High demand for consumer products has increased competition with foreign trading partners while diminishing U.S. influence as its primary source of trade.
"There's a greater degree of willingness to experiment, and the U.S. is no longer in a unique position of handing down 'dictots' to Latin American countries which they will automatically comply with," said Larry Birns, director of the Council on Hemispheric Affairs in Washington, D.C. "It's going to have to work very hard to get even minimal results out of the region. What this means is the Latin America of tomorrow is different from the Latin America of today."
In 1988, Latin America had burdening inflation in economies such as Brazil, Nicaragua and Peru. Foreign debt stood at $420 billion and gross domestic product grew at less than one percent, according to an essay published by Margaret Daly Hayes with the Council on Foreign Relations.
This year the World Bank forecasts Latin America's economy will grow 4.5 percent, a promising step toward recovery after lagging in commodity demand. The World Bank Group will also provide $17.9 billion in aid this year for growth recovery in Latin America.
Brazil is projected to lead with a 6.5 percent growth rate while Peru, Argentina and Uruguay may surpass the 4 percent expansion mark. Mexico might make the fastest growth pace in almost a decade with a growth of 4.3 percent.
"I sense more than in any other moment the majority of Latin American countries...see the United States as less and less relevant both in the international arena and vis-a-vis their ability to realize their own national interest, and that's a dramatic change," said Cynthia Arnson, director of the Latin American program at the Woodrow Wilson International Center on June 28, during a conference on U.S.-Latin American relations.
The U.S. is criticized for setting agendas in Latin America's internal political and economic affairs. Yet, in recent years Bolivia and Brazil looked elsewhere by seeking trade agreements with China, Europe, India and South Africa.
Increasing trade with China is also a motivating factor of Latin America's economic autonomy. Trade between Latin America and Asia (driven largely by China) has increased by 72 percent from 1996 to 2009, in comparison with an 82 percent increase with the U.S.
Mexico accounts for more than half of the region’s trade with the U.S., while its trade with the rest of Latin America is comprised of 8.3 percent, according to a Foreign Affairs Committee report released by the Congressional Research Service in June.
The report states that most large economies in South America have not formed free trade agreements with the U.S. Birns added in the past five years, political autonomy has increased in the region with the creation of independent institutions such as the Union of South American Nations, UNASUR.
As an example, UNASUR rejected U.S.'s military presence in Colombia in 2009, while Bolivian President Evo Morales expressed his opposition to military bases being established.
Birns said U.S. interests have also shifted away from Latin America since 9/11. The wars in the Middle East have caught more attention from U.S. policy than the Western Hemisphere.
The Obama administration has yet to clarify its policy toward Latin America.
At the conference, Associate professor Javier Corrales of Amherst College argued that Latin America will have little influence on U.S. affairs. He said the region is becoming more secondary in the world economy, with the exception of Brazil and Mexico.
"I think this is a question of why is it that Latin America has so little bargaining leverage vis-à-vis the United States,” said Corrales. “I think we're going to stay with a lot of that for many years to come."
Corrales said undermining foreign investment in Latin America is narcotics and political conflict. He explained Latin American countries gained attention when the U.S. exerted its interest by ending political conflicts, but even then there was a slight influence.
"I don't think Latin Americans have realized how they are lagging behind. It was said here the United States is less important to them in the region and Latin America is less important to the world economy."
(Raisa Camargo is a reporter with Hispanic Link News Service based in Washington D.C. Email her at: firstname.lastname@example.org)