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U.S. Diplomacy in the Americas

Thomas A. Shannon, Jr., Assistant Secretary for Western Hemisphere Affairs
Remarks at a Breakfast Discussion Hosted by the Center for Hemispheric Policy
Coral Gables, Florida
June 10, 2008

ASSISTANT SECRETARY SHANNON: Thank you very much, Susan. It is a great pleasure for me to be here. I always like coming to Miami and having an opportunity to speak to groups such as this. It helps me a lot. Washington, as many of you know, can be a narrowing place. Especially in a moment of political campaigning, it can become a place that is very, very focused on itself. So it’s a great opportunity to come down here and have a chance to meet with all of you.

What I’d like to do today, if it’s okay with all of you, is talk a little bit about how I see the region today and kind of create a framework for what I would hope would be the discussion that follows. I think we’ve got a fair bit of time this morning, so I’m very interested in your comments and very interested in your questions and I’ll try to answer them all to the best of my ability.

It’s a good time to talk about the region. The OAS General Assembly has just finished in Medellin, Colombia. Deputy Secretary Negroponte and I just finished a quick trip from Medellin to Central America. We visited El Salvador, Honduras and Guatemala. Our Congress is considering the Merida Initiative, the security assistance relation program we want to establish with Mexico and the Central American countries. There is considerable debate about outstanding Free Trade Agreements for Colombia and Panama. The Council on Foreign Relations has just issued a report on U.S.-Latin American relations and the Brookings Institute is busy producing another report. The two “candidates to be” have also delivered foreign policy addresses focusing on Latin America and Cuba. So I think there is a lot in the air right now, a lot of discussion, a lot of focus on the region, which from my point of view is very healthy and very important and helps, I think, a deeper dialogue on the region.

This is kind of a great moment to have that dialogue because from my own point of view the Americas today is one of the most dynamic, interesting and diplomatically challenging regions of the world to work in. But it’s also a region where the potential for accomplishment is huge. And if we behave in an intelligent fashion, if we construct a diplomacy that can connect more directly to what is happening in the region, we have an opportunity, I believe, to secure some very, very important U.S. interests in the region, especially as we face larger national security challenges elsewhere in the world, but do so in a way that really does change the tenor and tone of our relationship in the hemisphere and does respect the diversity and differences that exist in the region while understanding it as the Americas, as a region that has a long history of political commonality and solidarity and continue to have that history of political solidarity.

What I thought I would do very briefly is talk about kind of four broad themes or areas. The first is what I call the characteristics of the region or the context of U.S. diplomacy in the Americas.

The second would be what these characteristics or what this context means for us, especially what are the challenges that we face as we operate in the environment that we call the Americas today.

The third is what I call the importance of being there or being present in the Americas. This is really about how we take our foreign policy that we had developed over time and build some continuity into it, build some sustainability into it, especially as we approach the political transition, so that our engagement in the hemisphere doesn’t fall off. So much of our engagement in the Americas has been driven by crisis or conflict and has really been a series of high moments of engagement and then moments of really kind of disappearance. We need to make sure that as we look into the next administration that we have the ability to build continuity and sustainability into our policy.

Then I wanted to close by just talking about a couple of initiatives that we are working on right now that we believe can create discontinuity and sustainability if we are able to get the right kind of response from our Congress. Then obviously, I am very interested in your comments and your questions.

First, in terms of the characteristics of the region or the context of our diplomacy, from our point of view this is a region that is undergoing enormous and profound change, and change really is the defining feature of the region today. This is a change which is accelerating in pace. We don’t anticipate it slowing down any time soon. There are a variety of drivers of change in the region, and many of you are familiar with most of them. Things like migration, technology, globalization.

But from our point of view the principal drivers of change in the region are democracy and markets. And what I mean by that is, this is a region that, as I think you all know, has gone through enormous political change in a very short period of time and really has moved from authoritarian governments to elected governments. But it is a region that right now is attempting to kind of make the next strategic leap in its political evolution from democratic governments, from elected governments, to democratic states. And what I mean by that is states that understand democracy in the fullness of the word. Not democracy only as a political concept, not democracy only as a concept of transfer of power within a constitutional system, but democracy that refers to kind of a totality of citizenship. To economic citizenship, social citizenship, and political citizenship. That means kind of really opening societies and making them collusive.

This is a huge challenge throughout this region as all of you are aware. With the kind of poverty, the levels of inequality and social exclusion that have historically existed in Latin America and parts of the Caribbean, making a broad commitment to citizens that democracy will deliver the goods, and not just deliver the goods in terms of allowing people a voice in determining national leadership, but also in gaining access to resources, access to benefits, access to services is a huge challenge to take upon itself, but it is a challenge that this region has taken upon itself quite willingly, and it is a dramatic challenge, but it is one that really represents a big victory for our policy direction because this is really the direction that we have been pushing in for quite a long time. But it is also a huge victory for Latin American societies which have been struggling to create this kind of commitment from their own states and now are looking for ways to hold their governments accountable.

As this happens, as these democracies become more inclusive, as people and sectors that have historically been excluded from democratic practice kind of push into the political scene, they are making demands for accountability and transparency and responsiveness that are unique in Latin America’s history. This is really one of the huge drivers of change.

The other driver, of course, are markets. The way in which Latin America has moved from closed economies, import substitution driven economies, to open economies that are trade driven and really are connecting to global markets.

The convergence of the two, a commitment to democratic values and purpose and the desire to build a democratic state and the acceptance of markets as the principal feature or mechanism of economies and trade as the driver of economic growth really has broken down the traditional isolationism that has defined much of Latin America and really is connecting it to the world in new and important ways. And in the process of this is also connecting Latin America not just at a political or institutional or economic level, but it is also connecting Latin America to the world socially, demographically, and through its societies. This is especially evident here in the United States. It is especially evident here in Florida and in Miami. But it is evident elsewhere also.

The integration that is taking place in this hemisphere and more broadly throughout the world really is an integration that is not being driven by governments. The role of governments is really to facilitate and to guide or channel this integration in ways that are positive and respectful of institutions and broad political values. But the fact of the matter is that this integration is taking place. We really are seeing what Secretary Rice called an alliance of peoples in the Americas. Again, from our point of view this is an incredibly positive event because it enhances understanding, it enhances connections, and it builds a basis, I think, for longer term cooperation and dialogue which is going to be vital to our region.

But in this kind of context of constant change and broad commitment to democracy and markets, the question is largely what does this mean for us in our diplomacy as we try to navigate through this environment? I would say it has a couple of meanings for us as we kind of look ahead and try to shape our own diplomacy in the region.

The first is that we are operating in a region where historically at least we have seen the end of ideology. This really is a post Cold War world. There are still political figures out there that speak in ideological terms and try to describe themselves and their own struggles in ideological terms, but the reality is that the ideology that defines so much of the conflict and confrontation that we’ve faced in the world for so long in the aftermath of World War II has really melted away in the Americas. I think what we are seeing now is a diplomacy and engagement throughout the region based on values and on interests. And this is important. Values and interests is where we are strongest, and we can take advantage of this kind of convergence of values and interests in the Americas.

The second point that I think needs to be understood is that as societies become more inclusive and as citizens hold their governments responsible to provide benefits and services, the importance of social justice becomes paramount. The ability of a government to legitimize itself to its people. And in this regard for so long social justice in the Americas was seen as a consequence of political and economic action, but in today’s environment social justice is really the purpose of political and economic activity. For me there is a distinction because democracy now has to justify itself in terms of, as I mentioned earlier, it’s ability to deliver the goods, it’s ability to deliver social justice in the region.

This is one of the reasons why President Bush when he traveled to the region in March of 2007 focused so intently on the issue of social justice. In a speech he gave at the Hispanic Chamber of Commerce just before that trip he really laid out what we call a social justice agenda for the hemisphere, focusing on the ability of governments to provide the benefits and services their people want, the ability of governments to create economies that were inclusive and open, the ability of governments to link economic opportunity and individual capacity through investing in peoples, and the ability of elected officials to maintain the trust of the government, of citizens. This was really how the President chose to define and understand social justice in the Americas. It is how he chose to articulate our engagement in the hemisphere in terms of trade policy, in terms of foreign assistance policy, in terms of our broader security policy. And it was a message that was aimed not only at the countries that he would be visiting -- Brazil, Uruguay, Colombia, Guatemala and Mexico and more broadly, Latin America -- but it was also a message aimed at the American people and it was intent on educating the American people to a certain extent. A people that had been, in terms of the media, so overwhelmed by Iraq and Afghanistan and the larger war on terror that it really had not had much time to focus or think about our relationships in our own neighborhood, even though we think we were quite active and remain quite active in our neighborhood.

But what the President sought to do in that speech and what he sought to do in his trip to the region was to make it very clear that social justice in this hemisphere and the success of democracy and markets in this hemisphere are a vital national security concern of the United States. Our ability to articulate our policy in the language of social justice is key, I think, to the ability of our policy to be understood in the region.

The third important characteristic is the importance of what we call a positive agenda or an agenda that is focused on helping countries address the huge problems and challenges that they face today.

We have enough confrontation and conflict in the world right now. We do not need to be walking through the Americas looking for additional conflict and confrontation, and we are not. We are actively pursuing partners that want to work with us. Those who do not want to work with us, we just step aside and let them fail on their own. And quite frankly, both the Secretary and the President have made it clear that our intent is to make sure that as we engage we engage in a practical way, in a positive way, in a way that is designed to make clear that it is our goal to work with countries and not to work against them in this region.

The fourth point I would make in regards to the challenges that we face and what this means for us in the region is what I call the necessity of strategic partners. As I mentioned, this is a region that has opened to the world, that is connecting to the world in ways that are interesting and unique historically. And what this means is that the Americas can no longer be understood as an isolated preserve. Its broad connections in the world mean there are multiple points of contact and we need to understand those points of contact and work through them to reinforce our broad policy and diplomatic goals. This has actually been an active part of, or an important part of our diplomacy as we reach out to our European partners, as we reach out to Asian partners that have strategic interests in the Americas, and that we make sure that to the extent possible that the message we are sending in the region are consonant, that they line up, recognizing that we can’t always work with many of these countries in a cooperative fashion in the Americas, but we can work with them in parallel fashions and make sure that we are pursuing broad political values and economic interests and goals that more or less line up. I think we have been pretty successful at this in our broader diplomacy.

But strategic partners don’t only exist outside of the region, they also exist inside of the region. When I say the word strategic partner I have to be a little careful, because some countries get very uncomfortable when we identify them as a strategic partner. But the important word here is partner. We use the word strategic simply because we believe there is a shared vision, a shared political understanding which does not mean that there aren’t differences of opinion on really big and important issues, but that for the most part we understand that stability in the region, that success of democratic institutions, that success of economies, the promotion of economic growth, and the ability to resolve problems through dialogue and cooperation is vital to the hemisphere.

In this regard, this administration has worked very very hard to identify key countries in the region that are prepared to work with us. Countries like Brazil, countries like Mexico, Chile, Canada, Colombia, Peru, Argentina to the extent possible. And make sure that we do everything possible to kind of solidify that relationship. I am happy to talk about kind of all of these countries and any other country that you're interested in when we get to questions, but I think it is important to focus, especially in South America, on Brazil.

One thing this administration has tried to do globally is identify emerging democratic powers that are going to be only more important over time. Only more influential, only more powerful. The two countries that this administration has been, especially Secretary Rice, has been especially focused on have been India and Brazil -- two of the largest democracies in the world, two of the most important democracies in the world, and two economies that are very dynamic and important right now. We have made I think a very special effort to try to build a relationship with Brazil that is open, fluid and positive, and the relationship that we have seen between President Lula and President Bush really has helped define that relationship and helped inform the bureaucracies that work underneath them to do what they can to make that relationship a real and meaningful one. And I believe we have accomplished a fair bit in that regard. But again, as we look into the region we need to understand that this is a region that has its own historic dynamic, its own diplomatic dynamic, and we cannot be everywhere all the time, and that we need to have partners in whom we have great trust and confidence. Again, recognizing that differences are going to exist in some areas, but if they’re engaged on issues we feel comfortable.

The fifth point I would make in this broad area of what this means for us is the necessity of strategic patience. This is different from strategic partners. [Laughter]. Strategic patience means that as fast as the pace of change is moving in the region, that there are still countries that face really difficult internal political and economic challenges. And that as these countries work through these internal challenges, that we need to be patient with them and we need to treat them with a great degree of care and respect. A lot of these countries are well known to you already.

I think one of the things we need to understand about the democracies that have emerged in the Western Hemisphere, especially in Latin America, and especially in South America, is that we are seeing that democracies have their own immune system, that they have an ability to protect themselves if there’s the right kind of solidarity from the international community and there’s the right kind of institutional space existing in those countries. And that while these countries work out their internal issues, we need to have a degree of confidence in the ability of democratic systems to protect themselves. At the same time we need to understand that democracies in individual instances tend to fail as often as they succeed. Our own history is replete with our failures at key moments, and we need to understand this as we engage with our democratic partners in the hemisphere.

Finally in this regard, I would say that the other lesson that we need to take away from the changing context of the Americas is the importance of multilateralism. The United States has been one of the principal drivers of multilateralism in the Americas for the longest time. One of the founding members and drivers of the Inter-American System, of the Organization of American States, of the Pan American Union, of the Summit of the Americas process, and we’ve been, kind of active advocates of all the dialogue that has come out of the Summit of the Americas process especially at the ministerial level which has been such a rich and important dialogue for the hemisphere.

But we need to recognize that the multilateral system in the Americas is under great stress and strain right now, and in flux, and this isn’t a bad thing. It is really driven by the kind of integration that is taking place in the region and the different experiments in integration that are being undertaken right now. But in fact if you look out over the hemisphere today, everybody seems to be integrating all at once, and at every different kind of level. Whether it’s Mercosur, whether it’s the new Union of South American Countries, whether it’s the CAFTA countries and the creation of the Central American Integration System, whether it’s the single common market in the Caribbean, whether it’s the NAFTA countries, there is an enormous amount of dialogue going on, a lot of effort going into building structures of political cooperation and dialogue. All this is positive. Eventually there will be kind of a shakeout period in which those processes or systems of integration that are useful and work will survive, and those that aren’t useful and don’t work will just fall away. But while this all takes place, we do have an existing structure in the OAS, in the broader Inter-American System, and we do have an existing structure in the Summit of the Americas process that some have questioned both their relevance and their importance, especially to the degree that we are involved in them.

I think one thing we as the United States need to be very careful of at this point in time is to not walk away from those systems, not walk away from our multilateralism, but to understand that it is through these multilateral institutions that, first of all, a lot of the problems of the smaller countries that typically wouldn’t pop up on our radar screens until they were real crises, actually have a way of emerging and we actually have a way of seeing them, feeling them, understanding them, and then looking for ways to address them before they become major crises. But also there is a small group of political leaders in this hemisphere that would like to find a way to exclude us broadly from Latin American discussions and who really have in their larger diplomacy in multilateral institutions pursued what I call a diplomacy of rupture where they try to break the linkages that have been forged between North America and Central and South America and the Caribbean.

My own view is that this is a very pernicious and dangerous form of diplomacy because so much of what the Americas has accomplished up to this point we have accomplished because we have been able to work together. We have been able to find common ground on some really important issues. So we need to make sure that we don’t play into this diplomacy of rupture, that we actually have a diplomacy of integration and union and this requires a continuing commitment to multilateralism.

This brings me to my broader point of continuity. As we operate in an Americas which really is kind of changing itself constantly and evolving in really dramatic and I think important and a positive fashion, we need to understand that this is a very very competitive environment. That the countries themselves now have clear understandings of what they want to accomplish as they have democratized, they have redefined their national interests, they have redefined how they relate to other people, they have redefined their positions within multilateral institutions, they have built relationships outside of the Americas, in Europe and in Asia and beyond that are important to them. And in this kind of environment we need to understand that we have to be constantly present. We have to be there all the time. We cannot afford to take a time out. We cannot afford to step aside for a moment while we try to address our own internal political issues. Because if we do, this is a region that won’t wait for us. This is a region that is just going to continue to move on and will look for other partners that are better prepared and more willing to work with them in a constant and continuous fashion.

So I really do believe that as we look forward we need to understand that our engagement has to be continuous and it has to be sustainable and that as I indicated earlier, its agenda cannot be driven by crisis. It can’t be driven by conflict. It really has to be driven by a broader, positive agenda that has some very clear strategic understandings and interests that underpin it.

In this regard I want to talk about just a couple of initiatives that we have been working on that I think help build some continuity and some sustainability into our engagement in the hemisphere. And with the right kind of action in our Congress and elsewhere I believe we will act as bridges into the next administration and will allow a transition to take place in the United States without negatively affecting our engagement or our relationship in the rest of the Americas.

Two of the most obvious are our Free Trade Agreements with Colombia and Panama. From our point of view these are vital agreements, important U.S. allies that underscore long term strategic interests and relationships. The debate going on in our Congress right now really is focused on Colombia, since the Colombia Free Trade Agreement has been sent to the Congress. The agreement with Panama has yet to be sent to the Congress. I think most people here realize that the problem in our Congress with the Colombia Free Trade Agreement has very little to do with Colombia and everything to do with the internal dynamics of our own Congress and especially of the Democratic party.

It is our hope that there will be a way to bring this agreement to a vote. It is our belief that if it is brought to a vote that it would be approved. We think that it is vital that it be brought to a vote and it be approved. And not because of Colombia, but because of us. I mean obviously we think this is important to Colombia. Obviously we have an important relationship with Colombia. But at the end of the day if we are unable to bring this a positive conclusion, if we are unable to bring this to a vote, it is going to have a huge impact, a negative impact, on our credibility in the region. If we are unable to clearly see the national security interests that lies in this agreement, if we are unable to kind of navigate through our internal institutional political issues to get to this very clear national security interest, what does it say about our ability to address other national security concerns in the region and the hemisphere? And what degree of confidence will countries have in engaging with us if they think at the end of the day we will turn away from them because of issues or problems that these countries have absolutely no control over.

So as we look forward, we believe that the Colombia and the Panama Free Trade Agreements are essential components of our broader engagement in the hemisphere, that they are essential to our credibility. But also if approved by our Congress, they will complete a string of Free Trade Agreements that stretch from Canada to the tip of Chile. Twelve Free Trade Agreements in total, ten of which, or nine because the tenth is the Dominican Republic, but nine of which have been negotiated during this administration; and an unbroken string of Free Trade Agreements all along the Pacific Coast, all facing Asia. Although it’s not the Free Trade Area of the Americas, it’s pretty close. I think it’s an important strategic accomplishment that really would allow us to have a platform to jump across the Pacific and through APEC and other fora really begin to link the American economies with Asian economies. But I think it would also create an environment for a very interesting and useful discussion with the Brazil and Mercosur countries as we try to understand what our next steps are in a larger trading relationship in the Americas.

In this regard, there is already in South America and in Mexico and Central America an effort to begin to knit together these Free Trade Agreements. The Peruvians have begun an initiative called the Arc of the Pacific in which free trade partners are sitting down with themselves in a very quiet way at the level of trade ministers, and look at how you can begin to harmonize trading regimes, how you can begin to harmonize things like rules of origin and the rest, to try to take broader advantage of a commitment to free trade.

It’s striking that this is taking place without us. That the South Americans on their own, the Mexicans and the Central Americans are approaching this by themselves because they see the advantage of this kind of cooperation between free trading economies. And we really should find a way to be part of this. Because not only can you understand these linkages as enhancing trading regimes, but you can create a broader strategic framework or purpose for it in which the countries can actually begin talking about the consequences of trade and how we work together both to highlight the benefits of trade, but also to address those parts of our societies that suffer because of free trade. We all know there are winners and losers in trade, and the issue of our social policy has to be to help those who have lost in the short term and give them the ability to become winners in a larger trading environment. This is something we are looking at very closely right now, we are in discussions with a variety of our partners in the region about how we can involve ourselves in this conversation and help to give it this larger strategic purpose of countries not only connecting their free trading economies but also having a larger social conversation.

A third initiative that I think is important for building continuity is the Merida Initiative which many of you are familiar with. This is the security assistance program the President has proposed for Mexico and Central America which is currently before our Congress. Both the House and the Senate have passed bills in support of the initiative. They are in a pre-conference mode right now on discussing both the funding levels and conditionality language. This is an important conversation that is taking place in the Congress and the governments of Mexico and the governments of Central America have been watching this very closely.

From our point of view the Merida Initiative obviously addresses a very real security problem and threat that Mexico and Central America is facing from organized crime and drug trafficking cartels, but it really represents a big departure in our diplomacy in terms of how we have constructed these agreements and the kid of relationship that it implies for both Mexico and Central America.

The Mexico case in many ways in the most dramatic because the diplomacy that took place and the kind of conversations and dialogue that took place in the run-up to constructing the Merida Initiative proposals were really unique in our relationship with Mexico. Never have we sat down and had the kind of security conversation that we have had with Mexico before. Never has Mexico indicated a willingness to have this kind of relationship with us.

The program itself, which is about $1.4 billion for Mexico over three years and between $400 and $500 million for Central America over three years, is important but ultimately the kind of relationship that we build out of it will be even more important. Because, at the end of the day, we are really fashioning a new approach to address organized crime and drug trafficking in the Americas. One where we recognize there are shared challenges but also shared responsibilities because at the end of the day what we are able to do in Mexico and Central America really depends on what we are able to do here in the United States in terms of reducing demand for drugs and gaining greater control of the movement of illegal weapons into Mexico and Central America, and addressing money laundering here in the United States. So from our point of view the degree to which our Congress is able to successfully conclude their discussions on the Merida Initiative and approve the supplemental request that the President made of $550 million, and then move on to the other budget requests that will complete the Merida Initiative will be very important for continuity in our relationship.

Another area of continuity is our relationship here in North America. As you know in April the President met in New Orleans with President Calderon and Prime Minister Harper. This is the fourth time the North American leaders have met under the Security and Prosperity Partnership arrangement.
This is, again, one of the initiatives of the Bush administration to create a broader understanding of North America among three important partners, understanding North America’s shared economic territory and look for ways to improve our cooperation not just on trade issues but also on security issues. And security understood broadly, not only in terms of terrorism but also in terms of ecological and environmental disasters and pandemics. Recognizing that we have to protect this shared economic space that NAFTA has created and which has been so successful for us in creating a $15 trillion economy in North America.

The four meetings that President Bush has had with his Mexican and Canadian counterparts really have advanced how we cooperate along our frontier, but also kind of deeper into our three countries.

Canada and Mexico have both gone through political transitions during this Security and Prosperity Partnership relationship, and both of them have maintained a commitment to this broader vision of North America. We are the only country that has not gone through this transition, but we will shortly. And it is our hope that the next administration will understand the value of this North American relationship and the Security and Prosperity Partnership and commit itself to it as a way of maintaining continuity.

My final point in terms of building continuity, the U.S. engagement in the hemisphere is the Summit of the Americas. As many of you know, the next Summit of the Americas will taking place in Trinidad and Tobago in April of 2009. It will probably be the first time our next President will engage with his Latin American and Caribbean counterparts. Just as Quebec City in 2001 was President Bush’s first broad engagement with his counterparts.

The tenor and tone of this summit will be very important. We are working very hard with our partners throughout the region and with the government of Trinidad and Tobago to ensure this will be a successful summit, it will be a summit that will focus on a positive agenda, on an agenda that the region in its entirety can align itself with, and that it will leave a very positive impression with the new President. But we are going to do what we can in anticipation of that transition to hand off to the next President and to his staff and team a Summit of the Americas that is well prepared.

I think I’ll end there and just note that, again, I really thank you all for your patience this morning. I really look forward to your comments and questions. But then underscore that I really think we are at a moment in time where with the right kind of engagement, with the right kind of diplomacy this is a region that can accomplish a lot and can accomplish a lot not just because of ourselves but because of the relationships we have with others. Thank you very much.

[Applause].

Ms. Susan Kaufman Purcell [Moderator]: Thank you, Mr. Secretary. It was both an extremely broad, informative presentation, but also a very very thoughtful one, and I’m sure it has led to many questions from all of you.

We of course are now open to questions. Will you please wait for the hand-held mike and will you please say who you are, and could you keep your questions brief because there are a lot of people here this morning.

Who would like to start? Diane?

QUESTION: Good morning. I’m Diane Ashley, Managing Director of Zenith Capital Partners here in Miami. First, what a pleasure it is to hear your thoughtful observations on Latin America. Thank you.

ASSISTANT SECRETARY SHANNON: Thank you.

QUESTION: I’m curious, though, with our current “immigration policy”, and I’d like to put some quotes around that, how do you feel that that is going to affect a lot of the initiatives that this administration and the future administration we hope [will] continue? There seems to be a little bit of a contradiction in terms. Would you comment?

ASSISTANT SECRETARY SHANNON: Happily. Immigration will continue to be a huge issue in the Americas, especially in Mexico and Central America, but also in some of the Andean countries. I’m going to make two comments. One has to do with our immigration policy, the other has to do with immigration more broadly.

In regard to our immigration policy, there’s no doubt that the next President and the next Congress are going to have to deal with this in some fashion. It is a huge shame, and I look upon it with great regret that our Congress was unable to respond to President Bush in a positive way and to take the Kennedy-McCain immigration bill and make it a reality. Obviously some kind of comprehensive immigration reform is vital to the United States, to melding the reality of immigration and the reality of our economy, and to reforming laws that really don’t reflect the reality of the moment. Especially the economic importance of immigration. But also the importance that immigration has for the countries that send people to the United States and the importance of building some kind of structured relationship that will allow these people to achieve status and to be able to return to their own countries as part of a normal economic cycle, which was ultimately the goal of the proposal put forward by the President. So this is something that has to be dealt with.

The fact of the matter is, we have an informal and illicit migrant worker policy in the United States today. We have chosen to take a labor market issue and treat it as a law enforcement issue. We are going to have to fix that in some fashion.

But more broadly, immigration is not just a phenomenon in the United States. It is a phenomenon throughout the Americas. The countries of South America are familiar with this, the countries of the Caribbean are familiar with this, and as we engage in our own debate on immigration and on immigration reform, I think it would be very useful to connect it to a broader debate in the hemisphere and to try to draw the region into a larger discussion about immigration. Again, migration is an economic phenomenon but its demographic impact is huge. It does kind of have an impact on what I called earlier this alliance of people.

So number one, we have to fix our own problems. But as we do this we need to make sure we’re having a broader discussion with the region.

QUESTION: My name is Jose Padillo [inaudible].

At the beginning of the presentation you made use of a word that may qualify in Miami as a risqué or daring sort of word. You use the word “dialogue.” You used the word dialogue as an important tool of diplomacy. My question to you, sir, is what are the chances in doing [inaudible] that this administration may before the end of its course before the election [inaudible] process, make [inaudible] change to your policies, especially if the incoming administration happens to be a Republican administration.

The second part of the question is what do you think the impact of that move would have in [inaudible] to have an [inaudible]? Thank you.

ASSISTANT SECRETARY SHANNON: It’s a very good question, actually two questions.

In regard to the first, I think the President has made pretty clear both in his speech in October and his speech most recently, that we don’t believe that our relationship, and I assume we’re talking about Cuba, that our relationship with Cuba is not the defining factor in Cuba’s future. The defining factor is the relationship between the current regime and the Cuban people.

There is a lot of controversy about what our relationship with Cuba should be, but I think the President made it clear that we are not going to begin any kind of dramatic change in our policy towards Cuba until there is a dramatic change inside Cuba in terms of its relationship with is own people. What I mean by that is, our argument is that Cuba needs to begin an internal dialogue about its future, and it needs to begin an internal dialogue in which human rights are respected and free speech are respected. The President called for the release of political prisoners. He called for the respect for human rights and the creation of a space in which Cubans can have this dialogue. And while we have been prepared to acknowledge some of the changes that have taken place in Cuba up to this point, the President in his most recent speech indicated that we will license the cell phones to be sent to Cuba; that we’re prepared to license the sending of computers and certain kinds of software and fiber optics to Cuba; that we are prepared to bring Cubans into our scholarship programs in Latin America. In other words, we have indicated a willingness and an understanding of the economic and social changes that have begun to take place in Cuba.

But what we are really looking for is a larger political change. We believe that that larger political change is what is going to signal a transformation in Cuba. And the President has made clear that he wants our engagement in Cuba to be part of a transformative process. When I talked about strategic patience, it’s related to this. We are not going to commit ourselves, at least under this administration, until we see a bigger change.

QUESTION: Good morning. Alfred [inaudible] with [Berstein] Global [inaudible] Management and the President of the Central American U.S. Chamber of Commerce.

Mr. Secretary, I was curious with the recent news and everything going on with energy around the globe and the particular importance to this hemisphere, what is the State Department, our administration, doing currently to lead in possible solutions to mitigate the negative impact of high oil prices or the potential opportunities being created, whether it’s in biofuels or ethanol and things of that nature?

ASSISTANT SECRETARY SHANNON: Thank you for the question.

In the recent trip that Deputy Secretary Negroponte and I took to Central America, aside from public security which continues to be a big issue in these countries, rising energy prices and rising food prices really have spooked people. They’re very concerned about the impact of both of these economic phenomenon on the ability of governments to be able to provide social services. What they are finding is that a lot of the public budget funds that they would use for social services are now being eaten up by trying to address high prices of energy and high food prices.

What we are able to do as a single country in what is really a global phenomenon, in the region itself we have kind of promoted energy dialogue, we have promoted kind of market-based approaches to energy issues with Brazil, we have created a larger biofuels relationship where we are promoting the production of ethanol, especially cane-based ethanol in the Americas with Brazil. We are working in El Salvador, Haiti, the Dominican Republic, and St. Kitts and Nevis right now on this kind of ethanol production and we are exploring the possibility of expanding that to other countries in the Caribbean and Central America. And we know that countries throughout South America are also focused on ethanol and biofuels production, but cane based and cellulosic and grain based productions.

On the food side, we have put about a billion extra dollars into food aid, both direct food assistance, but also monetarized food assistance where we are actually paying for the production of food in different areas around the globe in order to kind of enhance production. But ultimately, what we are trying to do is focus on those countries that we consider to be the most vulnerable at this point in time and look for ways that we can help them both through our bilateral assistance programs, but also through multilateral assistance programs. And in this regard it is really about trying to protect their social programs and the ability of these governments to meet the needs of some of their poorest people as they face these big challenges.

MS. PURCELL: Mr. Secretary, you have gone through a very impressive list of activities and accomplishments, et cetera, in terms of the U.S. relationship with Latin America, and yet here within the United States and in Latin America there seems to be a very strong sense that the United States is ignoring Latin America, that there have not been any kind of necessary U.S. policy for Latin America, that the United States is not engaged with Latin America. How do you explain this disconnect, which I assume you think of as a disconnect. Maybe not. I don’t know.

ASSISTANT SECRETARY SHANNON: I don’t know if I have a good explanation or not. I run into this constantly. When I kind of walk people through what we have been doing in the region and how we have been engaged, they tend to be quite surprised. I tell them that President Bush has traveled to Latin America more than any President in U.S. history; he has met in the White House with more Latin American and Caribbean leaders than any President in U.S. history; if when I underscore the fact that he has attended three Summits of the Americas and hosted an OAS General Assembly, more summits than any U.S. President; and the last President to host an OAS General Assembly was Jimmy Carter. If I underscore the fact that he has negotiated ten Free Trade Agreements in the hemisphere that cover two-thirds of the GDP; if I highlight the fact that he has doubled foreign direct assistance to the region; if I highlight the fact that he has bilaterally working through international financial institutions, forgiven $19 billion of debt in the region; that he has increased Peace Corps spending 30 to 40 percent annually, that in any year there are 500 more Peace Corps volunteers in the region than previously. I can just kind of continue through this litany, and people tend to be quite surprised.

I think the only explanation is that we are in a fight for our life in Iraq. We are in a fight for our life in Afghanistan. We have got really, really large security issues out there that in terms of our media, in terms of our political debate, kind of suck all the oxygen out of the room. So a lot of the other things that we’re doing elsewhere in the world that are really interesting and important don’t get a lot of profile.

And it is not just in Latin America. We have done some really spectacular things in Africa. This President has tripled our assistance to Africa, and through PEPFAR, through his HIV/AIDS program and through his anti-malarial programs has had a dramatic impact on the quality of life of many many people in Africa, and some here in the Western Hemisphere where these programs have worked, especially in Haiti and Guyana.

All we can do is keep talking.

MS. PURCELL: Thank you.

QUESTION: [Inaudible]. We know that all the problems in this hemisphere, political problems, already [inaudible] Cuba, [inaudible] promotion, trading, [inaudible]. Chavez is influencing policies in Latin America by pouring hundreds of thousands or millions of dollars in elections. We are going to have elections in El Salvador, our best friend in Central America in [inaudible]. And the people in El Salvador are very worried that this money coming from Venezuela is going to influence their elections. What are you going to do to try to stop [inaudible] year and the year before in other countries in South America?

ASSISTANT SECRETARY SHANNON: I was just in El Salvador and had a chance to talk with a variety of political figures in El Salvador. This election in El Salvador is going to be an important one. For the first time in its history, the FMLN has a candidate that is not Shafik Handal. That is not a commandante, that is not a FMLN political leader. It’s Mauricio Funes, somebody who didn’t fight in the war and is not kind of tied to a hierarchy and a history of violence that has defined the FMLN. And that presents a big challenge to ARENA which has governed for so long. ARENA, I think, will choose a strong candidate. But ultimately, at the end of the day, this is a decision for the Salvadoran people.

But what has struck me as I have traveled through the region and as I understand how countries in the hemisphere are constructing their democracies, is that [inaudible], interventions in electoral events are very hard to do these days because they tend to be rejected if they are understood as interventions. This is what happened in Peru. This is what happened in several countries in the hemisphere. This is what I talked about earlier, that democracy does have an immune system, it does have an ability to protect itself. So obviously we watch all this with great interest and concern, but a visible foreign presence in a country like El Salvador would be a huge gift to ARENA because it would be something that it could use to its benefit. I think that’s understood.

So in this regard, I think what is important here is ensuring that there is transparency in electoral laws, that there is transparency in campaign financing laws, and that the media of these countries are working to make transparent to voters where the support for political leadership is coming from. In that regard the concern in elections throughout the hemisphere is not just interventions from foreign governments, it is the way in which organized crime and drug trafficking cartels have also been trying to play in an electoral environment. So in this regard we have to kind of work to create a larger atmosphere of transparency.

I think for the most part this has happened in the region. And let me say something that might sound a little outrageous, but in the elections that have taken place throughout the hemisphere, I am not sure many votes have been bought. I think most of the elections that have taken place have responded to international national concerns. And this does not mean that efforts have not been made to buy votes. This does not mean that countries have not had ambitions to try to control electoral outcomes. But I just don’t think they have been successful. I think the results we have seen really reflect the national dynamic in each of the countries where elections have taken place.

QUESTION: Good morning. My name is Blake Jackman, I’m an attorney with Ferrell Law in Argentina.

I was wondering about U.S. views on China’s investment into Latin America in particular Argentina. You mentioned [inaudible].

ASSISTANT SECRETARY SHANNON: Actually the issue of China in the Americas is an important one. China is on kind of an international buying spree and has been kind of scouring the world for energy and for primary resources and for food for its industry and for its people. And is kind of investing faster in Latin America, especially in South America, than any other foreign investor.

This is one of the reasons why we have begun bilateral consultations with the Chinese on the Americas, because we want to first of all understand kind of what China’s up to and understand kind of their purposes and prospects in the region, but we also want them to understand our purposes and prospects. And at the same time the Chinese have developed a trilateral consultation mechanism with the Koreans and the Japanese about Latin America. The Japanese and the South Koreans historically have been much more present in Latin America than China has. And also Latin American countries themselves have developed a consultation mechanism with the Chinese. So everybody is talking with the Chinese and everybody is trying to figure out what they are up to and what they are doing.

But a couple of interesting things have come out of our consultations with the Chinese. First, they are very alive to our broader national security concerns and very intent on making sure that what they are doing elsewhere in the world, but especially Latin America, does not complicate their relationship with us, especially their access to our market and their access to U.S. investment. That is important to know because it gives us some degree of leverage with them.

Also Chinese diplomacy in the region takes place at a couple of levels. I mentioned earlier they are on this buying spree and that really is the focus of so much of what they are doing in the region right now. But they have a more kind of traditional approach in the region which is a never-ending battle with Taiwan over who has diplomatic relationships with whom. They are trying to find ways to converge these two diplomatic approaches and try to create and generate a more holistic diplomacy in the Americas. They are not there yet largely because of their own capacity and their newness to the region, but they are still working at it.

As they try to build this new diplomacy in the region what they have I think come to understand is if their purpose is to have long term suppliers of energy, food and primary resources for industry, that they need to have stable governments. And that therefore, they really are intent on promoting political stability in the region, to the degree that they can. Again, this is an interesting point of convergence for us and again something that gives us a degree of leverage.

In the most recent consultations we had with the Chinese several months ago at the end of 2007 in Washington, in a meeting that my Chinese counterpart had at the American Chamber of Commerce with a variety of representatives from think tanks, he made the startling assertion that China recognizes that the political vocation of the Americas is democratic, and that successful democracies are the best path to political stability, and that therefore the Chinese do not come into this region with a political or revolutionary purpose, that they come into the region really trying to build stable partnerships. Now you can take that for what you want, but I thought it was a remarkable statement.

I think at the end of the line, to respond to your question, China’s presence in the region is just a reality and it’s not going to go away. The demands they have for their own internal purposes are huge so they will continue to pursue sources of energy, food and primary resources. But it’s very very important that we all maintain this open dialogue with them because China is in a period of great evolution and internal stress and therefore we need to have that dialogue in order to understand what they are up to but also so that they understand what we are up to. So this is something that’s just going to be a constant part of our diplomacy now.

QUESTION:  Good morning. My name is [inaudible] and I attended a meeting and a press conference with USAID Administrator Henrietta Fore, at which time she announced some additional resources that are going to be given to Haiti in response to the food crisis. Would you be able to give me a status today as to where we are in the process?

ASSISTANT SECRETARY SHANNON: I assume that is the food aid assistance? We have given several tranches of food aid assistance to Haiti, and I think it totals now about $45 million worth of food aid. Again, this is part of a larger package that is being worked with other members of the international community who have interests in Haiti, the purpose being to address the dramatic increase in food prices that led to rioting that deposed the government of Prime Minister Alexis.

In terms of a progress report, I don’t know exactly how much of the $45 million has actually been disbursed, but I know that disbursement has begun. And what we are attempting to do right now in Haiti is work with President Preval, put forward to him naming a new Prime Minister that can be approved by the Haitian parliament, and then with the new government begin to address some of the underlying issues of production that have to be addressed if Haiti is going to become more self sufficient in food supply.

QUESTION: Thank you very much. Luiz de Araujo Castro, Consul General of Brazil. I’d like to congratulate you on your words today, which we feel are a very positive and constructive vision of your approach to Latin America and I think it’s very welcome. Twenty years ago I was posted to our embassy in Washington and remember having a long conversation with your predecessor, Elliott Abrams, about Brazil-U.S. relations. I think there has been a presidential difference [inaudible]. I couldn’t get his attention because every two or three sentences he wanted to talk about Nicaragua. [Inaudible] about Brazil. He’d say two words about Brazil, then Nicaragua. Then he’d say, well talk to [inaudible], he really knows about South America. But he had never been there. At that moment he had never been to South America. I welcome the change that not only has [inaudible] very knowledgeable. And Brazil and other countries in our region have been able to develop a very positive and constructive relationship with the United States over the years, and I think this is very positive.

I know that diplomats do not like to speculate, especially not about the political future of their own country. But whether Barack Obama or John McCain is elected President, would you be willing to speculate a little bit on how they will actively be dealing with Latin America generally? In the presidential debates and preparation, very, very little was ever mentioned except for Cuba, migration, and I think that was it. But about the basic relations with the Latin American region as a whole.

MS. PURCELL: A nice easy question. [Laughter].

ASSISTANT SECRETARY SHANNON: It’s very hard to speculate. To begin with, John McCain is the first Central American to ever run for President. He was born in Panama. And Barak Obama in his speech actually did go beyond Cuba. He talked about creating a special envoy to the Americas, addressing energy concerns. The two candidates are thinking about these issues. They both have kind of a cadre of Latin Americanists working in their campaigns.

The reality of campaigns, though, is that they’re not won or lost by a candidate’s thinking on Latin America. So while the kind of policy papers that are being kind of generated by their Latin American teams are important as kind of guideposts, we have to be careful not to read too much into them because at the end of the day whoever is elected President is going to face a national security environment that isn’t much different than the one President Bush faces today. So the range of decisions will not be nearly as wide as some of us might think they are.

It’s my hope, and this is one of the reasons why I talked about the importance of continuity and sustainability. It’s my hope that whatever changes take place in terms of our policy in Latin America that there is a recognition of the importance of the region to us more broadly, of the importance of Latin America being successful in its democracy and in its economies, and of this recognition of the importance of strategic partnerships and how our relationship with these key countries in the region are going to be vital to the success of the region.

In the case of Brazil, which I will address since you represent the government of Brazil, what’s interesting about our relationship with Brazil is that this is a relationship that Rio Bronco recognized at the beginning of the 20th Century as important. And Elihu Root recognized at the beginning of the 20th Century as important. And it’s taken us a hundred years to actually construct something that is important. It took us way too long. But this is a relationship that I think both countries need to pay very special attention to because this relationship will really define what happens in South America and elsewhere in the world.

MS. PURCELL: Mr. Secretary, you mentioned the word national security. Could you explain the thinking of, I guess at this point either the State Department or the U.S. government in general, on the growth of Iran’s involvement and influence in Latin America?

ASSISTANT SECRETARY SHANNON: Happily. [Laughter].

We watch Iran with great interest and concern wherever they go. Our own view is that Iran’s primary strategic focus is the Middle East, and their effort to establish themselves as a leading power in the Middle East. And with influence into Central Asia and South Asia. And the role that Iran plays, especially in Lebanon and in West Bank and Gaza and elsewhere is very worrisome for us. As Iran kind of reaches into the hemisphere and begins to build relationships, it’s important to understand a couple of things.

First, many countries in the region have diplomatic relations with Iran, and we respect that. That’s a sovereign decision. Our argument has always been that those countries that do have these relationships with Iran, number one, need to respect existing UN Security Council sanctions against Iran because of its nuclear program, but that also they need to understand that Iran does have a history of terror in this hemisphere and its linkages to the bombings in Buenos Aires are pretty well established. And one of our broader concerns is what Iran is doing elsewhere in this hemisphere and what it could do if we were to find ourselves in some kind of confrontation with Iran.

Again, the message we underscore to our partners in the region is respect UN sanctions, send a clear and constant message to the Iranians that their behavior, especially in regard to the Middle East peace talks and efforts between Israel and the Palestinian Authority, that people should understand what is going on there and send a clear message to the Iranians that an unwillingness to be helpful in the Middle East peace process is not a good thing. And third, that it is very important for security services to keep a very close eye on those members of the Iranian embassies that are clearly identified as intelligence officers or members of the Kuds Force.

QUESTION: Joseph Ganitsky of the University of Miami.

You [inaudible] concept of strategic patience, and [inaudible]. But what I [inaudible] the notion of [inaudible].

MS. PURCELL: I’m sorry, we can’t hear too well.

QUESTION: Thank you again. Joseph Ganitzky from the University of Miami.

I refer to strategic patience, and from my [inaudible] impatience [inaudible] we see a tremendous change in the economic [inaudible] powers that we have in reference to the [inaudible] nations in the Americas as [inaudible].

ASSISTANT SECRETARY SHANNON: In regards to strategic patience, it is built on the assumption that countries that are attempting to address kind of profound social challenges through democratic processes and procedures are going to make missteps along the way. And that we need to have some patience with these missteps and some degree of confidence that the countries have the ability to self correct because of their institutions and because of a broader commitment to democracy, and because of the kind of internal political battles that take place. And therefore we should not be too quick to insert ourselves, too quick to believe that disaster is near, and that we need to make sure that ultimately as we engage in these kinds of circumstances that we do so carefully and that we do so in the company of others, especially in multilateral institutions. So again, it does not appear that we are trying to impose solutions but we are actually trying to help these countries resolve their own internal differences.

A perfect example is Bolivia. Bolivia right now is at a very important moment in its political history. It’s got a very important political dialogue going on between the government and between governors of provinces that are in the process of holding autonomy referendums.

We believe, as does the OAS and as does the Group of Friends that are working in Bolivia, Brazil, Colombia and Argentina, that this is a dialogue that can reach a solution that will actually be to the benefit of all Bolivians, but that this is a dialogue that is going to play itself out over time and that a variety of democratic events are going to take place while the dialogue plays itself out. Some are internal autonomy referendums in several provinces, but there is also the possibility of a broader national referendum on national and provincial state leadership that’s going to play itself out.

So I’m not sure what the final result is going to be of this process, and as we watch this process we can’t predict what the final result is going to be. But if the Group of Friends can do its job and if it can help the two sides of the dialogue come to some kind of broad terms, I think Bolivian democracy will be stronger for it, Bolivian society will be stronger for it, and I think that we, by showing a degree of patience, by helping the OAS and the Group of Friends help Bolivians address their own problems, Bolivia will be strengthened, the region will be strengthened, and will come out looking better.

In terms of what this means for our influence, the reality is that the nature of our influence is changing for some of the reasons you identified, but also because the region itself is changing. And as our influence changes it does not necessarily mean that we become less influential or less powerful, it just means that how we are able to exercise that influence changes.

As I mentioned, we are in a more competitive environment which means we are no longer the only option for a lot of these countries. And that ultimately is a good thing. It’s a good thing for the countries themselves, it’s a good thing for us because it requires us to be more [inaudible]. But where I think our influence is still very powerful is in the size and importance of our market and what access to that market means. And our ability to work with international financial institutions on behalf of partners and people who want to work with us. And in terms of this broader integration process that is taking place because that is one thing we are really good at. We are really good at helping governments construct systems to address specific problems. There are other areas that we could talk about. But my own view is that it is a mistake to talk about declining influence. I think it is correct to talk about the changing nature of influence.

MS. PURCELL: Last question.

QUESTION: [Inaudible] as you will expect.

ASSISTANT SECRETARY SHANNON: Yes.

QUESTION: [Inaudible], General Motors. Can you comment on the reported links between the Chavez administration and the FARC and the prospects for further U.S. sanctions?

ASSISTANT SECRETARY SHANNON: They’re not reported, they are real. [Laughter].

President Chavez did an important thing the other day. [Laughter]. He called on the FARC to put down their weapons. He called on the FARC to release their hostages. He said that “La guerra de guerrilla ya es parte de la historia.” In other words the kind of warfare that the FARC conducts is now part of history. Those were very useful words. It is the first time he has said that.

It is our hope that those words will be backed up by actions designed to prevent the use of Venezuela’s frontier with Colombia for the movement of weapons. Just the other day a Venezuelan national guardsman was captured inside Colombia with 40,000 rounds of ammunition that he was going to be turning over to the FARC. And the egress of drugs from Colombia. In other words, there is a lot that Venezuela can do in regard to Colombia.

It is our hope that as we understand better all that has come out of the tapes that were captured from the FARC camp site where Raul Reyes was killed and the hard drives and the thumb drives and everything else, and as we get a better understanding of the structure of the FARC at this moment in time, that countries in the hemisphere, and not just us but other countries in the hemisphere will understand that this is a democratic state that is under assault and that there needs to be a degree of solidarity with that democratic state. And that the region itself can no longer ignore the security concerns of 40 million Colombians. There has to be some commitment to Colombians.

In terms of U.S. sanctions, the designation of state-sponsored terrorism is a really serious designation and it involves more than just political support. It involves more than just material support to terrorist organizations. It involves a clear connection between that material support and terrorist acts in which people are killed. So there is a high bar for this.

But that does not mean we re not aware of what is happening and the kind of relationship that has been built over time between some members of the Venezuelan government and the FARC. And again, what we have been saying publicly is that this relationship exists, and the question that Venezuela faces is how will it use that relationship? Will it use that relationship in an effort to get the FARC to come in out of the cold and end the four-decade conflict? Or will it continue to conspire against a democratic neighbor?

It is my hope that what President Chavez said the other day is they have made a decision to try to help Colombia end its conflict, but that I think is what everybody in the region is waiting for, how Venezuela will define itself.

[Applause].

MS. PURCELL: Mr. Secretary, thank you so much for your willingness to share all your opinions and to share your thoughts with us. Thank you all for your questions. I think this has been an extraordinary session. We truly appreciate your coming here, and I know we have already applauded once, but please let’s give the Secretary a second round of applause.

[Applause].




Released on June 18, 2008

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