Updated October 20, 2020
Latin America and the Caribbean: U.S. Policy Overview
U.S. interests in Latin America and the Caribbean are
with the highest numbers of deaths. Before the pandemic,
diverse and include economic, political, security, and
the International Monetary Fund projected a regional
humanitarian concerns. Geographic proximity has ensured
economic growth rate of 1.6% in 2020, but its revised
strong economic linkages between the United States and the
forecast from October 2020 projects an 8.1% economic
region, with the United States a major trading partner and
contraction for the year. According to a July 2020 U.N.
source of foreign investment for many countries. Free-trade
report, as a result of the pandemic, 45 million people will
agreements (FTAs) have augmented U.S. economic
likely move into poverty in Latin America and the
relations with 11 countries in the region. The Western
Caribbean in 2020. Many countries may struggle with
Hemisphere is a large source of U.S. immigration, both
protracted recoveries. (Also see CRS In Focus IF11581,
legal and illegal; with proximity and economic and security
Latin America and the Caribbean: Impact of COVID-19.)
conditions the major factors driving migration trends.
Trump Administration Policy
Curbing the flow of illicit drugs from Latin America and
Under the Trump Administration, U.S. relations with Latin
the Caribbean has been a key component of U.S. relations
America and the Caribbean generally have moved toward a
with the region for decades. The flow of illicit drugs,
more confrontational approach, especially regarding efforts
including heroin, methamphetamine, and fentanyl from
to curb irregular immigration from the region, compared
Mexico and cocaine from Colombia, poses risks to U.S.
with the approach of past Administrations, which
public health and safety. Since 2000, Colombia has
emphasized partnership. In 2018, the State Department set
received support through Plan Colombia and its successor
forth a framework for U.S. policy toward the region
programs. For over a decade, the United States also has
focused on three pillars for engagement—economic growth
sought to forge partnerships with other countries to combat
and prosperity, security, and democratic governance. The
drug trafficking and related violence and to advance citizen
framework reflects continuity with long-standing regional
security, including through the Mérida Initiative, begun in
U.S. policy priorities, but it appears at odds with the
2007 to support Mexico; the Central America Regional
Administration’s sometimes antagonistic actions and
Security Initiative (CARSI), begun in 2008; and the
statements on immigration, trade, and foreign aid.
Caribbean Basin Security Initiative (CBSI), begun in 2009.
According to Gallup and Pew Research Center polls,
negative views of U.S. leadership in the region have
Another long-standing component of U.S. policy is support
increased markedly during the Trump Administration.
for democratic governance and the rule of law. U.S. policy
efforts have supported democracy promotion, including
Foreign Aid. The Administration’s foreign aid budgets for
support for strengthening civil society and promoting
the region would have cut assistance levels by more than a
human rights and the rule of law.
third in FY2018 and FY2019 and by 30% in FY2020.
Congress essentially rejected those requests by providing
Increasing Chal enges in the Region
significantly more assistance in appropriations measures. In
Over the past several years, the quality of democracy has
2019, the Trump Administration withheld some assistance
eroded in numerous countries, along with public
to the “Northern Triangle” countries of Central America (El
satisfaction with how democracy is working. Venezuela has
Salvador, Guatemala, and Honduras) to compel
descended into a dictatorship under President Nicolás
governments to curb the flow of migrants to the United
Maduro, and Cuba and Nicaragua are ruled by authoritarian
States. The FY2021 request of $1.4 billion would cut aid to
governments repressing the political opposition. In 2019,
the region by 18%, but a large proposed increase to support
many countries in the region experienced social unrest
a potential democratic transition in Venezuela masks larger
fueled by political factors such as fraudulent elections,
cuts for many countries and programs. In response to the
weak democratic institutions, politicized judicial systems,
COVID-19 pandemic, as of August 2020, U.S. agencies
public corruption scandals, high levels of crime and
allocated $141 million in new and previously announced
violence, and organized crime’s effect on state institutions.
assistance to help the region respond to the pandemic.
Economic factors such as declining or stagnant growth
rates, high levels of income inequality, and increased
Trade. In 2017, President Trump ordered U.S. withdrawal
poverty also increased social pressure.
from the proposed Trans-Pacific Partnership (TPP) FTA
negotiated in 2015 by 12 Asia-Pacific countries; the TPP
In 2020, the Coronavirus Disease 2019 (COVID-19)
would have increased U.S. economic linkages with Chile,
pandemic is having widespread economic, social, and
Mexico, and Peru, which were parties to the agreement. The
political effects in the region. As of October 19, 2020, the
President strongly criticized the North American Free Trade
region had over 10.4 million cases (over 26% of cases
Agreement (NAFTA) with Mexico and Canada, repeatedly
worldwide) and over 379,000 deaths (34% of deaths
threatened U.S. withdrawal, and initiated renegotiations in
worldwide), according to Johns Hopkins University. Brazil,
2017. The three countries agreed in 2018 to a new United
Mexico, and Peru were among the 10 countries worldwide
States-Mexico-Canada Agreement (USMCA), which
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Latin America and the Caribbean: U.S. Policy Overview
entered into force July 1, 2020; the agreement retained
legislation and oversight. The 116th Congress did not
many of NAFTA’s provisions but also included
approve the Trump Administration’s downsized foreign aid
modernizing updates and changes.
requests for the region for FY2019 (P.L. 116-6) or FY2020
(P.L. 116-94) and instead provided aid amounts roughly
Mexico, Central America, and Immigration. Relations
similar to those provided in recent years. For FY2021, the
with Mexico have been tested because of inflammatory
House-passed foreign aid appropriations bill, Division A of
anti-immigrant rhetoric and immigration actions that have
H.R. 7608, approved in July 2020, also would fund key
shifted the burden of interdicting migrants and offering
countries and programs at amounts higher than requested.
asylum to Mexico. In 2017, the Administration announced
(See CRS Report R46514, U.S. Foreign Assistance to Latin
it would end the Deferred Action for Childhood Arrivals
America and the Caribbean: FY2021 Appropriations.)
(DACA), a program begun in 2012 that provides relief from
deportation for certain immigrants who arrived as children;
On Venezuela, in December 2019, Congress enacted the
a federal court challenge ultimately led to a June 2020
VERDAD Act of 2019 in Division J of P.L. 116-94, which,
Supreme Court decision rejecting the procedures that the
among its provisions, codifies several sanctions and
Administration used in rescinding DACA. In 2018,
authorizes humanitarian assistance and support for
Mexico’s president agreed to allow the United States to
international election observation and democratic civil
return certain non-Mexican migrants to Mexico while
society. The measure incorporated provisions from S. 1025
awaiting U.S. immigration court decisions.
and three March 2019 House-passed bills: H.R. 854; H.R.
Other Administration actions on immigration have caused
920, and H.R. 1477. In July 2019, the House also approved
H.R. 549, which would provide TPS to Venezuelans.
concern in the region. In 2017, the Administration
announced it would terminate Temporary Protected Status
On trade, Congress enacted implementing legislation for the
(TPS) designations for Nicaragua, Haiti, El Salvador, and
USMCA (P.L. 116-113) in January 2020. Before approval,
Honduras, but federal court challenges have put the
the agreement was amended to address congressional
terminations on hold.
concerns regarding labor, the environment, dispute
Unauthorized migration from Central America has
settlement, and intellectual property rights. In September
increased in recent years, fueled by difficult socioeconomic
2020, Congress approved legislation (P.L. 116-164)
and security conditions and poor governance. The
extending, through September 2030, certain trade
Administration has used various policy tools to deter such
preferences currently provided to eight Caribbean countries.
migration. In addition to aid cuts and threats of increased
U.S. tariffs and taxes on remittances, these tools have
The FY2020 National Defense Authorization Act (NDAA;
included controversial asylum cooperation agreements—
P.L. 116-92) includes provisions on Venezuela and
also referred to as safe third country agreements—with
Guatemala and reporting requirements on Brazil, Honduras,
Guatemala, El Salvador, and Honduras to permit the United
Central America, and Mexico. The House-passed FY2021
States to transfer asylum applicants from third countries to
NDAA, H.R. 6395, approved in July 2020, has provisions
the Northern Triangle countries.
on the Caribbean, El Salvador, Brazil, Colombia,
Venezuela, Mexico, Guatemala, and Central America.
Venezuela, Cuba, and Nicaragua. As the situation in
Venezuela has deteriorated, the Trump Administration has
In other action, the House approved H.R. 133 in January
imposed targeted and broader financial sanctions, including
2019, which would promote economic cooperation and
sanctions against the state oil company, the country’s main
exchanges with Mexico; the Senate approved an amended
source of income. In January 2019, the Administration
version in January 2020. The House approved H.R. 2615 in
recognized the head of Venezuela’s National Assembly,
July 2019, which would authorize assistance to Central
Juan Guaidó, as interim president. The Administration also
America to address the root causes of migration; many of
the bill’s provisions were
is providing humanitarian and development assistance for
incorporated into the House-
Venezuelans who have fled to other countries, especially
passed FY2021 NDAA.
Colombia, and for Venezuelans inside Venezuela.
The House and Senate also approved resolutions on several
On Cuba, the Trump Administration has abandoned the
countries in the region. These included S.Res. 35 (April
policy of engagement advanced during the Obama
2019) and S.Res. 447 (January 2020), expressing support
Administration and imposed numerous economic sanctions
for democracy in Bolivia; H.Res. 441 (July 2019) and
on Cuba for its poor human rights record and support for
S.Res. 277 (October 2019), commemorating the 1994
the Maduro government in Venezuela. Sanctions have
bombing of the Argentine-Israeli Mutual Association in
included restrictions on travel and remittances and efforts to
Buenos Aires; H.Res. 754 (March 2020) and S.Res. 525
disrupt oil flows from Venezuela.
(June 2020), expressing support for democracy and human
rights in Nicaragua; and S.Res. 454 (June 2020), calling for
Since political unrest in Nicaragua against the government
the release of Cuban democracy activist Jose Daniel Ferrer.
of President Daniel Ortega began to grow in 2018, the
Trump Administration has employed targeted sanctions
Also see CRS Report R46258, Latin America and the
against several senior officials and other individuals and
Caribbean: U.S. Policy and Issues in the 116th Congress.
entities for human rights abuses or corruption.
Congressional Action in the 116th Congress
Mark P. Sullivan, Specialist in Latin American Affairs
Congress traditionally has played an active role in policy
IF10460
toward Latin America and the Caribbean in terms of both
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Latin America and the Caribbean: U.S. Policy Overview


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https://crsreports.congress.gov | IF10460 · VERSION 17 · UPDATED

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