Latin America and the Caribbean: U.S. Policy and Key Issues for Congress in 2012

Latin America and the Caribbean: U.S. Policy and Key Issues for Congress in Mark P. Sullivan, Coordinator Specialist in Latin American Affairs June S. Beittel Analyst in Latin American Affairs Anne Leland Information Research Specialist Peter J. Meyer Analyst in Latin American Affairs Clare Ribando Seelke Specialist in Latin American Affairs Maureen Taft-Morales Specialist in Latin American Affairs August 28, CRS Report for Congress Prepared for Members and Committees of Congress Congressional Research Service 7-5700 www.crs.gov R42360

Summary Geographic proximity has ensured strong linkages between the United States and the Latin American and Caribbean region, with diverse U.S. interests, including economic, political and security concerns. Current U.S. policy toward the region is focused on four priorities: promoting economic and social opportunity; ensuring citizen security; strengthening effective democratic institutions; and securing a clean energy future. There has been substantial continuity in U.S. policy toward the region under the Obama Administration, which has pursued some of the same basic policy approaches as the Bush Administration. Nevertheless, the Obama Administration has made several significant policy changes, including an overall emphasis on partnership and shared responsibility. U.S. policy toward the region must also contend with a Latin America that is becoming increasingly independent from the United States. Strong economic growth has increased Latin America s confidence in its ability to solve its own problems. The region has also diversified its economic and diplomatic ties with countries outside the region. Over the past few years, several Latin American regional organization organizations have been established that do not include the United States. Congress plays an active role in policy toward Latin America and the Caribbean. Legislative and oversight attention to the region during the 112 th Congress has focused on the continued increase in drug trafficking-related violence in Mexico and U.S. assistance to Mexico under the Mérida Initiative; efforts to help Central American and Caribbean countries contend with drug trafficking and violent crime; as well as continued counternarcotics and security support to Colombia. The January 2010 earthquake that devastated Port-au-Prince, Haiti, continues to focus congressional attention on the enormous task of disaster recovery and reconstruction. As in past years, U.S. sanctions on Cuba, particularly restrictions on travel and remittances, has remained a contentious issue in the debate over how to support change in one of the world s last remaining communist nations. Another area of congressional oversight has been concern about the deterioration of democracy in several Latin American countries, especially Nicaragua and Venezuela. Congressional concern has also increased about Iran s growing relations in the region, especially with Venezuela, and about the activities of Hezbollah. This report provides an overview of U.S. policy toward Latin America and the Caribbean, including the Obama Administration s priorities for U.S. policy and a brief comparison of policies under the Obama and Bush Administrations. It then examines congressional interest in Latin America, first providing an overview, and then looking at selected countries and regional issues and identifying key policy issues facing Congress in. The final section of the report analyzes several key events in the region in : the Pope s trip to Cuba in March, the sixth Summit of the Americas in April, Mexico s elections in July, and Venezuela s upcoming elections in October. An appendix provides a listing of hearings in the 112 th Congress focused on Latin America. For additional information and access to over 30 CRS reports on the region, see the CRS Issues in Focus webpage on Latin America and the Caribbean. Congressional Research Service

Contents Latin America and the Caribbean: Overview of U.S. Policy... 1 Four Priorities for the Region... 1 Continuity and Change in U.S. Policy... 4 Latin America s Increasing Independence... 5 Congressional Interest in Latin America and the Caribbean... 6 Overview... 6 Brazil... 8 Central America and the Caribbean: Citizen Security... 9 Colombia... 10 Cuba... 11 Haiti... 12 Mexico... 13 Venezuela... 14 Iran s Growing Relations in Latin America... 15 Organization of American States... 16 Key Events in... 16 March 26-28, : Pope Benedict XVI Visit to Cuba... 16 April 14-15, : Summit of the Americas... 18 July 1, : Mexican Elections... 19 October 7, : Venezuelan Election... 20 Figures Figure 1. Latin America and the Caribbean... 2 Tables Table A-1. Congressional Hearings in the 112 th Congress on Latin America and the Caribbean... 22 Appendixes Appendix. Hearings in the 112 th Congress... 22 Contacts Author Contact Information... 25 Congressional Research Service

Latin America and the Caribbean: Overview of U.S. Policy U.S. interests in the Western Hemisphere 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 countries. Free trade agreements (FTAs) have augmented economic relations with many countries in the region, including Mexico, Chile, Peru, Central America, and the Dominican Republic. Latin American nations, primarily Mexico and Venezuela, supply the United States with almost one-third of its imported crude oil. The Western Hemisphere is also the largest source of U.S. immigration, both legal and illegal, with geographic proximity and economic conditions being 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 almost two decades, and in recent years has included close security cooperation with Mexico as that country struggles to combat drug trafficking and related violence. With the exception of Cuba, the region has made enormous strides in terms of democratic political development over the past two decades, but the rise of undemocratic practices in several countries, especially Venezuela, has been a U.S. concern. The United States has often taken the lead in responding to natural disasters in the region, as was demonstrated once again in the aftermath of Haiti s catastrophic 2010 earthquake. Four Priorities for the Region The Obama Administration has set forth a broad framework for U.S. policy toward Latin America and the Caribbean centered on four pillars or priorities: promoting economic and social opportunity; ensuring citizen security; strengthening effective institutions of democratic governance; and securing a clean energy future. According to former Assistant Secretary of State for Western Hemisphere Affairs Arturo Valenzuela, these policy priorities are based on the premise that the United States has a vital interest in contributing to the building of stable, prosperous, and democratic nations in the hemisphere that can play an important role in dealing with global challenges. 1 The Obama Administration has emphasized that its policy approach toward the region is one that emphasizes partnership and shared responsibility, with policy conducted on the basis of mutual respect through engagement and dialogue. 2 1 U.S. Department of State, Arturo Valenzuela, Assistant Secretary of State, Bureau of Western Hemisphere Affairs, U.S.-Latin American Relations: A Look Ahead, January 6,. 2 Ibid; and U.S. Department of State, Arturo Valenzuela, Assistant Secretary of State, Bureau of Western Hemisphere Affairs, U.S. Foreign Policy in the Obama Era, October 9, 2010. The same general policy approach has continued under Acting Assistant Secretary of State for Western Hemisphere Affairs Secretary Roberta Jacobson, who was also nominated to the position by President Obama and is awaiting Senate confirmation. Congressional Research Service 1

Figure 1. Latin America and the Caribbean Source: Map Resources, adapted by CRS. Expanding economic opportunity focuses on one of the key problems facing Latin America: lingering poverty and inequality. At the end of 2010, some 177 million people in Latin America were living in poverty 31.4% of the region s population while 70 million people or 12.3% lived in extreme poverty or indigence. These statistics reflect a significant improvement from Congressional Research Service 2

2002 when 44% of the region s population lived in poverty. 3 Moreover, the 2010 statistics showed an improvement from 2009 when the region faced an uptick in poverty because of the global financial crisis. In addition to traditional U.S. development assistance programs focusing on health and education, expanding economic opportunity also has included programs such as: the Pathways to Prosperity Initiative launched in 2008, designed to help countries learn from each other s experiences through the exchange of best practices; and support for the Organization of American State s Inter-American Social Protection Network (IASPN), launched in 2009 to facilitate an exchange of information on policies, experiences, programs, and best practices in order to reduce social disparities and inequality and reduce extreme poverty. 4 Citizen safety is one of the most important concerns among Latin Americans, with high levels of crime and violence (often associated with drug trafficking) a significant problem in many countries. 5 The Central America-Mexico corridor is the route for 95% of South American cocaine entering the United States, while murder rates in several Central American and Caribbean countries are among the highest in the world and drug trafficking-related violence in Mexico has risen to unprecedented levels. U.S. support in this area includes a series of partnerships to help countries combat drug trafficking and organized crime such as the Mérida Initiative for Mexico, the Central American Regional Security Initiative (CARSI), and the Caribbean Basin Security Initiative (CBSI). The Colombia Strategic Development Initiative (CSDI) is designed to support Colombia s strategy in remote, but strategically important, areas by increasing the presence of civilian state economic and social development institutions. Over the past three decades, Latin America has made enormous strides in democratic political development, not only in terms of regular free and fair elections, but in terms of an improvement in respect for political rights and civil liberties. Despite this improvement, many countries in the region still face considerable challenges. Improving and strengthening democratic governance includes support to improve the capacity of state institutions to address citizens needs through responsive legislative, judicial, law enforcement and penal institutions. It includes defending press freedoms and democratic rights, such as free and fair elections and the protection of minority rights. Most significantly, according to former Assistant Secretary Valenzuela, because democratic institutions are absolutely critical and because of the history of military and other coups in the region, hemispheric nations need to stand together collectively to ensure that elected democratic institutions are not interrupted. 6 Many countries in Latin America and the Caribbean are vulnerable to climate change, which can have a negative effect on sustainable development and economic prosperity. Leaders in the region have committed to working together to address the challenges of climate change and to strengthen energy security. The Obama Administration advanced an Energy and Climate Partnership of the Americas (ECPA) in 2009 through which nations have committed themselves to strengthen inter- American collaboration on clean energy. ECPA includes voluntary bilateral and multi-country initiatives to promote clean energy, advance energy security, and reduce greenhouse gas 3 U.N. Economic Commission for Latin America and the Caribbean, Social Panorama of Latin America, Briefing paper, November 29,. 4 U.S. Department of State, Pathways to Prosperity in the Americas, Fact Sheet, April 8,. See the website of the IASPN at http://www.socialprotectionet.org/english/index.html. 5 Corporación Latinobarómetro, 2010 Report, December 2010. 6 U.S. Department of State, Arturo Valenzuela, Assistant Secretary of State, Bureau of Western Hemisphere Affairs, First Diplomacy Briefing Series Meeting: Issues and Challenges of U.S. Relations with Latin America, December 11, 2009. Congressional Research Service 3

emissions. Some of the initiatives involve international and regional organizations and the private sector. 7 Continuity and Change in U.S. Policy Substantial continuity characterizes U.S. policy toward the region under the Obama Administration, which has pursued some of the same basic policy approaches as the Bush Administration. Like the Bush Administration, the Obama Administration is providing significant anti-drug and security support to Colombia and significant support to Mexico and Central America to combat drug trafficking and organized crime through the Mérida Initiative and CARSI. In anticipation of a potential balloon effect of drug trafficking shifting to the Caribbean region, the Obama Administration also established the CBSI, the origin of which dates back to the Bush Administration. Implementing bills for FTAs with Colombia and Panama that were negotiated under the Bush Administration were officially introduced in early October after extensive work by the Administration to resolve outstanding congressional concerns related to both agreements, which were then approved by Congress. Just as the Bush Administration had, the Obama Administration has expressed support for comprehensive immigration reform, an especially important issue in U.S. relations with Mexico and Central America. In terms of Venezuela, it can be argued that the Obama Administration is following a policy similar to the latter years of the Bush Administration by attempting to avoid any unnecessary public spats with President Hugo Chávez, but at the same time speaking out with regard to concerns about undemocratic actions of the Venezuelan government as well as drug trafficking and terrorism concerns. Despite the continuity, the Obama Administration has made a number of changes that differentiate its policy from that of the Bush Administration. The Obama Administration has put an emphasis on partnership and multilateralism. It has also implemented several changes in Cuba policy by lifting restrictions on family travel and remittances, restarting semi-annual migration talks, and easing restrictions on other types of purposeful travel and remittances. At the same time, the Administration has continued to speak out about the poor human rights situation in Cuba and has repeatedly called for the release of a U.S. government subcontractor, Alan Gross, imprisoned since late 2009. The Administration has also increased development assistance to the region compared to that provided under the Bush Administration, although overall budget cutbacks could end up reducing both development and other types of foreign assistance to the region. In some areas where there has been continuity in U.S. policy toward Latin America, there nevertheless has been a change of emphasis. For example, assistance to Mexico is shifting toward more support for rule of law programs (including police, judicial, and penal reform) and programs to help communities withstand the pressures of crime and violence. Another example is Colombia, where assistance has become more evenly balanced between enhancing rule of law, human rights and economic development programs on the one hand, and continuing efforts on security and drug interdiction on the other. Moreover, U.S. assistance levels to Colombia have begun to decline as the country is increasingly taking over responsibility for programs once funded by the United States. 7 White House, Energy and Climate Partnership of the Americas, March 21,. Congressional Research Service 4

Assessments of U.S. policy toward Latin America during the Obama Administration offer a mixed picture. Some policy analysts have lauded the Administration for its emphasis on partnership and multilateralism; for deepening security cooperation with Mexico, Central America, and the Caribbean; for broadening relations with Colombia beyond counternarcotics and counterterrorism issues; and for a strong U.S. response to the earthquake in Haiti. On the other hand, some have urged the Administration to articulate a strategic vision and approach toward Latin America with a clearer explanation of why the region matters to the United States. 8 Other critics of the Administration call for U.S. policy toward Latin America to be reshaped to support Mexico more strongly in its efforts against organized crime and to provide more sustained focus on Venezuela s conduct and activities. 9 Some policy analysts maintain that the growing polarization of U.S. domestic politics is an additional impediment to productive engagement with the region. 10 Latin America s Increasing Independence U.S. policy toward the Latin American region needs to be considered in the context of the region s increasing independence from the United States. The region has diversified its economic and diplomatic ties with countries outside the region China, for example, has become a major trading partner for many countries in the region. Strong regional economic growth rates 6% in 2010 and 4.3% in 11 also has increased confidence in Latin America s ability to solve its own problems, and has lessened the region s dependency on the United States. The region s growing ideological diversity in recent years has also been a factor in the region s increased independence from the United States, as has the rise of Brazil as a regional and global power. Several Latin America regional integration organizations have been established in the past few years, a reflection of both the region s increasing independence and its growing internal cooperation. In December, 33 hemispheric nations excluding the United States and Canada met in Caracas to establish the Community of Latin American and Caribbean States (CELAC) to boost regional integration and cooperation. While some observers have concerns that CELAC could be a forum for countries that have tense or difficult relations with the United States, others point out that strong U.S. partners in the region are also members. Some observers have predicted that CELAC could diminish the role of the Organization of American States (OAS), while others maintain that CELAC does not have a permanent staff or secretariat that could compete with the OAS. The next CELAC summit will not take place until January 2013. The organization reportedly will work in the areas of energy, science and technology, infrastructure, finance, and social development. Some observers contend that CELEC s establishment reflects declining U.S. influence in Latin America, but the United States still remains very much engaged in the region bilaterally and 8 Shifting the Balance, Obama and the Americas, ed. Abraham F. Lowenthal, Theodore J. Piccone, and Lawrence Whitehead (Washington, D.C.: Brookings Institution Press, ). 9 Roger F. Noriega, Latin American Action Agenda for the New Congress, American Enterprise Institute, January ; Testimony by Ambassador Jaime Daremblum, Hudson Institute, Senate Foreign Relations Committee, December 1, 2010. 10 Testimony by Dr. Cynthia J. Arnson, Woodrow Wilson International Center for Scholars, Senate Foreign Relations Committee, December 1, 2010. 11 U.N. Economic Commission for Latin America and the Caribbean, Macroeconomic Report on Latin America and the Caribbean, June, p. 44. Congressional Research Service 5

multilaterally through the OAS and its numerous affiliated organizations. In addition, the Summit of the Americas process remains an important mechanism for the United States to engage with Latin American nations at the highest level. While the April summit in Colombia displayed U.S. divergence from the region in terms of policy toward Cuba and a reconsideration of the region s anti-drug strategy, the meeting also included a variety of initiatives to deepen hemispheric integration and addresses key hemispheric challenges (also see April 14-15, : Summit of the Americas below). Other regional organizations that have been established in recent years include the 12-member Union of South American Nations (UNASUR), established in 2008 (largely because of Brazil s influence) to promote political coordination in South America. It has served as a forum for dispute resolution. For example, the organization played a role in defusing tensions between Colombia and Venezuela in 2008, and helped resolve political conflicts in Bolivia in 2008 and Ecuador in 2010. Some analysts, however, have raised questions about UNASUR s overall efficacy, financial support, and ability to develop specialized capabilities and programs. 12 Another regional grouping, the Venezuelan-led Bolivarian Alliance of the Americas (ALBA, originally established as the Bolivarian Alternative for the Americas), was launched by President Hugo Chávez in 2004 with the goals of promoting regional integration and socioeconomic reform and alleviating poverty. In addition to Venezuela, this eight-member group includes Bolivia, Cuba, Ecuador, and Nicaragua as well as the Caribbean island nations of Dominica, Antigua and Barbuda, and St. Vincent and the Grenadines. Some observers maintain that ALBA has lost its initial energy. Director of National Intelligence James Clapper maintained in recent congressional testimony that ALBA was created in part to spread Chávez s influence in the region but is only muddling through. 13 Congressional Interest in Latin America and the Caribbean Overview As in the previous Congress, legislative and oversight attention to Latin America and the Caribbean during the 112 th Congress has focused on the continued increase in drug traffickingrelated violence in Mexico and U.S. assistance to Mexico under the Mérida Initiative; efforts to help Central American and Caribbean countries contend with drug trafficking and violent crime; as well as continued counternarcotics and security support to Colombia, which still faces threats from armed actors. The earthquake that devastated Port-au-Prince in January 2010, combined with a cholera outbreak in the fall of 2010, has continued to focus congressional attention on the enormous task of disaster recovery and reconstruction in Haiti. As in past years, debate over U.S. sanctions on Cuba, particularly restrictions on travel and remittances, has remained a contentious issue with ongoing congressional debate over how to support change in one of the world s last 12 Michael Shifter, The Shifting Landscape of Latin American Regionalism, Current History, February ; Testimony of James R. Clapper, Director of National Intelligence, before the Senate Select Committee on Intelligence, January 31,, Worldwide Threat Assessment of the U.S. Intelligence Community, available at http://intelligence.senate.gov/120131/clapper.pdf 13 Ibid. Congressional Research Service 6

remaining communist nations. Latin American nations, especially Mexico, which remains the leading source country of both legal permanent residents and unauthorized immigrants in the United States, have been disappointed by what they see as a lack of effort in Congress on comprehensive immigration reform. The U.S. government has spent billions of dollars in anti-drug assistance programs since the mid- 1970s aimed at reducing the flow of Latin American-sourced illicit drugs (largely from the Andean region) to the United States. Most of these programs have emphasized supply reduction tools, particularly drug crop eradication and interdiction of illicit narcotics. Successes in one country or sub-region have often led traffickers to alter their cultivation patterns, production techniques, and trafficking routes and methods in order to avoid detection. Congress has influenced U.S. drug control policy in Latin America by appropriating certain types and levels of funding for counterdrug assistance programs and conditioning the provision of antidrug funding on the basis of human rights and other reporting requirements. Congress has also sought to ensure that counterdrug programs are implemented in tandem with judicial reform, anti-corruption, and human rights programs. In the 112 th Congress, numerous oversight hearings have been held evaluating drug assistance programs especially the Mérida Initiative in Mexico, CARSI in Central America, and CBSI in the Caribbean and related domestic initiatives and border security efforts. 14 Another focus of congressional oversight has been the deterioration of democracy in several Latin American countries, including Nicaragua, where Daniel Ortega was re-elected in November in elections widely seen as seriously flawed, and Venezuela, where there have been concerns for several years about the deterioration of democratic institutions and threats to freedom of speech and press. Despite significant improvement in political rights and civil liberties in the region over the past three decades, in a number of countries weaknesses remain in the state s ability to deliver public services, ensure accountability and transparency, and advance the rule of law. The executive s abuse of power in several countries in the region has led to a setback in liberal democratic practices. The quality of democracy in Latin America is also being negatively affected by organized crime and violence; some governments have been unable to stem the wave of violence and to protect citizens, journalists, and elected officials. With regard to energy, issues of congressional concern include declines in production and U.S. dependence on oil from the region. Latin American and Caribbean nations supplied the United States with almost one-third of U.S. crude oil imports in 2010 Mexico and Venezuela accounted for 12.5% and 9.9%, respectively. 15 There have been concerns in recent years, however, about Mexico s declining oil production; the country s proven oil reserves are declining because of insufficient funds available for maintenance and exploration. Venezuela has vast proven oil reserves, the second largest in the world, but its production also has been in decline in recent years because of maintenance issues, natural decline of older fields, and compliance with Organization of Petroleum Exporting Countries (OPEC) production cuts. Venezuela remains a major supplier of crude oil to the United States (the fifth largest), but its U.S.-destined oil exports have declined as the country has diversified its trading partners and supplied significant amounts of oil at preferential prices to Caribbean and Central American nations, especially Cuba. 16 14 For additional information, see P.L. 112-127CRS Report R41215, Latin America and the Caribbean: Illicit Drug Trafficking and U.S. Counterdrug Programs, coordinated by Clare Ribando Seelke. 15 Derived from oil important statistics provided by the U.S. Energy Administration. 16 U.S. Energy Information Administration, Country Analysis Briefs: Venezuela, March. Congressional Research Service 7

Members of Congress have expressed concern about the continued U.S. dependence on imported oil from Venezuela, although observers point out that the two countries are mutually dependent on the oil sector since a large portion of Venezuela s oil is refined in the United States. Another pending issue for Congress is Cuba s development of its offshore oil sector and the potential impact of an oil spill on the United States. A foreign consortium led by the Spanish oil company Repsol will soon begin exploratory drilling off Cuba s north coast. 17 With regard to trade, the 112 th Congress conducted numerous hearings during the first session on the pending FTAs with Colombia and Panama, with implementing legislation for both agreements introduced and approved in October. Congressional attention is now likely to turn to the implementation of those agreements. Oversight on Colombia, which was the more controversial of the two agreements, will focus on whether the country is meeting its commitments under an Action Plan Related to Labor Rights. Progress on U.S. negotiations with eight Pacific rim countries for a Trans-Pacific Partnership (TPP) Agreement have been of congressional interest Chile and Peru are among the eight TPP countries that are negotiating the trade agreement with the United States, while Mexico was invited to join the TPP in June. 18 Other trade issues related to Latin America have included consideration of potential changes to U.S. cotton subsidies that would allow the United States to avoid retaliatory trade measures imposed by Brazil, and the safety of Mexican trucks operating in the United States. U.S. attention to terrorism in Latin America intensified in the aftermath of the September 2001 terrorist attacks on New York and Washington, with an increase in bilateral and regional cooperation. 19 The State Department maintains that terrorism in the region today is largely perpetrated by terrorist organizations in Colombia and by the remnants of radical leftist Andean groups, while the threat of a transnational terrorist attack remains low for most countries in the hemisphere. Cuba has been on the State Department s list of state sponsors of terrorism since 1982, and both Cuba and Venezuela are on the State Department s annual list of countries determined to be not cooperating fully with U.S. antiterrorism efforts. There has also been increased congressional concern about Iran s growing relations with several countries in the region, especially Venezuela, and related concerns about the activities of Hezbollah in the region. Both Hezbollah and Iran have been implicated in the bombing of two Jewish targets in Buenos Aires in the early 1990s. The State Department maintains that there are no known operational cells of either Al Qaeda or Hezbollah-related groups in the hemisphere, but it has concerns about the fundraising activities of these groups in the region. Brazil U.S. policy toward Brazil is in flux as policymakers seek to adjust to Brazil s role as an emerging center of influence. Brazil s economy is now the sixth largest in the world, and the country has utilized its economic clout to consolidate its power in South America and exert more influence on global matters. Consequently, U.S.-Brazilian engagement increasingly involves regional and international issues in addition to bilateral concerns. The changing relationship has occasionally 17 For additional information, see CRS Report R41522, Cuba s Offshore Oil Development: Background and U.S. Policy Considerations, by Mark P. Sullivan. 18 For additional information on the TPP, see CRS Report R40502, The Trans-Pacific Partnership Agreement, by Ian F. Fergusson and Bruce Vaughn; and CRS Report R42344, Trans-Pacific Partnership (TPP) Countries: Comparative Trade and Economic Analysis, by Brock R. Williams. 19 For additional information, see CRS Report RS21049, Latin America: Terrorism Issues, by Mark P. Sullivan. Congressional Research Service 8

frustrated U.S. officials as the two multicultural democracies shared values have not always translated into common approaches to foreign policy. In, for example, the United States and Brazil have differed over the best way to address the situation in Syria. Although some U.S. policymakers have expressed concerns about Brazil s foreign policy, they have continued to pursue bilateral cooperation on many issues. Collaboration on energy issues, especially biofuels development, has been a major focus of bilateral engagement, and the decision by Congress to allow a 54-cent-per-gallon duty on imported ethanol to expire at the end of removed a major barrier to further cooperation. U.S. policymakers have also sought to boost trade relations as Brazil s fast growing market is a potential destination for increased U.S. exports. Key Policy Issues in : Congress has maintained interest in energy and trade relations with Brazil in. For example, a bill introduced in April, H.R. 4621, would authorize negotiations with Brazil to obtain open and reciprocal market access for trade in ethanol products. Congress is also evaluating potential changes to the U.S. cotton program as part of the farm bill, which could ensure U.S. compliance with World Trade Organization (WTO) rulings, and allow the United States to reach a permanent agreement with Brazil to avoid WTO-sanctioned retaliatory measures. Brazil s foreign policy, including its relations with Iran, has been an additional subject of congressional interest in. For additional information, see CRS Report RL33456, Brazil-U.S. Relations, by Peter J. Meyer; and CRS Report RL32571, Brazil s WTO Case Against the U.S. Cotton Program, by Randy Schnepf. Central America and the Caribbean: Citizen Security In recent years, U.S. policymakers have grown increasingly concerned about security conditions in Central America and the Caribbean. Although conditions vary by country, many nations in the region have struggled for years to deal with rising levels of crime and violence, which analysts have linked to factors such as widespread social exclusion, security force corruption, and impunity for the perpetrators of crime. These problems have been compounded by traffickers seeking to exploit the region s institutional weaknesses to transport illicit narcotics from producers in South America to consumer markets in the United States and Europe. The U.S. government has sought to counter these trends through the Central America Regional Security Initiative (CARSI) and the Caribbean Basin Security Initiative (CBSI). Both initiatives provide partner nations with equipment, training, and technical assistance to support immediate law enforcement and interdiction operations. They also fund efforts to strengthen the long-term capacities of governmental institutions to address security challenges and the underlying conditions that contribute to them. Congress has appropriated an estimated $496.5 million for CARSI since FY2008 and an estimated $203 million for CBSI since FY2010. Key Policy Issues in : Congress is currently considering annual foreign aid appropriations bills to provide funding for CARSI and CBSI, and has continued to engage in oversight of the initiatives in. The report to the House Appropriations Committee s version of the FY2013 funding measure, H.R. 5857 (H.Rept. 112-494), recommends $117.5 million for CARSI and at least $56.2 million for CBSI. The report to the Senate Appropriations Committee s version of the bill, S. 3241 (S.Rept. 112-172), does not include total funding figures but notes the committee s continued support for both initiatives. The President requested $107.5 million for CARSI and $59 million for CBSI for FY2013. Many Members of Congress remain concerned about human rights abuses in the region, and both bills would maintain human rights conditions on aid to Honduran security forces similar to those enacted for FY. Additional issues of congressional interest in Congressional Research Service 9

have included the integration of CARSI and CBSI with similar U.S. security initiatives in Colombia and Mexico, attempts to improve regional cooperation, and efforts by leaders in the region to address corruption, impunity, and other rule of law challenges. For additional information, see CRS Report R41731, Central America Regional Security Initiative: Background and Policy Issues for Congress, by Peter J. Meyer and Clare Ribando Seelke; CRS Report RL34112, Gangs in Central America, by Clare Ribando Seelke; and CRS Report R41215, Latin America and the Caribbean: Illicit Drug Trafficking and U.S. Counterdrug Programs, coordinated by Clare Ribando Seelke. Colombia A key U.S. ally in the region, Colombia has endured internal armed conflict for nearly half a century. In recent years, the Colombian government, in close cooperation with the United States through a strategy known as Plan Colombia, has reestablished government control over much of its territory, reduced poverty, and made significant headway in combating drug trafficking and terrorist activities. Colombia s achievements in improved citizen security and economic stability are notable, but some observers continue to raise concerns about human rights conditions in the country. Between FY2000-FY, Congress provided Colombia more than $8 billion in assistance. This support, provided through U.S. State Department and Department of Defense accounts, is gradually being reduced as programs are being turned over to Colombian control. Under current President Juan Manuel Santos, Colombia has been strengthening its trade relations with the United States and others, and improving its relationships with neighboring countries, including Venezuela and Ecuador. In October, Congress approved implementing legislation for the U.S.-Colombia Free Trade Agreement (CFTA) with bipartisan support, despite continuing concerns about allegations of anti-trade union violence and related human rights and labor issues. In April, when Colombia hosted the Summit of the Americas in Cartagena (see Key Events in below), the Obama Administration announced the CFTA would enter into force on May 15,. Following its May entry into force, the CFTA eliminated duties on 80% of U.S. exports to Colombia. Most remaining tariffs and barriers to bilateral trade will be eliminated within 10 years of implementation. On August 27,, President Santos announced that the government had begun exploratory peace talks with the country s leftist guerrillas. Key Policy Issues in : Since entry into force of the CFTA, some Members of Congress have continued to monitor Colombia s compliance with the Action Plan Related to Labor Rights announced prior to the free trade agreement s passage. Congress will also consider U.S. assistance to Colombia with its ongoing counternarcotics, counterterrorism, judicial reform, economic development, and human rights components. In House and Senate foreign aid appropriations measures for FY2013, there appears to be broad support for the Obama Administration s FY2013 request of $332 million for Colombian foreign assistance. Members of Congress have indicated an interest in two legislative initiatives inside Colombia that were backed by the Santos Administration. They are the groundbreaking Victims Law which aims to provide reparations to thousands of victims of the ongoing armed conflict and restore land to those who had it taken illegally, and an amendment to the Colombian constitution that provides a legal framework for an eventual peace process. Both laws, which were approved by the Colombian Congress, could influence future U.S. assistance. The U.S. Agency for International Development has already announced $50 million of institutional support over a three-year period for programs established by the Victims Law. Congressional Research Service 10

For additional information, see CRS Report RL32250, Colombia: Background, U.S. Relations, and Congressional Interest, by June S. Beittel; CRS Report RL34470, The U.S.-Colombia Free Trade Agreement: Background and Issues, by M. Angeles Villarreal; and CRS Report RL34759, U.S.-Colombia Free Trade Agreement: Labor Issues, by Mary Jane Bolle. Cuba Since the early 1960s, U.S. policy has consisted largely of isolating Cuba through a variety of strong economic sanctions. A second policy component has consisted of support measures for the Cuban people, including U.S.-sponsored broadcasting and support for democracy and human rights activists. In light of Fidel Castro s stepping down from power in 2006 because of poor health and the economic goals of the Raúl Castro government that could significantly alter Cuba s state economic model, a number of observers have called for a new approach aimed at influencing the Cuban government and society through increased contact and engagement. Others maintain that despite Cuba s release of many political prisoners, the human rights situation remains poor with thousands of short-term detentions. They contend that easing U.S. sanctions without concrete political reform would facilitate the survival of the communist regime. The Obama Administration has relaxed various restrictions on travel and remittances to Cuba, most significantly for Cuban families, but the Administration has continued to express concern about the poor human rights situation. Moreover, a key impediment to improved relations since late 2009 has been Cuba s imprisonment of U.S. Agency for International Development (USAID) subcontractor Alan Gross, who was working on USAID-funded democracy projects in Cuba. (Also see March 26-28, : Pope Benedict XVI Visit to Cuba below.) Key Policy Issues in : Strong congressional interest on Cuba has continued in. Policy issues of sustained congressional interest include the country s human rights situation; the status of Cuba s offshore oil development and oil prevention and response capability (drilling began in early ); funding for U.S. government democracy and human rights projects; funding for Radio and TV Martí broadcasting to Cuba; and the continued imprisonment of Alan Gross. In terms of legislative action, S.Res. 366, approved in February, condemns the Cuban government for the death of democracy activist Wilman Villar Mendoza after a hunger strike, while S.Res. 525, approved in July, honors prominent Cuban dissident Oswaldo Payá, killed in a car accident, and calls on the Cuban government to allow an impartial, third-party investigation into the circumstances of the accident. With regard to Cuba democracy funding, the Senate Appropriations Committee version of the FY2013 foreign aid appropriations measure, S. 3241, would provide $15 million as the Administration requested, while the House Appropriations Committee version of the bill, H.R. 5857, would provide $20 million. With regard to Cuba broadcasting, S. 3241 would provide $23.4 million ($194,000 less than the Administration s request) while H.R. 5857 would provide $28.062 million ($4.468 million more than the request). In, legislative efforts to roll back President Obama s easing of restrictions on remittances and family travel in FY appropriations legislation were ultimately unsuccessful, and have not been introduced in FY2013 appropriations legislation. For additional information, see CRS Report R41617, Cuba: Issues for the 112 th Congress, by Mark P. Sullivan; CRS Report RL31139, Cuba: U.S. Restrictions on Travel and Remittances, by Mark P. Sullivan; and CRS Report R41522, Cuba s Offshore Oil Development: Background and U.S. Policy Considerations, by Mark P. Sullivan. Congressional Research Service 11

Haiti In the two years since the January 2010 earthquake that devastated much of Haiti and killed an estimated 316,000 people, 20 the overarching goal of U.S. assistance there has been to help Haiti build back better. U.S. assistance focuses on four key sectors, in alignment with Haiti s national plan for reconstruction and development: 1) infrastructure and energy; 2) governance and rule of law; 3) health and other basic services; and 4) food and economic security. Major accomplishments include removal of rubble at a much faster rate than in recent disasters elsewhere; the election of and transition to a new president and legislature; a rapid and coordinated response to a cholera epidemic and prevention of its outbreak in displaced persons camps in the capital; and increased agricultural production. Nonetheless, there is widespread criticism that aid is not being disbursed quickly enough. There are many obstacles to more rapid recovery and reconstruction, including the concentration of damage in a densely populated urban area. Although an aid coordinating mechanism, the Interim Haiti Reconstruction Commission (IHRC), was criticized for being slow to get organized and approve programs, its term expired in October, and the Haitian government has yet to create a new official mechanism to take its place. A cholera epidemic further delayed the shifting of funds and efforts from emergency response to reconstruction programs and continues to require resources. Another obstacle is political fragility and instability. The already weak Haitian government suffered massive losses in infrastructure and personnel, and often seemed paralyzed with inaction after the disaster. The election process to choose a new government was flawed and sometimes violent. Gridlock between the new administration of President Michel Martelly and the legislature continue to make aid disbursal and development difficult. Former members of the Haitian army and would-be soldiers protesting in favor of reestablishing the army disrupted parliament; after one of their marches turned violent in May, the government closed two of the ten old bases they have been occupying. Elections for one-third of the Senate and a variety of local officials are overdue; Prime Minister Laurent Lamothe said in July that they would be held before the year s end. Key policy issues: The key congressional concern remains: how effectively is U.S. aid to Haiti being disbursed and implemented, especially now that no official coordinating mechanism is in place? A related issue is corruption. Officials in Haiti and the Dominican Republic have been investigating corruption allegations linked to President Martelly. Martelly has denied the charges. Other concerns include what is the best way to continue to improve security in Haiti, through further strengthening of the Haitian National Police, as outlined in Haiti s national plan for development, and agreed upon by international donors, or through re-creation of an army, as proposed by President Martelly? How can U.S. aid programs further strengthen Haitian institutions of governance and rule of law in a context of political gridlock between the Haitian executive and parliament? How can U.S. programs promote greater respect for basic human rights, including addressing the problem of gender-based violence? Congress is also concerned that the overdue elections be held in a free, fair, and transparent manner. 20 U.S. Agency for International Development, Haiti Earthquake and Cholera, Fact Sheet #3, FY, December 12,. Congressional Research Service 12

For background information, see CRS Report R42559, Haiti Under President Martelly: Current Conditions and Congressional Concerns, by Maureen Taft-Morales; CRS Report R41689, Haiti s National Elections: Issues, Concerns, and Outcome, by Maureen Taft-Morales; and CRS Report R41023, Haiti Earthquake: Crisis and Response, by Rhoda Margesson and Maureen Taft- Morales. Mexico Security issues have recently overshadowed immigration and trade in U.S. relations with Mexico, but the focus of bilateral relations may shift after President-elect Enrique Peña Nieto takes office on December 1,. Outgoing President Felipe Calderón has made combating organized crime a top priority of his Administration and expanded security cooperation with the United States through the Mérida Initiative. Since FY2008, Congress has appropriated $1.9 billion in Mérida assistance for Mexico, with the focus of aid gradually shifting from training and equipping security forces towards institution-building. Bilateral cooperation has helped Mexico arrest or kill record numbers of drug kingpins, but more than 55,500 people have died as a result of organized crime-related violence since Calderón took office. Concerns about the violence in northern Mexico prompted border security to return to the forefront of the bilateral agenda, with policymakers seeking to make the border as secure and efficient as possible. As comprehensive immigration reform efforts have stalled in the U.S. Congress, the enactment of tough state laws against illegal immigration has concerned the Mexican government. In the economic realm, the U.S. and Mexican governments resolved a longstanding trade issue in involving the trucking provisions of the North American Free Trade Agreement and have sought to improve North American competitiveness through regulatory cooperation. Mexico requested an invitation to join on-going negotiations for a Trans-Pacific Partnership (TPP) agreement. On June 18,, President Obama announced that the nine countries involved in the negotiations had extended an invitation to Mexico to join the negotiations. The February signing of a Trans-Boundary Hydrocarbons Agreement for managing oil resources in the Gulf of Mexico could create new opportunities for bilateral energy cooperation. Key Policy Issues in : Congress has maintained an active interest in Mexico, with the agenda dominated by the country s security situation and the Mérida Initiative, human rights conditions, border security, economic issues, and the July elections (see Key Events in below.) The Obama Administration asked for $269.5 million in assistance for Mexico in its FY2013 budget request, including $234 million in Mérida assistance. The Senate Appropriations Committee s version of the FY2013 foreign aid appropriations measure, S. 3241, would exceed the Administration request for Mérida accounts by $10 million, while the House Appropriations Committee version of the bill, H.R. 5857, would increase Mérida aid by $49 million. Congress has also held hearings and issued reports on how organized crime and government efforts to suppress it are affecting human rights and democracy in Mexico. Drug trafficking-related violence in northern Mexico has kept border security on the agenda, with P.L. 112-93, signed into law in January, increasing penalties for aviation smuggling, and P.L. 112-127, signed into law in June, tightening sentencing guidelines for building illicit border tunnels. Congressional action is likely to be required in order for the Trans-Boundary Hydrocarbons Agreement to take effect. 21 21 A procedural question has emerged with respect to what actions are needed for the agreement to be accepted in the United States. At issue is whether the agreement should be entered in the form of a treaty (in which case it would need to be submitted to the Senate and approved by a two-thirds majority) or a Congressional-Executive Agreement (in which case congressional authorization would take the form of a statute passed by a majority of both houses). Congressional Research Service 13