U.S.-Latin America Relations in a Global Context

Panelists discuss U.S.-Latin America relations during the Biden administration, potential changes under the Trump administration, and opportunities to develop more effective U.S. policies in the region.

O’NEIL: Excellent. Good afternoon. Thank you all for coming. It’s a pleasure to be here. For those of you who don’t know me, I’m Shannon O’Neil. I’m the senior vice president and the director of Studies, so the director of the think tank here at the Council on Foreign Relations. And it is my great pleasure—two things. One, to be holding a meeting on Latin America during this transition time. And two, to have these two gentlemen, both of whom I’ve known for a long time, up here to talk about Latin America.  

And so you all have their bios, but a quick read. 

This is Dan Erikson, who has been a longtime Council member, I believe. And he is the special assistant to the President and right now the senior director for Western Hemisphere affairs at the National Security Council. 

And then Juan Cruz, who I’ve also known for a good amount of time. Right now he’s the senior advisor of the Americas program at CSIS, at the Center for Strategic and International Studies. But he was previously in the first Trump administration the senior director for the Western Hemisphere at the National Security Council.  

So these two gentlemen have followed each other—there’s a few in between—but have followed each other in these various paths. So we will be talking about all things Latin America, countries in Latin America, and U.S. policy towards Latin America. This meeting is on the record, just for all of you to remember. And we will have a conversation up here for about half an hour and then I will open it up to questions from you all. So please, whatever you’d like to hear, be ready with those questions.  

So there’s much to talk about, but what I thought I would start off talking about is the issue of democracy and politics in the region. So on the one hand, I would say Latin America, in some ways, is a good news story. This is a region of the world that has more people living under democracy than almost any other region in the world. Which we often forget. There’s a lot of Europeans, but there’s a lot of Latin Americans. And this is a place also that are—there are a lot of middle-income countries. So these people who vote again and again for democracy, even though they have huge challenges of inequality, of poverty, of violence, of other things that we know we don’t face here in the United States, or face in some of the richer advanced industrial economies.  

But, on the negative side, there’s a real question about how long this might last, right? We’ve seen democratic backsliding in many countries. Some of the most popular leaders are those that tend to break the rules once they’re elected and put into office. And we do have now—which, you know, we wouldn’t have said a number of years ago—we do have some authoritarian regimes again, right? We have Venezuela. We have Nicaragua. We have Cuba. And we have worries and other ones. So I’d like to just sort of kick off and hear each of your thoughts on democracy in the region. Are you optimistic? Are you pessimistic? And what could the United States do? Or what should the United States do, if this is a priority? How do you defend democracy?  

So let me start with you. Dan. 

ERIKSON: Great. Well, thank you so much, Shannon. It’s a real pleasure to be back here at the—at the Council on Foreign Relations, and also be here with Juan Cruz. Although we have not worked together directly in administrations, we’ve had many chances to exchange views over time. So happy to—happy to be here today. Those of you who know me know that I’ve worked for President Joe Biden for some time on Latin America, beginning when he was vice president. And he always had an expression that his vision for this hemisphere was one that was democratic, prosperous, middle class, and secure. 

And the democratic principles that we espouse are really critical for U.S. policy in this region. And it’s really been the lodestar for his career and so much of what we’ve been working on as the Biden administration. And I think that, as you said in your introduction to the question, Shannon, that there is a lot of good news in this hemisphere, but certainly not universal good news. And there are—both some countries have been trending away from democracy for some time, and then some democracies that have either new challenges to rule of law, balance of power, and the conduct of democratic practice.  

I think one thing that’s really critical to remember about this period of time, and particularly because it coincides with the Biden presidency, is that all of the democracies in this hemisphere are under extreme pressure. And a lot of this pressure exists both from underlying weaknesses have been there for many time—for a long time, but also the fact that all of these democracies had to weather and come out of the COVID-19 pandemic, which put just incredible stresses on public finances, public health. That really, in some cases, exacerbated political polarization.  

And meant that in a moment in time where it’s really critical that democracies deliver in order to maintain their political legitimacy, many of the democracies in this region were really unable to deliver on a variety of fronts. Security and public security is a really crucial part of this as well. You’ve seen negative trend lines in several countries across the region over the coming period. And so I think looking forward, while clearly there are many problems in democracy throughout the region that we could point to, there is actually a scenario where it’s much, much worse.  

And the fact that when we talk about the countries that are having democratic challenges, they still tend to be more the exception than the rule. Certainly, when you see democracy sliding backwards dramatically, that’s the exception not the rule. I think that is some credit both to the strength of public institutions and to the fact that countries like the United States, countries in the European Union as well, have really worked to solidify and strengthen democratic practice. 

O’NEIL: Juan, let me ask you—and also as you think about it—and you’ve been a long-time watcher, participant, you know, thinker, and analyzer of Latin America. Is there anything the United States can do? Or is this—whether democracy holds, whether it strengthens or weakens—is really in domestic hands and not in ours? Be interested in your thoughts on that. But overall, how do you see democracy in the region?  

CRUZ: OK. Thank you, Shannon, and Dan, and everybody for having me. Yeah, Dan and I have known each other for a long time. I admire him tremendously, the things he’s done.  

Maybe where I’d start, being the actual graybeard on stage, I’ll go back to when, you know, I started following Latin America, over three and a half decades ago. And most of the countries in the region were governed by right-wing dictatorships. So we’ve come a long way. And during that period of time, we’ve been able to develop significant and solid institutions. And so I’m an optimist. We just experienced yesterday a model election in Uruguay, the way things are supposed to go, the way—despite having a president who’s extremely popular for one political inclination, it was the other inclination that won in a very peaceful, normal, very solid fashion.  

We also had regional elections in Chile which were a model, and also demonstrated the ability of the people to select whoever the hell they wanted to select regardless of where they landed on the political spectrum, with independents winning important—importantly, two governorships. So I’d like—you know, I’m an optimist. I like to point to those things. And to the fact that we have—true, we have challenges. Our challenges have been born of some of the maladies in the region, which include—I think, the biggest one being corruption. And so when people get disappointed in democracies where that happens—in good example, Peru, but not just Peru, in other places. It’s either corruption or insecurity that then brings some of these governments, especially from the left, to set roots. 

If you look at—Venezuela under Chavez was an excellent example, but not the only one, of using the instruments of democracy to destroy democracy. But I’d say it’s been prevalent in the left and, of course, in Bolivia as well. The institutions in Nicaragua have been savaged. And we’ve just seen the most recent examples of that last week. And then there’s some governments of—you know, of a different political persuasion where we see that they’ve—they come with tremendous popularity, and the popularity then becomes a way to ignore some of the—or, set aside some of the instruments of democracy and cause a little bit of concern.  

So I’m actually an optimist in all of this. I think there was a time where we were bashing—disappointment of the population the region with democracy were something that we were jumping on here in New York, and Washington, and the U.S. And I think there’s been a self-correction because the institutions are really strong. And we worked hard at that. Look at—you know, I never worried about Brazil, for example, when people were because Brazilian institutions are strong. And there will be—and those are the ones that we developed and strengthened during the period of democracy building that we can rely on today. 

O’NEIL: Thanks. Let me ask you a question about migration. And obviously migration played a big role here in the United States in the election, but I actually want to talk about migration just more broadly. And so we look around the world and there’s over 100 million people who have been forcibly displaced from their homes in their home country, and twenty million of them are in the Western Hemisphere. So there’s an outsized proportion of people in this hemisphere. And yes, you know, many come to the U.S. southern border, though we know those numbers have fallen in recent months. But most of those are being absorbed in other parts of the—of the hemisphere.  

I would also venture to guess, given what’s been happening in Venezuela, that we will see more Venezuelans leave in the coming weeks and months, you know, in addition to the eight million that are that are out living in other parts, mostly in the in the Western Hemisphere. So, you know, I’d be interested, as you all watch this from a—from a policy lens, and just more generally, how are—you know, how are countries handling this? Are there some countries who have handled it well? And what have they done? Are there some that have handled it less well, and how is it affecting them? And are there sort of any lessons to be learned as you look at how does a country absorb a huge wave of migrants that are coming your way? Because lots of them have had to do it here in the Western Hemisphere. So I’ll start with you, Dan, and then go to Juan. 

ERIKSON: Great. Thanks, Shannon. 

It’s such an important topic and important question. And I think that when you look at migration in the Western Hemisphere, one thing that the Biden administration believes is that we are all in this together. Which is to say, while this country has had tremendous challenges with migration, you also see that reflected in any number of countries across particularly South America, Central America, Mexico, because every individual that’s migrating from the region, the first time they step—take a step outside their country, unless they’re coming from Mexico, they’re entering another country in the region. And you’ve seen more than seven million people leave Venezuela. You mentioned the twenty million people in the hemisphere. About a third are coming from Venezuela alone.  

That’s had huge impacts on Brazil, on Colombia. There’s been the new migration route through the Darien Gap between Colombia and Panama and up through Central America. And so there’s several different policy responses. One, of course, that the U.S. has been very focused on, is addressing the root causes of migration, particularly the Northern Triangle in Central America, or northern tier, if you wish, of Central America. So that’s Guatemala, Honduras, El Salvador. And in fact, the number of migrants that are coming from those countries has declined during the period of the—of the Biden administration.  

Another step to this is migrant reintegration, which means encouraging countries and working with countries to provide safe haven or resettlement opportunities for migrants who are in those countries, and perhaps seeking to move onward but perhaps not. I think a real star in this area has actually been Colombia, which is offered an equivalent of temporary protected status to over two million people from Venezuela in Colombia. And that has helped to really slow some of the migratory patterns that we’ve seen out of Venezuela, and also offered opportunities for people to resettle in countries where they may be able to have a better chance to reintegrate more easily.  

And then there’s identifying legal pathways where people who are qualified asylees, rather than having to take this dangerous trek to the U.S.-Mexico border, where they may be denied or they may be put in a situation where they’re in essentially a limbo for months or years on end, that they can actually apply from their country of origin, if they’re a qualified asylee, receive that permission.  

A couple years ago at the Summit of the Americas, which took place in Los Angeles hosted by President Biden in June of 2022, more than twenty countries joined together to sign the Los Angeles Declaration on migration protection. And this is essentially a joint template by which countries from across the hemisphere can look at how to deal with this issue of migration in a way that’s sustainable, that upholds the rights of individuals, but also ensures that there’s not essentially unregulated migration taking place throughout the hemisphere. And there’s been a number of steps that have taken place under that agreement over the last couple years as well.  

And so I think that this is going to be an issue that the entire hemisphere continues to wrestle with. I didn’t even get into the important question of extraterritorial migrants, migrants that are coming from regions outside of Latin America into this region and onward, which poses challenges both for the countries where they first arrive and then for other destination countries, including the United States. But it’s something that, for us to really get to a sustainable solution to, it’s most effective to work in partnership with other countries in the region.  

O’NEIL: Yeah, Juan, how do you see migration affecting countries around the region? Or those who have adapted well, and those perhaps who haven’t? 

CRUZ: Well, let’s start—you know, there’s a reason that migration was either, you know, number one or number two in the polls in the United States from the forefront of the electorate. And the fact that—(coughs)—excuse me—the fact that we have, in a lot of countries in the region in the last, you know, let’s put it eight years, migration flows that have come to the attention or created discomfort in the region in areas because it’s placed stress on the ability of these countries to provide for their own citizens. And we all know what that represents, especially for countries like Peru. And then it turns into something, unfortunately, like xenophobia in some of the countries in the region that have had to carry an extra burden here. 

But it also gives them an optic and an opportunity to see things the way we see them. And our immigration system here is broken. We all know that. And there’s no oxygen to fix it. But what we’re talking about are measures that are half measures. These are measures that are dissuasive. These aren’t measures to actually fix the situation in the United States. Across the board parties and governments, and just there’s no opportunity for a good conversation on that. So in the meantime, if you have countries that have made mistakes—and we would point those out, and the countries would be reluctant to correct them but eventually have come around. For example, countries that don’t require visas for citizens of countries that are of concern for us. And then what they do is they serve as a gateway to bring these people into the hemisphere, and then a superhighway to move them up through it. Clearly, that can’t be right.  

So when you get countries like Brazil and Ecuador that eventually correct that, the reason they didn’t do anything about it was because it didn’t affect them. But as soon as it did start to affect them, then you saw some change. And you also see the fact that countries—and, you know, Colombia, Panama and others—would simply serve as a way to facilitate the movement of those folk, because what they didn’t want was for those people to stay in their countries. Recognizing, again, that it places a burden on them. And as we’ve seen in a number of these countries, also place a particular security threat in their individual countries. I agree with Dan that, you know, Columbia deserves a lot of credit for the work it’s done to be able to assimilate and bring on board and accommodate and provide for a large population that’s not theirs. And let’s be honest, it’s a zero-sum game. So those are resources you can’t dedicate to your own people. So I take my hat off to them.  

But there are other countries that spend time just being able to pass the buck. And that’s got to be corrected. And just like, you know, countries like Brazil and Ecuador could correct some mistakes they’ve—or some opportunities they provided for migrants, I think that that holds true throughout the—throughout Central America and Mexico. And you know, there’s no mistake that we’re going to have to employ a lot of creative measures to be dissuasive and discourage, and then detain and deport. 

O’NEIL: Great. Juan, let me just ask you in particular, about security issues in the hemisphere, because this is something you’ve spent many years looking at. And, you know, Latin America, infamously, you know, is a place with less than 10 percent of the globe’s population and over 30 percent of the murders that happen. So, you know, one of the most violent places not in a, you know, hot conflict happening. (Laughs.) And, you know, this has—this has not changed in terms of the numbers, but as my colleague Will Freeman and others have written about, is that the nature of crime, and especially organized crime, has been changing in the hemisphere. So if you could talk a little bit about, like, what do you see changing? Do you see changes in sort of the nature of violence and where it’s coming from? And if so, do you see any success stories in people combating it? 

CRUZ: Yeah. I’d say that what stands out for me in particular is the trends that led to an historic production of coca leaf in Bolivia, Paraguay—I’m sorry—Bolivia, Peru, and Colombia, contributed to a saturation in the market. The U S market and the market up north is oversupplied. So with this historic highs, where there’s been no eradication in any of those countries since December of ’22, creates conditions where now they need to find new markets. And they found these markets in Eastern Europe and in parts of Western Europe, in Southern Africa, in parts of Western Africa, and in Asia. And to do that, they need to find ways to move that drug out into those areas.  

And what they’ve done is they’ve found those routes through all the countries now that will hold up their hands in cite security is prevalent among their concerns. In the elections in Chile, for example, one of the top issues is, of course, security and crime. But it also includes what—the phenomenon we saw of Ecuador going from peace to instability in zero to sixty in three seconds. And we also saw it—or have seen it in Paraguay and Uruguay, of all places, in Argentina and southern Brazil. And all that created because these organizations fortified themselves, needed a new route to move their stuff out their market—to new markets, and create new markets. And so that’s some of what we’re seeing in the phenomenon.  

Also, during the last four years we focused primarily the war on fentanyl. And that involves one country in the region basically, Mexico. And what it does, it does so at the—at the expense of all these other countries that haven’t had the kind of attention they should have had, and that they have had in the past. And I think that’s also part of what we’re seeing in the region, fewer resources from the U.S. dedicated to the—not saying no resources, but fewer resources. And certainly not at the levels that we’re used to. And so all those things provide a perfect storm.  

And if you add just one more element to that, which is that these organizations have become poly crime organizations. Wherever you can make a nickel, right? So if it’s the trafficking of people, or illegal mining, or illegal trafficking of flora and fauna, or on logging—just pick the crime. If there’s money to be made out of it. Now, they don’t have to run it themselves. What they’ve done is they’ve created a bit of a franchise on their—on the reputation and their logo. So if you’re a small bit criminal that happens manage this in your area of operations, you deputize them. And then you, you know, request a percentage of the profits, and you allow them to operate. But what it does is it expands their network. So that’s, you know, some of what we’ve seen to create a critical situation in the region. And ultimately what this does is destabilize democracy. 

O’NEIL: Dan, let me ask you about sort of economics and commerce. And, you know, one thing that strikes me is, you know, as we’re seeing this sort of once in a generation shift in global supply chains, lots of industries are trying to find alternatives to China, that the Western Hemisphere seems like the place to do it. And I know there have been policies. You know, the Biden administration doing the Americas Partnership for Economic Prosperity. There’s mineral security partnerships, and the like. But when I look at the actual data on sort of foreign direct investment, on the movement, it’s not really coming to the Western Hemisphere. (Laughs.) And even Mexico, which has sort of all the wind in its sales in terms of proximity and access and ecosystems and all of that—sort of commercial ecosystems, you know, the foreign direct investment numbers are fine, but they’re not particularly explosive or, you know, they’re not what Vietnam or India or some other countries are seeing.  

So as you look at sort of, you know, Latin American economies, as you look at the commerce and what they’re trying to do, you’ve talked with lots of these governments, you know, what is it that they’re doing well? What is it that they’re still missing in order to attract, sort of, you know, the big multinationals, or attract the foreign direct investment that would help them take off in these areas?  

ERIKSON: I think that Latin America and the Caribbean still struggles with the huge gap between the potential of the region and the reality. And that is just reflected in economic growth numbers. You know, I think they’re around 1.9 percent, 2 percent this past year, looking maybe at 2 ½ percent next year. Well, that’s economic growth, but when you look at population growth, when you look at what’s really required throughout the region—which is a revolution in growth—it’s still far, far behind that. And there’s a few different reasons for this. Juan alluded to one of them earlier, which is the concerns about corruption in the region are still relatively high, and really needing to address the transparency of procurement rules, ensuring that companies have a level playing field is really critical.  

There’s also more that needs to be done in terms of skill building and really prioritizing, in different countries, areas for national investment, and to figure out what is the true competitive advantage that they have. One initiative that the Biden administration launched a couple of years ago, which is called—you alluded to it—the Americas Partnership for Economic Prosperity, was to take—work with a cross-section of countries in the region—so not everybody. It’s about twelve countries. It includes representatives from the Caribbean, Central America, Canada, and Mexico as well, and most of the countries on the Pacific Rim of South America. To see what can we do in a more concrete way to really build up and strengthen supply chains in a few sectors—semiconductors, the energy sector and critical minerals, and also pharmaceuticals—to see if we can create a stronger basis there to bring investment into the region.  

There’s been an extraordinary level of commitment from the member countries that are part of this initiative. There’s also been a series of kind of ministerial-level meetings that drive that through the U.S. trade representative, the secretary of the treasury and the Secretary of State Tony Blinken. And what we’ve seen is that there’s a lot of enthusiasm for this, and interest in bringing more investment into the region. But there’s still a lot of homework to be done by the individual countries to see where are the supply chains that they can plug into that will really generate jobs and draw investment in. And so this is an initiative that we’re very enthusiastic about. It’s one, at least in Congress, that has bipartisan support. We’ll see how much interest remains in it during the change of administration.  

But I think that’s something that really needs to be addressed, particularly in this era that we’re in now which, you know, many countries in the Western Hemisphere have free trade agreements with the United States, but it seems like the politics of free trade agreements in this country have changed in a very bipartisan way, which probably there’s not going to be a lot of new ones negotiated in the coming period. I don’t want to get ahead of what the future administration may do. So that means really drilling in at of another level down. And looking at supply chain integration is going to be really critical. 

O’NEIL: So I want to ask one more question, and I’m going to open it up to all of you. So please think about what you’d like to ask.  

And this one I want to ask you about sort of an obvious question in terms of foreign policy, which is China. Now, the United States is still the biggest trading partner in the region, largely because of the ties with Mexico, but China is the biggest trading partner of lots of South American countries. Now, they would say, and many leaders, you know, in Latin America would say, you know, this is a commercial win-win, right? We get investment, we get trade. You know, they’re building ports, and we need this infrastructure, and the like. Obviously, there are people here who worry about the national security concerns, the sort of diplomatic, geopolitical concerns. And so I’d love to ask both of you, as you look at China in the hemisphere, you know what worries you, but what doesn’t worry you? Sort of where is the line in sort of how, you know, challenging this is for the United States? And also, you know, maybe where and why we should be concerned about China.  

So let me start with you, Juan, 

CRUZ: Sure. So what worries me and what doesn’t worry me? I think, in the area of what doesn’t worry me—and I used to spend a lot of time, and I think I’m probably wrong on it now, in trying to explain to the region—the region thought that what the U.S. was doing was saying, you know, like two kids on the playground saying you’ve got to pick. You’ve got to pick one side or the other. As we know from the Cold War, that ends up really terrible for the countries in the middle. And what are you picking? And I used to say, we’re not asking you to do that. Certainly not in commerce, because it’s our number-one—back then, our number-one trading partner. So how can we deny you that?  

And I—and I spent a lot of time explaining—I even wrote an article in in an Argentine daily on the issue, to try to explain what it is we were actually saying. But I’m not sure we’re saying that anymore. (Laughs.) I think that’s been mutated quite a bit. And we are saying, you got to choose. And it might be because of the unfair practices that the Chinese have insisted are taken advantage of, Mexico being a good example of that. And also, when I think of what doesn’t worry me, some aspects of infrastructure. And I tried to get my head around it when I was in—when it was my turn at the White House, to understand what exactly we were worried about. And the prevalent sort of narrative is that the Chinese have displaced us in the region in all facets, and infrastructure in particular.  

But when I looked at the facts, the facts were that they didn’t actually displace us at all. I went to the U.S. companies—a number of U.S. companies that were well known for operating in the region, and no longer were operating in the region, or very little. And they gave me a few reasons for this. Number one, the projects are simply not big enough. You can make a lot of money in projects in the Middle East and in Asia, and Latin America you just didn’t have that scope of project. Number two was it’s really hard to operate in a corrupt ecosystem where you might be from another country and get away with it, but a U S company, you know, you’ll end up in jail. They wanted to avoid that.  

Number three was getting paid. Our region’s terrible at paying. And what would happen is you sign a contract for a big infrastructure project, and who gets credit? It’s the is going to be the government that signed the contract and the government that delivers at the end, which is not going to be the same government ten years later—normally, isn’t the same government ten years later. And ones in between don’t get any credit. And the ones at the end, while they get credit, they don’t get all the credit. And what happens is you also don’t get all the payment. So what would happen is you end up not getting paid at the end. And you don’t want to take these governments to court. And so you lose out.  

And so there’s huge disincentives for the U.S. companies. That’s what I what I heard. And then—so, who displaced the U.S. companies? It wasn’t the Chinese. It was the Canadians, and the Australians, and the Israelis, and the Spaniards, and the Argentines. And the number one, Odebrecht. Odebrecht was everywhere, in charge of all the projects, and all the big projects, and delivering left and right. And when Odebrecht collapses, there’s this vacuum. And who steps in the gap, but the Chinese, looking for an opportunity. Now, if we don’t give them any other alternative, and they’re—and they’re willing to build, you know, a super train from, you know, Patagonia to Salta, I mean, who are we in the U.S. to—we don’t build that. And we’re not good at it. We don’t have super trains. So why would we want to prevent the Chinese—and the kind of economic impact that could have in Argentina—why would we want to prevent that? So, again, that doesn’t worry me.  

And lastly, what I would say is we need more competition. And I heard it from an ambassador of—I don’t feel it’s right to say who he is, but he’s not from the region. But it’s a large country—let’s say, Western country. And he said that we often get it wrong. To being typical Americans, we talk in terms of the balance between China and the United States and it’s not that at all. It’s China and the West. And so what we should be talking about is it’s not what the U.S. can do for you and your country, but what the U.K., and Italy, and Spain, and Germany, and the Netherlands, and, you know, and the Japanese, and the South Koreans, because they’re kind of the, you know, the West in this, and Australians. What can they do? Because it’s not that binary. 

O’NEIL: Yeah. No, thanks. How do you see China in the region? 

ERIKSON: Well, you know, I have a few different views of it. Unfortunately, unlike Juan, I’m still in government, so I’m paid to worry about all of it. (Laughter.) So there’s not one part that I’m kind of not worried about at this juncture. But I do think that what’s really key for any U.S. administration looking at China’s engagement in Latin America is to prioritize what parts you’re going to worry about the most. Because this is—these are—we’re in a global economy. Countries are going to buy and sell from China. Some of this is—has not as much impact on U S interests.  

And, you know, from our vantage point, I mean, the things that really concern me is anything that’s around Chinese investment in space-enabling infrastructure, that affects the ability of the United States to interact in space. Sensitive communications. There’s been a lot of discussion, as I’m sure many here know, about Huawei, and the fact that Huawei is providing or trying to provide 5G capabilities in many of these countries. And that’s of particular concern for us, if you have a government network or defense network of a country that’s otherwise allied with the United States but relying on China for its 5G communication.  

I also have some concerns around professional military education, which is an area where the United States historically has been the largest provider of professional military education to Latin America. And I think in recent years you’ve seen more examples of delegations from Latin American militaries or ministries of defense traveling to China. You know, everyone wants to go to China once, so I’m not going to begrudge anyone that single trip. But if you get into a pattern of militaries starting to train on a continual basis with China, that’s an area of major concern.  

You know, at the—I worked at Department of Defense for a number of years. And so there we kind of expand our aperture a little bit to look at both the Arctic and the Antarctic. And I think that you have, on both of our—both poles—some real Chinese interests that are starting to manifest themselves in those areas that I think we need to be very concerned about. And particularly when you look at strategic ports, or access routes, or things of that nature. So I do have—that’s not my entire list of things I’m worried about, but I do have a few things on the list, and I could probably add a few others. 

If I could just relate, just very briefly, about a week or so ago I was down in Lima, Peru for the APEC summit. And while I was there, I was there with President Biden. President Xi was also in attendance. They were inaugurating a Chinese port, the Port of Chancay in Peru, which garnered a lot of fanfare. But while we were in Peru as well we rolled out a number of initiatives that were really aligned to Peru’s interests, including we had the NASA administrator there signing a sounding rockets agreement with the Peruvians. We made a contribution—a $65 million contribution of nine Black Hawk helicopters to help the Peruvians fight their battle with counternarcotics. And unlike Colombia, Peru actually brought the level of coca production down—or, brought flat over the last year or so. So they’ve been a good partner there.  

And then also we helped to arrange a big donation of trains from Caltrain—California, Caltrain, has actually moved from diesel cars to electric cars. And they had all these leftover locomotives. And we got over a hundred of those down to Peru for the Lima metro system. Just really practical thing. You’re going to have, you know, over the course of time, hundreds of thousands of citizens in Lima, they’re going to have an easier time getting to work because of that. And so I think that even when China’s doing big set pieces related to infrastructure, there are very kind of tangible, concrete areas where the United States can engage and make a real difference, and strengthen those bilateral relationships. 

CRUZ: Shannon, can I add something to this? So one thing that I’m worried about the Chinese is that the Chinese spend about ten times more than we do on a, pick your term, let’s call it information. Information. The old term would be propaganda. But ten times more than we do. And that’s something—you know, Dan just talked about projects that we have. And one thing, I served in nine embassies overseas during my career. And in those nine embassies, what I saw over a period of time is that projects like these lose their luster within the embassy. We don’t give them the full attention that we do, and—you know, that we should.  

And so when you have—I’ll use another example, Peru. Peru had one of its kind of seasonal natural disasters, you know, a flood and some landslides. And they needed some assistance. And the Chavez government—at the time—Chavez donated some, you know, three tons of tuna fish, with his face on the label and everything. It was in every newspaper, TV programs, and everything. And the Peruvians would come to us and ask us why we weren’t doing anything for them. There was a $144 million aid program, et cetera. But we don’t talk about it, right, because it’s become—we’ve become so used to doing it. We don’t give it importance, wo why should they? 

O’NEIL: Hmm. We need to have more faces on the—you know, on the goods. (Laughter.) All right, I’m going to open it up. Go ahead, Ruben. I’ll start with you here. 

Q: Thank you. Thank you, Shannon. For Mr. Erikson, specifically.  

So people here may agree or disagree with this view, but as a person who watches Mexico very closely, over the course of the last few months of President Lopez Obrador’s administration, and now in the administration of President Sheinbaum, one could say—and there are many people in Mexico who would say—that there—that the institutional foundation of a democratic system, such as we say that we would like to see, has been undermined dramatically.  

A single party was assigned a super majority—it and its allies were assigned a super majority in Congress that enables them to make constitutional revisions. They have gone ahead and made them. The judiciary is in the process of, in my view, collapsing. And just this week, we expect a whole series of autonomous entities within the government to be eliminated and brought back under the control of the executive. So does the administration not see this as a very destructive course of action? And if it does see it that way, what can it do? What can this administration do? What could the next administration do to address what, for many of us, is a catastrophic development in Mexico? 

ERIKSON: Well, thank you for the question. You know, Mexico is a critically important country for the United States, for the reasons everyone here knows—whether it’s the trade relationship, the border, the migration issue, and just the fact that Mexico is a critical partner on a whole range of—a whole range of issues. In terms of the constitutional reform process, this is something that we’ve followed, you know, very, very closely from the beginning and also have engaged with our counterparts in Mexico on, including on specific areas of concern as it relates to impacts on the rule of law, Mexico’s obligations under the USMCA treaty, and just overall best practice in terms of managing our trade relationship. 

As you stated, in the current political system in Mexico the presidency has enormous power because they also have a majority in both houses of Congress as well as in the governorships, which enables constitutional reform when it passes to happen very quickly. That’s what happened with the judicial reform that passed earlier in September that actually, you know, just thinking about constitutional reform here in the United States and what we would go through to get anything through, the fact that you could have a majority of states vote within basically forty-eight to seventy-two hours to support reform is incredible. You know, so the views that we have on this have been expressed, including by our ambassador, who’s present in Mexico.  

There’s also some signs that, in fact, Mexico may make—be making some adjustment to some of the reforms you just alluded to in terms of the regulatory—the independent regulatory agencies. And there may be some potential changes to how that—how that plays out. I think that the—you know, one question that remains open is, even after the reforms pass, how are they going to be implemented on the back end? And there may be an opportunity for the United States, or for other partners, to engage in this—in that part of the equation as well. But the—you know it’s something that we’ve watched, and followed with great attention, and have engaged with our counterparts in Mexico on. 

O’NEIL: OK. A question right over here.  

Q: Hi. I read— 

O’NEIL: Please introduce yourself, sorry. 

Q: Oh, sure. My name is Allison Silver. I’m from 4Context. 

I have been reading—I’m sure all of us have been reading—about the wave of extraterritorial immigrants coming in in Latin America and destabilizing as they—and destabilizing the region as they go northward. Just how serious is this issue? How real is the issue? And what is a way of helping it stabilize? 

ERIKSON: Thanks. I’ll take a first crack at that. So it is—you know, it is an issue, and something that’s happening. And I think that the level of seriousness depends a little bit on the country and where the populations are coming from. I think that one thing that had existed previously in many countries in Latin America is a pretty open visa system. Meaning which a visa was not required for entry for many countries, or you could transit through a country without requiring a visa. And that opened up an opportunity for third—extraterritorial nationals to basically come from other regions, arrive at a port of destination in Latin America, and transit on. And so we, as an administration, have been working very closely with a number of governments in the region. 

First, to make them aware that this is happening, because they weren’t all aware—at least not in the same way that we were—about the fact that their countries were basically being utilized to facilitate these sorts of migrant flows. And then ensuring that we have good sharing of information across our different migration security agencies to be aware of this. And then also looking at the actual airlines that are sending these. Some of these are charter airlines, or maybe other airlines that are engaging practices that they shouldn’t be. And so ensuring that those entities were warned, or even other steps being taken to limit and to curtail this behavior.  

So it is an element there of the overall migration pattern in the region. The still predominant pattern, though, is of people within Latin America migrating. And I think that one thing that we’ve seen too is that there’s been—because there has not really been a lot of maritime-based migration from certain countries, like Cuba and Haiti. And so that migration has continued, but as land-based migration because they would fly from those countries to Latin America and then transit onward. So that’s something that we’ve seen, too.  

O’NEIL: Mmm hmm. Ivan. 

Q: Thank you. Ivan Rebolledo with TerraNova Partners. 

I have a question to both of you. It has to do with critical minerals. So at the onset of this administration, General Richardson from SOUTHCOM made some very strong, controversial statements on critical minerals that ruffled a great deal of feathers, particularly in the lithium triangle and other countries. Now those political landscapes have changed. Argentina has a new leader. Bolivia will probably have a new political leader next year. How do you both foresee things changing in the Trump administration in relation to critical minerals and the region? 

CRUZ: You know, first of all, it’s important to say that critical minerals is exactly one of the areas that the Trump administration would focus on in the—you know they’re focusing on, what they call themselves, energy friendly, which is oil and gas, and on the issue of critical minerals. On the issue of critical minerals, the idea here is to ensure a market for the United States and for—and access. And so as long as—that doesn’t necessarily mean it has to be the U.S. involved, right? So South Korea’s a—South Koreans are involved. And it also points to the fact that when you look at—and I’m going to throw copper in there because it’s gotten a lot of attention lately, but there’s a reason for that, and the increased interest by the United States in all of these.  

The reason to do that is, of course—and, just as a tangent, as you probably know, there’s a race to find other—lithium in other locations, Canada, the U.S., of course, Australia, China. And that could—were a big find to be discovered, that could put a real stress on the lithium triangle and their ability to deliver. I mean, right now there’s a lot of investment by a lot of big mining companies, but what happens if something more accessible, easier to get to market, and easier to extract, were to take place? So the interest in the Trump administration in critical minerals is, I think, kind of—you’d have to look at it through a wider prism. And in terms of a greater definition of their interest, I’m not aware of that. A lot of that’s being devised as we speak inside the different teams. Those teams haven’t even been totally selected yet, so. 

ERIKSON: And, I would just add, this has been an area where the Biden administration has been very active. The State Department’s led a Mineral Securities Partnership that’s looked at precisely this set of questions. And I think that, as we look at kind of technologies for the future and what’s going to be needed—whether it’s for electric vehicles, AI, et cetera—I can’t imagine a future administration wouldn’t also prioritize this. 

O’NEIL: Joyce, do you have one? 

Q: Joyce Chang from JPMorgan. Great to see you both. 

So my question’s on Venezuela. How are you seeing the endgame for Venezuela? And with Marco Rubio at the State Department, with Trump’s stance on it, just what the endgame is? And how do you also just assess the sanctions strategy, how effective it was, and what to do, you know, next on the sanctions? 

CRUZ: I’ll take this this one. 

ERIKSON: Sure. 

O’NEIL: Please. 

CRUZ: The—(laughs)—so Venezuela strategy hasn’t been solidified within Trump 2.0 yet. And it’s no surprise that there are—and you’ve read it—that there are differing views. And one of the prevalent views is going to be driven by the migrant crisis, right? So we all know that domestic policy often trumps foreign policy. You have a great push to be able to control and diminish those numbers. And if you put part of your strategy upfront is going to be deportation and your aim is one million—minimum one million deportees in the first year, they have to come out of somewhere and they have to go somewhere.  

And so if—what’s the best way? And the country has to be able to want to receive them. So if that’s a big push, if that’s your priority, if it’s your stated priority and you’re going to grade yourself on how well you do, there’s an argument there—a very strong argument led by domestic policy people—that you got to—you’ve got to come to some sort of—some sort of agreement. Now, what I’ve seen lately, and if you’ve read, is that rather than being very black and white there’s been a shade of gray. Which is, you know, it’s not that you smoke the peace pipe, or you get along, or there’s this understanding, but you make it very transactional—very characteristic of the Trump administration—transactional.  

You say, you take, you know, these number of people back, and you get this. And you don’t take these number of people back, and this will happen to you. That’s the best way to—and I think that latest view is probably a result of the other factions in there that are vying for a role in how to define the future policy towards Venezuela. That being led by the new national security advisor, who has long supported Venezuela, and by the secretary of state designate, who is also a protector of Venezuelan democracy. But you have to—that assessment will be, you know, who ends up winning and what argument ends up winning.  

And then, of course, there’s this, I would say, a smaller faction, that would go—that would like to go back to, you know, maximum pressure. I don’t know what—you know, if there’s stomach for that. If I had to guess, I was the architect of the Venezuela policy under Trump, with the president’s instructions, and I had many conversations with him on this subject. And what I would say is, you know, he’s given his best shot. It’s very difficult—I see it, very difficult for him either to give up on the idea and also to go back and doubling down on something that didn’t work. So that, I think, means that there’s an opportunity for influence there. 

And in terms of the effectiveness of sanctions, I’ve heard so many times, you know, so many arguments about this. For most of my career, I was not a big fan of sanctions because in the U.S. government I found that sanctions were levied either in lieu of good policy or when you were starved of good decisions. What the hell, just sanction them, right? And some of that has taken place in last few years, in the last two, three administrations where, you know, we just beat these countries over the head with sanctions.  

And if it’s—sanctions can be very effective as part of a regime, not just by themselves. And sanctions, we have to remember, are not just punitive, but they’re also intended to correct behavior and influence behavior of others. So when you assess whether a sanction is successful or not, you got to look at that. And then lastly, I would say if the sanctions weren’t effective in Venezuela, you wouldn’t get the regime bringing them up as the only thing they want to talk about. 

ERIKSON: And I’ll just add a couple of comments on current policy. I mean, over the course of this year there’s been a lot of focus initially leading up to the July 28 presidential election, and there was actually both some sanctions relief that was offered previously and then relief of the sanctions relief. So sanctions kind of reimposed in April, as the Maduro government failed to meet many of its commitments. But at the same time, you know, things did move forward. They initially—or, not initially—but they did not allow the winner of the opposition primary to run in the election, Maria Corina Machado. They did not allow her first choice alternate, Dr. Corina Yoris to run.  

But they did allow Edmundo Gonzalez Urrutia to run in these elections. And, based on all the data that we’ve seen after July 28 including the kind of receipts, or known as the Actas, over 80 percent of these were collected from different polling stations, Edmundo Gonzalez won the most votes by a lot, right? By, like, a two-to-one margin. So several days after the election, Secretary of State Antony Blinken said that we believe Edmundo Gonzalez won the election. After that, there was a pressure campaign of the sort to see if the Venezuelan authorities would ever release the underlying data for the election. They never did. Just a week or so ago, Secretary Blinken declared that we view Edmundo Gonzalez as the president-elect in Venezuela.  

And so, you know, how the Maduro authorities are going to kind of deal with this over the coming months and into a future U S administration remains to be seen. But it’s clear that any kind of shred of democratic legitimacy that they might have had or hoped to gain in the July 20 election was not successful. And, you know, the vast majority of countries around the world have not recognized the legitimacy of this election.  

O’NEIL: Great. Go ahead, Bruce. 

Q: Hi. Bruce Churchill. 

For both of you, is there a single Latin American head of state you admire? (Laughter.) 

CRUZ: I didn’t hear the question. 

O’NEIL: Is there a single Latin American head of state you admire? (Laughter.) 

CRUZ: Yes. Do I have to say who? (Laughter.) I admire Mulino. Mulino from Panama, who was dealt a—you know, he’s not a politician. He’s not naive enough to believe that he arrived in that position on his own. He borrowed a political party. He was supported by a tremendously popular figure who couldn’t run on his own. And he got elected. And he’s not under any sort of, you know, impression, you know, that he’s the guy. And then he knows—and if you talk to the Panamanian political class, they’ll tell you that they didn’t vote for him the first time, but they would vote for him if the elections were held again because he’s been very fair. His Cabinet is—it’s a technocratic Cabinet, made up of all sorts of figures that represent many factions and professionals.  

And he’s come forward, you know, with hard decisions and statements and so forth on the issues of migration, and towards Venezuela, and trying to plug the gap, and all these other kinds of things. I think that’s notable. And the fact that he wants to—you know, he’s reinstated security capabilities had been lost in a short period of time, I’d give him a lot of credit for that.  

ERIKSON: So I’m not going to pick— 

O’NEIL: You got to pick someone else.  

ERIKSON: I’m not going to pick. You can ask me after late January. (Laughter.) 

O’NEIL: OK. All right. I’m going to take moderator prerogative for our last two minutes. And I would love you guys, very short answers, but as you look we’re—understatement is, we’re going to have a change in administration. We’re going to have a new set of policies. As you look at Latin America policy, where do you see continuity between a Biden administration and a Trump administration? And where do you expect pretty significant change, in terms of either particular countries or the region in general? So, Dan, let me start with you, and then I’m going to go to Juan. 

ERIKSON: Well, thanks, Shannon, for starting with me. (Laughter.) So I—you know, I think that if you look over the last, you know, thirty-odd years, going back to the end of the Cold War in the early 1990s, that you’ve had, I think, a really core set of interests that U S administrations have pursued in Latin America. And while there have been important divergences on certain points, there’s really been a throughline, you know, throughout. And that’s been support for democracies and democratic governance, having strong economic relationships, having a secure U.S. border. And also a real focus on countering organized crime, countering the narcotics trade, in more recent years certainly concerns about extra-regional actors, whether that’s China, Russia, Iran, or others.  

And so I think all of that is going to provide the scaffolding under which any divergences or differences between the Biden and Trump administration are going to be kind of bounded by, right? I don’t think—I do not envision any future U.S. administration, you know, somehow not caring about democracy, or not caring about security, or border, or immigration issues. You know, the question, to some degree, is to—what’s the area of emphasis or priority within that framework? In the case of the Biden administration, you know, we’ve really put our strongest emphasis on trying to work with the democratic partners that want to work with us. And so whether that’s working with the countries of South America. Mexico, even though it’s been challenging at times, has still remained very important.  

And then—you know, and then you, of course, have the set of countries that don’t want to work with us, right? Cuba, Venezuela, Nicaragua. But if you look at how the Biden administration has conducted itself even on those files, there really hasn’t been a radical kind of turn back to some of the policies of prior democratic administrations. So I think you’re going to see probably more of a change in kind of how Latin America is talked about by a U.S. administration than the policies that are actually implemented. 

O’NEIL: Good. Juan, you get the last word. What do you see—what changes, what continues? 

CRUZ: I think—you know, I can make an argument on either end. But what I would say is the focus is going to change. And it’s going to be number one and foremost, migration, migration crisis, and what you can do to help the United States with this problem. And you need to be creative. You’re one of these countries in the region, you need to be creative. If you’re not part of the problem, you need to be part of the solution, for whatever that means. You’re bringing—you’re receiving deportees from other countries, whatever that means, or something of that nature. So we’ll define the—I think in the first Trump administration the region was defined by Venezuela policy, unfortunately. But I think migration is going to define. 

And then very quickly and rapidly right behind that is the fight against drugs and drug trafficking. It’s an issue very close to the president, genuine. I think he’s disappointed in the way the numbers have gone. And for him, it’s about the American people, right? That’s what America first means, looking after Americans and their wellbeing and safety. So you can—the relationships will be defined by those two.  

And then, thirdly, China, but I throw in their trade. We all know that there’s a—I’m going to call it the weaponization of tariffs. And that means that sometimes you’re going to get caught up in this. And there are unintended consequences. We saw it the first time around, on steel and aluminum, where it had unintended consequences. I think, as they beat China over the head with a blunt instrument, some countries are going to get wrapped up into it, some of them who avoided it the first time and some who weren’t that successful. 

O’NEIL: Great. Well, much to watch. And I want to thank both of our panelists for enlightening us today. Thank you very much. (Applause.) 

(END) 

This is an uncorrected transcript.