"Resurgent Latin America is a Threat to U.S. Interests."
Quite the opposite. Listen to some of the rhetoric in Washington and you would think that Latin America only impacts the U.S. economy by sucking away manufacturing jobs and flooding the country with illegal immigrants. The truth is that U.S. economic interests are more entwined with those of its southern neighbors than ever. This is an overwhelmingly positive development.
For instance, U.S. oil imports from Latin America are larger than those from the Middle East. Saudi Arabia, Iraq, and Kuwait combined make up only 20 percent of U.S. oil imports. Latin American countries -- specifically Venezuela, Mexico, Ecuador, Colombia, and Trinidad and Tobago -- account for one third of U.S imports. For the United States, assuring a stable oil supply from its Latin American neighbors should be no less important than preserving stability in the Middle East.
Also, the Latin American consumer market is by no means irrelevant for U.S. companies. The region's GDP is $4.2 trillion, roughly 84 percent of China's $5 trillion. With only 40 percent of China's population, Latin America's average per capita income is twice that of China's. Therefore, Latin American households are important consumers of U.S. manufactured goods and services. For example, in 2010, 20 percent of Citicorp's overall profits came from Latin America.
While the Middle East is currently forging its own path toward democracy and Asian nations are rapidly competing with the United States for global market share, the United States can partner with its democratic Latin American neighbors to set a strong path toward mutual economic prosperity.
Stronger hemispheric economic integration is the natural first step. But moving forward in this direction requires debunking the most pernicious myth. Many in Washington still believe that the United States is exporting jobs to Latin America. Rather, the opposite is true: The region buys goods and services that generate jobs in the United States. Mexico is the second-largest market for U.S. exports, Brazil the 8th, and Colombia the 20th -- even without the passage of the pending free-trade agreement. Their combined imports from the United States in 2010 exceeded $210 billion, which represent thousands of jobs in America, especially in the manufacturing sector. But today, Latin America has signed free-trade agreements with countries like Canada and South Korea that can supply similar goods. Signing the pending free-trade agreements with Panama and Colombia would be an effective way to preserve U.S. competitiveness in the region.
Economic success, social inclusion, and political assertiveness are the buzzwords of the new Latin America, a region that now exudes confidence and optimism. Long-term U.S. strategic interests will be much better served by a re-engagement with this often-ignored neighbor.
President Obama is exceptionally popular in the region, and can play a transformational role in hemispheric relations. But to do that he will need to begin by challenging Washington itself, slaying the demons and self-serving misconceptions that muddle a clear view of Latin America.