Latin America and the Caribbean: Issues in the 115^th Congress

Contents

• Regional Political and Economic Environment
• Challenges to Democracy
• Economic Outlook
• U.S. Policy Toward Latin America and the Caribbean
• Obama Administration Policy
• Trump Administration Policy
• Congress and Policy Toward the Region
• Regional Issues
• U.S. Foreign Aid
• Drug Trafficking and Gangs
• Trade Policy
• Migration Issues
• Corruption
• Selected Country and Subregional Issues
• Argentina
• Brazil
• Caribbean Region
• Central America's Northern Triangle
• Colombia
• Cuba
• Haiti
• Mexico
• Nicaragua
• Peru
• Venezuela
• Outlook

Summary

Geographic proximity has ensured strong linkages between the United States and Latin America and the Caribbean, based on diverse U.S. interests, including economic, political, and security concerns. The United States is a major trading partner and the largest source of foreign investment for many countries in the region, with free-trade agreements enhancing economic linkages with 11 countries. The region is a large source of U.S. immigration, both legal and illegal; proximity and economic and security conditions are major factors driving migration. Curbing the flow of illicit drugs has been a key component of U.S. relations with the region for more than three decades and currently involves close security cooperation with Mexico, Central America, and the Caribbean. U.S. support for democracy and human rights in the region has been long-standing, with particular current focus on Cuba, Nicaragua, and Venezuela.

Under the Trump Administration, the outlook for U.S. relations with the region has changed. The Administration proposed deep cuts in FY2018 and FY2019 assistance to the region compared with FY2017. On trade, President Trump ordered U.S. withdrawal from the proposed Trans-Pacific Partnership trade agreement, which would have increased U.S. economic linkages with Mexico, Chile, and Peru. President Trump criticized the North American Free Trade Agreement (NAFTA) with Mexico and Canada as unfair, warned that the United States might withdraw, and initiated renegotiations; ultimately, the three countries agreed to a United States-Mexico-Canada Agreement in late September 2018. The proposed agreement largely leaves NAFTA intact but includes some updates and changes (especially to the dairy and auto industries). Administration actions on immigration have caused concern in the region, including the announced ending of the deportation relief program known as Deferred Action for Childhood Arrivals (DACA) and of Temporary Protected Status (TPS) designations for Nicaragua, Haiti, El Salvador, and Honduras. President Trump unveiled a new policy in 2017 toward Cuba partially rolling back U.S. efforts to normalize relations.

Congress traditionally has played an active role in policy toward Latin America and the Caribbean in terms of both legislation and oversight. Congress rejected many of the Trump Administration's proposed FY2018 cuts in foreign assistance to the region when it enacted the Consolidated Appropriations Act, 2018 (P.L. 115-141). Likewise for FY2019, both the House and Senate Appropriations Committees' bills, H.R. 6385 and S. 3108, would fund key countries and initiatives approaching FY2017 amounts.

To date in the 115^th Congress, the House has approved bills on Nicaragua and Venezuela. H.R. 1918 would require the United States to vote against certain loans from the international financial institutions benefiting Nicaragua until the government takes actions regarding democratic practices; a similar bill, S. 2265, was introduced in the Senate. In 2018, legislation was introduced in both houses, S. 3233 and H.R. 6683, that would impose sanctions on those responsible for human rights abuses in Nicaragua. On Venezuela, the House approved H.R. 2658 in 2017, which would authorize humanitarian assistance, among other provisions; a similar bill was introduced in the Senate, S. 1018 in 2017, and a newer version, S. 3486, was introduced in 2018. Both houses approved several resolutions indicating policy preferences on a range of issues and countries: S.Res. 35 and H.Res. 259 on Venezuela, S.Res. 83 and H.Res. 336 on Mexico, H.Res. 54 on Argentina, H.Res. 145 on Central America, S.Res. 224 on Cuba, and H.Res. 981 on Nicaragua.

Looking ahead, in addition to completing action on FY2019 foreign aid appropriations, Congress also might turn to completing legislation on Nicaragua and Venezuela as the United States confronts crises in both countries. Other events in the region through the end of the year could generate congressional interest. These events include Brazil's presidential elections in October; Mexico's inauguration of a new president in December; and President Trump's planned attendance at the G-20 summit in Argentina (November 30-December 1, 2018) and subsequent visit to Colombia.

This report examines the political and economic environment in Latin America and the Caribbean and U.S. policy toward the region in the 115^th Congress, highlighting congressional interest and legislative action. An Appendix lists hearings on the region in the 115^th Congress.

---

Regional Political and Economic Environment

With 33 countries—ranging from the Caribbean nation of St. Kitts and Nevis, one of the world's smallest states, to the South American giant of Brazil, the world's fifth-largest country—the Latin American and Caribbean region has made significant advances over the past three decades in terms of both political and economic development. (See Figure 1 for a map of the region and Table 1 for basic facts on the region's countries.) In the early 1980s, 16 Latin American and Caribbean countries were governed by authoritarian regimes, both on the left and the right. Today, most governments are elected democracies, at least formally. The threat to elected governments from their own militaries has dissipated in most countries. Free and fair elections have become the norm in the region, even though elections in several countries have been controversial and contested. In 2017, the Bahamas, Ecuador, and Chile held successful elections for heads of government. Elections in Honduras in November 2017, however, were characterized by significant irregularities, with the Secretary General of the Organization of American States (OAS) calling for new elections to be held. Despite a series of mass civil protests, incumbent President Juan Orlando Hernández was certified as the winner in December 2017.

To date in 2018, eight countries in the region—Antigua and Barbuda, Barbados, Costa Rica, Colombia, Grenada, Mexico, Paraguay, and Venezuela—have held elections for head of government. With the exception of Venezuela, all of these elections were free and fair. The Venezuelan election, boycotted by most opposition parties, was significantly flawed. Looking ahead, Brazil is scheduled to hold presidential elections in October 2018. In addition, Cuba underwent a political transition in April, when Raúl Castro stepped down from power and Cuba's legislature selected a new president. (See Table 1 for a listing of leaders and elections.)

Challenges to Democracy

Despite significant improvements in political rights and civil liberties, many countries in the region still face considerable challenges. In a number of countries, weaknesses remain in the state's ability to deliver public services, ensure accountability and transparency, advance the rule of law, and ensure citizen safety and security. There also are numerous examples of elected presidents over the past three decades who left office early amid severe social turmoil and economic crises, the presidents' own autocratic actions contributing to their ouster, or high-profile corruption. Corruption scandals led to the 2015 resignation of Guatemala's president and contributed to the impeachment and removal from office of Brazil's president in 2016. In 2018, Peru's president resigned in March just ahead of a vote on impeachment on corruption charges.

The quality of democracy has eroded in recent years in several countries in the region. One factor contributing to this democratic erosion is increased organized crime. Organized crime has particularly affected Mexico and several Central American countries because of the increased use of the region as a drug transit zone and the associated rise in corruption, crime, and violence. A second factor negatively affecting democracy in several countries has been the executive's abuse of power. Elected leaders have sought to consolidate power at the expense of minority rights, leading to a setback in liberal democratic practices. Venezuela stands out in this regard, with the government of President Nicolás Maduro repressing the opposition with force and manipulating state institutions to retain power. Media freedom also has deteriorated in several countries in recent years, precipitated by the increase in organized crime-related violence and by politically driven attempts to curb critical or independent media.

Figure 1. Map of Latin America and the Caribbean

Source: CRS Graphics. Notes: Caribbean countries are in purple, Central American countries are in gold, and South American countries are in green. Although Belize is located in Central America and Guyana and Suriname are located in South America, all three are members of the Caribbean Community (CARICOM).

Since 1973, the human rights group Freedom House has compiled an annual evaluation of political rights and civil liberties in which it categorizes countries worldwide as free, partly free, and not free. In its 2018 report (covering 2017), the group ranked two countries in the Latin American and Caribbean region as not free: Cuba and Venezuela. It ranked 10 countries as partly free—Bolivia, Colombia, the Dominican Republic, Ecuador, Guatemala, Haiti, Honduras, Mexico, Nicaragua, and Paraguay—and the remaining 21 countries of the region as free. The report pointed to positive developments in Ecuador and Colombia. Freedom House lauded Ecuador's President Lenín Moreno for moving away from the "often repressive rule" of his predecessor, Rafael Correa; for easing pressure on the media; and for proposing the restoration of term limits. A referendum on term limits and other reform measures was approved by a substantial margin in early February 2018. The Freedom House report also praised reform measures in Colombia to limit pretrial detention and for the continued expansion of state control in areas formerly controlled by left-wing rebels pursuant to the government's 2016 peace accord with the Revolutionary Armed Forces of Colombia (FARC).¹

On the negative side, Freedom House pointed to concerning developments in Venezuela, Bolivia, Honduras, Nicaragua, and Mexico in 2017. Freedom House described Venezuela as continuing its "descent into dictatorship and humanitarian crisis." In Bolivia, it expressed concern about actions by the country's constitutional court, which overturned presidential term limits that were supported by a 2016 referendum; the term limits would have prevented current President Evo Morales from seeking a fourth term. Freedom House criticized Honduras for flawed November 2017 presidential elections in which belatedly updated vote totals reversed an early vote count and handed victory to the incumbent, and it criticized Nicaragua for holding flawed municipal elections in 2017 favoring the party of President Daniel Ortega. (As discussed below, the situation in Nicaragua has deteriorated in 2018. Since April, there has been growing opposition to Ortega's rule; the government and its supporters have violently repressed this opposition.) In Mexico, Freedom House cited revelations of extensive state surveillance against journalists and civil society activists threatening to expose public corruption.²

Since 2006, the Economist Intelligence Unit (EIU) has produced an annual democracy index examining the state of democracy worldwide. The index classifies countries as full democracies, flawed democracies, hybrid regimes, and authoritarian regimes based on ratings for 60 indicators covering electoral process and pluralism, civil liberties, the functioning of government, political participation, and political culture. In its 2017 democracy index, the EIU examined 24 countries in Latin America and the Caribbean, not including 9 small English-speaking Caribbean countries. Both Cuba and Venezuela were classified as authoritarian regimes. Venezuela was downgraded to authoritarian for the first time because of the "continued slide toward dictatorship" and because of the government's violent suppression of opposition protests, jailing and disenfranchisement of opposition leaders, and sidelining of the opposition-dominated legislature.³

The EIU classified five countries in the region—Bolivia, Guatemala, Haiti, Honduras, and Nicaragua—as hybrid regimes, or countries characterized by weak rule of law, weak civil society, and, often, widespread corruption. Similar to Freedom House's evaluation, the EIU noted serious irregularities with Honduras's presidential election and Nicaragua's municipal elections, as well as with Bolivia's overriding of a 2016 referendum that rejected an extension of presidential term limits. The EIU also noted efforts by the Guatemalan president to impede investigations regarding corruption associated with campaign funding; concerns about such efforts continue in 2018 as the government is attempting to weaken the U.N.-backed International Commission against Impunity in Guatemala (CICIG).

The EIU classified one country in the region, Uruguay, as a full democracy, and it classified 16 regional countries as flawed democracies, or countries that have free and fair elections and respect basic civil liberties but exhibit weaknesses in other aspects of democracy. One of the most significant problems noted in the region was corruption, with high-profile scandals rocking several countries. On a positive note, the EIU lauded improvements in Ecuador under the Moreno government, which resulted in the country's classification being upgraded from hybrid regime to flawed democracy.

Economic Outlook

Whereas the 1980s were commonly referred to as the lost decade of development because many countries were bogged down with unsustainable public debt, the 1990s brought about a shift from a strategy of import-substituting industrialization to one focused on export promotion, attraction of foreign capital, and privatization of state enterprises. Latin America experienced an economic downturn in 2002 (brought about in part because of an economic downturn in the United States), but it recovered with strong growth rates until 2009, when a global economic crisis again affected the region with an economic contraction of almost 2%, according to International Monetary Fund (IMF) statistics.⁴ Some countries in the region experienced deeper recessions than others in 2009. Those more closely integrated with the U.S. economy, such as Mexico, were hit hardest; other countries with more diversified trade and investment partners experienced lesser downturns.

The region rebounded in 2010 and 2011, with economic growth rates of 6.1% and 4.6%, respectively, but growth began to decline annually after that, registering 1.3% in 2014 and 0.3% in 2015. The global decline in commodity prices significantly affected the region, as did China's economic slowdown and reduced appetite for imports. The region experienced an economic contraction of 0.6% in 2016, dragged down by recessions in Argentina and Brazil and by Venezuela's severe economic deterioration, in which the economy contracted 16.5%.

In July 2018, the IMF estimated that economic growth in Latin America and the Caribbean increased 1.3% in 2017 and was projected to increase by 1.6% in 2018 and 2.6% in 2019 (see Table 2). Early in the year, the IMF had forecast 1.9% regional growth in 2018. However, continued economic challenges and uncertainties in several countries lowered the growth forecast. These challenges and uncertainties included tighter financial conditions and needed policy adjustment in Argentina, strikes and political uncertainty in Brazil, trade tensions and uncertainty regarding the NAFTA renegotiation and the policy agenda of the incoming government in Mexico, and the continued economic collapse and humanitarian crisis in Venezuela.⁵

Latin America made significant progress in combating poverty and inequality from 2002 through 2014. In 2002, almost 46% of the region's population lived in poverty, but by 2014 that figure had dropped to 28.5%, representing 168 million people. Extreme poverty (currently defined by the World Bank as living on less than $1.90 per day) also declined over this period, from 12.4% in 2002, representing 63 million people, to 8.2% in 2014, or 48 million people.⁶ Two key factors accounting for this decline were increasing per capita income levels and targeted public expenditures, known as conditional cash transfer programs, for vulnerable sectors.

Since 2015, however, the poverty rate for Latin America has been increasing annually to an estimated 30.7% of the region's population in 2017, or 187 million people. Likewise, extreme poverty in Latin America has increased to an estimated 10.2% in 2017, representing 62 million people. The reversal in poverty reduction since 2015 can largely be attributed to economic setbacks in Brazil and Venezuela, both of which experienced significant declines in per capita income levels, according to the United Nations (U.N.) Economic Commission for Latin America and the Caribbean. In contrast, poverty reduction has continued since 2015 in a number of countries in the region, including the Dominican Republic, Panama, Peru, Costa Rica, Colombia, Uruguay, and Mexico.⁷ Looking ahead, as economic growth resumes in those countries that were experiencing economic downturns (with the exception of Venezuela), poverty once again should begin to decline in the region.

U.S. Policy Toward Latin America and the Caribbean

U.S. interests in Latin America and the Caribbean are diverse and include economic, political, security, and humanitarian concerns. Geographic proximity has ensured strong economic linkages between the United States and the region, with the United States being the major trading partner and largest source of foreign investment for many Latin American and Caribbean countries. Free-trade agreements (FTAs) have augmented U.S. economic relations with 11 countries in the region. Latin American nations, led by Venezuela, Mexico, and Colombia, supplied the United States with almost 28% of its imported crude oil in 2016. The Western Hemisphere is a large source of U.S. immigration, both legal and illegal; geographic proximity and economic and security conditions are major factors driving migration trends. Curbing the flow of illicit drugs from Latin America and the Caribbean has been a key component of U.S. relations with the region and a major interest of Congress for more than three decades. Over the past decade, the United States has engaged in close security cooperation with Mexico, Central America, and the Caribbean to combat drug trafficking and related violence. As described above, although most countries in the region have made enormous strides in terms of democratic political development since the 1980s, communist Cuba has remained under authoritarian rule since the 1959 Cuban revolution and undemocratic practices have risen in several countries, particularly in Venezuela, which many observers characterize as a dictatorship, and Nicaragua, which has grown increasingly authoritarian.

Obama Administration Policy

In its policy toward the region, the Obama Administration set forth a broad framework centered on four priorities: promoting economic and social opportunity, ensuring citizen security, strengthening effective democratic governance, and securing a clean energy future. In many respects, there was significant continuity in U.S. policy toward the region under President Obama; his Administration had many of the same policy approaches as the George W. Bush Administration. In addition, the Obama Administration emphasized partnership and shared responsibility, with policy conducted on the basis of mutual respect through engagement and dialogue.

Under the Obama Administration, the United States provided significant support to the region to combat drug trafficking and organized crime and to advance citizen security. Efforts included a continuation of Plan Colombia and its successor programs as well as the creation of the Mérida Initiative, begun in 2007 to support Mexico; the Central America Regional Security Initiative (CARSI), begun in 2008; and the Caribbean Basin Security Initiative (CBSI), begun in 2009. In 2015, spurred by a surge of unaccompanied children and other migrants from Central America seeking to enter the United States, the Obama Administration developed a broader approach known as the U.S. Strategy for Engagement in Central America aimed at improving security, strengthening governance, and promoting prosperity.

On trade matters, the Obama Administration resolved outstanding congressional concerns related to FTAs with Colombia and Panama that were negotiated under the Bush Administration; this resolution led to congressional enactment of implementing legislation for the two FTAs in 2011. The Administration also concluded negotiations in 2015 for the proposed Trans-Pacific Partnership (TPP) trade agreement, which included Mexico, Chile, and Peru, among other nations.

In the absence of congressional action on comprehensive immigration reform, President Obama turned to executive action in 2012 with a program known as Deferred Action for Childhood Arrivals (DACA), which provided relief from deportation for certain immigrants who arrived as children. The Obama Administration also granted Temporary Protected Status (TPS) to Haitians in the United States after the country's massive earthquake in 2010.

In other policy changes, the Obama Administration announced a major policy shift toward Cuba, moving away from the long-standing sanctions-based approach toward a policy of engagement. With regard to the deteriorating political and economic situation in Venezuela, the Obama Administration pressed for dialogue to resolve the conflict. Then, prompted by Congress through passage of the Venezuela Defense of Human Rights and Civil Society Act of 2014 (P.L. 113-278), the Administration imposed targeted sanctions in 2015 on Venezuelan officials involved in human rights abuses.

Trump Administration Policy

The Trump Administration has taken actions that have changed the dynamics and outlook for U.S. relations with Latin America and the Caribbean. As discussed below, the State Department set forth a framework for U.S. policy toward the region in February 2018 that reflects continuity with long-standing U.S. objectives in the region. The framework, however, appears to be at odds with some of the Administration's actions, sometimes accompanied by tough rhetoric, on immigration, trade, and foreign aid. Although President Trump's cancellation of his planned attendance at the April 2018 Summit of the Americas in Peru was a lost opportunity to engage with hemispheric leaders, Vice President Mike Pence represented the United States at the summit. President Trump plans to attend the Group of 20 (G-20) summit to be held November 30-December 1, 2018, in Buenos Aires and then to visit Colombia.⁸

The Trump Administration proposed deep cuts in assistance to Latin America and the Caribbean, a significant departure from past Administrations. The approximately $1.1 billion requested for the region for each of FY2018 and FY2019 would have reflected a decrease of 36% and 35%, respectively, of the $1.7 billion in assistance provided to the region in FY2017. (As noted below, Congress has continued to fund foreign aid to the region at levels approaching assistance in FY2017. See "Congress and Policy Toward the Region" and "U.S. Foreign Aid" below.)

On trade issues, President Trump has shifted the long-standing policy of past Administrations that focused on increasing economic linkages with Latin America through reciprocal free trade agreements. He has described past free trade agreements as detrimental to U.S. workers and industries and vowed to renegotiate new "fair and reciprocal" agreements. President Trump ordered U.S. withdrawal from the proposed Trans-Pacific Partnership (TPP) trade agreement in January 2017; the accord would have increased U.S. economic linkages with Mexico, Chile, and Peru. Similarly, the President strongly criticized NAFTA and warned repeatedly that the United States might withdraw from the agreement. Negotiations to modernize NAFTA began in August 2017; by August 2018, the United States and Mexico had reached a preliminary bilateral agreement, and on September 30, 2018, all three countries reached an agreement, dubbed the United States-Mexico-Canada Agreement (USMCA). USMCA leaves NAFTA largely intact but includes some changes, including provisions regarding the dairy and auto industries. The Administration's imposition of duties on steel and aluminum imports in 2018 added new challenges to U.S. trade relations with several countries in the region. (See "Trade Policy," below.)

Beyond trade, bilateral relations with Mexico have been tested because of inflammatory anti-immigrant rhetoric, President Trump's repeated calls for Mexico to pay for a border wall, and the Administration's September 2017 decision to end DACA (potentially affecting several hundred thousand Mexicans and more than 100,000 migrants from elsewhere in the hemisphere). Despite tensions, overall U.S.-Mexican relations remain cooperative, including security cooperation related to drug interdiction and efforts to bolster economic ties, particularly energy cooperation and the negotiation of a preliminary bilateral trade agreement noted above. (See "Mexico," below.)

Other Trump Administration actions on immigration have caused concerns in the region. The Administration announced the termination of TPS for up to 5,300 Nicaraguans in January 2019; up to 58,000 Haitians in July 2019; up to 263,000 Salvadorans in September 2019; and up to 86,000 Hondurans in January 2020. El Salvador, Haiti, and Honduras have expressed concerns about whether they have the capacity to receive so many people and about the effects of potential deportations on their economies. In light of Nicaragua's unrest in 2018, some observers also have called for the Administration to delay termination of the country's TPS designation in January 2019. Other immigration actions, such as the implementation of a "zero tolerance" policy toward illegal border crossings and an Attorney General decision in June 2018 that migrants' claims pertaining to gang violence or domestic abuse generally will not qualify them for asylum, could restrict the ability of many Central American migrants to receive asylum. (See "Migration Issues," below.)

With regard to Cuba, President Trump unveiled a new policy in June 2017 that partially rolled back some of the Obama Administration's efforts to normalize relations. The most significant changes included restrictions on financial transactions with companies controlled by the Cuban military and the elimination of individual people-to-people travel. In another action affecting bilateral relations, the State Department downsized the staff at embassies in both capitals in September 2017 in response to unexplained injuries of U.S. personnel at the U.S. Embassy in Havana. (See "Cuba" below.)

With regard to the Caribbean region, the State Department issued a multiyear strategy on U.S. policy toward the region as required by the United States-Caribbean Strategic Engagement Act of 2016 (P.L. 114-291). The strategy established a framework for enhanced relations in six priority areas—security, diplomacy, prosperity, energy, education, and health. In the aftermath of Hurricanes Irma and Maria, the United States provided some $23 million in humanitarian relief assistance to several Caribbean countries and foreign territories. (See "Caribbean Region" below.)

As the political and economic situation in Venezuela has continued to deteriorate, the Trump Administration has spoken out against the actions of the Maduro government and supported regional efforts to help resolve the situation. It also has imposed a variety of economic sanctions (both targeted and broader economic sanctions) and provided humanitarian assistance for Venezuelans who have fled to other countries. In mid-September 2018, concerns about potential military intervention prompted 11 Latin American members of the Lima Group (a group of countries supporting the restoration of democracy in Venezuela) to issue a statement rejecting the use of military force or violence to resolve the situation.⁹

In Nicaragua, as political unrest against the increasingly authoritarian rule of President Daniel Ortega began to grow in 2018, the Trump Administration spoke out strongly about against the Ortega government's use of violence and supported an OAS resolution condemning the violence. The Administration also has employed targeted sanctions (visa restrictions and asset freezing) against several individuals responsible for human rights abuses or significant corruption.

In Guatemala, the Administration strongly supported the role of the U.N.'s International Commission against Impunity in Guatemala (CICIG) in 2017, when it was under siege by the government of President Jimmy Morales. More recently, however, some observers contend that the Administration has not spoken out strongly enough as the Morales government continues efforts to weaken CICIG. Although a State Department official testified to Congress in July 2018 about CICIG's important role in strengthening the rule of law, fighting impunity, and combatting corruption in Guatemala, a State Department readout of Secretary of State Mike Pompeo's September 2018 telephone call with President Morales raised questions about U.S. support for CICIG. The statement said that Pompeo and Morales discussed the importance of the Guatemalan government working with CICIG but also that the Secretary expressed continued U.S. support for "a reformed CICIG" and committed to working with Guatemala on implementing such reforms in the coming year.¹⁰

The Trump Administration also has warned about the activities of China and Russia in the region. The Administration's 2017 National Security Strategy contends that China "seeks to pull the region into its orbit through state-led investments and loans," and that Russia is continuing "its failed politics of the Cold War by bolstering its radical Cuban allies as Cuba continues to repress its citizens." The strategy asserts that "both China and Russia support the dictatorship in Venezuela" and "are seeking to expand military linkages and arms sales across the region."¹¹ In February 2018, then-Secretary of State Rex Tillerson warned "against potential actors that are now showing up in our hemisphere," specifically referring to China and Russia. Tillerson spoke out against China's "foothold in Latin America" and asserted, "Russia's growing presence in the region is alarming," noting its sales of arms and military equipment "to unfriendly regimes who do not share or respect democratic values."¹²

More recently, following El Salvador's decision to switch diplomatic relations from Taiwan to China in August 2018, the White House issued a statement that it would reevaluate U.S. relations with the Salvadoran government.¹³ The Trump Administration's policy approach toward China's activities in the region is a departure from that of previous Administrations, which, while raising concerns about China's influence, emphasized engagement and consultations with China on Latin America. U.S. warnings about China have been met with skepticism in the region, with some countries calling on the United States to respect their sovereign decisions. (For additional information, see CRS In Focus IF10982, China's Engagement with Latin America and the Caribbean, by [author name scrubbed] and [author name scrubbed].)

Trump Administration Policy Framework. Vice President Mike Pence spoke on the Administration's policy toward the region in several speeches during, and just after, an August 2017 trip visiting Argentina, Chile, Colombia, and Panama. Similar to other U.S. officials speaking about U.S. policy in other parts of the world, the Vice President maintained that "America First" does not mean America alone. He acknowledged that prosperity and security for Latin America and the United States are inextricably linked. He maintained that transnational crime sustained by drug trafficking is the most immediate threat to security in the region, and he pledged continued U.S. support to combat it.¹⁴

In the Trump Administration's second year, officials fleshed out its framework for U.S. policy in Latin America and the Caribbean. In February 2018, then-Secretary of State Tillerson set forth a framework focused on three pillars for U.S. engagement in the region—economic growth and prosperity, security, and democratic governance.¹⁵ These three pillars have been long-standing U.S. policy objectives in Latin America and the Caribbean, and they match up with three of the Obama Administration's four policy priorities for the region (with the exception of securing a clean energy future). At the April 2018 Summit of the Americas in Peru, Vice President Pence emphasized that the Western Hemisphere nations are bound together by geography, history, and "an enduring aspiration for freedom."¹⁶ U.S. Agency for International Development (USAID) Director Mark Green also advanced this theme of a "hemisphere of freedom" in an August 2018 speech that discussed the work of his agency largely within the same policy framework set forth by the State Department.¹⁷

In some respects, the objectives and activities advanced by the State Department's framework for U.S. policy toward the region appear to contradict some of the political rhetoric by President Trump and the Administration's efforts to reduce U.S. foreign assistance to the region significantly. Moreover, as noted above, positive views in the region of U.S. leadership dropped in 2017, influenced by disparaging political rhetoric and certain actions on immigration and trade. Such views could affect the willingness of countries in the region to cooperate with the United States on regional and global challenges, making it more difficult for the United States to engender support from individual countries when needed.

Congress and Policy Toward the Region

Congress traditionally has played an active role in policy toward Latin America and the Caribbean in terms of both legislation and oversight. Given the region's geographic proximity to the United States, U.S. foreign policy toward the region and domestic policy often overlap, particularly in areas of immigration and trade.

The 115^th Congress rejected many of the Trump Administration's proposed cuts in foreign assistance to Latin America and the Caribbean for FY2018 in the Consolidated Appropriations Act, 2018 (P.L. 115-141), enacted in March 2018. Although total assistance for the region is not yet available since the legislation does not indicate aid levels for each country, the law specified funding for several key countries and initiatives exceeding the Administration's request and approaching FY2017 levels. Likewise, for FY2019, both the House and Senate Appropriations Committees reported out bills (H.R. 6385 and S. 3108) that would fund key countries and initiatives at levels approaching FY2017 levels. Two additional FY2019 House Appropriations Committee bills, H.R. 5952 (Commerce) and H.R. 6258/H.R. 6147 (Financial Services), have provisions that would tighten economic sanctions on Cuba.

The John S. McCain National Defense Authorization Act for FY2019, P.L. 115-232 (H.R. 5515), signed into law in August 2018, has several Latin America provisions. Section 1032 extends a prohibition on the use of funds in FY2019 to close or relinquish control of the U.S. Naval Station at Guantanamo Bay, Cuba. Section 1287 requires a report from the Secretary of State, in coordination with the Secretary of Defense and other appropriate agencies, regarding narcotics trafficking corruption and illicit campaign finance in Honduras, Guatemala, and El Salvador, including the naming of officials involved in such activities. The conference report to the bill, H.Rept. 115-874, also directs the Defense Intelligence Agency to submit a report on security cooperation between Russia and Cuba, Nicaragua, and Venezuela.

To date in the 115^th Congress, the House has approved measures on Nicaragua and Venezuela; Senate action could follow before the end of the second session. H.R. 1918, approved in October 2017, would require the United States to vote against any loan from the international financial institutions benefiting Nicaragua, except to address basic human needs or promote democracy. A similar bill, S. 2265, was introduced in the Senate in December 2017. More recently in 2018, Nicaragua legislation was introduced in both houses, S. 3233 in July and H.R. 6683 in August. These bills would impose sanctions on those persons responsible for violence and human rights abuses in Nicaragua. With regard to Venezuela, the House approved H.R. 2658 in December 2017; among its provisions, this bill would authorize humanitarian assistance for Venezuela. Similar bills were introduced in the Senate—S. 1018 in May 2017 and a newer version, S. 3486, in September 2018.

Both houses have approved several resolutions on U.S. policy toward the region over the course of the 115^th Congress.

• On Venezuela, the Senate passed S.Res. 35 in February 2017, which called for the release of political prisoners and support for dialogue and efforts at the OAS; the House passed H.Res. 259 in December, which urged Venezuela to hold free, fair, and open elections, release all political prisoners, and open a channel for international humanitarian assistance. On September 27, the House Committee on Foreign Affairs approved H.Res. 1006, amended, which condemns the deteriorating situation in Venezuela and the regional humanitarian crisis it has caused; the committee agreed to seek House consideration of the bill under suspension of the rules.
• On Mexico, the Senate passed S.Res. 83 in March 2017, which called for the United States to support efforts by Mexico and China to stop the production and trafficking of illicit fentanyl into the United States; the House agreed to H.Res. 336 in December 2017, reaffirming its strong commitment to a bilateral partnership based on mutual respect.
• On Argentina, the House passed H.Res. 54 in April 2017, which expressed commitment to the bilateral partnership and commended Argentina for making far-reaching economic reforms; the Senate Foreign Relations Committee reported a similar resolution, S.Res. 18, in June 2017.
• On Central America, the House passed H.Res. 145 in May 2017, which reaffirmed that combating corruption in El Salvador, Guatemala, and Honduras is an important U.S. policy interest.
• On Cuba, the Senate passed S.Res. 224 in April 2018, commemorating the legacy of Cuban democracy activist Oswaldo Payá.
• On Nicaragua, the House passed H.Res. 981 in July 2018, "condemning the violence, persecution, intimidation, and murders committed by the Government of Nicaragua against its citizens."

Looking ahead to its waning months, the 115^th Congress faces completing action on the FY2019 State Department and Foreign Operations (or foreign aid) appropriations measure. Congressional attention to the region also could include consideration of pending legislation on Nicaragua and Venezuela as the United States confronts crises in both countries. With regard to the recently announced United States-Mexico-Canada Agreement (USMCA) revising NAFTA, President Trump has indicated that he would sign the agreement by the end of November and then submit it to Congress for consideration; the 116^th Congress likely will take up legislation implementing the agreement. Potential oversight issues for Congress also include Brazil's upcoming presidential elections in October; the inauguration of a new president in Mexico on December 1, 2018; and the political situation in Guatemala amid the government's attempt to undermine the work of the CICIG.

Regional Issues

U.S. Foreign Aid

The United States provides foreign assistance to the nations of Latin America and the Caribbean to support development and other U.S. objectives. U.S. policymakers have emphasized different strategic interests in the region at different times, from combating Soviet influence during the Cold War to promoting democracy and open markets since the 1990s. Over the past two years, the Trump Administration has sought to refocus U.S. assistance efforts in the region to address U.S. domestic concerns, such as irregular migration and transnational crime.

The Trump Administration also has proposed significant cuts to U.S. assistance to Latin America and the Caribbean (see Table 3). In each of its annual budget proposals, the Administration has requested approximately $1.1 billion to be provided to the region through foreign assistance accounts managed by the State Department and the U.S. Agency for International Development (USAID). The FY2019 request would cut funding for nearly every type of assistance and would reduce aid for every Latin American and Caribbean nation. If enacted, U.S. assistance to the region would decline by $600 million (35%) compared to FY2017. The Administration's FY2019 budget proposal also would eliminate the Inter-American Foundation (IAF), a small, independent U.S. foreign assistance agency that promotes grassroots development in the region.

Congressional Action: After a series of five short-term continuing resolutions that funded most foreign aid programs at slightly below the FY2017 level, Congress passed the Consolidated Appropriations Act, 2018 (P.L. 115-141), in March 2018. The total amount of assistance appropriated for Latin America and the Caribbean remains unclear since the legislation and the accompanying explanatory statement do not specify aid levels for every country. Nevertheless, the amounts designated in the act for several significant initiatives indicate that total funding for the region in FY2018 will exceed the Administration's request and may approach FY2017 levels.

Congress has not yet completed action on foreign aid appropriations for FY2019. The House and Senate Appropriations Committees approved their respective FY2019 Department of State, Foreign Operations, and Related Programs appropriations measures, H.R. 6385 and S. 3108, in June 2018. The bills and their accompanying reports (H.Rept. 115-829 and S.Rept. 115-282) do not specify appropriations levels for every Latin American and Caribbean nation. Nevertheless, the amounts the measures would designate for key U.S. initiatives in Colombia, Mexico, and Central America exceed the Administration's request significantly. Both measures also would continue funding the IAF. A continuing resolution, P.L. 115-245 (Division C), signed by President Trump on September 28, 2018, continues to provide assistance at the FY2018 level until December 7, 2018.

For additional information, see CRS Report R45089, U.S. Foreign Assistance to Latin America and the Caribbean: FY2018 Appropriations, by [author name scrubbed].

Drug Trafficking and Gangs

Latin America and the Caribbean feature prominently in U.S. counternarcotics policy due to the region's role as a source and transit zone for several illicit drugs destined for U.S. markets—cocaine, marijuana, methamphetamine, and plant-based and synthetic opiates. Heroin abuse and opioid-related deaths in the United States have reached epidemic levels, raising questions about how to address foreign sources of opioids—particularly Mexico, which has experienced a sharp uptick in opium poppy cultivation and the production of heroin and fentanyl (a synthetic opioid). Policymakers also are concerned that cocaine overdoses in the United States are on an upward trajectory. Rising cocaine usage is occurring as coca cultivation and cocaine production in Colombia, which supplies roughly 90% of cocaine in the United States, reached record levels in 2017.¹⁸

Whereas Mexico, Colombia, Peru, and most other source and transit countries in the region work closely with the United States to combat drug production and interdict illicit flows, the Venezuelan government does not. Public corruption in Venezuela also has made it easier for drug trafficking organizations to smuggle illicit drugs.

Contemporary drug trafficking and transnational crime syndicates have contributed to degradations in citizen security and economic development in some countries, often resulting in high levels of violence and homicides. Despite efforts to combat the drug trade, many governments in Latin America, particularly in the Central American transit zone through which 90% of U.S.-bound cocaine passes, continue to suffer from overstrained criminal justice systems and overwhelmed law enforcement and border control agencies.¹⁹ Moreover, government corruption, including high-level cooperation with criminal organizations, frustrates efforts to interdict drugs, investigate and prosecute traffickers, and recover illicit proceeds. There is a widespread perception, particularly among many Latin American observers, that the continuing U.S. demand for illicit drugs is largely to blame for the Western Hemisphere's ongoing crime and violence problems.

Criminal gangs with origins in southern California, principally the Mara Salvatrucha (MS-13) and the "18^th Street" gang, continue to undermine citizen security and subvert government authority in Central America. Gang-related violence has been particularly acute in El Salvador, Honduras, and urban areas in Guatemala, contributing to some of the highest homicide rates in the world. Although some gangs engage in local drug distribution, gangs generally do not have a role in transnational drug trafficking. Gangs have been involved in a range of other criminal activities, including extortion, money laundering, and weapons smuggling. Gang-related violence has fueled unauthorized migration to the United States.

U.S. Policy. U.S. support to counter drug trafficking and reduce production in Latin America and the Caribbean has been a key focus of U.S. policy toward the region for more than 40 years. The most significant U.S. support program was Plan Colombia, begun in FY2000, which provided more than $10 billion to help Colombia combat both drug trafficking and rebel groups financed by the drug trade. After Colombia signed a historic peace accord with the country's largest leftist guerrilla group, the United States provided assistance to help implement the agreement under a new strategy called Peace Colombia. Colombia's decisions to end aerial fumigation and minimize forced eradication caused some tensions with U.S. officials concerned about rising cocaine production. Recently inaugurated Colombian President Ivan Duque has vowed to resume aerial fumigation. (Also see "Colombia" section below.)

U.S. support to combat drug trafficking and reduce crime also has included a series of partnerships with other countries in the region: the Mérida Initiative, which has led to improved bilateral security cooperation with Mexico; the Central America Regional Security Initiative (CARSI); and the Caribbean Basin Security Initiative (CBSI). Under the Obama Administration, those initiatives combined U.S. antidrug and rule-of-law assistance with economic development and violence prevention programs intended to improve citizen security in the region.

The Trump Administration's approach to Latin America and the Caribbean has focused heavily on U.S. security objectives. All of the aforementioned assistance programs have continued, but they place greater emphasis on combating drug trafficking, gangs, and other criminal groups than did policies under President Obama. The Trump Administration has also sought to reduce funding for each of the U.S. security assistance programs.

President Trump and Attorney General Jeff Sessions also have prioritized combating gangs, namely the MS-13, which the Department of Justice has named a top priority for U.S. law enforcement agencies. Antigang efforts were a central focus of Attorney General Session's July 2017 visit to El Salvador. U.S. law enforcement agencies, in cooperation with vetted units in Central America funded through CARSI, have brought criminal charges against thousands of MS-13 members in the United States.

Congressional Action: The 115^th Congress has held hearings on opioids, which have included consideration of heroin production in Mexico, and on Colombia's peace process and how it relates to drug policy. In March 2017, the Senate passed S.Res. 83, which called for increased U.S. support for Mexico's efforts to combat fentanyl. The Consolidated Appropriations Act, 2018 (P.L. 115-141), provided increased FY2018 resources for Colombia and Mexico, slightly less funding for CARSI, and a stable level of funding for CBSI compared to FY2017. The legislation required a plan on how the State Department is addressing illicit opioid flows. Both the House and the Senate Appropriations Committees' versions of the FY2019 foreign aid appropriations bills (H.R. 6385 and S. 3108) largely would maintain funding for the aforementioned security partnerships and would continue to address the underlying conditions that contribute to crime and violence in addition to antidrug efforts. Congress is likely to continue funding and overseeing counternarcotics and antigang programs as well as considering the proper distribution of domestic and international drug control funding and the relative balance of civilian, law enforcement, and military roles in regional antidrug and antigang efforts.

For additional information, see CRS In Focus IF10578, Mexico: Evolution of the Mérida Initiative, 2007-2018, by [author name scrubbed]; CRS Report R41349, U.S.-Mexican Security Cooperation: The Mérida Initiative and Beyond, by [author name scrubbed] and [author name scrubbed]; CRS Report R41576, Mexico: Organized Crime and Drug Trafficking Organizations, by [author name scrubbed]; CRS In Focus IF10400, Transnational Crime Issues: Heroin Production, Fentanyl Trafficking, and U.S.-Mexico Security Cooperation, by [author name scrubbed] and [author name scrubbed]; CRS Report R44812, U.S. Strategy for Engagement in Central America: Policy Issues for Congress, by [author name scrubbed]; CRS Report R44779, Colombia's Changing Approach to Drug Policy, by [author name scrubbed] and [author name scrubbed]; CRS Report R43813, Colombia: Background and U.S. Relations, by [author name scrubbed]; and CRS In Focus IF10789, Caribbean Basin Security Initiative, by [author name scrubbed].

Trade Policy

The Latin American and Caribbean region is one of the fastest-growing regional trading partners for the United States. Economic relations between the United States and most of its trading partners in the region remain strong, despite challenges such as the Trump Administration's initiative to renegotiate NAFTA, diplomatic tensions, and high levels of violence in some countries in the region. The United States accounts for roughly 33% of the Latin American and Caribbean region's imports and 46% of its exports. Most of this trade is with Mexico, which accounted for 73% of U.S. imports from the region and 62% of U.S. exports to the region in 2017. In 2017, total U.S. exports to Latin America and the Caribbean were valued at $393.2 billion and U.S. imports were valued at $430.0 billion (see Table 4).

The United States strengthened economic ties with Latin America and the Caribbean over the past 24 years through the negotiation and implementation of FTAs. Starting with NAFTA in 1994, the United States currently has six FTAs in force involving 11 Latin American countries: Mexico, Chile, Colombia, Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua, Panama, and Peru. NAFTA is significant because of the market opening provisions but more importantly because it established new rules and disciplines that influenced future trade agreements on issues important to the United States, such as intellectual property rights protection, services trade, agriculture, dispute settlement, investment, labor, and the environment.

In addition to FTAs, the United States has extended unilateral trade preferences to some countries in the region through trade preference programs such as the Caribbean Basin Trade Partnership Act and the Generalized System of Preferences (GSP), which expired on December 31, 2017. GSP was reauthorized in March 2018 until the end of 2020, under Division M, Title V of the Consolidated Appropriations Act, 2018 (P.L. 115-141). Most countries in the region also belong to the World Trade Organization (WTO) and are engaged in WTO multilateral trade negotiations.

In the 15 to 20 years after NAFTA, some of the largest economies in South America, such as Argentina, Brazil, and Venezuela, resisted the idea of forming comprehensive FTAs with the United States. As a result, there are numerous other bilateral and plurilateral trade agreements throughout the Western Hemisphere that do not include the United States. For example, the Pacific Alliance, a trade arrangement comprised of Mexico, Peru, Colombia, and Chile, is reportedly moving forward on a possible trade arrangement with Mercosur, composed of Brazil, Argentina, Uruguay, and Paraguay.

In a shift in U.S. trade policy toward the region and other parts of the world, President Trump has viewed FTAs as detrimental for U.S. workers and industries. He made NAFTA renegotiation and modernization a priority of his Administration's trade policy, stating that the agreement is "the worst trade deal" and repeatedly warning that the United States may withdraw from the agreement. After a year of NAFTA renegotiation talks, the United States and Mexico reached a preliminary bilateral agreement in August 2018. U.S. talks with Canada concluded September 30, 2018, leading to the announcement of the United States-Mexico-Canada Agreement (USMCA). The new agreement leaves NAFTA largely intact but includes some changes, including provisions regarding the dairy and auto industries. Expanded intellectual property rights, enforceable labor provisions, and digital trade provisions are similar to what had been in the proposed TPP. In addition to the NAFTA renegotiation, U.S. trade actions in 2018 under Section 232 of the Trade Expansion Action Act of 1962 on aluminum and steel imports added new challenges to U.S. trade relations with the region.

President Trump's January 2017 withdrawal from the proposed TPP, an FTA that included Mexico, Peru, and Chile as signatories, signified another change to U.S. trade policy. These actions may affect U.S. influence in the region, especially because other countries continue to pursue trade agreements. In March 2018, the other TPP parties, including Mexico, Peru, and Chile, signed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which essentially, if ratified by at least six signatories, would bring a modified TPP into effect. Mexico was the first country to ratify the agreement in April 2018, and several other countries are advancing ratification procedures. Colombia has expressed plans to request entry into the CPTPP after it enters into force.

Congressional Action: The 115^th Congress, in both its legislative and its oversight capacities, has faced numerous trade policy issues related to the renegotiation and modernization of NAFTA. Now that renegotiation has concluded, the proposed USMCA will face congressional examination. Given the short time remaining in the 115^th Congress, implementing legislation for the new agreement likely will be considered by the 116^th Congress. Lawmakers may take an interest as to whether U.S. negotiating objectives were followed, as required by Trade Promotion Authority. They also may consider how the proposed USMCA may affect U.S. industries, especially the auto industry, the U.S. and Mexican economies, North American supply chains, and overall trade relations with the LAC region. The recent Section 232 investigations on aluminum and steel imports raise a number of issues for Congress, including the potential impact of tariffs and retaliatory tariffs from Mexico on U.S. producers, domestic U.S. industries, and consumers. Energy reform in Mexico and the implications for U.S. trade and investment in energy also may be of interest to Congress. Policymakers also may consider how U.S. trade policy is perceived by the region and whether it may affect multilateral trade issues and cooperation on matters regarding security and migration. Another issue relates to U.S. market share. If countries such as Mexico, Chile, Colombia, and Peru continue trade and investment liberalization efforts with other countries without the United States, it may open the door to more intra-trade and investment among Argentina, Brazil, or possibly China and other Asian countries, which may affect U.S. exports.

For additional information, see CRS Insight IN10968, NAFTA and the Preliminary U.S.-Mexico Agreement, by [author name scrubbed] and [author name scrubbed]; CRS In Focus IF10047, North American Free Trade Agreement (NAFTA), by [author name scrubbed]; CRS Report R44981, NAFTA Renegotiation and Modernization, by [author name scrubbed] and [author name scrubbed]; CRS In Focus IF10038, Trade Promotion Authority (TPA), by [author name scrubbed]; CRS In Focus IF10000, TPP: Overview and Current Status, by [author name scrubbed] and [author name scrubbed]; and CRS Report R43748, The Pacific Alliance: A Trade Integration Initiative in Latin America, by [author name scrubbed].

Migration Issues

Latin America's status as a leading source of both legal and unauthorized migration to the United States means that U.S. immigration policies significantly affect countries in the region and U.S. relations with their governments. Latin Americans comprise the vast majority of unauthorized migrants who have received relief from removal (deportation) through the Temporary Protected Status (TPS) program²⁰ or the Deferred Action for Childhood Arrivals (DACA) initiative.²¹ As a result, several Trump Administration U.S. immigration policy changes have concerned countries in the region. These include the Administration' s actions to increase immigration enforcement; end TPS designations for Haiti, El Salvador, Nicaragua, and Honduras; rescind DACA; criminally prosecute migrants who unlawfully enter the United States; and alter U.S. asylum policy.

The factors that have driven legal and unauthorized U.S.-bound migration from Latin America are multifaceted and have changed over time. They include familial ties, poverty and unemployment, demography, political and economic instability, natural disasters, proximity, economic conditions in the United States, and crime and violence. As an example, Venezuela, a historically stable country with limited emigration to the United States, has recently become a top country of origin among U.S. asylum seekers due to the crisis it has been undergoing (see "Venezuela" section below).²²

Apprehensions of, and encounters with, unauthorized migrants at the southwestern U.S. border declined during President Trump's first year in office compared to the same period in 2016, but began to rise in August 2017 and to follow seasonal patterns similar to the last few years.²³ Many analysts attributed that initial decline, in part, to President Trump's tough campaign positions against unauthorized migration, executive action on border security and immigration enforcement (E.O. 13767), and efforts to fund the construction of a border wall. The executive order broadened the focus of interior enforcement to include unauthorized individuals who lack a criminal record.

President Trump's assertions that Mexico will pay for a border wall have periodically strained bilateral relations. The Administration's policies have also tested U.S. relations with other countries in the region. Mexico and Central America's northern triangle countries, which received approximately 90% of the 226,119 individuals removed in FY2017, have expressed concerns that potential large-scale removals could overwhelm their capacity to receive and reintegrate migrants.²⁴ Central American countries also are concerned about the potential for increased removals of gang suspects with criminal records exacerbating security problems in their countries that they have been trying to address with U.S. foreign assistance. Mexico and the northern triangle countries have stepped up services at their U.S. consulates to provide legal and other services to those affected by changes in U.S. immigration policies.

Termination of TPS.²⁵ Since September 2017, the Secretary of Homeland Security has announced plans to terminate TPS designations for six countries, four of which are located in Latin America (El Salvador, Haiti, Nicaragua, and Honduras). The large number (between 250,000-350,000) of Central Americans with TPS relief, along with their length of U.S. residence and resulting economic and family ties, have led some to support extending TPS for Central Americans. Continued recovery difficulties from natural disasters have led others to support continuing TPS for Haitians (up to 59,000). Supporters of extending TPS have argued that violence and political unrest have left these countries unable to handle a large-scale return of their nationals. The Trump Administration maintains that ending TPS is a move toward interpreting the original intent of the program—to provide temporary safe haven.

Critics of the Administration's decisions to terminate TPS designations for these four countries predict that it is likely to have negative effects on mixed-status families (where adults with TPS have U.S. citizen children), hurt foreign relations, and diminish the flow of remittances on which many families depend. Affected governments have expressed hope that the U.S. Congress will enact legislation to protect their constituents whose TPS protections will be ending. They are nevertheless working with USAID, other donors, and the private sector to prepare reintegration assistance and job opportunities for former TPS beneficiaries who may return to their countries of origin.

Rescission of DACA.²⁶ On September 5, 2017, the Department of Homeland Security (DHS) announced its decision to rescind the DACA initiative. The future of the DACA initiative remains uncertain, as dueling lawsuits are underway in several federal courts to preserve DACA and to force its termination.

According to data from U.S. Citizenship and Immigration Services, more than 95% of active DACA recipients were born in Latin America (80% were born in Mexico).²⁷ The Mexican government has expressed hope that the U.S. Congress will enact legislation to protect individuals who have benefited from the DACA initiative, but also has said that it would welcome and provide support to any DACA enrollees who may be deported. If DACA ends and its beneficiaries must return to their countries of origin, they could have difficulty continuing their education or obtaining employment in countries already struggling with high levels of youth unemployment.

"Zero Tolerance" Immigration Enforcement and Restrictions on Access to Asylum.²⁸ For the last several years, Central American migrant families have arrived at the U.S.-Mexico border in relatively large numbers, many seeking asylum. In early May 2018, the Department of Justice (DOJ) implemented a zero tolerance policy toward illegal border crossing. Under the policy, DOJ prosecuted all adults apprehended while crossing the border illegally, with no exception for asylum seekers or those with minor children. This policy resulted in up to 3,000 children being separated from their parents.²⁹ After a federal judge mandated that all separated children be reunited with their families in late June 2018, DHS reverted to some prior immigration enforcement policies. Some families have yet to be reunited.

On June 11, 2018, Attorney General Sessions issued a decision maintaining that victims of gang violence or domestic abuse perpetrated by nongovernmental actors generally do not meet the standards required for receiving asylum in the United States.³⁰ This decision is likely to restrict the ability of many Central American migrants to quality for asylum.

The U.N. Secretary General, the Inter-American Commission on Human Rights, and other governments in the region denounced these U.S. policies.³¹ Restricting the availability of asylum in the United States to Central Americans, who face high rates of femicide and gang-related violence, could cause more emigration to Mexico and other countries less equipped to assist them.

As increasing numbers of Central American migrants have sought asylum in Mexico, the Mexican government has bolstered its weak humanitarian protection system even as it deported 450,000 Central American migrants from 2015-2017. Mexico has reportedly resisted signing a "safe third country agreement" with the Administration, which could require asylum seekers who transit through Mexico to seek asylum there rather than in the United States. It is unclear whether Mexico will accept $20 million offered by the Trump Administration to pay for the removal of U.S.-bound migrants.³²

Congressional Action: Congress has provided foreign assistance to help address some of the factors fueling migration from Central America and to support Mexico's migration management efforts (P.L. 115-141). The Senate version of the FY2019 foreign aid appropriation measure, S. 3108, stipulates that $18 million of the Economic Support Funds provided should be "transferred to, and merged with" funds appropriated under the Migration and Refugee Assistance account to help process the asylum applications of Central Americans in Mexico. The 115^th Congress also is considering the amount and type of funding to provide for border infrastructure. It is uncertain how and whether Congress may consider legislation affecting DACA recipients. A range of proposals related to TPS have been introduced in the 115^th Congress, either to extend it, limit it, adjust some TPS holders to lawful permanent resident status, or make TPS holders subject to expedited removal.

For more information, see CRS In Focus IF10215, Mexico's Immigration Control Efforts, by [author name scrubbed]; CRS Report R44812, U.S. Strategy for Engagement in Central America: Policy Issues for Congress, by [author name scrubbed]; CRS Report R45266, The Trump Administration's "Zero Tolerance" Immigration Enforcement Policy, by [author name scrubbed]; CRS Report R44764, Deferred Action for Childhood Arrivals (DACA): Frequently Asked Questions, by [author name scrubbed]; CRS Report R45158, An Overview of Discretionary Reprieves from Removal: Deferred Action, DACA, TPS, and Others, by [author name scrubbed]; and CRS Report RS20844, Temporary Protected Status: Overview and Current Issues, by [author name scrubbed].

Corruption

Corruption has become a serious political concern for many countries in the region. Transparency International's Corruption Perceptions Index (CPI) for 2016 and 2017 found that respondents in most Latin American nations believed corruption was increasing. This perception is fueling civil society efforts to combat corrupt behavior and demand government accountability. Corruption continued to be a central theme in elections across the region in 2018, including pivotal, large countries, such as Colombia, Mexico, and Brazil.

Perceptions of growing corruption may reflect a greater awareness of corrupt behavior rather than an increase in actual corruption. This heightened awareness may be due to the growing use of social media to report violations and inform the citizenry, as well as to greater scrutiny by domestic media and investigative reporters, international investors, and, in some cases, congressional bodies or justice sector officials. Moreover, the region's growing middle class, with its rising expectations, seeks more from its politicians.

The Transparency International surveys found that in the 20 Latin American nations polled, respondents viewed politicians, political parties, and police as among the most corrupt. Citizens reported being most concerned about the use of public office for private gain—graft, influence peddling, extortion, bribe solicitation, money laundering, and political finance violations were the most frequently cited.

Corruption throughout the Region. Venezuela scored lowest (most corrupt by perceptions of its citizenry) among the 20 countries surveyed in the region in the 2016 and 2017 CPI assessments. Public corruption has been a major drain on the economy, particularly in the country's foreign exchange regime.

In Brazil, a sprawling corruption investigation under way since 2014 has implicated much of the political class. Brazilian construction firm Odebrecht, in a landmark plea deal, admitted to paying some $735 million in bribes to politicians and office holders throughout Latin America to secure public contracts, producing fallout in several countries, including Colombia, the Dominican Republic, Ecuador, Panama, and Peru.³³

In Mexico, the costs of corruption reportedly reach as much as 5% of gross domestic product each year. Mexico's long-dominant Institutional Revolutionary Party, dogged by the issue in the July 2018 national elections, performed poorly in the final congressional and presidential vote.

In Peru, President Pedro Pablo Kuczynski, accused of taking Odebrecht bribes, stepped down in March 2018 to avoid impeachment. His successor, Martin Vizcarra, hosted the Summit of the Americas in April 2018 with a theme of fighting corruption. In the wake of a judicial corruption scandal concerning bribery in Peru's high court, Vizcarra unveiled a series of political and judicial reforms, including anticorruption measures, in August 2018. He then successfully challenged Peru's congress in September 2018 to a vote of confidence in his government with the goal of getting congress to approve the reforms, which include a significant revision of campaign finance rules among other measures. Those reforms that make constitutional changes are slated to be put before voters in a public referendum in late 2018.

In Central America, international entities have worked with the governments of Guatemala and Honduras to combat corruption. The U.N.'s International Commission against Impunity in Guatemala, established in 2006, assisted in corruption cases against Guatemala's former President Otto Perez-Molina and his vice president, who were jailed in 2015 after being forced from office. In 2016, the OAS worked with the Honduran government to establish a similar organization, the Mission to Support the Fight against Corruption and Impunity in Honduras (MACCIH). In 2018, as CICIG investigations have focused more closely on relatives of Guatemala's President Jimmy Morales, the government has become openly more hostile to extending CICIG's mandate when it expires in September 2019. In September 2018, Morales barred CICIG's commissioner, former Colombian judge Iván Velásquez, from reentering the country, an action opposed by Guatemala's constitutional court.³⁴ The Honduran government has also sought to undermine MACCIH over the past year.

U.S. Policy. The 2017 U.S. National Security Strategy states that U.S. strategic interests related to corruption derive from the concern that criminals and terrorists can thrive in governments where corruption is rampant. Many studies indicate that corruption affects productivity and mars competitiveness in developing economies; it can spur migration, and can reduce GDP measurably when it is systematic.³⁵

U.S. assistance has supported anticorruption efforts in Central America. Since FY2016, some U.S. aid to the region has been subject to several conditions, including anticorruption measures by recipient governments. U.S. assistance has also supported multilateral efforts to address corruption in Guatemala and Honduras. Both CICIG and MACCIH also receive U.S. support. CICIG received some $50.5 million between FY2008 and FY2017 in U.S. funding.

The United States has also imposed targeted economic sanctions on individuals involved in significant acts of corruption. This has included Venezuelan officials involved in corruption pursuant to Executive Order 13692 and individuals from other countries such as the Dominican Republic and Nicaragua targeted pursuant to Executive Order 13818.

Congressional Action: Some analysts maintain that U.S. funding for "anticorruption" programming has been limited, noting worldwide spending in recent years has not exceeded $115 million annually depending on how anticorruption is defined. Nevertheless, Congress has taken steps to condition U.S. assistance, support anticorruption efforts and training for police and justice personnel, and backed the Trump Administration's use of targeted sanctions. Congress could in coming months oversee changes to NAFTA related to corruption in the proposed USMCA, which includes a separate chapter with anticorruption provisions.

In May 2017, the House passed H.Res. 145, reaffirming that combatting corruption is an important U.S. policy interest in the northern triangle countries of Central America, acknowledging the important work of CICIG and MACCIH, and encouraging anticorruption efforts in the northern triangle countries. In July 2017, the Senate Foreign Relations Committee reported S. 1631, a foreign relations authorization bill with a title focused on combating public corruption worldwide. The FY2019 John S. McCain National Defense Authorization Act (NDAA), P.L. 115-232 , signed into law in August 2018, contains a provision in Section 1287 requiring a report on drug trafficking and corruption in Central America's northern triangle countries, including identifying government officials and other individuals involved in such activities. As noted in the section on "Central America's Northern Triangle" below, Congress has continued to support funding for CICIG and MACCIH in FY2018 and FY2019.

For additional information, see CRS In Focus IF10802, Spotlight on Public Corruption in Latin America, by [author name scrubbed].

Selected Country and Subregional Issues

Argentina

Current President Mauricio Macri, elected in 2015, is the leader of the center-right Republican Proposal and was the candidate of the Cambiemos (Let's Change) coalition representing center-right and center-left parties. Macri's election ended 12 years of rule by the Kirchners (Néstor Kirchner, 2003-2007, and Cristina Fernández de Kirchner, 2007-2015) from the leftist faction of the Peronist party. The Kirchners' rule helped Argentina emerge from a severe economic crisis in 2001-2002 but was characterized by protectionist and unorthodox economic policies and increasing corruption—former President Fernández is now facing multiple investigations for corruption.

President Macri moved swiftly to usher in a series of economic policy changes, including the lifting of currency controls; elimination or reduction of taxes on agricultural exports; and reduction of electricity, water, and heating gas subsidies. The government also reached a deal with remaining private creditors in 2016 that ended the country's 15-year default, an action that allowed the government to repair its "rogue" debtor status and resume borrowing in international capital markets. Although adjustment measures contributed to a 1.8% economic contraction in 2016, the economy grew by 2.9% in 2017, according to the International Monetary Fund (IMF).

In early 2018, the IMF had forecast almost 2% growth, but Argentina's economic difficulties, which included a severe drought that affected agricultural exports, led the IMF to adjust its forecast significantly downward, and the government is now forecasting an economic contraction of 2.4%. As pressure on the peso increased in April 2018, the government turned to the IMF for support, which approved a three-year $50 billion program in June, with $15 billion made available immediately for budget support. As the economy continued to decline, the Macri government announced a new package of austerity measures that requires congressional approval. The government also reached a revised agreement with the IMF to increase its total support to $57 billion over three years, with an additional $13.4 billion disbursed for the remainder of 2018 and $22.8 billion in disbursements planned for 2019.³⁶

Macri's coalition made significant gains in Argentina's 2017 midterm legislative elections, in which one-third of the Senate and one-half of the Chamber of Deputies were at stake, although it did not win a majority in either chamber. Argentina's economic turbulence in 2018 has taken a toll on President Macri's popularity. The fall in Macri's support could threaten the president's political coalition and make a reelection bid more difficult, although the presidential race is not scheduled until October 2019.

In the foreign policy arena, the Macri government improved relations with neighboring Brazil and Uruguay and other promarket countries in the region. It has been deeply critical of the antidemocratic actions of the Maduro government in Venezuela.

U.S.-Argentine relations generally have been characterized by robust commercial relations and cooperation on such issues as nonproliferation, human rights, education, and science and technology. Under the Kirchner governments, there were periodic tensions in relations. The Obama Administration moved swiftly to engage the Macri government on a range of bilateral, regional, and global issues.

Strong bilateral relations continue under the Trump Administration. President Macri visited the White House in April 2017, with the two leaders underscoring their commitment to expand trade and investment and pledging strengthened partnership to combat narcotics trafficking, money laundering, terrorist financing, corruption, and cyber issues. Vice President Pence visited Argentina in August 2017, and highlighted Argentina's emerging global leadership and its role in forums such as the Group of 20 (G-20) and the World Trade Organization. (Argentina took over the rotating presidency of the G-20 in December 2017 and is scheduled to host the annual G-20 summit on November 30-December 1, 2018.) The Vice President also expressed support for Argentina's bid to start the accession process for the Organisation for Economic Co-operation and Development. Amid Argentina's recent economic difficulties, President Trump spoke with President Macri in early September 2018 and reaffirmed strong U.S. support for Argentina and Macri's engagement with the IMF. President Trump also has plans to attend the G-20 summit in Buenos Aires later this year.

Congressional Action: Congress has expressed support for close relations with Argentina. In the 115^th Congress, the House passed H.Res. 54 in April 2017, which expressed commitment to the bilateral partnership and commended Argentina for its economic reforms. In June 2017, the Senate Committee on Foreign Relations reported a similar resolution, S.Res. 18. Congress provided $2.5 million in FY2018 foreign assistance (P.L. 115-141) to support Argentina's counterterrorism, counternarcotics, and law enforcement capabilities.

Over the years, Congress has expressed concern about Argentina's progress in investigating two terrorist bombings in Buenos Aires—the 1992 bombing of the Israeli embassy that killed 29 people and the 1994 bombing of the Argentine-Israeli Mutual Association (AMIA) that killed 85 people—as well as the 2015 death of AMIA special prosecutor Alberto Nisman. H.Res. 201, reported by the House Foreign Affairs Committee in May 2017, would express support for Argentina's investigation of the bombings. Two other resolutions, S.Res. 354 and H.Res. 704, would commend Nisman's work and life and call for a swift, transparent investigation into his death.

For additional information, see CRS In Focus IF10932, Argentina, by [author name scrubbed]; and CRS In Focus IF10991, Argentina's Economic Crisis, by [author name scrubbed].

Brazil

Occupying almost half of South America, Brazil is the fifth largest and the fifth-most populous country in the world. Given its size and tremendous natural resources, Brazil has long had the potential to become a world power. Its rise to prominence has been hindered by setbacks, however, including an extended period of military rule (1964-1985) and uneven economic performance. Brazil gradually consolidated liberal democracy following its political transition, and it implemented economic reforms in the 1990s that laid the foundation for stronger growth. A boom in international demand for Brazilian commodities—such as oil, iron, and soybeans—during the first decade of the 21^st century fueled a period of rapid economic expansion, which contributed to, and was reinforced by, the growth of Brazil's middle class. In addition to providing the Brazilian government with the resources necessary to address long-standing social disparities, this economic growth strengthened Brazil's international stature.

Over the past several years, however, Brazil has struggled to emerge from a series of domestic crises. The economy contracted by nearly 7% from 2014 to 2016, according to the IMF, due to a decline in global commodity prices and the government's economic mismanagement. Although economic growth returned in 2017, the national unemployment rate remains above 12% and several million Brazilians who joined the middle class during the boom years have fallen back into poverty. At the same time, a sprawling corruption investigation under way since 2014 has implicated politicians from across the political spectrum and many of the country's most prominent business executives. The scandal contributed to the controversial impeachment of President Dilma Rousseff (2011-2016). It also has fueled discontent with the country's political class, which has been exacerbated by rising violence and the enactment of unpopular economic reforms under President Michel Temer (2016-present). These conditions have created a high level of uncertainty as Brazil prepares to hold presidential and legislative elections in October 2018.

The United States traditionally has enjoyed robust political and economic relations with Brazil, though the countries' independent foreign policies and occasionally divergent national interests have led to some disagreements. U.S. trade policy has generated some friction over the past year as Brazilian officials have objected to the Trump Administration's decision to impose an import quota on Brazilian steel. The countries have sought to increase cooperation in other areas, however, launching a new Permanent Forum on Security, bolstering defense ties, and continuing negotiations over potential U.S. access to Brazil's Alcântara space launch center. The United States and Brazil also have worked together to address the crisis in Venezuela, with the United States providing some humanitarian assistance for Venezuelans seeking refuge in Brazil. Vice President Mike Pence traveled to Brazil in June 2018 to reaffirm the countries' "strong bond and strategic partnership."³⁷

Congressional Action: The 115^th Congress has continued long-standing U.S. support for conservation efforts in Brazil. The Consolidated Appropriations Act, 2018 (P.L. 115-141) provided $10.5 million for environmental programs in the Brazilian Amazon. The FY2019 foreign aid appropriations measures reported in the House and Senate would both continue such assistance; the House Appropriations Committee's bill, H.R. 6385, would provide $10.5 million and the Senate Appropriations Committee's bill, S. 3108, would provide $11 million.

Several other aspects of U.S.-Brazilian relations also have attracted interest from some Members of Congress. Following a scandal in which Brazilian meatpacking companies were found to have bribed food inspectors to approve the sale of tainted meat, a measure was introduced in the Senate, S. 688, to suspend beef and poultry imports from Brazil for 120 days. Some Members called on the Administration to take action, and the U.S. Department of Agriculture ultimately suspended all imports of fresh beef from Brazil. Other Members have expressed concerns about the March 2018 assassination of Rio de Janeiro city councilor Marielle Franco, the judicial process that led to the imprisonment of former president Luiz Inácio Lula da Silva (2003-2010), and reports of unlawful removals of U.S. minors to Brazil.

For additional information, see CRS Insight IN10976, Brazil's Presidential Election, by [author name scrubbed]; CRS Report RL33456, Brazil: Background and U.S. Relations, by [author name scrubbed]; and CRS In Focus IF10447, U.S.-Brazil Trade Relations, by [author name scrubbed].

Caribbean Region

The Caribbean is a diverse region of 16 independent countries and 18 overseas territories that include some of the hemisphere's richest and poorest nations. Among the region's independent countries are 13 island nations stretching from the Bahamas in the north to Trinidad and Tobago in the south; Belize, which is geographically located in Central America; and Guyana and Suriname, located on the north-central coast of South America (see Figure 2).

In June 2017, the State Department submitted a multiyear strategy for the Caribbean (required by P.L. 114-291, the United Sates-Caribbean Strategic Enhancement Act of 2016). The strategy established a framework to strengthen U.S.-Caribbean relations in six priority areas: (1) security, with the objectives of countering transnational crime and terrorist organizations and advancing citizen security; (2) diplomacy, with the goal of increasing institutionalized engagement to forge greater cooperation at the OAS and U.N.; (3) prosperity, including the promotion of sustainable economic growth and private sector-led investment and development; (4) energy, with the goals of increasing U.S. exports of natural gas and the use of U.S. renewable energy technologies; (5) education, focusing on increased exchanges for students, teachers, and other professionals; and (6) health, including a focus on long-standing efforts to fight infectious diseases such as HIV/AIDS and Zika.

Because of their geographic location, many Caribbean nations are vulnerable to use as transit countries for illicit drugs from South America destined for the U.S. and European markets. Many Caribbean countries also have suffered high rates of violent crime, including murder, often associated with drug trafficking activities. In response, the United States launched the Caribbean Basin Security Initiative (CBSI) in 2009, a regional U.S. foreign assistance program seeking to reduce illicit trafficking in the region, advance public safety and security, and promote social development. Congress has supported funding for the CBSI. From FY2010 through FY2018, Congress appropriated almost $559 million for the CBSI, including $57.7 million in each of FY2017 and FY2018. These funds benefitted 13 Caribbean countries. The program has targeted assistance in five areas: maritime and aerial security cooperation, law enforcement capacity building, border/port security and firearms interdiction, justice sector reform, and crime prevention and at-risk youth.

Figure 2. Map of the Caribbean Region: Independent Countries

Source: CRS Graphics. Notes: With the exception of Cuba and the Dominican Republican, the remaining 14 independent countries of the Caribbean region are members of the Caribbean Community, an organization established by English-speaking Caribbean nations in 1973 to spur regional integration. Six Eastern Caribbean nations—Antigua and Barbuda, Dominica, Grenada, St. Kitts and Nevis, St. Lucia, and St. Vincent and the Grenadines—are members of the Organization of Eastern Caribbean States, which was established in 1981 to promote economic integration, harmonization of foreign policy, and other forms of cooperation among the member states.

Many Caribbean nations also depend on energy imports and, over the past decade, have participated in Venezuela's PetroCaribe program, which supplies Venezuelan oil under preferential financing terms. The United States launched the Caribbean Energy Security Initiative (CESI) in 2014, with the goal of promoting a cleaner and more sustainable energy future in the Caribbean. The initiative included a variety of U.S. activities to facilitate cleaner energy resources; develop collaborated networks on clean energy; finance clean energy projects; increase energy efficiency; and expand access to electricity, information, and technology.³⁸

In September 2017, Hurricanes Irma and Maria caused widespread damage in several Caribbean countries and foreign territories, especially in the Eastern Caribbean. Hurricane Irma struck during the first week of September, causing catastrophic damage to the island of Barbuda, with 95% of structures seriously damaged or destroyed. Hurricane Maria struck during the third week of September, killing 27 people in Dominica and causing significant structural damage to most buildings and severe damage to the agricultural sector. In the aftermath of the hurricanes, the United States provided almost $23 million in humanitarian funding to six Caribbean countries and foreign territories, including Antigua and Barbuda, Dominica, the Bahamas, St. Kitts and Nevis, and the foreign territories of St. Martin (French) and St. Maarten (Dutch).³⁹

Congressional Action: For each of FY2018 and FY2019, the Trump Administration requested $36.2 million for the CBSI, about a 36% decrease from the $57.7 million provided in FY2017. For FY2018, Congress continued to fund the CBSI at the same level as in FY2017, $57.7 million, as set forth in the Consolidated Appropriations Act, 2018 (P.L. 115-141, Explanatory Statement, Division K). The law also provided $2 million for the CESI.

For FY2019, both the House and Senate versions of the foreign aid appropriation bill would reject the Administration's proposed cuts for the CBSI. The House Appropriations Committee's bill, H.R. 6385 (H.Rept. 115-829), would provide $58 million for the CBSI, while the Senate Appropriations Committee's version, S. 3109 (S.Rept. 115-282), would provide $57.7 million. The report to the Senate bill would also provide $2 million for the CESI to support enhanced efforts to help Latin American and Caribbean countries achieve greater energy independence from Venezuela.

In July 2017, the House Western Hemisphere Subcommittee held an oversight hearing on the State Department's new multiyear strategy on the Caribbean (see Appendix).

For additional information, see CRS In Focus IF10789, Caribbean Basin Security Initiative, by [author name scrubbed]; CRS In Focus IF10666, The Bahamas, by [author name scrubbed]; CRS In Focus IF10407, Dominican Republic, by [author name scrubbed]; CRS In Focus IF10912, Jamaica, by [author name scrubbed]; CRS In Focus IF10914, Trinidad and Tobago, by [author name scrubbed]; and CRS Report R45006, U.S. Liquefied Natural Gas (LNG) Exports: Prospects for the Caribbean, by [author name scrubbed] et al. Also see sections on "Cuba" and "Haiti," below.

Central America's Northern Triangle

Central America has received renewed attention from U.S. policymakers in recent years, as the region has become a major transit corridor for illicit drugs and a significant source of irregular migration to the United States. These narcotics and migrant flows are the latest symptoms of deep-rooted challenges in the region, including widespread insecurity, fragile political and judicial systems, and high levels of poverty and unemployment.

The Obama Administration determined it was in the national security interests of the United States to work with Central American nations to improve security, strengthen governance, and promote prosperity in the region. Accordingly, the Obama Administration launched a new, whole-of-government U.S. Strategy for Engagement in Central America and requested a significant increase in foreign assistance for the region to support the strategy's implementation. Congress appropriated nearly $1.5 billion of aid for Central America in FY2016 and FY2017, allocating most of the funds to El Salvador, Guatemala, and Honduras—the northern triangle countries of Central America (see Figure 3). Congress required a portion of the aid to be withheld, however, until the northern triangle governments took steps to improve border security, combat corruption, protect human rights, and address other congressional concerns.

The Trump Administration has maintained the U.S. Strategy for Engagement in Central America while seeking to enact some significant changes in U.S. policy toward the region. Over the past two years, the Administration has sought to cut foreign aid to Central America by more than a third and has placed a greater emphasis on security concerns. As noted above (see "Migration Issues"), the Administration also has implemented a series of immigration policy changes that affect Central Americans living in the United States without authorization, including the phaseout of the DACA program and the termination of TPS for Salvadorans and Hondurans. The northern triangle governments have raised concerns that the Administration's efforts to reduce assistance while simultaneously increasing deportations could exacerbate poverty and instability in the region.

Figure 3. Map of Central America

Source: CRS Graphics. Note: The "northern triangle" countries of El Salvador, Guatemala, and Honduras are in orange.

The northern triangle countries, with U.S. support, have made some tentative progress toward improving conditions in the region over the past three years. They have implemented policy changes intended to attract increased investment and have benefitted from the U.S. economic recovery, but the improved macroeconomic situation has yet to translate into reductions in poverty. Security conditions also have improved in some respects, as homicide rates have declined for three consecutive years. Nevertheless, the northern triangle countries continue to contend with some of the highest rates of violent crime in the world and impunity remains widespread. The countries' attorneys general—with the support of the U.N.-backed International Commission against Impunity in Guatemala (CICIG) and the Organization of American States-backed Mission to Support the Fight against Corruption and Impunity in Honduras (MACCIH)—have begun to investigate and prosecute high-level corruption cases. Their efforts have generated fierce backlash, however, and the Guatemalan and Honduran governments repeatedly have sought to undermine CICIG and MACCIH over the past year. (Also see section on "Corruption" above.)

Congressional Action: The 115^th Congress has continued to demonstrate support for the U.S. Strategy for Engagement in Central America, though funding for the initiative has begun to decline. The Consolidated Appropriations Act, 2018 (P.L. 115-141) provided "up to" $615 million for the Central America strategy, which is $155 million more than the Administration requested but $84.7 million less than was allocated to the initiative in FY2017. The FY2019 foreign aid appropriations measures reported out of the House and Senate Appropriations Committees in June 2018, H.R. 6385 and S. 3108, would provide $595 and $515.5 million, respectively, to continue implementing the Central America strategy. The Trump Administration requested $435.5 million for Central America in FY2019. Other bills introduced in the 115^th Congress, such as H.R. 4796 and S. 2367, include provisions intended to improve the effectiveness of the Central America strategy.

At the same time, Congress remains concerned about widespread corruption in the region. In May 2017, the House adopted a resolution, H.Res. 145, that recognizes the anticorruption efforts of CICIG, MACCIH, and the attorneys general of El Salvador, Guatemala, and Honduras and calls on the northern triangle governments to provide the attorneys general with the support, resources, and independence they need to carry out their responsibilities. A provision in the FY2019 National Defense Authorization Act (P.L. 115-232, §1287), requires the Secretary of State to report the names of Salvadoran, Guatemalan, and Honduran officials known to have engaged in, or facilitated, acts of grand corruption or narcotics trafficking. A similar provision included in the report accompanying the Senate Appropriations Committee's FY2019 foreign aid appropriations measure, S.Rept. 115-282, would require the State Department to assess the extent of grand corruption in the northern triangle and describe the steps it intends to take to address the problem. Moreover, some Members of Congress have spoken out about recent attempts to undermine anticorruption efforts in the region, particularly the Guatemalan president's decision to expel the head of CICIG and not renew the commission's mandate.

Congress also has appropriated funding to support anticorruption efforts. The Consolidated Appropriations Act, 2018 (P.L. 115-141) provided $6 million for CICIG and $31 million for MACCIH and the northern triangle's attorneys general. Some Members of Congress sought to suspend U.S. funding for CICIG, however, after a Russian family convicted of participating in a passport forgery network in Guatemala alleged that the Russian government was using CICIG to persecute Russian dissidents. The U.S. State Department has found no evidence supporting the allegations against CICIG.⁴⁰ The House and Senate Appropriations Committees have both recommended continued funding for CICIG, MACCIH, and the attorneys general in their FY2019 foreign aid appropriations measures, H.R. 6385 and S. 3108.

For additional information, see CRS In Focus IF10371, U.S. Strategy for Engagement in Central America: An Overview, by [author name scrubbed]; CRS Report R43616, El Salvador: Background and U.S. Relations, by [author name scrubbed]; CRS Report R42580, Guatemala: Political and Socioeconomic Conditions and U.S. Relations, by [author name scrubbed]; CRS Report RL34027, Honduras: Background and U.S. Relations, by [author name scrubbed]; CRS Report RL34112, Gangs in Central America, by [author name scrubbed]; CRS In Focus IF10394, Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR), by [author name scrubbed]; and CRS Report R44812, U.S. Strategy for Engagement in Central America: Policy Issues for Congress, by [author name scrubbed].

Colombia

Colombia, a close U.S. ally, elected a new congress in March 2018 and a new president in June 2018. The national elections were notable for their relative lack of violence and higher voter turnout than in recent decades. In August 2018, President Iván Duque was inaugurated and his right-wing party, the Democratic Center, which had won the most seats in the Colombian Senate, moved from being an opposition party to a newly dominant position. Duque set a course for economic renewal and lower taxes, fighting criminality, and building renewed confidence in the country's institutions. Duque's Ambassador to the United States, Francisco Santos, who served two terms as vice president under former President Álvaro Uribe, stated in September 2018, "Under President Duque's administration, we are putting pressure on all links in the drug trafficking chain, from small farmers involved in the first stage of production—cultivation—to those criminals and criminal networks that are benefitting the most financially from these illicit activities."⁴¹ Ambassador Santos also maintained that resolving the crisis in neighboring Venezuela was a strategic priority for Colombia and the region, and Colombia would seek a leading role in that effort.

Colombia endured a violent internal conflict for more than a half century, which resulted in human rights violations by all sides and more than a quarter million deaths, mostly of civilians. Illicit drugs, primarily cocaine and heroin, intensified Colombia's conflict, providing resources to left-wing guerrillas and right-wing paramilitaries. Two-term President Juan Manuel Santos made achieving peace the central goal of his government. The Colombian government engaged in intense, formal peace talks from 2012 to 2016 with the Revolutionary Armed Forces of Colombia (FARC), the largest of Colombia's leftist rebel groups, culminating in a peace accord ratified by the Colombian congress in November 2016.

In early 2017, the Santos government began formal peace talks with the country's second-largest rebel group, the National Liberation Army (ELN), but suspended the talks in January 2018, after violence by ELN forces spiked. The ELN talks restarted in Cuba during the summer of 2018 but stalled when President Duque took office and have been suspended. Duque pledged during his campaign to alter some elements of the peace accord with the FARC that remain controversial. In July 2018, a special "transitional justice" tribunal, tasked to adjudicate the worst crimes of Colombia's decades-long armed conflict, began to hear cases, but Colombians remain skeptical of its capacity. Estimates to pay for full implementation of the FARC-government peace accord over the next 15 years exceed $40 billion, adding to friction in Colombia at a time of modest growth. Colombia's economy is likely to expand by 2.7% in 2018, according to several estimates.

The U.S. government has invested in Colombia's security for almost two decades through a program known as Plan Colombia and its, successor Peace Colombia. Originally designed as a 6-year program, Plan Colombia ultimately became a 17-year U.S.-Colombian bilateral effort. The U.S.-Colombian partnership initially focused on counternarcotics and later on counterterrorism; it since broadened to include sustainable development, human rights, regional security, and many other areas of cooperation. The Colombian government's long-term strategy evolved from defeating insurgents to postconflict stabilization.

According to U.S. estimates, Colombia in 2017 cultivated an unprecedented 209,000 hectares of coca, from which cocaine is derived, capable of generating 921 metric tons of cocaine. The U.N. estimates for 2017, which typically differ in quantity but follow the same trends as U.S. estimates, stated that Colombia's potential production of cocaine reached nearly 1,370 metric tons, 31% above its 2016 estimate. Even with Colombia's economic stability and improving security, cocaine exports, primarily to the U.S. market, remain a major concern for U.S. lawmakers.

Congressional Action: In May 2017, Congress enacted a FY2017 omnibus appropriations measure (P.L. 115-31) that fully funded the programs of Peace Colombia at $391.3 million.⁴² The FY2018 omnibus appropriations measure, approved by Congress in March 2018 (P.L. 115-141), again provided $391.3 million to support Colombia's transition to peace and peace accord implementation, address inequalities in historically marginalized areas, reintegrate demobilized fighters, and continue counternarcotics efforts, such as building state presence in former FARC-held areas.

The Trump Administration's FY2019 budget request for Colombia is $265 million, approximately a 32% reduction over the funds appropriated by Congress in FY2018, whereas both the House and Senate appropriations bills, H.R. 6385 and S. 3108, would again support the funding level of $391.3 million. The Administration's request would reduce postconflict recovery programs while placing greater emphasis on counternarcotics and security.

Colombia has also received additional U.S. humanitarian funding to help it cope with more than 1 million Venezuelan refugees and migrants fleeing the turmoil in their crises-plagued country. Funding from a Venezuela Regional Crisis Response program in FY2017 and FY2018 targeted for Colombia amounted to about $26.8 million out of a total $46.8 million.⁴³ In late September 2018, Vice President Pence announced an additional $48 million in humanitarian assistance targeted to countries assisting Venezuelan migrants, but it is uncertain how much will be designated for Colombia.⁴⁴ In addition to humanitarian assistance, Colombia is receiving an additional $23.5 million in bilateral assistance to support medium-and long-term efforts to respond to the influx of Venezuelans in Colombia.⁴⁵ (Also see "Venezuela" section below.)

Key concerns are implementing the peace accord, fighting organized crime, and lowering corruption. In late August 2018, Colombia held a referendum on measures to reduce public corruption that barely missed its threshold requirements by less than a half million votes and narrowly did not pass. The U.S and Colombian governments have cited joint efforts to address the spike in assassinations of social activists and human rights defenders in the country, and to more effectively combat cocaine production increases.

For additional information, see CRS Report R43813, Colombia: Background and U.S. Relations, by [author name scrubbed]; CRS Report R44779, Colombia's Changing Approach to Drug Policy, by [author name scrubbed] and [author name scrubbed]; CRS In Focus IF10817, Colombia's Elections in 2018, by [author name scrubbed] and [author name scrubbed].

Cuba

Cuba remains a one-party authoritarian state with a poor record on human rights. Current President Miguel Díaz-Canel succeeded Raúl Castro on April 19, 2018, although Castro is continuing in his position as first secretary of Cuba's Communist Party. Over the past decade, Cuba has implemented gradual market-oriented economic policy changes, but critics maintain that it has not taken enough action to foster sustainable economic growth. Most observers do not anticipate significant policy changes under Díaz-Canel, at least in the short term, but the president faces the enormous challenges of reforming the moribund economy and responding to desires for greater freedom.

Congress has played an active role in shaping policy toward Cuba, including the enactment of legislation strengthening and at times easing U.S. economic sanctions. Since the early 1960s, the centerpiece of U.S. policy has consisted of economic sanctions aimed at isolating the Cuban government. In 2014, however, the Obama Administration initiated a major policy shift, moving away from sanctions toward a policy of engagement. The policy change included the restoration of diplomatic relations (July 2015); the rescission of Cuba's designation as a state sponsor of international terrorism (May 2015); and an increase in travel, commerce, and the flow of information to Cuba implemented through regulatory changes.

President Trump unveiled a new policy toward Cuba in June 2017 that partially rolls back some of the Obama Administration's efforts to normalize relations. The most significant regulatory changes include restrictions on transactions with companies controlled by the Cuban military and the elimination of individual people-to-people travel. In response to unexplained injuries of members of the U.S. diplomatic community at the U.S. Embassy in Havana, the State Department ordered the departure of nonemergency personnel from Cuba in September 2017, which cut U.S. staff by about two-thirds, and subsequently ordered the departure of 15 Cuban diplomats from the Cuban Embassy in Washington, DC, in October. U.S. officials maintain that the U.S. investigation has not reached a definitive conclusion regarding the cause, source, or technologies that might have been used.

Congressional Action: In the 115^th Congress, debate over Cuba policy is continuing, especially with regard to economic sanctions. To date, several bills have been introduced to ease or lift sanctions altogether: H.R. 351 and S. 1287 (travel); H.R. 442/S. 472 and S. 1286 (some economic sanctions); H.R. 498 (telecommunications); H.R. 525 (agricultural exports and investment); H.R. 572 (agricultural and medical exports and travel); H.R. 574, H.R. 2966, and S. 1699 (overall embargo); and S. 275 (private financing for U.S. agricultural exports). For FY2017, the Consolidated Appropriations Act, 2017 (H.R. 244, P.L. 115-31) provided $20 million in democracy assistance and $28.1 million for Cuba broadcasting.

For FY2019, the Trump Administration is requesting $10 million in democracy assistance and $13.7 million for Cuba broadcasting. The House Appropriations Committee's State Department and Foreign Operations appropriations bill, H.R. 6385, would provide $30 million for Cuba democracy programs while the Senate version, S. 3108, would provide $15 million; both bills would provide $29 million for broadcasting. Two other House appropriations bills, Commerce (H.R. 5952) and Financial Services (H.R. 6258 and H.R. 6147), have provisions that would tighten sanctions.

In other action, the John S. McCain National Defense Authorization Act for FY2019, P.L. 115-232 (H.R. 5515), signed into law August 13, 2018, extends a prohibition on the use of funds in FY2019 to close or relinquish control of the U.S. Naval Station at Guantanamo Bay, Cuba; the conference report to the bill also requires a report on security cooperation between Russia and Cuba. The Senate version of the 2018 farm bill, H.R. 2, approved in June 2018, would permit funding for certain U.S. agricultural export promotion programs in Cuba. In April 2018, the Senate approved S.Res. 224, commemorating the legacy of Cuban democracy activist Oswaldo Payá. The House passed H.R. 3328 in October 2017, which would, among other provisions, require information on Cuba's airport security measures.

For additional information, see CRS Report R44822, Cuba: U.S. Policy in the 115th Congress, by [author name scrubbed]; CRS In Focus IF10045, Cuba: U.S. Policy Overview, by [author name scrubbed]; CRS Report RL31139, Cuba: U.S. Restrictions on Travel and Remittances, by [author name scrubbed]; CRS Report R43888, Cuba Sanctions: Legislative Restrictions Limiting the Normalization of Relations, by [author name scrubbed] and [author name scrubbed]; CRS Report R44822, Cuba: U.S. Policy in the 115th Congress, by [author name scrubbed]; CRS In Focus IF10045, Cuba: U.S. Policy Overview, by [author name scrubbed]; CRS Report RL31139, Cuba: U.S. Restrictions on Travel and Remittances, by [author name scrubbed]; and CRS Report R43888, Cuba Sanctions: Legislative Restrictions Limiting the Normalization of Relations, by [author name scrubbed] and [author name scrubbed].

Haiti

President Jovenel Moïse was inaugurated in February 2017, after almost a year without an elected president because of political gridlock and delayed elections. Moïse came to office amid ongoing investigations into his possible involvement in money laundering, which he denies. Widespread corruption has been an impediment to good governance throughout much of Haiti's history. In November 2017, the Haitian Senate's Special Commission of Investigation released a report alleging embezzlement and fraud by 15 current and former Haitian officials, including two former prime ministers and President Moïse's chief of staff, in managing $2 billion in loans from Venezuela's PetroCaribe oil program. After the chief of the U.N. mission in Haiti said she welcomed the justice ministry's appointment of an investigative judge to look into citizens' complaints demanding accountability for those funds, Moïse recalled Haiti's Ambassador to the U.N. in protest.⁴⁶ Foreign donors and civic society are demanding more action against corruption.

The government launched fuel increases of up to 51% in July 2018 as part of an agreement with the International Monetary Fund to enact economic reforms. The resulting violent protests led to the resignation of Moïse's prime minister. Moïse named a new prime minister, Jean-Henry Céant, on August 5, after consulting with the legislature to get a consensus candidate.

Given Haiti's proximity to the United States, and the country's chronically unstable political environment and fragile economy, Haiti has been an ongoing concern for the United States. Many in the U.S. Congress view Haiti's stability with great concern and have demonstrated a commitment to improve conditions there. Haiti is the poorest country in the Western Hemisphere, and chronic political instability and frequent natural disasters exacerbate its poverty. Almost 60% of the country's 10 million people live in poverty, and almost 25% of them live in extreme poverty. Haiti is still recovering from a devastating earthquake in 2010, as well as Hurricane Matthew, which hit the island in 2016. The latter worsened a process begun by a two-year drought, destroying Haiti's food supply and creating a humanitarian disaster. In addition, Haiti continues to struggle against a cholera epidemic inadvertently introduced by U.N. peacekeepers in 2010.

Nonetheless, according to the State Department, Haiti is transitioning from a postdisaster era to one of reconstruction and long-term development. The Trump Administration and some in Congress contend that conditions in Haiti no longer warrant a reprieve for Haitian migrants who have been allowed to live and work in the United States under the TPS program since the 2010 earthquake. In November 2017, the Department of Homeland Security announced that TPS for Haitians will be terminated in July 2019; termination of this program could affect up to almost 59,000 Haitians in the United States. In August 2018, a group of 110 Members called on the Trump Administration to reinstate TPS, saying State Department documents showed the decision was made "despite warnings of grave consequences for the U.S. national security."⁴⁷

In October 2017, the U.N. Stabilization Mission in Haiti (MINUSTAH, 2004-2017) was succeeded by a smaller mission, the U.N. Mission for Justice Support in Haiti (MINUJUSTH), which is focusing on rule of law, development of the Haitian National Police (HNP) force, and human rights. The HNP now have primary responsibility for domestic security. MINUSTAH helped facilitate elections, combat gangs and drug trafficking with the HNP, and respond to natural disasters. MINUSTAH was criticized, however, because of sexual abuse by some of its forces and for introducing cholera to the country. The U.N. maintains it has diplomatic immunity, but after years of international pressure said that it would support the epidemic's victims and a new $400 million plan to fight cholera in Haiti.⁴⁸ Neither plan has been fully funded or implemented.

Congressional Action: The Trump Administration's proposed FY2018 budget of $157 million for aid to Haiti was about a 15% reduction from the estimated amount provided in FY2017. The total amount appropriated for Haiti in the Consolidated Appropriations Act, 2018 (P.L. 115-141) is uncertain since the legislation and accompanying explanatory statement do not specify total funding for Haiti. However, the legislation has several Haiti provisions. It continues to condition some assistance unless the Secretary of State certifies that the Haitian government is taking certain steps to strengthen the rule of law, combat corruption, increase government revenues and resolve commercial disputes between U.S. entities and the Haitian government. It also continues to permit the Haitian government to purchase U.S. defense articles and services for its Coast Guard. The law also provided $10 million for multilateral efforts to assist communities affected by cholera resulting from MINUSTAH. In addition, the explanatory statement provided $8.5 million for Haiti reforestation and $1.5 million for prison assistance.

For FY2019, the Administration requested $170.5 million for Haiti, an 8% reduction from that provided in FY2017. Both the House and Senate Appropriations Committees' versions of the FY2019 foreign aid appropriations measure, H.R. 6385 and S. 3108, would continue to permit the Haitian government to purchase U.S. defense articles and services for its coast guard. The House version also would continue a provision from FY2018 conditioning some assistance pending a certification from the Secretary of State that the Haitian government is taking certain steps to strengthen the rule of law, combat corruption, increase government revenues, and resolve commercial disputes between U.S. entities and the Haitian government.

As noted in the section on "Migration Issues" above, a range of proposals related to TPS have been introduced in Congress, either to extend it, limit it, adjust some TPS holders to lawful permanent resident status, or make TPS holders subject to expedited removal.

For additional information, see CRS Report R45034, Haiti's Political and Economic Conditions: In Brief, by [author name scrubbed].

Mexico

Congress has demonstrated renewed interest in Mexico, a top trade partner and energy supplier with which the United States shares a nearly 2,000-mile border and strong cultural, familial, and historical ties. Economically, the United States and Mexico are interdependent, and Congress closely followed efforts to renegotiate NAFTA, which began in August 2017, and ultimately resulted in a proposed United States-Mexico-Canada Agreement (USMCA) at the end of September 2018. Similarly, security conditions in Mexico affect U.S. national security, particularly along the U.S.-Mexican border. Observers are concerned about resurgent organized crime-related violence in Mexico, which reached record levels in 2017.

President Enrique Peña Nieto of the Institutional Revolutionary Party (PRI) is in the final months of his six-year term. During 2013, Peña Nieto shepherded significant structural reforms through the Mexican congress, including a historic reform that opened Mexico's energy market to foreign investment. He has since struggled to implement some of those reforms and address human rights abuses, insecurity, and corruption. With Peña Nieto's influence waning, he has aimed to keep the economy stable. His government concluded NAFTA renegotiations with the Trump Administration in August 2018 and is expecting to sign the proposed USMCA before his term expires on December 1, 2018.

Political attention in Mexico is focused on the incoming government of Andrés Manuel López Obrador, the populist leader of the National Regeneration Movement (MORENA) party, who won 53% of the vote in the July 1, 2018, presidential elections. MORENA's coalition also won majorities in both chambers of congress. López Obrador promised to govern differently than recent PRI and National Action Party (PAN) administrations that have presided over periods of moderate but stable economic growth, rising insecurity, and ongoing corruption. Some observers are concerned that López Obrador's victory could alter Mexico's historically investor-friendly policies and cause friction with the United States, but others predict that he will seek to address poverty and corruption and pursue pragmatic foreign relations. The president-elect has expressed support for the proposed USMCA.

U.S.-Mexican relations remain relatively strong, but periodic tensions have emerged since January 2017. In recent years, both countries have prioritized bolstering economic ties, particularly energy cooperation; interdicting illegal migration from Central America; and combating drug trafficking, including heroin and fentanyl. Security cooperation has continued under the Mérida Initiative, a security partnership for which Congress has provided Mexico some $2.9 billion from FY2008 through FY2018.

In January 2017, President Trump's assertion that Mexico should pay for a border wall, which Mexico has consistently opposed, led Peña Nieto to cancel a White House visit. Although the Mexican government continues to oppose paying for the border wall, has spoken out against the Administration's "zero tolerance" immigration policies, and is concerned about the future of the DACA initiative, which has shielded some 550,000 Mexicans from deportation, bilateral security and migration efforts continue. Mexico also applied retaliatory tariffs in response to the Trump Administration's recent tariffs on U.S. imports of steel and aluminum.

Congressional Action: The 115^th Congress has closely followed the renegotiation of NAFTA and how changes to the agreement, or a U.S. withdrawal from it, could affect the U.S. economy and U.S.-Mexican relations; consideration of the proposed USMCA will likely occur in the 116^th Congress (see "Trade Policy" above).

In March 2017, the Senate passed S.Res. 83, a resolution calling for U.S. support for Mexico's efforts to combat fentanyl. In December 2017, the House approved H.Res. 336 , a resolution reiterating the importance of bilateral cooperation with Mexico. On September 27, 2018, the House Committee on Foreign Affairs approved H.R. 1567, which promotes economic partnership and cooperation between the United States and Mexico in the areas of academic exchange, entrepreneurship, and infrastructure integration; the committee agreed to seek House consideration of the bill under suspension of the rules.

In March 2018, Congress provided $152.6 million in the Consolidated Appropriations Act, 2018 (P.L. 115-141) for Mexico, with extra funds provided to combat the production and trafficking of opioids. The Trump Administration's FY2019 request for Mexico was for $78.9 million, some 43% lower than the FY2017 enacted amount ($138.5 million). The House Appropriations Committee's FY2019 version of the foreign aid appropriations bill, H.R. 6385 (H.Rept. 115-829), recommends providing $125 million for Mexico. The Senate version of the bill, S. 3108 (S.Rept. 115-282), recommends $169.5 million.

For additional information, see CRS In Focus IF10867, Mexico's 2018 Elections: Results and Potential Implications, by [author name scrubbed] and [author name scrubbed]; CRS Report R42917, Mexico: Background and U.S. Relations, by [author name scrubbed]; CRS Report RL32934, U.S.-Mexico Economic Relations: Trends, Issues, and Implications, by [author name scrubbed]; CRS Report R44981, NAFTA Renegotiation and Modernization, by [author name scrubbed] and [author name scrubbed]; CRS In Focus IF10578, Mexico: Evolution of the Mérida Initiative, 2007-2018, by [author name scrubbed]; CRS Report R41576, Mexico: Organized Crime and Drug Trafficking Organizations, by [author name scrubbed]; CRS In Focus IF10215, Mexico's Immigration Control Efforts, by [author name scrubbed]; and CRS In Focus IF10400, Transnational Crime Issues: Heroin Production, Fentanyl Trafficking, and U.S.-Mexico Security Cooperation, by [author name scrubbed] and [author name scrubbed].

Nicaragua

After decades of dictatorship and civil war, Nicaragua began to establish a democratic government in the early 1990s. Democratic space has narrowed, however, as the Sandinista National Liberation Front (FSLN) and its leader, Daniel Ortega, have consolidated control over the country's institutions. President Ortega, now 72, is currently facing the kind of popular unrest that he once led as a "comandante" of the FSLN when it succeeded in overthrowing the Somoza regime in 1979. Ortega, who served as president from 1985 to 1990 and then as opposition leader, was reelected in 2006, 2011, and 2016. Nonetheless, popular opposition to Ortega's rule had begun to take hold in parts of the country, as his government grew increasingly authoritarian. Ortega buoyed his popular support by implementing social welfare programs that benefited Nicaragua's poor and by accommodating the business community. Domestic and international critics consistently objected to Ortega's antidemocratic policies and self-enrichment, however, and popular domestic support began to wane. Ortega was able to resist most of this pressure because the political opposition was weak, divided, and handicapped by FSLN control of the legislature, electoral council, and other aspects of Nicaraguan political life.

Until 2018, for many Nicaraguans, Ortega's populist economic measures that improved their standard of living outweighed his authoritarian tendencies. Similarly, for many in the international community, the relative stability in Nicaragua outweighed Ortega's antidemocratic actions. Both domestic and international attitudes toward the Ortega government began to change in April 2018; Ortega's long-term strategy to retain control of the government began to unravel when he proposed reducing benefits of the social security system to shore up its insolvency. The announcement set off weeks of unexpected protests led by university students, who argued that corruption and mismanagement of social security system resources were the main factors behind the system's problems. Ortega repealed the proposed reforms, but protests continued and grew into mass antigovernment protests led by students, businesspeople, civil society groups, farmers, and the Catholic Church. The protests called for early elections and/or Ortega's resignation. The Ortega government and its parapolice supporters have violently repressed protests, leaving some 300 people dead and thousands injured.

Nicaragua is the second poorest country in the Western Hemisphere, ahead of Haiti. Nicaragua maintained growth levels above the average for Latin America over the past decade, ⁴⁹ but the Economist Intelligence Unit estimates the current political crisis will affect the economy this year with a contraction of more than 3%.⁵⁰

Congressional Action: In October 2017, the House of Representatives passed the Nicaraguan Investment Conditionality Act, H.R. 1918, which would oppose loans at international financial institutions for the government of Nicaragua unless the government was taking effective steps to hold free elections, combat corruption, and implement other reforms; a similar measure was introduced in the Senate, S. 2265. Under the Consolidated Appropriations Act, 2018 (P.L. 115-141, S.Rept. 115-152), Congress requires the Secretary of State to submit a report to the appropriate congressional committees on the involvement of senior Nicaraguan government officials in corrupt practices or violations of human rights in Nicaragua. On July 25, 2018, the House passed H.Res. 981, "condemning the violence, persecution, intimidation, and murders committed by the Government of Nicaragua against its citizens." Bills also were introduced in both houses, S. 3233 in July 2018 and H.R. 6683 2018 in August, which would impose sanctions on those persons responsible for violence and human rights abuses in Nicaragua. The Senate Foreign Relations Committee approved S. 3233, amended, on September 26, 2018.

For additional information, see CRS Report R44560, Nicaragua: In Brief, by [author name scrubbed].

Peru

Martín Vizcarra was sworn in as Peru's president on March 23, 2018. He had been first vice president to Pedro Pablo Kuczynski, who resigned as president the day before the Peruvian congress was to vote on whether to impeach him over bribery allegations related to the Brazilian construction firm Odebrecht. An orderly, constitutional transition took place, and Vizcarra is serving out the remainder of the former president's five-year term, until July 2021.

Officials from the previous four Peruvian governments—including the presidents and the opposition—have been implicated in the Odebrecht international bribery scandal. Vizcarra has made fighting corruption a top priority. He responded swiftly and strongly to a new scandal in which high level judicial officials were taped allegedly negotiating bribes in exchange for favors. Vizcarra proposed a series of judicial and political reforms in August 2018 (some of which would be subject to a future public referendum), and successfully challenged Peru's congress to a vote of confidence in his government in September in order for the reforms to move forward. (Also see "Corruption" section above.)

Peru's economy has been one of the strongest in Latin America since 2001, consistently growing over 5% per year because of the boom in international prices for commodities—particularly petroleum and other minerals. According to the Economist Intelligence Unit, economic growth dropped from 4.1% in 2016 to 2.5% in 2017 but will average 4% annual growth in 2018-2022.⁵¹ In March 2018, Peru and the other 10 signatories of the Trans-Pacific Partnership (minus the United States) signed a new trade pact, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.

President Vizcarra is continuing the same types of market-friendly economic policies as his recent predecessors. Beginning in July, Vizcarra began issuing a series of legislative decrees designed to improve infrastructure and stimulate economic growth. Peru's congress granted the executive branch legislative authority for 60 days in certain policy areas, leaving themselves the right to review the issued decrees.

Social unrest and debate over exploitation of natural resources long have been and likely will remain major challenges for any Peruvian government. Many disputes have involved the mining industry and the rights of indigenous peoples in those areas where mining exists or where mining interests intend to operate. A current dispute involves a highway project that is to run through protected areas and indigenous reserves in the Amazon rainforest. Successive Peruvian governments have found it politically difficult to balance a stated desire to help the poor and indigenous with efforts to encourage investment by the business sector.

Congressional Action: For FY2018, the Trump Administration requested $49.7 million for Peru, a 23% reduction from the amount provided in FY2017. The total amount appropriated for Peru in the Consolidated Appropriations Act, 2018 (P.L. 115-141) is uncertain since the legislation and accompanying explanatory statement do not specify total funding for all countries. However, the explanatory statement to the law specifies $32 million in International Narcotics Control and Law Enforcement (INCLE) assistance and $1.8 million in Foreign Military Financing (FMF).

For FY2019, the Administration requested $47.4 million, a decline of about 26% from FY2017. The reports to the House and Senate Appropriations Committees' versions of FY2019 foreign aid appropriations, H.Rept. 115-829 to H.R. 6385 and S.Rept. 115-282 to S. 3108, would provide $32 million in INCLE assistance and $1.8 million in FMF.

Venezuela

Venezuela remains in a deep political crisis under the authoritarian rule of President Nicolás Maduro of the United Socialist Party of Venezuela (PSUV). On May 20, 2018, Maduro defeated Henri Falcón, a former governor, in a presidential election boycotted by the Democratic Unity Roundtable (MUD) of opposition parties and dismissed by the United States, the European Union, and 18 Western Hemisphere countries as illegitimate. Maduro, who was narrowly elected in 2013 after the death of President Hugo Chávez (1999-2013), is unpopular. Nevertheless, he has used the courts, security forces, and electoral council to repress opposition.

Maduro's reelection capped off his efforts since 2017 to consolidate power. From March to July 2017, protesters called for President Maduro to release political prisoners and respect the MUD-led National Assembly. Security forces quashed protests, with more than 130 killed and thousands injured. Maduro then orchestrated the controversial July 2017 election of a National Constituent Assembly to rewrite the constitution; the constituent assembly assumed the National Assembly's legislative powers. The PSUV dominated gubernatorial and municipal elections held in 2017, although fraud likely occurred in those contests. Maduro has arrested dissident military officers and others, but he also has released some political prisoners, including U.S. citizen Joshua Holt, since the May election. Maduro has cracked down further since narrowly surviving an apparent assassination attempt in early August 2018.

Venezuela also is experiencing a serious economic crisis, marked by rapid contraction of the economy, hyperinflation, and severe shortages of food and medicine, that has prompted a humanitarian crisis in the country and driven more than 2 million Venezuelans to flee, according to the U.N. High Commissioner for Refugees. President Maduro has blamed U.S. sanctions and corruption for these problems while conditioning receipt of food assistance on support for his government and increasing military control over the economy. He maintains that Venezuela will seek to restructure its debts, although that appears unlikely. The government and state oil company Petróleos de Venezuela, S. A. (PdVSA) defaulted on bond payments in 2017. Lawsuits over nonpayment and seizures of PdVSA assets are likely, particularly since a U.S. court recently ordered the company to turn over shares in CITGO, its U.S. refining unit, to a Canadian company to satisfy an arbitration award it is owed.

The United States historically had close relations with Venezuela, a major U.S. oil supplier, but relations have deteriorated under the Chávez and Maduro governments. U.S. policymakers have expressed concerns about the deterioration of human rights and democracy in Venezuela and the lack of bilateral cooperation on counternarcotics and counterterrorism efforts. U.S. democracy and human rights funding has bolstered civil society in Venezuela for more than a decade.

The Trump Administration has employed targeted sanctions against Venezuelan officials responsible for human rights violations, undermining democracy, and corruption. In August 2017, President Trump imposed economic sanctions that restrict the ability of the government and PdVSA to access U.S. financial markets; he imposed new sanctions following the May 2018 election further restricting U.S. purchases of Venezuelan debt. The Treasury Department imposed additional targeted sanctions in September 2018 on several of Maduro's closest allies, including the first lady, the vice president, and the defense minister.

The Administration is also providing nearly $95 million in humanitarian assistance for Venezuelans who have fled to other countries, including Colombia; of this amount, Vice President Pence announced $48 million at the United Nations on September 24, 2018.⁵² Colombia is also receiving an additional $23.5 million in bilateral assistance to support medium- and longer-term efforts responding to the influx of Venezuelans.⁵³

Congressional Action: In response to the situation in Venezuela, the 115^th Congress has taken several actions. In February 2017, the Senate approved S.Res. 35, which, among its provisions, called for the release of political prisoners and expressed support for dialogue and OAS efforts. In December 2017, the House passed a bill and a resolution on Venezuela: H.R. 2658, the Venezuela Humanitarian Assistance and Defense of Democratic Governance Act, which would authorize humanitarian assistance for Venezuela (similar but not identical bills, S. 1018 and S. 3486, were introduced in the Senate, respectively, in May 2017 and September 2018); and H.Res. 259, which urges the Venezuelan government to suspend the constituent assembly, hold elections, release political prisoners, and accept humanitarian aid. On September 27, the House Committee on Foreign Affairs approved H.Res. 1006, amended, which condemns the deteriorating situation in Venezuela and the regional humanitarian crisis it has caused; the committee agreed to seek House consideration of the bill under suspension of the rules.

In FY2018 appropriations legislation (P.L. 115-141) enacted in March 2018, Congress provided $15 million to support democracy and human rights in Venezuela. For FY2019, the Trump Administration requested $9 million in democracy and human rights funding for Venezuela, $6 million less than what Congress appropriated in FY2018. The House Appropriation Committee's version of the FY2019 foreign aid appropriations bill, H.R. 6385, would provide $15 million; the Senate Appropriations Committee's version, S. 3108, would provide $20 million.

Other legislation introduced on Venezuela includes the following: H.R. 2161, introduced in April 2017, would adjust the immigration status for certain Venezuelans in the United States to permanent resident status; S.Res. 363, introduced in December 2017, would express concern about the humanitarian crisis; and S.Res. 414, introduced in February 2018, would condemn the undemocratic practices of the government.

For additional information, see CRS Report R44841, Venezuela: Background and U.S. Relations, by [author name scrubbed] and [author name scrubbed]; CRS Report R45072, Venezuela's Economic Crisis: Issues for Congress, by [author name scrubbed]; CRS In Focus IF10715, Venezuela: Overview of U.S. Sanctions, by [author name scrubbed]; CRS In Focus IF10230, Venezuela: Political and Economic Crisis and U.S. Policy, by [author name scrubbed]; CRS In Focus IF10857, Venezuela's Petroleum Sector and U.S. Sanctions, by [author name scrubbed].

Outlook

The U.S. economic, political, and security concerns discussed in this report likely will sustain congressional interest in Latin America and the Caribbean for the remainder of the 115^th Congress. Congress still faces completing action on FY2019 foreign aid appropriations that proposes significant cuts in assistance to the region. In the renegotiation of NAFTA, the Administration reached an agreement with Mexico and Canada for a United States-Mexico-Canada Agreement at the end of September 2018. Although the agreement is expected to be signed at the end of November, congressional consideration of implementing legislation for the agreement will likely take place in the 116^th Congress. Potential consideration of immigration legislation related to the termination of TPS for Nicaragua, Haiti, El Salvador, and Honduras and the rescission of DACA is also likely to wait until the next Congress.

The ongoing political crises in Nicaragua and in Venezuela, with its significant humanitarian implications for the region, will likely command congressional oversight attention in the remaining weeks of the 115^th Congress, and could prompt Congress to complete legislative action on both countries. Other upcoming events in the region through the end of the year could generate congressional interest. These include Brazil's upcoming presidential elections in October; the inauguration of a new president in Mexico in December; and President Trump's scheduled attendance at the G-20 summit in Argentina (November 30-December 1, 2018) and subsequent visit to Colombia.

Appendix. Hearings in the 115^th Congress

Author Contact Information

Footnotes

1.	Freedom House, "Freedom in the World 2018, Democracy in Crisis," January 2018.
2.	Ibid.
3.	Economist Intelligence Unit, "Democracy Index 2017, Free Speech under Attack," January 2018.
4.	Economic statistics in this section are from International Monetary Fund (IMF), "World Economic Outlook Database," April 2018, and "World Economic Outlook Update," July 2018. Economic growth rates and contraction refer to percentage changes in gross domestic product (in constant price) as reported in the IMF database.
5.	IMF, "World Economic Outlook Update," July 2018.
6.	U.N. Economic Commission for Latin America and the Caribbean, Social Panorama of Latin America 2017, December 2017.
7.	Ibid.
8.	The G-20 is a forum for advancing international cooperation among 20 major advanced and emerging market economies. From Latin America, it includes Argentina, Brazil, and Mexico.
9.	Brazil, Ministry of Foreign Affairs, "Lima Group Declaration (Spanish)," September 15, 2018.
10.	U.S. Department of State, "Secretary Pompeo's Call with Guatemala President Jimmy Morales," readout, September 6, 2018; and U.S. Congress, House Committee on Foreign Affairs, Advancing U.S. Interests in the Western Hemisphere, testimony of Kenneth H. Merten, Acting Principal Deputy Assistant Secretary for the U.S. Department of State, Bureau of Western Hemisphere Affairs, 115th Cong., 2nd sess., July 11, 2018.
11.	White House, National Security Strategy of the United States, December 2017.
12.	U.S. Department of State, Secretary of State Rex W. Tillerson, "U.S. Engagement in the Western Hemisphere," February 1, 2018.
13.	White House, "Statement from the Press Secretary on El Salvador," August 23, 2018.
14.	White House, "Remarks by Vice President Pence and President Santos of Colombia in Joint Press Conference," August 13, 2017.
15.	U.S. Department of State, Secretary of State Rex W. Tillerson, "U.S. Engagement in the Western Hemisphere," February 1, 2018.
16.	White House, "Remarks by Vice President Pence at First Plenary Session of the Summit of the Americas," April 15, 2018.
17.	USAID, "U.S. Agency for International Development Administrator Mark Green's Remarks at Council of the Americas Event," August 8, 2018.
18.	The White House, "New Annual Data Released by White House Drug Policy Office Shows Record High Cocaine Cultivation and Production in Colombia," June 28, 2018.
19.	U.S. Department of State, International Narcotics Control Strategy Report 2016, March 2017.
20.	Temporary Protected Status (TPS) is a discretionary, humanitarian benefit granted to eligible nationals after the Department of Homeland Security (DHS) determines that a country has been affected by armed conflict, natural disaster, or other extraordinary conditions that limit the country's ability to accept the return of its nationals from the United States. TPS designations for Nicaragua and Honduras began in 1999, for Haiti in 2010, and for El Salvador in 2001.
21.	DACA is a program that the Obama Administration implemented in 2012 to provide temporary relief from removal and work authorization to certain unlawfully present individuals who arrived in the United States as children.
22.	In FY2017, Venezuela ranked first among countries of origin for those seeking affirmative asylum in the United States. See https://www.uscis.gov/outreach/asylum-division-quarterly-stakeholder-meeting-6.
23.	U.S. Department of Homeland Security (DHS), U.S. Customs and Border Protection, "Southwest Border Migration FY2018," February 7, 2018.
24.	DHS, U.S. Immigration and Customs Enforcement, FY2017 ICE Enforcement and Removal Operations Report.
25.	This is drawn from: CRS Report RS20844, Temporary Protected Status: Overview and Current Issues, by [author name scrubbed].
26.	For information on DACA and related legislation in the 115th Congress on the DACA initiative, see CRS Report R44764, Deferred Action for Childhood Arrivals (DACA): Frequently Asked Questions, by [author name scrubbed]. For litigation on the DACA initiative, see CRS Legal Sidebar LSB10136, DACA Rescission: Legal Issues and Litigation Status, by [author name scrubbed].
27.	See information on DACA from USCIS: https://www.uscis.gov/tools/reports-studies/immigration-forms-data.
28.	This section is drawn from: CRS Report R45266, The Trump Administration's "Zero Tolerance" Immigration Enforcement Policy, by [author name scrubbed].
29.	U.S. Department of Health and Human Services, "HHS Issues Statement on Ms. L, et al., Status Report Regarding Plan for Compliance for Remaining Class Members," press release, July 13, 2018.
30.	Matter of A-B-, 27 I. & N. Dec. 316 (A.G. 2018), available at https://www.justice.gov/eoir/page/file/1070866/download/.
31.	Aris Folley, "UN Chief Criticizes Trump Family Separation Policy," The Hill, June 18, 2018; OAS, "IACHR Expresses Concern over Recent Migration and Asylum Policies and Measures in the United States," June 18, 2018.
32.	"U.S. Migration Proposal Produces Divisions in Mexico," Latin News Daily, September 14, 2018.
33.	Anthony Faiola, "The Corruption Scandal Started in Brazil, Now It's Wreaking Havoc in Peru," Washington Post, January 23, 2018.
34.	Sandra Cuffe, "Guatemala's Assault on an Anti-Corruption Commission Evokes the Country's Dark Past," World Politics Review, September 19, 2018.
35.	See, for example, the findings of K. Murphy, A. Shleifer, and R. Vishney, "The Allocation of Talent: Implications for Growth," The Quarterly Journal of Economics, vol. 106, no. 2, 1991 and Elvin Mirzayev, "How Corruption Affects Emerging Economies," Investopedia, January 22, 2018.
36.	IMF, "Update on Argentina: IMF's Revised Stand-By Arrangement," September 26, 2018.
37.	White House, "Remarks by Vice President Pence and President Temer of the Federative Republic of Brazil in Joint Press Statements," June 26, 2018.
38.	For background, see U.S. Department of State, Caribbean Energy Security Initiative (CESI), at https://www.state.gov/e/enr/c66945.htm.
39.	U.S. Agency for International Development, "Caribbean – Hurricanes," Fact Sheet #7, Fiscal Year 2018, July 16, 2018.
40.	U.S. Congress, House Committee on Foreign Affairs, Advancing U.S. Interests in the Western Hemisphere, testimony of Kenneth H. Merton, Acting Principal Deputy Assistant Secretary for the U.S. Department of State, Bureau of Western Hemisphere Affairs, 115th Cong., 2nd sess., July 11, 2018.
41.	"Ambassador of Colombia Francisco Santos Presents Credentials to President Donald J. Trump," Embassy of Colombia, Press Release, September 17, 2018.
42.	In FY2017, the enacted appropriation for Colombia was $391.3 million in the State Department and USAID portion of the omnibus appropriations measure, but according to the U.S. State Department's FY2019 Congressional Budget Justification, the actual allocation was about $5 million less, or $386.3 million.
43.	U.S. Agency for International Development, "Venezuela Regional Crisis, Fact Sheet #5, FY2018," September 11, 2018.
44.	White House, "Remarks by Vice President Pence at the Regional Migration and Humanitarian Crisis – Flows from Venezuela Event," September 25, 2018.
45.	USAID, "United States Announces Additional Humanitarian Assistance for Venezuelans in Colombia," fact sheet, August 8, 2018.
46.	Jacqueline Charles, "Haiti Didn't Like What the U.N. Said About Corruption, so It Recalled Ambassador," Miami Herald, February 27, 2018.
47.	Senate Committee on Foreign Relations, Ranking Member, "Menendez, Engel Lead Over 100 Members of Congress in Demanding TPS for El Salvador, Honduras, and Haiti," press release, August 2, 2018.
48.	"U.N.'s Ban Apologizes to People of Haiti, Outlines New Plan to Fight Cholera Epidemic and Help Communities," UN News, December 1, 2016.
49.	The World Bank, "Nicaragua: Country at a Glance," August 25, 2018.
50.	Economist Intelligence Unit (EIU), "Country Report: Nicaragua," September 2018.
51.	Economist Intelligence Unit (EIU), "Country Report: Peru" September 2018.
52.	U.S. Agency for International Development, "Venezuela Regional Crisis, Fact Sheet #5, FY2018," September 11, 2018; White House, "Remarks by Vice President Pence at the Regional Migration and Humanitarian Crisis – Flows from Venezuela Event," September 25, 2018.
53.	USAID, "United States Announces Additional Humanitarian Assistance for Venezuelans in Colombia," fact sheet, August 8, 2018.