Recent Trends in Latin American Foreign Policies: Catching up with the Times

- Manpreet Sethi



The realm of international politics in which we dwell and operate today hardly allows any advantage of familiarity to national policy makers. The sheer scope, intensity and rapidity of political transformations that have swept the globe have turned traditional political doctrines into relics of the past. Simultaneously, the field of economics has witnessed a widespread restructuring along the lines of free market economics, globalization, formation of regional trade groupings, emergence of new players and a prevalence of economic power dictating international competition and rivalry. In the ensuing scenario, politics and economics have come to be closely entwined. Consequently, political ideologies are no longer the predominant driving force behind external relations. Instead, economics has taken over as a crucial determinant of foreign policy making.1

Obviously, the changed international scenario has brought with it new challenges--of anticipating future trends and evolving suitable strategies to ensure easy adjustments and smooth transitions. At the same time, with the new emerging world order, new opportunities have also cropped up--to shed old shibboleths and to reshape external relations along more realistic and multi-dimensional lines.

Accordingly, all nations, developed and developing have been compelled to reassess, restructure and reformulate domestic and foreign policy postures.This essay is a study of the concomitant alterations that the major Latin American countries have been making in their foreign policies since the advent of the 1990s, in an attempt to catch up with the present day realities.

At the outset it must be clarified that the entire Latin American region comprises 33 countries and an indepth study of all the nations is a task well beyond the scope of this short essay. The paper seeks to confine itself to identifying and analysing recent trends in the external relations of some of the more prominent Latin American nations viz. Argentina, Brazil, Chile, Colombia, Mexico and Peru. Of course, these nations do not in any way constitute a homogenous or composite group. Their individual historical experiences, geopolitical compulsions, economic thresholds and political ideologies do condition their responses. Yet, it is possible to discern certain trends that have permeated all countries, albeit to a larger or a smaller degree. Through the identification of these trends, the essay intends to prove the broad hypothesis that Latin American foreign policies are increasingly being determined by domestic economic imperatives.

Emphasis on Intermestic Policies

For some political scientists, internal change and reform are totally domestic in nature. Consequently, they believe that each nation state has the freedom to act autonomously while framing its political and economic systems. This viewpoint, however, is hardly borne out by the contemporary interactive global scenario. Today, a nation has to frame "an intermestic policy"--i.e. international + domestic. This denotes an erosion of the traditional distinction between foreign and domestic policies.2

The blurring of these lines of external and internal policies is clearly evident in Latin America. Economic conditions at home and the need to remedy them are essentially the reason for the present Latin American foreign policy orientations. In order to make up for the economic adversities suffered during the previous decade, most Latin American countries have launched novel projects of modernization based on economic restructuring and the introduction of neo-market reforms. Budgetary cuts, privatization, reduction in or abolition of subsidies, downscaling of governmental expenditures are only some of the catchwords of the new economic models adopted all over the region.

The domestic economic changes have been accompanied by complementary changes in foreign policies. An important objective of external relations has come to be identified as its ability to help finance domestic economic reforms. Alignments with other nations have been strategically planned so as to attract foreign capital as a means of reenergizing and modernizing domestic economies. A clear indication of this trend was provided by the Argentine President Carlos Saul Menem in 1991 when he said, "I am endeavouring to make our foreign policy a prime factor in solving economic and social problems at home."3 His Foreign Minister Domingo Cavallo explained how this was to be done. By making the foreign policy more "realistic and seeking to create a better political relationship with friendly countries of the world in order to resolve Argentina's economic and social problems."4

Similarly, Mexico lying at the doorstep of USA has attempted to evolve a balance between its domestic compulsions and relations with its neighbour. After the December 1994 peso crisis, substantial efforts have been made at macroeconomic stabilization so as to restore and promote recovery of investor and consumer confidence. In fact, economic plans of other countries of the region too have been formulated with one specific objective in mind--to attract capital inflows from abroad, including foreign direct investments.5

Greater Pragmatism in Foreign Policies

In the light of the above it can be safely stated that Latin American foreign policies have become more pragmatic and less ideological in their approach. Traditionally, foreign policy goals have been structured around two areas: military—strategic and economic—developmental; and, it had been the former that had dictated foreign policy formulation. This was evident in the insistence on territorial sovereignty and emphasis on geopolitics as was predominant in major Latin American nations. The 1970s witnessed a heightened attention being focussed on Antarctica, Beagle Channel Islands and Falklands. Argentina, Brazil and Chile boasted of well developed and articulate schools of geopolitics that held sway over military strategy and national defence.

However, with economics now gaining primacy, foreign policies are shifting focus to economic development. The changed perception rests on the premise that only economic growth and a higher standard of living can ensure an influential presence of the country on the world stage. Accordingly, foreign policy concerns have moved away from strictly geopolitical issues to a greater preoccupation with economic factors. In turn, with economics gaining primacy, pragmatism has automatically followed. Peruvian President Alberto Fujimori put it bluntly when he said, "In economic matters, realism is the first responsibility of a serious government whose concern with the country's problems is authentic."6

An illustrative example of this trend is the pragmatic Argentine stance on the Malvinas (Falkland Islands). It is a well known fact that Argentina has a long standing territorial dispute with the United Kingdom over these South Atlantic islands. While the political rhetoric over the issue continues, Menem has reiterated the need to resolve the crisis through diplomatic means. The issue of sovereignty has therefore, been kept "under an umbrella"—a matter to be resolved but one on which discussion remains suspended, for the present, because the economic benefits that accrue from having UK as a trade and investment partner are more significant. In fact, Menem has clearly stated that better relations with UK provide Argentina with "a chance to openly approach the European Common Market, improve our image in the international arena, demonstrate our goodwill before the world."7 Taking pragmatism a step further, Argentina and UK have signed an agreement in New York in September 1995 for the joint exploration and exploitation of the Malvinas basin for petroleum deposits.8

Yet another evidence of rising pragmatism in foreign policy is the thawing of strategic relations between Argentina and Chile. Traditionally, geopolitical thinking had held sway over the bilateral relations of the neighbours. But in recent times their relations have improved to such an extent that both are preparing to have joint military exercises and end mutual suspicions over arms procurement. That there is an economic undertone to this move is evident from this statement of Chilean Foreign Minister, Jose Miguel Insulza : "We agreed to work jointly to get an international organization like the IMF or the World Bank to design a method that will allow us to compare defence spending in a more objective, a more transparent manner."9

Economic pragmatism has also propelled Argentina and Brazil to sign an agreement for increased defence cooperation. Reduced defence budgets in both nations have induced the military to shed their historical mutual distrust. Brazil has announced cutbacks in its forces in the border areas, acknowledging that there is no likelihood of a conflict. Significant proof of the growing cooperation is provided by the joint manoeuvres conducted in April this year aboard the Brazilian aircraft carrier, Minas Gerais. Given the fact that the Brazilian Navy does not have a naval air arm to use its aircraft carrier, whereas the Argentine Navy has an air fleet, but no aircraft carrier, this exercise highlights the prevalence of practicality.10

Another indicator of rising pragmatism vis a vis ideological trappings is the changed stance of Argentina and Brazil on the Nuclear Non Proliferaton Treaty (NPT). Traditionally, these two neighbouring nations boasting of well structured and well executed nuclear policies and programmes had long been critics of the NPT on the grounds that it was discriminatory and an instrument for perpetuating nuclear hegemony. Abandoning its traditional policy postures, Argentina signed the NPT in 1995 and Brazil has followed in June this year. At the time of joining the NPT, Buenos Aires had made it clear that it was doing so for the sake of improving relations with the USA. Meanwile, Brazil has openly declared that it wishes to use the move as a means of garnering support for its entry into an expanded UN Security Council. Clearly, pragmatism has replaced ideological dogmatism.

Increased Pace of Latin American Economic and Strategic Integration

The last decade or so has witnessed a series of striking successes in the field of economic integration of the Latin American countries. It has become the norm for every country of the region to be a member of common markets or free trade areas. Consequently, one has seen the emergence of NAFTA (Mexico, USA, Canada), Mercosur (Argentina, Brazil, Uruguay and Paraguay), G-3 (Colombia, Mexico, Venezuela), Andean Pact (Bolivia, Colombia, Ecuador, Peru, Venezuela), Central American Common Market and the Caribbean Common Market (Caricom). These multinational groupings have been further supplemented by increased bilateral trade and investment ventures. A steady headway has also been made for the merger of the subregional groupings under a larger Latin American regional umbrella in preparation for an eventual unified common market for the Americas. A major step in this direction was taken when the Association for Latin American Integration comprising 25 nations and territories of the Caribbean region was established in 1994.11

The concept of regional economic integration in Latin America, however, is not new. It has been attempted several times earlier. But, different factors (such as the region's economic dependence on USA, disparate development of countries of the region etc.) conspired to bring efforts in that direction to nought. More recently though, the trend towards democratic governments in the region and an accompanying shift in economic development choices have combined with the global inclination for regional groupings to increase the chances of success of the ongoing regional integration measures. Consequently, as Menem has prophesied, "The great fatherland dreamed of by San Martin and Bolivar may no longer be a utopian goal in the 21st century."12

The success of Mercosur is ample proof of this. Expecting the creation of "economic blocs to be the forerunner of a freer, more efficient international trade", Mercosur has been envisaged to create a stable external context for the economic growth of the four member nations. The conclusion of a customs union, liberalization of intra-regional trade, and adoption of a common tariff etc., are expected to lead to a collective economic discipline and greater regional competitiveness of the four economies. Recently in fact, Mercosur has been expanded with the inclusion of Chile as an associate member. Bolivia too is likely to seek associate membership.13

Other projects attempting to link Latin America include a vast waterway plan starting in the Orinoco Basin, going through the Paraguayan river to the Rio de la Plata in Argentina;14 and, a contract between Brazil and Bolivia for a new gas pipeline.15

Besides multilateral economic groupings and multinational projects, and possibly because of them, bilateral relations in the region too have begun to improve. A most significant example of this is the disappearance of strained relations between Argentina and Chile. Rival claims between the neighbours over Beagle Channel islands had almost brought them to the brink of war in 1979. However, as has also been mentioned in the previous section of this paper, relations have improved to such an extent that they have started thinking in terms of "joint armies" and the implementation of a "common security system."16

By the end of this year, Chilean army officers, after undergoing training at the training centre for peacekeeping operations in Buenos Aires, are expected to join the Argentine batallion that is part of UN peacekeeping force in Cyprus.17 This is indeed an unprecedented step, given that Chile does not have a tradition of sending its soldiers into international conflicts and moreso, because it is becoming involved in the UN mission under the leadership of Argentina.

Changing Equations with USA

This decade has seen foreign policy adjustments by Latin American countries in order to improve their relations with USA. Historically, South American relations with USA have largely gone through cycles of protracted discord followed by periods of relative harmony. Given their geographical compulsions, the US factor has always remained important for these countries. Recently though, the trend has been to adopt a more positive attitude towards USA and to avoid direct confrontation with Washington.

For Latin America, Washington represents the main source of foreign captial and the largest trading partner, not to mention its influence over such multilateral institutions as IMF, World Bank and the Latin American Development Bank. Support from these financial organizations has been deemed crucial for the success of the economic reforms in the region. Naturally then, expansion of economic relations with USA has been of paramount importance for all Latin American nations. Consequently, low key postures have been adopted on international issues involving US national interests such as policy towards the Frente Sandinista para Liberacion Nacional in Nicaragua, guerrillas in El Salvador and UN human rights investigations in Cuba.

Former Mexican President, Salinas de Gortari, gave top priority to NAFTA negotiations during his term. His Argentine counterpart, President Menem demonstrated his desire to achieve "un amor carnal" with USA by taking a series of measures to eliminate every possible issue of discord on their joint policy agendas. Following his first trip to Washington after assuming Presidency in September 1989, he committed Argentina to ratify the Treaty of Tlatelolco,18 to dismantling the Condor II missile project,19 and subsequently even agreed to participate alongside USA in the UN blockade of Iraq.20 Later, Buenos Aires supported the US sponsored proposal for UN intervention in Haiti.21

All these measures were taken in the hope of receiving tangible rewards to reenergize the domestic economy. In this regard, the following statement of Menem is revealing : "It sounds absurd to say that the pre requisite for a successful economic plan at home is good diplomatic relationship with the US. But when one takes into account the enormous influence this country has on international credit organizations, the impossibility of having a coherent economic policy unaccompanied by an efficient foreign policy is self evident."22 True to this fact, American backing for Argentina's economic reforms provided strength to Buenos Aires during its debt negotiations with the IMF and the World Bank, as well as with American creditor banks.23 Defusing the foreign debt crisis facilitated an increased inflow of private investment into Argentina: between 1990-92, US investments were the largest at $637 million.

A second kind of advantage that Argentina has obtained from improved bilateral relations with USA is a greater access to arms and technology. In November 1989, USA lifted restrictions on arms sales to Argentina. Since then cooperation in areas of defence, aerospace technology, nuclear field and arms sales has increased. In 1994, Argentina received 2 squadrons of Skyhawk A-4M bombers.24 In Sept 1996 during the visit of Argentine Defence Minister Jorge Dominguez to Washington, he received assurances from US Defence Secretary William Perry that Buenos Aires would be eligible to receive lethal defence equipment, that is excess with US defence, virtually free of charge. This would greatly aid the modernization of Argentina's defence forces considering that nearly 85 per cent of its $2 billion defence budget goes in meeting personnel costs leaving only $ 300 million for operation and modernization of the three services.25

In Brazil, the President stated that the chief policy goal of his government was the maintenance of good relations with USA. As a step in this direction he opened the Brazilian computer market to foreign manufacturers, thereby ending the trade war over products of information industry. Similarly, Colombia and Peru reached agreements with Washington on joint action against drug trafficking. In Sept. 1996, US Congress gave assurances to Colombia to expedite the sale of 12 UH-60 Black Hawk utility helicopters to the Colombian Army.26

In a larger context, aircraft and other military equipment worth $112 million has been transferred to Latin America and Caribbean nations for anti-drug operations according to US government. The Congress has considered proposals to transfer surplus Bell UH-1H helicopters and Fairchild C-26s for Venezuela, 4 C-26s for Peru and 2 C-26s for the Eastern Caribbean states. In a second batch worth $37 million, Mexico is expected to receive 53 UH-1Hs and 4 C-26s.27

Principle of Independence

Despite their apparent acceptance of US dictates on some major issues, it may not be surmised that Latin American nations have let themselves be ridden over by USA. Rather, adherence to the principle of independence has continued to remain of paramount importance. This is particularly evident in the case of drug trafficking—an issue of discord that has long existed between Latin America and USA.

Washington holds that the eradication of overseas sources of supply constitutes the key to the solution of the drug problem. On the other hand, Latin American countries ask Washington to reduce its domestic demand and offer them economic assistance in their efforts to plant substitute crops for narcotics. At the San Antonio Anti-Drug Summit Conference in the state of Texas, USA, held in Feb. 1992, Latin American states agreed to the exchange of information in the drug war, strict control over means of communication in their territorial supervision over production of drugs, and the timely investigation into money laundering. But, they categorically rejected the US proposal for the establishment of a multinational anti-drug force. Mexican President Salinas reflected the larger Latin American sentiment when he said that "We hope for cooperation in the drug war, but it is the responsibility of us Mexicans to combat this crime on our soil."28 More recently, Colombia and Paraguay jointly rejected US certification procedures used to evaluate countries in the fight against drug trafficking.29

Adherence to the principle of independence and a resurgence of the spirit of Latin American solidarity has been further demonstrated in the 4 sessions held of the Iberian - Latin American Summit Conference, a regional conference held on the intiative of the region itself without any participation of USA.

On several other issues too Latin American nations have shown a strong consciousness of state sovereignty and national self respect. For example, in 1991, Guatemala rejected US military aid when it came attatched with harsh terms. In the same year, Panamanian government strongly reacted to a bill tabled in US Congress seeking fresh negotiations between the two countries on the issue of Panama Canal zone. Their opposition eventually led to the killing of the bill.

The pace of the ongoing negotiations on the Free Trade Area of the Americas (FTAA) also reflects this trend. FTAA is envisaged to be in place by year 2005. It is to be a complementary agreement, coexisting with the majority of agreements that are already in place in the hemisphere. The FTAA talks have become polarized between the US position that is advocating negotiations for the reduction of customs tariffs to start immediately and the Mercosur demand that the issue be left for the final stage of the FTAA process. The Brazilian position in this context mirrors the larger stand of the region. President Cardoso of Brazil said, "Relations between Brazil and USA are very good." But he added a caveat. "This does not mean that Brazil and Mercosur can indulge in the luxury of failing to see where their interests lie."30

He noted that US barriers were affecting several Brazilian and Mercosur products such as footwear, textiles, steel, and agricultural items. Unless these were removed, no progress could be made in the FTAA negotiations.

Policy of Multi-Dimensional Diplomacy

To a large extent, the ability of the Latin American nations to stand up to US bullying has been enhanced by their following a conscious and coherent drive of diversification of external relations. Expanding relations with Western Europe, Japan, Asia-Pacific and other Third World countries in the field of political exchanges, economics, diplomacy, culture and science and technology have increased the room for manoeuverability against all kinds of pressures.

With the establishment of the Iberian-Latin American Conference, relations with West European countries have considerably strengthened. Spain has been designated to play the role of a bridge linking Latin America with Europe. Considering that the EC is one of the three biggest trading blocs in the world, not only in terms of total trade but also in terms of its merchandise transactions with the rest of the world, Latin American efforts in this direction are based on sound logic. Italy, Spain, France and Germany have participated in Latin American privatization efforts. Joint ventures in areas of technology and energy development have been finalized and total volumes of bilateral trade have increased.

Another important change in this regard has been the turn away from USA as the sole, or even the most important, source of weaponry. Between 1972-81, Washington still accounted for 77.8 per cent of all sales of subsonic combat aircraft in the region, 41 per cent of all light armor and 47.8 per cent of all artillery. But presently, the US share has come down with an increase in West European arms sales to the region.31

With Japan too, a permanent consultation mechanism has been established. Over the past several years, Presidents of Peru, Argentina, Chile, Brazil and Mexico have visited Tokyo in the hope of attracting larger contributions for their country's economic rejuvenation. During his 1992 Asia visit, the Chilean President, Particio Aylwin made friendship overtures towards the Pacific Ocean. While in Malaysia he referred to the possibility of opening direct air and shipping lines between Chile and the region.


Foreign policies are sets of activities evolved by communities for changing the behaviour of other states and for adjusting their own activities to the international environment. This is exactly what Latin American foreign policies have been attempting to do.

The uppermost concern for the entire region remains economic rejuvenation and its sustainability for a continuous and consistent economic growth. Having renounced the erstwhile inward looking economic policies, Latin American countries have realised the link between their economies and foreign markets. Naturally therefore, trade, finance and business investments have become the sine qua non of external relations. As a result of domestic economic conditions dictating foreign relations, pragmatism and an emphasis on realism has gained greater berth in foreign policy formulation. A practical approach has taught Latin America to look within the region for better bilateral and multilateral relations. While the importance of USA has been realised and is being exploited for the economic well being of the region, yet it is not being done at the cost of compromising national sovereignty and interests. At the same time, the forging of alliances with other geographical areas of the world has brought in a multi-dimensionality in Latin American foreign policies that had never been so evident.

Rooted in pragmatism, foreign policies of the region have begun to be formulated as innovative responses more in keeping with the present times. They are daring to look into the future to find and explore new possibilities of political, economic and strategic relationships and alignments.



1. Several international experts have made a persuasive case for the primacy of economics based on the shift from strategic bipolarity to economic tripolarity (USA, EEC, Japan). See Fred Bergsten's article in Foreign Policy, Summer 1992 ; D Banerjee's article in Strategic Analysis, July 1993 ; and Noam Chomsky, Towards a New Cold War: Essays on the Current Crisis and How We Got There (New York, 1982).

2. J Spanier, Games Nations Play, 7th edition (New Delhi, 1990).

3. Carlos Menem, The United States, Argentina and Carlos Menem (Buenos Aires : Editorial Ceyne, 1990), p.32.

4. Roberto Russell & Laura Zuvanic, "Argentina : Deepening Alignment with the West", Journal of Interamerican Studies and World Affairs, vol.33, no. 3, Fall 1991, p.114.

5. World Bank, Annual Report (Washington, 1996).

6. Summary of World Broadcasts, AL/2986, Aug 1, 1997, p.L/4. Emphasis added.

7. Menem, n.3, p.45.

8. Peter Calvert, "History", Regional Survey of the World -- South America, Central America and the Caribbean, 6th edition, (London : Europa Publications, 1997).

9. Summary of World Broadcasts, AL/2976, Jul 21, 1997, p.L/2.

10. Ibid. AL/2913, May 8, 1997, p.L/1.

11. World Bank, n.5.

12. Summary of World Broadcasts, May 5, 1994.

13. World Bank, n.5.

14. Summary of World Broadcasts, AL/2985, Jul 31, 1997, p.L/8.

15. Ibid. ALW/0498, Aug 5, 1997, p. WL/3.

16. Ibid. AL/2981, Jul 26, 1997, p.L/1.

17. Ibid.

18. The Tlatelolco treaty proscribing nuclear weapons from Latin America came into force on June 24, 1967. At the time it was not ratified by Argentina, Brazil and Chile.

19. The project in which Argentine military took great pride was declassified and parts of the missile sent to USA via Spain.

20. Argentina sent 2 warships, 2 airplanes and more than 300 troops to the Persian Gulf.

21. In early August 1994, Argentina even promised to send its marines to participate in Haiti's invasion. But, unable to gain the approval of his Congress, Menem later announced that the Argentine military contingent would take part only in peacekeeping and infrastructure building operations. 4 Argentine corvettes had already been sent to patrol and enforce economic embargo against Haiti.

22. Menem, n.3, p.57.

23. In April 1993, a debt reduction plan based on the mechanism devised in 1989 by US Treasury Secretary Nicholas Brady was signed with creditor banks in New York. This effectively ended the 11 year foreign debt crisis. Buenos Aires then calculated that the burden of servicing $ 19,290 million in debt principal would be reduced by a third.

24. Calvert, n.8.

25. "Argentina to seek free aircraft", Strategic Digest, vol. 26, no.11, November 1996, p.1656.

26. Ibid., p.1657.

27. Strategic Digest, vol. 26, no.11, November 1996, p.1663.

28. Wang Yulin, "Latin America : Post-Cold War Diplomatic Trends", Contemporary International Relations, vol.5, no.2, February 1995.

29. Summary of World Broadcasts, AL/2987, August 2, 1997, p.L./3.

30. Ibid. ALW/0486, May 13, 1997, p. WL/3.

31. US Department of State, Conventional Arms Transfers in the Third World 1972-81, Special Report no.102 (Washington,1982).