TFR 39 – Latin America at a Crossroads: The Challenge to the Trilateral Countries

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Political

1. Sustained, high-profile public support for democracy in Latin America must comprise the cornerstone of Trilateral foreign policy toward the region. This includes:

* more frequent consultation and more intense association with the democratic leaders.

* strengthening of links between kindred political parties of the industrialized countries and the nations of the region.

* expanded private and government-sponsored exchange programs to foster democracy and enhance understanding with the Trilateral countries with special attention to individuals from parliaments, the press, academia, the military, government bureaucracies and the private sector.

* increased support for programs aimed at improving the local administration of justice in order to promote equity, improve public safety and foster a modern regulatory climate. E.C. nations with kindred legal systems, especially Spain and Portugal, could be particularly helpful in this regard.

2. Special and sustained efforts should be made to work closely with local governments on problems caused by threats to regional democracy and the continued existence of recalcitrant, undemocratic regimes.

Economic

1. With due deference to local circumstances and sensibilities, the Trilateral countries should be frank in advocating the need for reform and modernization of Latin American economies. Such efforts are necessary both to achieve recovery and secure international support particularly from the Trilateral private sector.

2. On the other hand, the Trilateral countries must be prepared to provide simultaneous and effective debt relief on a case-by-case basis for Latin American nations making a real reform effort. This will involve:

* more Mexico-like arrangements for reform-minded governments tailored to local circumstances on a prompt, sequential basis.

* greater coordination among international financial institutions, Trilateral governments and private credit institutions. In particular, the European Community should consider greater channeling of credit resources through the Inter-American Development Bank. For example, the linking of the European Investment Bank to the Inter-American Development Bank should be seriously considered.

* review of Trilateral countries' laws and regulations on amortization of debt write-down and on loan-loss reserve requirements.

* consideration of greater and more timely contributions to international financial institutions based upon their respective policy performance.

* encouragement of debt-equity swaps as appropriate to local circumstances.

* support for modernization and strengthening of local capital markets and programs like Employee Stock Ownership Programs (ESOPs) that encourage wider equity ownership.

* consideration by those Trilateral nations with large trade surpluses of Japanese-style capital recycling efforts. Reduction of Trilateral budget deficits, especially in the case of the United States, would also contribute to greater availability of credit for Third World nations, including those in Latin America.

3. The Trilateral nations should keep their markets open to Latin American products to the greatest extent practicable. The Trilateral countries should:

* support Latin American countries' efforts to promote exports to Trilateral countries, especially non-traditional exports to non-traditional markets, and explore opportunities for reducing trade barriers where Latin American countries have greatest comparative advantages. This latter point applies most particularly to Japan and those E.C. nations still experiencing trade surpluses with the region.

* consider undertaking bilateral trade-barrier reduction initiatives on a reciprocal basis like the present U.S.-Mexican framework agreement and the discussions of a possible free trade area that are now underway.

* support expansion and strengthening of the Caribbean Basin Initiative (CBI) concept.

* in the case of Western Europe, consider granting of Lomé privileges to more regional countries; and, more generally, turn over more responsibility and authority for Latin American trade matters to E.C. bodies.

* encourage regional free trade initiatives and integration efforts (such as prompt reconstitution of the Central American Common Market) and greater Latin American participation in trade with Eastern Europe and the Pacific Rim.

* press for reinvigoration of the GATT process and/or a move toward new general world trade initiatives. Special attention here should be devoted to manufactured exports of special interest to the region, like textiles and steel and, of course, to the reduction of protectionism in agriculture in the Trilateral nations.

4. The industrialized nations should also keep Latin American investment opportunities well in mind. The Trilateral countries should:

* stress the need to foster a favorable local business climate.

* devote adequate attention to OPIC-like insurance guarantees and bilateral investment treaties that assure potential investors.

* regularly dispatch investment missions to keep regional opportunities in full view of Trilateral private sectors.

* promote more active use of in-bond industry and joint-production efforts between Trilateral and Latin American countries both to utilize local labor and transfer technology to the region.

* consider tax and other incentives for private sector investment in debtor nations.

5. Trilateral aid levels to the region must be kept at the highest practicable levels, and these funds must be used in the most effective possible manner. The Trilateral countries should:

* ensure that the percentage of total Trilateral aid flows destined for Latin America is as great as possible.

* aim these funds carefully at truly productive projects or real human needs.

* take full advantage of volunteerism and PVOs.

Foreign and Security Policy

1. Prudent, realistic attention must be devoted to a changing constellation of regional security issues.

* The first and preferred option is close support of local efforts toward stability and security.

* The development of a more effective regional security system should be encouraged, for collective defense of local democracies and protection of their citizens against criminal violence. This implies fundamental rethinking of the OAS and the Rio Treaty and their relationship to NATO.

* Closer police and legal cooperation is needed on the drug question among the Trilateral countries and between them and the region. The Trilateral countries should consider support for regional police establishments including the possibility of a standing regional force.

* The Trilateral nations should also urge regional actors to adher to the Nuclear Non-Proliferation Treaty and to exercise restraint in the transfer of weapons systems that might aggravate conflict in other areas of the globe.

2. A positive and more concrete policy agenda should be forged between the Trilateral and Latin American countries. The Trilateral countries should:

* foster greater integration of the Latin American democracies in the councils of the industrialized world.

* cultivate a climate of respect, realism and reciprocity.

* actively search for grounds for positive mutually beneficial cooperation in key areas like trade, finance, natural resources, the environment, law enforcement and collaboration in multilateral organizations.

* consider channeling new worldwide environmental protection initiatives toward the Latin American countries.

 

Authors

George W. Landau, President, Americas Society and the Council of the Americas; former U.S. Ambassador to Venezuela and Chile
Julio Feo, Chairman, Consultores de Comunicacion y Direccion; former Chief of Staff to Prime Minister Felipe González
Akio Hosono, Chairman, Japan Association for Latin American Studies; Professor, The University of Tsukuba

Table of Contents

Summary of Policy Recommendations for the Trilateral Countries
I. Introduction
II. Current Circumstances and Trends
III. The Stakes for the Trilateral Countries

A. The United States
B. The E.C. Countries
C. Japan
D. Canada
IV. The Issues of the 1990s and Beyond
A. Political
B. Economic
C. Social
D. Security
E. Foreign Policy
V. Toward the Future: Recommendations for the Trilateral Countries
Appendix: Enterprise for the Americas Initiative

  • Topics: Economics, Energy, Trade, Security, Multilateral Cooperation
  • Region:  North America, Europe, Pacific Asia
  • Publisher:  The Trilateral Commission
  • Publication Date:  © 1990
  • ISBN:  0-930503-62-7
  • Pages:  56
  • Complete Text: Click here to download
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