, however, the United States has failed to take full advantage of the already established Central America-Dominican Republic Free Trade Agreement to increase trade collaboration by establishing more nearshoring. It’s time for Washington to recommit to CAFTA-DR’s original promise, which included integrating markets, cutting production costs, and reducing barriers to services. 

Back to basics

Even farther south, the prospects for partnership look different, though still promising. Brazil boasts one of the world’s largest economies and has made clear that it wants to play a larger role in helping bridge the divide between the West and the Global South. Washington will likely find an economic ally in Javier Milei, the newly elected Argentinian president. And it should do more to leverage the Colombian government’s long-standing economic and political ties with the United States. As for South America’s other countries, while they may have their own priorities, many of their goals still parallel U.S. interests – be it on clean energy, infrastructure, or trade – which could allow for broader U.S. engagement.  

Some major points of tension remain, of course, especially with the government of Venezuela. And any discussion of deepening U.S. engagement in South America cannot ignore the fact that China continues making strategic inroads there. In Brazil, for example, Beijing has invested more than $30 billion since 2007, completing or proposing projects in the country’s maritime ports, highways, and railways. China’s presence may make it harder for the United States to get more involved, but that should not discourage U.S. policymakers and private enterprise. The stakes are high. Should Washington walk away from South America, it would only create more opportunities for Beijing in the region.  

That would be an unfortunate error, especially at a moment when U.S. and Latin American interests are relatively well aligned and there are abundant opportunities for deepening U.S. government and business ties to the region. American policymakers and CEOs should recognize that the clock is ticking and that the turmoil in other parts of the world only makes the moment more urgent for increasing U.S. engagement with its neighbors.