Updated January 26, 2021
Latin America and the Caribbean: U.S. Policy Overview
U.S. interests in Latin America and the Caribbean are
projected 4.1% recovery in 2021. The strength of recovery
diverse and include economic, political, security, and
will vary across countries, influenced by the availability of
humanitarian concerns. Geographic proximity has ensured
vaccines and medical therapies and the effectiveness of
strong economic linkages between the United States and the
economic policy support. The U.N. estimates that some 45
region, with the United States a major trading partner and
million people in the region moved into poverty in 2020.
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. From FY2018 to FY2021, the
Caribbean Basin Security Initiative (CBSI), begun in 2009.
Administration’s proposed foreign aid budgets for the
region would have cut assistance considerably, but
Another long-standing component of U.S. policy is support
Congress rejected those requests by providing significantly
for democratic governance and the rule of law. U.S. policy
more assistance than requested. In 2019, the Trump
efforts have supported democracy promotion, including
Administration withheld some assistance to the “Northern
support for strengthening civil society and promoting
Triangle” countries of Central America (El Salvador,
human rights and the rule of law.
Guatemala, and Honduras) to compel governments to curb
the flow of migrants to the United States.
Increasing Chal enges in the Region
Over the past several years, the quality of democracy has
Trade. In 2017, President Trump ordered U.S. withdrawal
eroded in numerous countries, along with public
from the proposed Trans-Pacific Partnership (TPP) FTA
satisfaction with how democracy is working. Venezuela
negotiated in 2015 by 12 Asia-Pacific countries; the TPP
Cuba, and Nicaragua are ruled by authoritarian
would have increased U.S. economic linkages with Chile,
governments repressing the political opposition. In 2019,
Mexico, and Peru, which were parties to the agreement. The
many countries in the region experienced social unrest
President strongly criticized the North American Free Trade
fueled by political factors such as fraudulent elections,
Agreement (NAFTA) with Mexico and Canada, threatened
weak democratic institutions, politicized judicial systems,
U.S. withdrawal, and initiated renegotiations. The three
public corruption scandals, and high levels of crime and
countries agreed in 2018 to the United States-Mexico-
violence. Economic factors, such as declining or stagnant
Canada Agreement (USMCA), which entered into force
growth rates and high levels of income inequality and
July 1, 2020; the agreement retained many of NAFTA’s
poverty, also increased social pressure.
provisions but included modernizing updates and changes.
The Coronavirus Disease 2019 (COVID-19) pandemic is
Mexico, Central America, and Immigration. Relations
having widespread economic and social effects in the
with Mexico and Central America were tested because of
region. At the end of 2020, according to Johns Hopkins
inflammatory anti-immigrant rhetoric and immigration
University, the region reported over 507,000 deaths (almost
actions that shifted the burdens of interdicting migrants and
28% of deaths worldwide). Before the pandemic, the
offering asylum to Mexico. In 2017, the Administration
International Monetary Fund (IMF) projected a regional
announced it would end Deferred Action for Childhood
economic growth rate of 1.6% in 2020, but in its January
Arrivals (DACA), a program begun in 2012 that provides
2021 World Economic Outlook Update, the IMF estimated
relief from deportation for certain immigrants who arrived
a 7.4% regional economic contraction in 2020 and a
as children; federal court challenges led to a June 2020
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Latin America and the Caribbean: U.S. Policy Overview
Supreme Court decision vacating the Administration’s
(P.L. 116-94) and instead provided aid amounts roughly
recession of DACA. The Administration also announced in
similar to those provided in recent years. For FY2021 (P.L.
2017 that it would terminate Temporary Protected Status
116-260), Congress provided funding for key initiatives and
designations for Nicaragua, Haiti, El Salvador, and
countries in the region at amounts higher than requested.
Honduras, but federal court challenges put the terminations
on hold. In 2018, Mexico’s president agreed to allow the
In other action, Congress enacted the VERDAD Act of
United States to return certain non-Mexican migrants to
2019 (P.L. 116-94, Division J) on Venezuela in December
Mexico while awaiting U.S. immigration court decisions.
2019, which, among its provisions, codified several
sanctions and authorized humanitarian assistance. The
The Administration used various policy tools to deter
FY2021 appropriations measure (P.L. 116-260) also
increased unauthorized migration from Central America. In
included the United States-Northern Triangle Enhanced
addition to aid cuts and threats of increased U.S. tariffs and
Engagement Act, requiring the State Department to develop
taxes on remittances, these tools included controversial
a five-year strategy to advance economic prosperity,
asylum cooperation agreements with Guatemala, El
combat corruption, strengthen democratic governance, and
Salvador, and Honduras to permit the United States to
improve civilian security conditions in El Salvador,
transfer asylum applicants from third countries to the
Guatemala, and Honduras, and the United States-Mexico
Northern Triangle countries.
Economic Partnership Act, requiring the Secretary of State
Venezuela, Cuba, and Nicaragua. As the situation in
to develop a strategy to prioritize and expand educational
Venezuela deteriorated, the Trump Administration imposed
and professional exchange programs with Mexico.
numerous broader financial sanctions, including sanctions
against the state oil company, the country’s main source of
On trade, Congress enacted implementing legislation for the
income. In January 2019, the Administration recognized the
USMCA (P.L. 116-113) in January 2020. Before approval,
head of Venezuela’s National Assembly, Juan Guaidó, as
the agreement was amended to address congressional
interim president. The Administration also provided
concerns regarding labor, the environment, dispute
humanitarian and development assistance for Venezuelans
settlement, and intellectual property rights. In September
who fled to other countries, especially Colombia, and for
2020, Congress approved legislation (P.L. 116-164)
Venezuelans inside Venezuela.
extending, through September 2030, certain trade
preferences currently provided to eight Caribbean countries.
On Cuba, the Trump Administration reversed the
engagement policy advanced during the Obama
The FY2020 National Defense Authorization Act (NDAA;
Administration and imposed numerous economic sanctions
P.L. 116-92) included provisions on Venezuela and
on Cuba for its poor human rights record and support for
Guatemala and reporting requirements on Brazil, Honduras,
the Maduro government in Venezuela. In January 2021, the
Central America, and Mexico. The FY2021 NDAA (P.L.
Secretary of State designated the Cuban government as a
116-283) included provisions or reporting requirements on
state sponsor of international terrorism.
Guatemala, drug interdiction in the region, Cuba, the
After political unrest in Nicaragua against the government
Caribbean, Brazil, Colombia, Mexico, and Venezuela.
of President Daniel Ortega began to grow in 2018, the
Congress also approved the Organization of American
Trump Administration employed targeted sanctions against
States Legislative Engagement Act of 2020 (P.L. 116-343)
several senior officials and other individuals and entities for
in late 2020 to strengthen the participation of elected
human rights abuses or corruption.
national legislators in the activities of the Organization of
American States (OAS) and reaffirm U.S. support for OAS
Biden Administration
human rights and anti-corruption initiatives.
Most observers expect the Biden Administration to take a
very different approach in U.S. policy toward the region.
The House and Senate also approved resolutions on a range
During the election campaign, Biden vowed to rebuild
of issues. These resolutions included S.Res. 35 (April 2019)
strong hemispheric ties based on respect for democracy,
and S.Res. 447 (January 2020), expressing support for
human rights, and the rule of law. He promised changes to
democracy in Bolivia; H.Res. 441 (July 2019) and S.Res.
the Trump Administration’s immigration policies and a
277 (October 2019), commemorating the 1994 bombing of
strategy to address poverty and insecurity in Central
the Argentine-Israeli Mutual Association; H.Res. 754
America, factors that have driven migration from the
(March 2020) and S.Res. 525 (June 2020), expressing
region. On Venezuela, Biden said the overriding policy
support for democracy and human rights in Nicaragua; and
goals would be pressing for a democratic outcome through
S.Res. 454 (June 2020), calling for the release of a Cuban
free and fair elections and helping Venezuelans rebuild
democracy activist.
their country. On Cuba, Biden said he would reverse Trump
Also see CRS Report R46258, Latin America and the
Administration policies, maintaining that they inflicted
Caribbean: U.S. Policy and Issues in the 116th Congress;
harm on the Cuban people without advancing human rights.
CRS Report R46514, U.S. Foreign Assistance to Latin
Congressional Action in the 116
America and the Caribbean: FY2021 Appropriations; and
th Congress
CRS In Focus IF11581, Latin America and the Caribbean:
Congress traditionally has played an active role in policy
Impact of COVID-19.
toward Latin America and the Caribbean in terms of both
legislation and oversight. The 116th Congress did not
Mark P. Sullivan, Specialist in Latin American Affairs
approve the Trump Administration’s downsized foreign aid
requests for the region for FY2019 (P.L. 116-6) or FY2020
IF10460
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Latin America and the Caribbean: U.S. Policy Overview


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https://crsreports.congress.gov | IF10460 · VERSION 19 · UPDATED

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