In each of the three recent presidential debates, Republican challenger Mitt Romney pointedly extolled the potential benefits of greater U.S. trade with Latin America. This was neither a throwaway line nor a sop to Hispanic voters. It was a keen recognition that a region neglected by the Obama administration in its first term can be a key to the United States’ economic recovery.
One hopes President Obama will similarly come to recognize the abounding economic opportunities in our own neighborhood to help jump-start the U.S. economy and create more jobs here at home. Looking beyond the noise and radicalism of Venezuela’s Hugo Chavez and his populist ilk, a number of important countries have enjoyed a recent history of exemplary political and economic management that has enabled their economies not only to weather the international economic downturn, but to thrive.
Indeed, as the roots of democracy and the rule of law continue to take hold, countries such as Brazil, Mexico, Chile, Peru and Colombia have been at the forefront in modernizing their economies, liberalizing trade, opening their economies to investment and becoming more competitive overall.
The numbers tell the story. Since 2003, an estimated 73 million Latin Americans have risen out of poverty. Moreover, between 2003 and 2010, the average Latin American income increased by more than 30 percent, meaning that today, nearly one-third of the region’s population of nearly 570 million is considered middle class. In just the next five years, regional economies are projected to expand by one-third.
This is good news for U.S. business. It means millions of new consumers with an ingrained affinity for U.S. goods and services.
Mr. Obama recognized the linkage between exports and more jobs at home when he launched his National Export Initiative in 2010 with the goal of doubling U.S. exports by 2014. After some early enthusiasm, however, interest in the issue has waned.
With the election over, there is no reason why the White House cannot embrace the opportunities to our south and be a better partner to neighbors who share our values and to whom we are bound by close historical, cultural, familial and geographic ties.
A strategic economic pivot to Latin America could involve three immediate actions:
1. Mr. Obama should initiate negotiations to integrate the 11 existing free-trade agreements the United States has with countries in our hemisphere. Harmonizing those pacts and bringing about uniformity in standards and treatment of goods — while eliminating barriers between those countries themselves — will increase efficiencies, propel intrahemispheric trade and create more opportunities for U.S. businesses.
2. The administration should expand Latin American participation in the Trans-Pacific Partnership, an initiative to promote stronger economic ties between the Western Hemisphere and the Asia Pacific region, beyond Peru, Chile and Mexico. Doing so would mean better integration, better efficiencies and better opportunities for trade and investment.
3. The White House needs to engage Brazil more aggressively. With a population of about 200 million consumers and a $2.5 trillion economy (the world’s sixth-largest), Brazil is an emerging global player. It is in both countries’ interests to deepen the partnership in the areas of trade, security and energy. Granted, past attempts to broaden trade have foundered on our own market barriers to agricultural products, but that is even more reason for more strenuous engagement and negotiation to resolve disputes.
Much as China used the 2008 Beijing Olympics to unveil its economic progress and modernity, Brazil will be the focus of global attention in 2014 and 2016 as it plays host to the World Cup and Olympics, respectively. It also can herald a new U.S.-Brazil relationship.
Latin America has changed markedly in recent years. The Western Hemisphere is now home to some of the most dynamic markets in the world. The question is no longer what the United States can do for the region, but what we can do together to benefit all the peoples of the hemisphere and boost our own recovery and competitiveness.
Greater economic integration also will create momentum to deal with other challenges in the region, from security issues to modernizing immigration policy — not to mention rendering obsolete once and for all the retrograde, populist agendas of some who prefer looking to the past rather than the future.
The incentives are powerful for a fundamental reassessment of relations in our own hemisphere. The Obama administration needs to recognize the potential opportunities and mutual benefits sitting right on our doorstep.