U.S. Latin American relations examined through six case studies

¶ … U.S. And Latin America, through discussion of the following case studies: Cuba and the U.S. trade embargo; Mexico and the use of U.S. branch plants (or maquiladors); Colombia and the U.S.A. war on drugs; Brazil and the U.S. environmental standards in the rainforest; Panama Canal and U.S. actions regarding U.S. involvement; and the Chile-U.S. fair trade agreement. The paper finds that the relationship between the U.S. And Latin America is not a positive one for Latin America.

has a long history of interaction with Latin America, from its involvement with Cuba, which stemmed from the Cuban missile crisis, to its current covert activities in Colombia, in response to the drug problems created in the U.S. from cocaine production in Colombia. The paper will discuss the history and workings of six of these interactions, as detailed in the Executive Summary, and the effect of these interactions upon Latin America. The paper finds that the history of U.S. interaction with Latin America is not a positive one for Latin America.

Literature Review

Cuba and the U.S. trade embargo

The issue of Cuba has been a thorn in the side of the U.S. since the Cuban missile crisis. Currently, the U.S. imposes a trade embargo on Cuba, and all of its products. This, coupled with Russia's disengagement from Cuba, has caused huge economic problems for Cuba, which is rich in natural resources, including sugar and tobacco.

Without outlets for its products, Cuba is unable to maximize its profits from its natural resources, and remains a poor country. Yet, it is a country with an excellent health and education system, which is the envy of many developing (and even developed) nations: the socialist government ensures that those resources the country does have are used wisely, to the benefit of the majority of the people on the island.

The U.S. responses to threats to its business interests in Latin America always try to ensure that their business interests remain valid: nationalization in Peru and Venezuela ensured that diplomatic means could be used to safeguard U.S. business interests in these two countries; in others, such as Chile, campaigns were used to oust the government of the country, to put in place a more sympathetic government; in Cuba, neither of these means worked, and the only option for the U.S. was to put in place the trade embargo (O'Brien, 1999).

Mexico and the use of U.S. branch plants (or maquiladors)

The U.S. produces many of its cars in Mexico, as labor and parts are cheaper here. In 1962, the Mexican government issued a decree limiting the number of foreign auto manufacturers to seven, and requiring that sixty per cent of the value of the cars be manufactured in Mexico; the decree, in effect, carved up the Mexican car industry between U.S. And German manufacturers (O'Brien, 1999). Following this decree, U.S. automakers responded quickly, with Ford building two new factories in Mexico City, and GM and Chrysler building new factories in Toluca (O'Brien, 1999).

Some may argue that U.S. companies give jobs to Mexicans, but the long-term future of a country that relies on outside investment, especially outside investment as flighty as U.S. investment, is not good: U.S. car makers could decide at the drop of a hat that they no longer wish to make their cars in Mexico, and then hundreds of thousands of Mexicans would be out of work. External investment is a good thing only if it is used to invest in infrastructure within the country; if it is not used to invest in infrastructure, as is the case with most examples of U.S. investment in Latin America, the investment creates a false economy, leaving a whole generation vulnerable to the whims of the foreign investor. The only way to ensure future prosperity for Latin American countries is to build infrastructure, so that an independent, thriving, economy can develop: this will not happen whilst Latin American countries have so much foreign debt, and whilst exploitative temporary investments are still the norm.

Brazil and the U.S. environmental standards in the rainforest

The Amazonian rainforest in Brazil constitutes some of the most valuable natural resource the planet has: U.S. companies began incursions into the Brazilian rainforest decades ago, cutting down huge swathes of forest to provide land for intensive farming. This land soon turned to desert, due to the lack of minerals in rainforest soil, and so more and more forest was cleared to keep up with the demand for the products of these companies.

Is this right? Should private (foreign) companies be allowed to enter a country, to take profit from destroying its natural resources? A persuasive case can be made to argue that this is immoral, but yet it continues, particularly in U.S. incursions in to Latin America, as we have seen with the cases of Mexico and Colombia.

The rainforest continues to be exploited, destroyed, still being cut down for land, and now being raided by U.S. drug companies, who act as biopirates, sampling huge numbers of tropical trees, in the hope of finding cures for diseases, which they then patent, making huge profits from their 'findings', charging hundreds of dollars for drugs to help mainly Westerners (the majority of Brazilians can't afford these drugs, just as the majority of Africans cannot afford HIV medication).

Panama Canal and U.S. actions regarding U.S. involvement

The Panama Canal was built with U.S. money, following a 1903 treaty between Panama and the U.S., which gave the U.S. The right to build the Canal (Ropp, 2002). As part of the same treaty, the U.S. gained the right to govern an area of land called the Panama Canal Zone on both sides of the canal (Ropp, 2002).

In 1977, Panama and the U.S. signed a new treaty, which allowed Panama territorial jurisdiction of the Canal; the U.S., however, kept control of some military installations and areas 'necessary to operate and defend the canal' (Ropp, 2002). In 1999, this power was taken away from the U.S., and since 1999, Panama has had control of the canal and its associated military operations (Ropp, 2002). Another treaty, post-1999, gave the U.S. A right to defend the 'neutrality' of the canal (Ropp, 2002).

The U.S. paid to build the canal, but do U.S. dollars allow the U.S. The right to occupy land in a country that is not its own? Saddam Hussein was the subject of a war following his occupation of Kuwait: the U.S., and its dollars, seem to buy the right to occupy land in Latin America, without international scandal; prisoners are currently held in Guantanamo Bay in Cuba (when the U.S. doesn't trade with Cuba, nor recognize Cuba democratically), and American soldiers are currently stationed in many other Latin American countries, as a result of diplomatic pressure, and some suggest, as a result of threats of aid withdrawal.

Is the presence of U.S. troops in Panama beneficial for Panama? Generally, U.S. troops, when abroad, receive all the goods they need from the U.S., so they add little money to the local economy: they therefore do not benefit positively the local economy. It is difficult to see what benefit Panama receives from U.S. troops stationed in the U.S., and it is well-known that U.S. troops are in Panama solely to safeguard its national interests with regard to the canal, not to help Panama.

Chile-U.S. fair trade agreement

The U.S.-Chile trade agreement (I will not call it fair, as it is not), is an extenspion of the failed NAFTA. This agreement, between the U.S., Canada and Mexico, was set up with the broad aims of liberalising trade between these countries; in effect, what happened was a further insurgence of U.S. business to Mexico, creating many of the problems already discussed under 'Mexico and the use of U.S. branch plants (or maquiladors)': deteriorating trade balances, lost jobs, trampled rights, and inadequate economic development (as discussed further in the report to be found at (http://www.americasnet.net/news/groups_oppose_ftaa.pdf).

As stated in a report by the senior economist of the American Farm Bureau, John Skorburg, "the U.S. will send more exports to Chile this year" (Skorburg, 2002). He continues, "there is potential for U.S. exports to Chile to grow in bulk...more than three quarters of U.S. agricultural goods will enter Chile tariff-free within four years" (Skorburg, 2002). This report does not paint a pretty picture of an agreement that is - in public, and on the international stage - supposed to encourage fair trade between the U.S. And Chile; an agreement that is fair would encourage trade from Chile to the U.S. In a similar manner, and certainly would not allow the entrance of goods to Chile - tariff-free - that are already manufactured in bulk in Chile, thus leading to the potential for the destruction of this industry within Chile, leading to dependence on foreign - U.S. - goods.

It seems, therefore that even 'fair trade' agreements between the U.S. And Chile are not fair, and do not add anything positive to the country concerned in the agreement; NAFTA is pretty much wholeheartedly dismissed by development workers, and it seems that this FTA with Chile will attract the same sort of condemnation.

Conclusions

As we have seen through the discussions of these case histories, the relationship between the U.S. And Latin America is not a positive one for Latin America, rather it is always an exploitative relationship, from which the U.S. gains huge advantages, and from which, Latin America emerges just as poor and hopeless as before the U.S. intervention.

Citations

O'Brien, T. (1999). The Century of U.S. Capitalism in Latin America. University of New Mexico Press.

Ropp, S.C. (2002). Panama Canal. In World Book Encyclopaedia for Macintosh.

Skorburg, J. (2002). An analysis of U.S.-Chile Trade. To be found at http://www.ifbf.org/commodity/pdf/200301_uschiletrade.pdf[Accessed 14th December 2003]. http://www.americasnet.net/news/groups_oppose_ftaa.pdf"U.S.-Chile Trade Agreement Rolls Back Progress in Trade Policy and Tramples on Workers Rights'" Press Release, Miami, June 6, 2003. [Accessed 14th December 2003].