Updated January 12, 2021
Latin America and the Caribbean: U.S. Policy Overview
U.S. interests in Latin America and the Caribbean are
2020, it projected an 8.1% economic contraction.
diverse and include economic, political, security, and
According to a July 2020 U.N. report, as a result of the
humanitarian concerns. Geographic proximity has ensured
pandemic, 45 million people likely will move into poverty
strong economic linkages between the United States and the
in Latin America and the Caribbean in 2020. Many
region, with the United States a major trading partner and
countries may struggle with protracted recoveries.
source of foreign investment for many countries. Free-trade
agreements (FTAs) have augmented U.S. economic
Trump Administration Policy
relations with 11 countries in the region. The Western
Under the Trump Administration, U.S. relations with Latin
Hemisphere is a large source of U.S. immigration, both
America and the Caribbean generally moved toward a more
legal and illegal; with proximity and economic and security
confrontational approach, especially regarding efforts to
conditions the major factors driving migration trends.
curb irregular immigration from the region, compared with
the approach of past Administrations, which emphasized
Curbing the flow of illicit drugs from Latin America and
partnership. In 2018, the State Department set forth a
the Caribbean has been a key component of U.S. relations
framework for U.S. policy toward the region focused on
with the region for decades. The flow of illicit drugs,
three pillars for engagement—economic growth and
including heroin, methamphetamine, and fentanyl from
prosperity, security, and democratic governance. The
Mexico and cocaine from Colombia, poses risks to U.S.
framework reflected continuity with long-standing regional
public health and safety. Since 2000, Colombia has
U.S. policy priorities, but at times appeared to be at odds
received support through Plan Colombia and its successor
with the Administration’s sometimes antagonistic actions
programs. For over a decade, the United States also has
and statements on immigration, trade, and foreign aid.
sought to forge partnerships with other countries to combat
According to Gallup and Pew Research Center polls,
drug trafficking and related violence and to advance citizen
negative views of U.S. leadership in the region increased
security, including through the Mérida Initiative, begun in
markedly during the Trump Administration.
2007 to support Mexico; the Central America Regional
Security Initiative (CARSI), begun in 2008; and the
Foreign Aid. The Administration’s foreign aid budgets for
Caribbean Basin Security Initiative (CBSI), begun in 2009.
the region would have cut assistance levels by more than a
third in FY2018 and FY2019, 30% in FY2020, and 18% in
Another long-standing component of U.S. policy is support
FY2021. Congress rejected those requests by providing
for democratic governance and the rule of law. U.S. policy
significantly more assistance in appropriations measures. In
efforts have supported democracy promotion, including
2019, the Trump Administration withheld some assistance
support for strengthening civil society and promoting
to the “Northern Triangle” countries of Central America (El
human rights and the rule of law.
Salvador, Guatemala, and Honduras) to compel
governments to curb the flow of migrants to the United
Increasing Chal enges in the Region
States. In response to the COVID-19 pandemic, as of
Over the past several years, the quality of democracy has
August 2020, U.S. agencies allocated $141 million (latest
eroded in numerous countries, along with public
figure provided) in new and previously announced
satisfaction with how democracy is working. Venezuela has
assistance to help the region respond to the pandemic.
descended into a dictatorship under President Nicolás
Maduro, and Cuba and Nicaragua are ruled by authoritarian
Trade. In 2017, President Trump ordered U.S. withdrawal
governments repressing the political opposition. In 2019,
from the proposed Trans-Pacific Partnership (TPP) FTA
many countries in the region experienced social unrest
negotiated in 2015 by 12 Asia-Pacific countries; the TPP
fueled by political factors such as fraudulent elections,
would have increased U.S. economic linkages with Chile,
weak democratic institutions, politicized judicial systems,
Mexico, and Peru, which were parties to the agreement. The
public corruption scandals, high levels of crime and
President strongly criticized the North American Free Trade
violence, and organized crime’s effect on state institutions.
Agreement (NAFTA) with Mexico and Canada, threatened
Economic factors , such as declining or stagnant growth
U.S. withdrawal, and initiated renegotiations . The three
rates and high levels of income inequality and poverty, also
countries agreed in 2018 to a new United States-Mexico-
increased social pressure.
Canada Agreement (USMCA), which entered into force
July 1, 2020; the agreement retained many of NAFTA’s
The Coronavirus Disease 2019 (COVID-19) pandemic is
provisions but included modernizing updates and changes.
having widespread economic, social, and political effects in
the region. At the end of 2020, the region reported over
Mexico, Central America, and Immigration. Relations
507,000 deaths (almost 28% of deaths worldwide),
with Mexico and Central America were tested because of
according to Johns Hopkins University. Before the
inflammatory anti-immigrant rhetoric and immigration
pandemic, the International Monetary Fund projected a
actions that shifted the burdens of interdicting migrants and
regional economic growth rate of 1.6% in 2020; in October
offering asylum to Mexico. In 2017, the Administration
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Latin America and the Caribbean: U.S. Policy Overview
announced it would end Deferred Action for Childhood
The FY2021 appropriations measure (P.L. 116-260) also
Arrivals (DACA), a program begun in 2012 that provides
included the United States-Northern Triangle Enhanced
relief from deportation for certain immigrants who arrived
Engagement Act (the House approved an earlier version,
as children; federal court challenges led to a June 2020
H.R. 2615, in 2019), which requires the State Department
Supreme Court decision vacating the Administration’s
to develop a five-year strategy to advance economic
recession of DACA. In 2018, Mexico’s president agreed to
prosperity, combat corruption, strengthen democratic
allow the United States to return certain non-Mexican
governance, and improve civilian security conditions in El
migrants to Mexico while awaiting U.S. immigration court
Salvador, Guatemala, and Honduras, and the United States-
decisions. Other Administration actions on immigration
Mexico Economic Partnership Act (the House and Senate
also caused concern in the region. In 2017, the
previously approved their versions of the act, H.R. 133,
Administration announced it would terminate Temporary
respectively, in 2019 and 2020), which requires the
Protected Status (TPS) designations for Nicaragua, Haiti, El
Secretary of State to develop a strategy to prioritize and
Salvador, and Honduras; federal court challenges put the
expand educational and professional exchange programs
terminations on hold.
with Mexico.
Unauthorized migration from Central America has
On Venezuela, in December 2019, Congress enacted the
increased in recent years, fueled by difficult socioeconomic
VERDAD Act of 2019 in Division J of P.L. 116-94, which,
and security conditions and poor governance. The
among its provisions, codified several sanctions and
Administration used various policy tools to deter such
authorized humanitarian assistance and support for
migration. In addition to aid cuts and threats of increased
international election observation and democratic civil
U.S. tariffs and taxes on remittances, these tools included
society. The measure incorporated provisions from S. 1025
controversial asylum cooperation agreements with
and three March 2019 House-passed bills: H.R. 854; H.R.
Guatemala, El Salvador, and Honduras to permit the United
920, and H.R. 1477. In July 2019, the House also approved
States to transfer asylum applicants from third countries to
H.R. 549, which would have provided TPS to Venezuelans.
the Northern Triangle countries.
On trade, Congress enacted implementing legislation for the
Venezuela, Cuba, and Nicaragua. As the situation in
USMCA (P.L. 116-113) in January 2020. Before approval,
Venezuela deteriorated, the Trump Administration imposed
the agreement was amended to address congressional
targeted and broader financial sanctions, including
concerns regarding labor, the environment, dispute
sanctions against the state oil company, the country’s main
settlement, and intellectual property rights. In September
source of income. In January 2019, the Administration
2020, Congress approved legislation (P.L. 116-164)
recognized the head of Venezuela’s National Assembly,
extending, through September 2030, certain trade
Juan Guaidó, as interim president. The Administration also
preferences currently provided to eight Caribbean countries.
provided humanitarian and development assistance for
Venezuelans who fled to other countries, especially
The FY2020 National Defense Authorization Act (NDAA;
Colombia, and for Venezuelans inside Venezuela.
P.L. 116-92) included provisions on Venezuela and
On Cuba, the Trump Administration did not pursue the
Guatemala and reporting requirements on Brazil, Honduras,
policy of engagement advanced during the Obama
Central America, and Mexico. The FY2021 NDAA (P.L.
Administration and imposed numerous economic sanctions
116-283), enacted over a presidential veto in January 2021,
on Cuba for its poor human rights record and support for
included provisions, statements, or reporting requirements
the Maduro government in Venezuela. Sanctions included
on Guatemala, drug interdiction in the region, Cuba, the
restrictions on travel and remittances and efforts to disrupt
Caribbean, Brazil, Colombia, Mexico, and Venezuela.
oil flows from Venezuela. On January 11, 2021, the State
Department designated Cuba as a state sponsor of
The House and Senate also approved resolutions on several
international terrorism, alleging Cuba is granting safe
countries in the region. These included S.Res. 35 (April
harbor to terrorists (the previous state sponsor of terrorism
2019) and S.Res. 447 (January 2020), expressing support
designation for Cuba was rescinded in 2015).
for democracy in Bolivia; H.Res. 441 (July 2019) and
S.Res. 277 (October 2019), commemorating the 1994
After political unrest in Nicaragua against the government
bombing of the Argentine-Israeli Mutual Association in
of President Daniel Ortega began to grow in 2018, the
Buenos Aires; H.Res. 754 (March 2020) and S.Res. 525
Trump Administration employed targeted sanctions against
(June 2020), expressing support for democracy and human
several senior officials and other individuals and entities for
rights in Nicaragua; and S.Res. 454 (June 2020), calling for
human rights abuses or corruption.
the release of a Cuban democracy activist.
Congressional Action in the 116th Congress
Also see CRS Report R46258, Latin America and the
Congress traditionally has played an active role in policy
Caribbean: U.S. Policy and Issues in the 116th Congress;
toward Latin America and the Caribbean in terms of both
CRS Report R46514, U.S. Foreign Assistance to Latin
legislation and oversight. The 116th Congress did not
America and the Caribbean: FY2021 Appropriations; and
approve the Trump Administration’s downsized foreign aid
CRS In Focus IF11581, Latin America and the Caribbean:
requests for the region for FY2019 (P.L. 116-6) or FY2020
Impact of COVID-19.
(P.L. 116-94) and instead provided aid amounts roughly
similar to those provided in recent years. For FY2021 (P.L.
Mark P. Sullivan, Specialist in Latin American Affairs
116-260), Congress provided funding for key initiatives and
countries in the region at amounts higher than requested.
IF10460
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Latin America and the Caribbean: U.S. Policy Overview


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https://crsreports.congress.gov | IF10460 · VERSION 18 · UPDATED

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