Latin America's political and economic problems ordinarily are low on the U.S. foreign policy agenda, but occasionally events there do capture the attention of both the American public and governmental leaders. During the 1980s, the large foreign debt run up by several Latin American countries, particularly Mexico, Brazil, and Argentina, gained the attention of the U.S. government, first through the Baker Plan during the Reagan administration and then the Brady Plan during the Bush administration. The Brady Plan offered private banks guarantees for the portion of loans remaining after partial forgiveness of debt. The United States also increased its funding for the World Bank, the International Monetary Fund, and the Interamerican Development Bank to allow new loans to Latin America. The debt issue, once so worrisome, is no longer of great concern in the United States or Latin America, principally due to this renegotiation and the selling off of costly state-owned enterprises.
The issue of the 1990s is the development of agreements that will reduce trade barriers. The issue is more broadly defined in Latin America than in the United States, where trade issues have been reduced to the sharp domestic fight over the North American Free Trade Agreement (NAFTA) and its impact on the U.S. economy--an issue more properly viewed as a foreign policy question concerning U.S. relations with Mexico and Latin America.
In Latin America, the issue is viewed from the perspective of how the region will be affected if the Mexican economy is more closely tied to the U.S. economy than to those of the nations to the south of Mexico. Latin American countries, particularly those with stronger economies, see NAFTA as an opportunity for Latin America, or at least regional arrangements within Latin America, to develop similar arrangements and perhaps one day join in an expanded NAFTA, one that may extend to the entire hemisphere.
Optimism concerning hemispheric free trade is not without justification. In June 1990, President Bush introduced the Enterprise for the Americas Initiative, a plan that lacked specifics but seemed to focus on trade and investment problems in Latin America and hinted at a free-trade zone for the Western Hemisphere. The introduction of the plan was followed by an announcement that in September 1990 Bush would visit Argentina, Brazil, Uruguay, Chile, and Venezuela--all countries economically capable of taking advantage of the new plan.
South America was enthusiastic about the visit and hoped to learn more about the details of Bush's initiative. The visit was delayed until early December due to the invasion of Kuwait in August but resulted in great excitement, nevertheless, when
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