President-elect Barack Obama is taking office facing an extraordinary list of international challenges, ranging from the wars in Iraq and Afghanistan to relations with North Korea and Iran to the global financial meltdown. Expectations for change are enormous, and clearly Obama will need to make some hard choices about what issues to prioritise. Yet, he cannot afford to lose sight of Latin America as his predecessor did. Focusing on the ‘war on terror’ with single-minded determination since 9/11, the Bush administration displayed a strange – and misguided – indifference towards its neighbouring region to the South. Relations between Latin America and the United States today are at the lowest point they have been in years,  and there is an acute need to mend fences.

Latin America matters – and it matters a lot – to the United States. Deteriorating governance in the region, affecting countries like Bolivia, Guatemala, Mexico, Nicaragua, and Venezuela, threatens the health of democratic institutions and the effectiveness and legitimacy of the state, and it is a source of growing instability and violence. A recent United States Joint Forces Command report, for example, lists Mexico alongside Pakistan as states whose sudden collapse would pose grave threats to world security. Latin America is also the source of one third of US oil imports, most of the country’s foreign-born population (both legal and illegal), and it accounts for a fifth of the US’s overseas trade. And oh yes, Latin America also provides virtually all of the cocaine entering the US. These are vital links that cannot be ignored.
Fortunately, Obama’s election provides a unique opportunity to usher in a new era of improved cooperation with Latin America. Four areas in particular require urgent attention to work towards this task: immigration, the war on drugs, disillusionment with democratic structures and the market economy, and the future of trade.

Immigration is a thorny issue that stirs a lot of passions. Yet the way to manage this problem is not by building a massive wall across the border and criminalising illegal ‘aliens’. Comprehensive immigration reform is needed, and the United States also needs to work more closely with governments in the region to support more robust and more equitable economic development. In addition, the incoming US administration must reconsider drug control policies that have simply not worked and have in fact been part of the problem of deteriorating governance and political violence in places like Mexico, Central America, and the Andes. It is essential for the US government to open a regional dialogue about the illegal drug trade and to acknowledge that drug-trafficking is not simply an issue of supply -- the demand-side of the equation needs to be tackled much more seriously than has so far been the case.

Latin America is also experiencing a profound disillusionment with the processes of democratisation and economic liberalisation that swept across the region from the 1980s onwards. This frustration has manifested itself in the resurgence of the left and the rise of populist leaders promising to do things differently. Yet, it is essential to keep in mind that this shift toward the left is not a homogeneous trend. There are significant differences in style and substance between Hugo Chávez in Venezuela or Evo Morales in Bolivia (with their fiery dreams of a ‘Bolivarian revolution’), Daniel Ortega in Nicaragua (who does not seem to realise we live in a new century), Cristina Fernández de Kirchner (with her particular homegrown brand of economic nationalism in Argentina), and Lula Da Silva in Brazil and Michelle Bachelet in Chile (with their more pragmatic, social-democratic approaches to the market. The dilemma for the incoming Obama administration lies precisely in how to address the rift between these different lefts in a way that improves U.S.-Latin American relations, fortifies those moderate governments that are seeking to build a democratic solution to the tensions between society and market, and weakens more retrograde leftist currents without resorting to the failed interventionist policies of the past.

Finally, there is the issue of trade. Among other things, Obama has expressed doubts about approving the free trade agreement with Colombia (based on deteriorating human rights conditions in-country), and has called for the renegotiation of the North American Free Trade Agreement. The challenge here for the new president is how to transform himself from free-trade critic on the campaign trail to international policymaker in Washington. As the renowned scholar Jorge Castañeda has pointed out, the aim should be to deepen, rather than weaken, these and other trade agreements that are undeniably flawed. Lessons from the European Union in this area can come in handy – by insisting, for instance, on the inclusion of clear and more explicit human rights, democracy, labour, environmental, gender-rights, and indigenous-rights clauses as addenda. Agreements should also incorporate badly needed provisions for infrastructure and ""social-cohesion"" funds to maximise the potential benefits of free trade on a more levelled playing field.

This is an ambitious, and very challenging, agenda, and it will require considerable commitment from the incoming US President to see it through. However, through more creative, honest, mature, and sustained engagement with partners in the region, it may be possible for the Obama administration to bring about a palpable and much needed transformation in the nature of the relationship between Latin America and the United States in the years to come. Change we can believe in?

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