ACCORDING TO the Congressional Research Service, trade between the United States and Latin America grew an astounding 82 percent between 1998 and 2009, surpassing the growth rates of U.S. commerce with Asia or Europe. In 2011 alone, U.S. exports to and imports from Latin America increased by more than 20 percent. Every year, the United States imports more crude oil from Mexico and Venezuela than from the entire Persian Gulf. As one Obama administration official puts it, “We do three times more business with Latin America than with China and twice as much business with Colombia [as] with Russia.”

The United States also shares with Latin America an interest in cementing and protecting democratic values, as well as a set of common problems—including deadly transnational criminal threats and the mutual need to harness tomorrow’s energy resources.

Cultural and human ties are profound and growing: Latinos make up 15 percent of the U.S. population, and the United States is now the second-largest Spanish-speaking country in the world after Mexico.

Yet given the scale of these bonds, the degree of high-level U.S. strategic thinking about the region remains disproportionately low. The result is that Latin America and the Caribbean, with a population of roughly six hundred million and a GDP of more than $5.6 trillion, continue to represent a missed U.S. opportunity, economically, politically and diplomatically.

There are exceptions. Larger countries—Mexico, Brazil, Colombia—do get time and resources. Occasionally, the United States seeks (but does not always secure) Latin America’s collaboration at the un or when natural disasters hit the region’s weak states. But for the last two decades, U.S. domestic politics have too often driven Washington’s Latin America agenda—whether on issues of trade, immigration, drugs, guns or that perennial political albatross, Cuba, long driven by the supposedly crucial “Cuban vote” in Florida. As painfully, a host of Cold War legacy issues and actors still deplete the energy from Washington’s already anemic Latin America policy debate.

In his first term, President Obama rarely overcame these dynamics. Defending his administration’s record, senior officials unfurl a long list of dialogues, partnerships and initiatives. They cite Secretary of State Hillary Clinton’s travel—the most of any secretary of state in history. Early on, Clinton responded to congressional Democrats who recommended face time and a posture of listening, not lecturing. Her speeches in and about the region have put forth thoughtful ideas about social inclusion, gender, education and energy independence.

Likewise, after a century in which echoes of the Monroe Doctrine and a lingering ethos of the “white man’s burden” dominated Washington’s posture toward Latin America, Obama sought to bury the hatchet of asymmetrical power and the resentments it engendered. He appeared at a couple of summits, shook the hand of Venezuela’s president, Hugo Chávez, and visited several countries.

Yet in urging regional leaders to “deal with the future” and not “debate the past,” as he did in 2009, Obama has at times undervalued the importance of actually acting to address long-standing grievances. Ultimately, a U.S. Latin American strategy tailored to geopolitical realities in the region and poised to take greater advantage of its many economic opportunities will require real work, not just listening tours.

OBAMA ENTERED office amid sharpened anti-American skepticism across the world, even among America’s closest allies. Latin America was no exception. By 2009, two George W. Bush terms colored by torture, extraordinary rendition, Abu Ghraib, Guantánamo, counterinsurgency and a dismissive attitude toward multilateral institutions had reinforced long-held perceptions about American power. In the eyes of many Latin Americans, the Bush years had expanded to the global stage the kind of policies they had long experienced. A hostile climate for immigrants to the United States, particularly the undocumented, in a country grappling with the complex and emotional issue of illegal immigration, compounded the mistrust.

Bush’s tenure in Latin America concentrated largely on the drug war (based on funding) and on opening markets for American businesses (measured by the political capital and time spent negotiating free trade agreements with Central America, the Dominican Republic and Colombia). The president also seemed fixated in his first term on left-wing regional leaders such as Fidel Castro in Cuba, Venezuela’s Chávez and Haiti’s Jean-Bertrand Aristide. In Bush’s second term, however, he appeared to recognize the Left as a permanent feature of Latin American politics. Yet in the interim—with the United States preoccupied elsewhere in the world—Latin America moved beyond its historic deference to American foreign-policy priorities. And, notwithstanding the so-called pink tide of left-leaning governments elected to power in the region in recent years, Latin America largely embraced sound macroeconomic policies, diversifying its trade and investment portfolios to include Europe, India and China, while also moving to build new regional institutions that excluded the United States. With some big exceptions—namely, American drug consumption and lax gun laws, which have fueled transnational criminal networks in the region—Latin American leaders generally no longer saw the United States as the sole cause of or solution to their problems.

Obama’s election in itself raised America’s standing in the region. Just three months after his inauguration, the new president strode into the 2009 Fifth Summit of the Americas in Trinidad and Tobago hoping to ride this wave of goodwill and, in the process, frame a regional policy agenda for his presidency. Proposals related to citizen security, counternarcotics, microfinance, economic recovery (including a recapitalization of the Inter-American Development Bank) and energy (the so-called Energy and Climate Partnership of the Americas) offered a substantial menu of pragmatic initiatives. And even if Obama lacked patience for the depth of Latin America’s historic grievances against the United States, he hit a note of conciliation by acknowledging U.S. responsibility for past impositions and identifying U.S. demand for narcotics as a root cause of drug violence.

In the lead-up to the summit, however, political opinion in the region leapfrogged over energy, the global financial crisis and poverty, focusing instead on America’s relations with Cuba. Fidel Castro’s 2006 illness and his brother Raúl’s subsequent formal assumption of power in 2008 unified Latin American opinion around the idea of a soft landing on the island. Regional assessments of Cuba’s actuarial tables, coupled with the political coming-of-age of numerous Latin American leaders for whom Cuba remained charged with personal history, made the half century of America’s embargo and regime-change policies a litmus test for Obama.

In symbolic terms, many countries throughout the region regarded Washington’s relentless hostility toward Havana as a living vestige of the imperialism they had experienced prior to and during the Cold War. Strategically, the United States had lost considerable standing in countries now governed by the Left and whose leaders at times used Washington’s anti-Cuba policies as fodder for their own domestic agendas. Washington’s Cuba fixation also played poorly among the larger regional powerhouses: Brazil, Mexico, Chile, Argentina and Colombia. The embargo, they argued, would only impede the reform process then under way in Havana by strengthening hard-liners at the very moment Raúl Castro had signaled some readiness to pursue a more open society.

In Trinidad and Tobago, Obama and Clinton acknowledged U.S. policy toward Cuba had failed and offered to write a new chapter in the history of the two countries. Just prior to the summit, Obama repealed some Bush-era restrictions, allowing Cuban Americans with families in Cuba unfettered travel and remittance transfers to the island. (Later, in December 2010, he would also reinstate, in a more limited way, a Clinton-era policy that granted so-called people-to-people travel licenses to non–Cuban Americans.) But for the leaders gathered in Port-of-Spain, these measures proved too limited to change the subject. As a result, Obama and Clinton still got an earful from their regional peers.

Nonetheless, the president and his deputies signaled their readiness for partnership rather than paternalism by sitting in the room, listening to the rainbow coalition of mostly next-generation leaders, and hitting the right notes on social inclusion and shared prosperity. More intangibly, Obama’s personal story and youth gave his counterparts a sense that they would be able to find common ground with this president. Thus, despite their skepticism over Cuba, the region’s leaders generally accorded Obama an assumption of good faith.

A few months later, the Organization of American States (OAS) General Assembly, meeting in Honduras, afforded Washington the chance to put some meat on the bone of its declared intention to address the Cuba impasse. Almost fifty years earlier, the OAS had voted to suspend Cuba’s membership at Washington’s insistence. Now Washington signaled its readiness to discuss other members’ demands that Cuba be brought back to the collective table. Leery of the OAS as an institution weakened by Washington’s historic dominance, Cuba played coy in public during the backroom negotiations, insisting it had no interest in a return. Behind the scenes, however, OAS secretary general José Miguel Insulza and Brazil’s then president Luiz Inácio Lula da Silva helped broker a deal that resulted in a unanimous vote to lift Cuba’s suspension. But the deal was predicated on Cuba’s request for inclusion and on its compliance with democratic values enshrined in the 2001 Inter-American Democratic Charter. Though critics in Congress threatened unsuccessfully to cut off U.S. funding for the OAS in retaliation, both the administration and the media heralded the new consensus as a forward-looking diplomatic advance. Without giving ground on democracy, this confection gained regional points for Washington and gave Cuba a diplomatic win it could plausibly deny having actually sought.

SUCH FORWARD momentum on regional affairs came to a halt on June 28, 2009, when the Honduran military raided the home of then president Manuel Zelaya and put him on a plane to Costa Rica, still in his pajamas. Obama and Secretary Clinton initially condemned the coup and defended the legitimacy of Zelaya’s presidency. In so doing, they aligned themselves with politically disparate regional voices such as Brazil, Chile, Argentina and Mexico—and consciously distanced themselves from the legacy of George W. Bush’s controversial endorsement of a failed 2002 coup attempt in Venezuela.

But within weeks the mood changed as the organizers of Zelaya’s ouster and their lawyers pushed hard in the U.S. Congress and the media to promote an alternative narrative. Zelaya, they argued, had provoked his own demise by pushing for a referendum that, though nonbinding, might create the political conditions for him to alter the country’s constitution and seek reelection. The dispute exacerbated a profound polarization in Honduras between status quo forces (represented by the military, the Congress and the Supreme Court) and the base of often poor, poorly organized voters, who saw Zelaya’s ouster as a potentially destabilizing step backward for Honduran society.

Obama’s initial instinct was to side with the consensus in the region to restore Zelaya to power. But American conservatives in Congress who had vowed to make Obama a one-term president would have none of that. Eager to pin the scarlet letter of national-security weakness on the new Democratic administration, they argued that Zelaya deserved his fate, given his affinity with Hugo Chávez in particular. Jim DeMint of South Carolina, a Republican member of the Senate Foreign Relations Committee, championed the Hondurans who organized the coup and quickly found two allies on the committee bent on stopping Obama from moving further on Cuba: newly elected Florida Republican Marco Rubio and New Jersey Democrat Robert Menendez. The latter was well-known for long-standing warnings to fellow Democrats in Congress and the White House that a more liberal policy toward Cuba would cost his support—whether campaign finance from his donors or his votes on major appropriations bills. Combining forces, DeMint, Rubio and Menendez held up confirmation of the administration’s nominees for assistant secretary of state for Western Hemisphere affairs and ambassador to Brazil.

The new administration spent the second half of 2009 tied up in a poisonous confirmation process rather than pursuing the framework it had set forth in Trinidad and Tobago. Ultimately, to secure confirmations, the Obama team backed off its initial position on the Honduran coup and acquiesced in Zelaya’s ouster. Further, the new administration committed itself to Bush-era Cuba programs, for which $45 million had been appropriated for the fiscal year in which Obama entered office. Leaving those programs in place soon blew up in Obama’s face when the Cuban government arrested and prosecuted a USAID contract worker named Alan Gross for “acts against the independence or the territorial integrity of the state.” Gross, who was working for a Bethesda-based company that received multimillion-dollar contracts from USAID for Cuba-related initiatives, was convicted of smuggling into Cuba communications equipment that could neither be obtained commercially in the United States nor monitored easily by Cuban authorities. Pushed with particular zeal by Rubio, Menendez and other Cuban Americans in Congress and promoted politically under the more benign rubric of democracy promotion, these activities were widely understood to be part of the U.S. government’s long-standing regime-change efforts directed against Cuba. According to Gross’s 2012 lawsuit against USAID, the risks involved should have obligated USAID to train Gross in counterintelligence and Spanish.

Over the following months, the slog in the Senate Foreign Relations Committee over Cuba, Honduras and confirmations led to an administration practice of bending to ideological winds in Congress when it came to Latin America—even at the expense of the president’s stated diplomatic objectives. This occurred despite support for the president from key congressional Democrats and a number of Republicans, including Representative Paul Ryan, who backed trade with and travel to Cuba.

This path of least political resistance extracted a cost for the administration in terms of U.S. standing in the region. In the meantime, the noise over Cuba and Honduras reinforced the administration’s strategic instincts to focus on the region’s biggest countries, especially Mexico, Brazil and Colombia. Mexico mattered particularly because of its proximity and the severity of its security crisis, as well as the depth of its commercial and human ties to the United States. Brazil stood out for its sheer size and growing diplomatic and economic weight. Colombia—long tied to U.S. security assistance—represented an institutionalized legacy relationship and an opportunity to involve a model ally in security efforts within and beyond Latin America. With such priorities rising to the top in a low-priority region, Obama’s Latin America policy increasingly resembled his predecessor’s.

IF ANY country warranted such continuity from Washington, it was Brazil. While George W. Bush’s second-term pivot toward pragmatism failed to produce diplomatic breakthroughs with Bolivia, which threw out the U.S. ambassador and the Drug Enforcement Administration, or Venezuela, the world’s sixth-largest oil producer, the Bush administration saw that Brazil required a more serious strategy.

As the world’s fifth-largest country in landmass and population, Brazil’s sheer physical scale, together with its vast natural resources, has contributed to its global emergence. Steady growth between 2004 and 2010 served to integrate Brazil into the global financial system, allowing the country to surpass Great Britain as the world’s sixth-largest economy in 2012. Brazil is a world-class player in commodities markets and a leading global producer of iron, oil, soybeans, ethanol, wood, beef, cane sugar, coffee and citrus. It holds 18 percent of the world’s freshwater supply. Brazil’s social programs, a signature accomplishment of the country’s democracy, are responsible for the rapid movement of some forty million Brazilians out of poverty, all made possible by a stable macroeconomic environment of low inflation and steadily declining interest rates.

Good chemistry between Bush and Brazilian president Luiz Inácio Lula da Silva, senior Brazilian officials say, helped the Workers Party leader to govern from the center. In bilateral relations, big-ticket items such as free trade agreements fell off the to-do list, but other important initiatives served to slowly pull the two societies together. At the same time, Brazilian foreign policy under Lula and his foreign minister, Celso Amorim, built upon Brazil’s tradition of cautious independence from great-power politics while also emphasizing its identity as a democratic and emerging power with a strategic stake in enhancing its regional bona fides. Indeed, in an era of widespread anti-American and anti-Bush sentiment, Brazil maintained cordial relations with Bush while seeking to rewrite the rules of global governance to reflect new global realities—regarding trade policy at the WTO, peace and security issues at the UN, and voting rights at the IMF. Collaborating with other emerging nations, Brazil carved out a leadership role that at times challenged the traditional powers, including the United States, over the international architecture that had governed the post–World War II era.

Until recently, Brazil’s gigantic internal market, Portuguese heritage and—in comparison to its neighbors—more intensive history of African slavery militated against strong identification with the rest of Latin America. But Lula and Amorim reasoned that Brazil’s geopolitical aspirations required a foreign policy that defined Brazil as the strategic anchor of South America and defined Brazilians as Latin Americans. Following initial steps taken by Lula’s predecessor, President Fernando Henrique Cardoso, they pushed for new regional institutions such as the Union of South American Nations and the Community of Latin American and Caribbean States. Brazil began providing assistance to the Colombian government with hostage rescues and intelligence on drug flights garnered from its satellite system. Since 2004, Brazil has won praise for successfully leading the United Nations Stabilization Mission in Haiti. And Brazil’s development bank backed Brazilian megacompanies investing throughout the Americas, including in Cuba and the United States.

Lula took some domestic flack for appearing too simpatico with the Castros in Cuba, Chávez in Venezuela and Evo Morales in Bolivia. Still, by the time Obama came into office during the last year of Lula’s second term, Brazil had registered a solid regional record. Among the most important: Brazil’s commitments to macroeconomic stability, democracy and improving social inclusion were now regarded from El Salvador to Peru as an alternative to the bluster, executive power grab and poor economic management in Chávez’s Venezuela.

Lula wanted warm relations with Obama, but frictions emerged over the administration’s decision to buck the regional consensus on the coup in Honduras. Moving to consolidate its gains in Latin America, Brazil challenged the United States at the OAS and helped Zelaya return to Tegucigalpa, where he camped out in the Brazilian embassy for four months. Washington and even many Brazilians saw Brasilia’s tough stand over Honduras as a case of overreach into a subregion of the Americas still clearly within Washington’s shrinking domain. Lula and his foreign minister, by contrast, saw the Honduran crisis as an opportunity to champion the very liberal-democratic order that the Americans themselves had long purported to defend. The fact that Central America had been the scene of U.S.-backed oligarchies, military regimes, death squads and counterinsurgencies helped Brazil position itself as the principled, law-abiding regional power. While Obama and Clinton may have seen their position on Honduras as the pragmatic path of least political resistance, especially by comparison with what seemed like more consequential foreign-policy issues, it ended the era of relative good feeling beginning in Trinidad and Tobago and set the stage for another standoff with Brasilia, this time over much higher stakes: Iran.

Global tensions over Iran’s nuclear program coincided with Brazil’s rotating two-year seat on the UN Security Council, where securing the votes for a sanctions resolution on Iran topped Obama’s agenda. Lula and Amorim saw sanctions as a slippery slope to war and wanted to protect Brazil’s own right to a peaceful nuclear program consistent with the Nuclear Non-Proliferation Treaty. Brazil, moreover, long has seen itself as mediator and bridge between the old powers and the new. Brasilia calculated that success in bringing Tehran to the negotiating table might pave the way to a permanent Security Council seat and prevent or at least slow the momentum toward a direct conflict between Iran and the West.

Moreover, Lula believed he had a tacit green light from the White House when, with Turkey’s help, he revived an earlier U.S.-supported proposal to have Tehran send its uranium outside of Iran’s borders to be enriched for civilian purposes. Washington did not expect these efforts to succeed. Thus, when Lula, Turkish prime minister Recep Tayyip Erdogan and Iranian president Mahmoud Ahmadinejad proposed a nuclear-fuel-exchange deal in May 2010—without giving Washington advance notice—the response at Foggy Bottom was surprise and anger. Irritated by Brazil’s lack of deference to U.S. leadership and convinced Lula’s team had fallen for an Iranian stalling tactic, Washington moved forward with its UN sanctions resolution and publicly upbraided Brazil. To avoid appearing an opportunist to the developing and non-Western world, Lula instructed his diplomats, long accustomed to the more polite abstention, to vote no on the resolution. Combined with the flap over Honduras, this incident left considerable bad blood between the White House and Lula’s government.

IT TOOK the inauguration of a new president, Dilma Rousseff, in January 2011 for Washington and Brasilia to begin recovering from the conflict over Iran. Rousseff rapidly changed the tone and substance of Brazil’s foreign policy in ways that encouraged Foggy Bottom. A victim of torture, she publicly condemned the stoning of women in Iran and voted to appoint a special rapporteur for Iran in the UN Human Rights Commission. She appointed Antonio Patriota, Brazil’s ambassador in Washington under Bush and Obama, as her foreign minister. And she moved quickly to restore diplomatic relations with the new government in Honduras. Within a year, the United States and Brazil would negotiate a deal to avert close to $1 billion in Brazilian duties on American exports to compensate for Washington’s cotton subsidies. Distancing herself, moreover, from some of the high-wire foreign-policy initiatives of the previous administration (in which she had served as Lula’s chief of staff and energy minister), Rousseff made clear that her top priorities lay on the home front: growth with social inclusion, progress in eliminating poverty, reducing inequality and—to move Brazil up the value-added chain—investments in infrastructure and education to foster innovation in science and technology.

Foreign policy thus became a more direct extension of her domestic agenda. Her priority list featured global finance, climate change, energy, Security Council reform, and managing relations with China and the United States. China has become the largest source of foreign investment in Brazil and a top consumer of Brazilian commodities such as soy, iron ore and oil. But Chinese currency manipulation had weakened the Brazilian real and reduced the competitiveness of Brazilian exports. The United States, meanwhile, offered a natural market for Brazilian capital and commerce but protected its farm and ethanol industries, just as Brazil did. From China, Rousseff needed currency reform; from the United States, she needed market access, financial stability, and entrée for Brazilian students to American educational and scientific institutions. Her “Science without Borders” program allocated $1.2 billion to send one hundred thousand undergraduate and graduate students abroad, mainly to the United States.

The ubiquitous nature of Lula’s foreign policy and the prior clash over Iran also prepared the Obama and Rousseff administrations to deal smoothly with disagreements over new international-security crises. Indeed, Rousseff’s initial attempts to bury the hatchet over Iran in the first months of her administration coincided with the outbreak of civil war in Libya and the controversy over American military involvement. During Obama’s March 2011 visit to Brazil, he announced somewhat awkwardly the beginning of limited American military operations to support the insurgency against Muammar el-Qaddafi. Rousseff chose not to pick a direct fight. Instead, she used the remainder of Brazil’s stint on the Security Council to advance the goal of Council reform by engaging emerging democratic nations, established powers and developing countries. As civilian casualties mounted in Libya, moreover, Patriota and Rousseff circulated a proposal to amend the “responsibility to protect” doctrine with an iteration they dubbed “responsibility while protecting.” The proposal called for a greater focus on mitigating humanitarian casualties such interventions were intended to avert. Brazil received a serious hearing for its ideas, and Washington began to accept that Brazil and other major democratic powers such as India and South Africa would insist on reform and resist automatically conforming to the received wisdom of the established powers.

Despite differences over Libya and Syria, both Obama’s visit to Brazil and Rousseff’s later visit to the United States in April 2012 took ideology largely off the table. And in December 2011, Congress finally ended—with White House backing—its subsidies for corn-based ethanol, long a major issue for Brazilians seeking access to the American market for their own sugar-based ethanol products. But precisely because Brazil lives in a peaceful, nonnuclear and democratic neighborhood, the Obama administration stopped short of a Brazil strategy worthy of its potential. Both countries now participate in a host of joint dialogues, clearly viewing the convergence of interests, where possible, as a plus. They cooperate on matters that include biofuels, tropical-medicine initiatives in the Caribbean and Africa, and drug interdiction in Bolivia; they disagree on Cuba, where Rousseff has made clear that she considers Washington’s approach toward Havana counterproductive. But the United States pointedly avoided endorsing Brazil’s case for a seat on a reformed UN Security Council, in contrast to backing nuclear India’s identical claim. Meanwhile, a skeletal defense-cooperation agreement negotiated under George W. Bush lost some muscle when the Pentagon, after an aggressive anti-Brazil lobbying campaign by Hawker Beechcraft, canceled a pending contract to purchase aircraft from the Brazilian aviation company Embraer.

The perennial second-class status afforded to Latin American affairs—even when it comes to such an important power as Brazil—came into full relief during Rousseff’s 2012 visit to Washington. Notwithstanding the Obama administration’s commitment to working in a world of emerging powers, Brazil’s foreign-policy independence and implicit geographic and thus bureaucratic determinism within the interagency process appear to disqualify it from full diplomatic treatment. Still, while Brazilian diplomats and presidents may bristle at such slights, they recognize that this distance from the United States affords Brazil the space to autonomously pick and choose its foreign-policy objectives in order to propel its domestic priorities.

COLOMBIA, WHERE Washington has invested over $7 billion in counternarcotics and counterinsurgency programs since 1999, has traditionally been much more dependent on the United States than Brazil. Yet under the leadership of its president, Juan Manuel Santos, Colombia has sought a degree of independence from Washington after years of ideological intimacy. With the strategic upper hand on the battlefield against the Revolutionary Armed Forces of Colombia (FARC), Colombia’s primary Marxist-Leninist insurgency force, and with bona fides from his time as defense minister to the hard-line president Álvaro Uribe, Santos broke with Uribe—and to some extent with Washington—in order to end his country’s internal conflict and Colombia’s isolation from its neighbors. He worked out a modus vivendi with Venezuela’s Chávez after years of tension. The result was restored bilateral trade, joint extraditions, tighter security on the country’s porous two-thousand-mile border and an effort, facilitated at Santos’s request by Cuba, to press the FARC into talks with the Colombian government.

At first thrown off by Santos’s autonomy, the Obama administration adjusted quickly and successfully sought from Congress approval for the languishing free trade agreement negotiated by George W. Bush. Likewise, Obama continued a steady reduction of security resources devoted to Colombia—while pushing a willing Bogotá to export its U.S.-funded antidrug expertise to Central America and the Caribbean.

Santos also added his name to the growing list of current and former Latin American heads of state that question America’s largely ineffectual three-decade-long approach to interdicting narcotics flows. President Obama listened to their critique and boosted funds for treating American drug habits as a public-health challenge, not just a matter of law and order. Yet he rejected their call for legalization or “harm reduction” strategies, arguing that legalization would not address the underlying economic and institutional weaknesses that help power the illicit, transnational drug trade.

Going forward, the passage of marijuana-legalization laws in Colorado and Washington might afford the United States greater leeway to reconsider the basic precepts of the drug war. Thus far, however, a belief within the bureaucracy in the lessons of Plan Colombia’s counterdrug strategy coupled with understandable anxiety over levels of violence near the Mexican border and in Central America, led Obama to extend, in slightly amended form, the Mérida Initiative assistance programs for Mexico he inherited from Bush. The effectiveness of these efforts has been widely questioned by human-rights activists concerned by the collateral damage accompanying a militarization of the drug war.

Combating transnational criminal cartels has dominated relations between the United States and Mexico, which have become involved in each other’s security and intelligence agencies to an extent unimaginable just a few years ago. Washington has sent more than $2 billion in aid south of the border during Obama’s first term. Yet Mexico’s conservative president, Felipe Calderón, left office deeply frustrated that Obama held back on the single most significant component of their much-lauded “shared responsibility” in addressing the roots of the violence: the interdiction of guns flowing into Mexico from the United States.

Between 2006 and 2011, some sixty thousand Mexicans fell victim to cartel-related homicides. Many of Mexico’s hideous crimes, moreover, were committed with firearms sourced in the United States. In fact, over the past four years, 70 percent of the firearms recovered by the Mexican government from crime scenes and submitted for tracing to the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) were found to have originated north of the border. Reinstating the assault-weapons ban (allowed to lapse in 2004) requires an act of Congress, which, fearing the presumed political power of the National Rifle Association (NRA), has failed to act. In his second term, however, Obama will have room to prove that the NRA is actually a paper tiger. Recent surveys indicate that 74 percent of NRA members and 87 percent of nonmember gun owners favor some gun-control measures such as background checks on people purchasing firearms.

Despite Brazil’s higher profile, the security challenge in Mexico has represented probably the greatest priority of the United States in the region. Yet, the scandal over the ill-fated “Fast and Furious” ATF operation dominates memories of Obama’s first-term strategy south of the border. As violence increased and the Mexican economy began to thrive, public opinion increasingly questioned Calderón’s emphasis on a military approach. Some even wistfully recall the era when the Institutional Revolutionary Party (PRI), which dominated Mexican politics for seven decades until 2000, maintained a cold peace with the leading cartels. But with more active cartels and drug factions than ever before, the PRI’s return to power under President Enrique Peña Nieto is unlikely to prompt a return to the status quo ante. Still, a new president in Mexico and Obama’s reelection could pave the way for a reset in the security strategy the two countries have pursued over the last six years.

OBAMA ROUNDED out his first term with yet another Summit of the Americas, this time in Cartagena, Colombia. Once again, the president spoke eloquently about a common regional agenda promoting employment, education, energy, the environment and infrastructure development, all with an eye toward making the region economically competitive in the twenty-first century. Yet Obama dismissed his closest regional partners’ demands that the next summit include Cuba. In an echo of remarks from 2009, he noted, “Sometimes I feel as if . . . we’re caught in a time warp, going back to the 1950s and gunboat diplomacy and Yankees and the Cold War, and this that and the other.” It’s difficult to imagine an American president telling the Israelis, Palestinians, Vietnamese, Japanese or Chinese that they are just too caught up in history. Gunboat diplomacy may indeed be a thing of the past. But Washington’s response to the coup in Honduras, the obsolescence of U.S. Cuba policy and the ineffectual drug-and-gun strategy all suggest that Washington itself is helping to perpetuate the time warp.

It’s understandable that Obama finds these fixations exasperating. But they need not become permanent features of his second term. Having won nearly half of the Cuban American vote in Florida in 2012, a gain of 15 percentage points over 2008, Obama can move quickly on Cuba. If he were to do so, he would find a cautious but willing partner in Raúl Castro, who needs rapprochement with Washington to advance his own reform agenda. Obama should move to clean up the regime-change programs and move to swap jailed U.S. subcontractor Alan Gross for the five Cuban agents imprisoned (or, in one case, already out on parole) in the United States. He should use his executive authority to eliminate restrictions on nontourist travel for all Americans and negotiate a bilateral agreement on a host of neighborhood security and environmental issues. Finally, he should take Cuba off the list of state sponsors of terror. Cuban Americans in Congress and some other Florida Democrats will howl in protest, but the domestic political noise rapidly will be drowned out by the applause and support from pundits, the business community and the public, including increasing numbers of Cuban American business owners of both political parties. Obama’s Latin American partners and the regions skeptics alike will also cheer the president. Obama should then urge Congress to pass legislation to end the travel ban and embargo. The American tourism, agriculture, energy, construction, health care, biotechnology and pharmaceutical industries will quickly support such a move, helping Obama to secure his legacy as the first president in sixty years to set the United States and Cuba on a rational course.

Even if Obama stops short of a full-throated debate about legalizing or decriminalizing drugs, Mexico, Central America and the Caribbean will face fewer gun-related deaths and see the United States as a more serious partner in weakening transnational criminal networks if the president beefs up regulation and enforcement efforts pertaining to gun sales, tracing and trafficking. He should support California senator Dianne Feinstein’s plan to reinstate the assault-weapons ban, and he should push ratification of U.S. membership in the inter-American convention on arms trafficking. Despite the NRA’s predictable assertions that such moves would represent an erosion of Second Amendment rights, the president would have the bipartisan support of mayors, governors, state legislators and law-enforcement officials across the country.

With serious initiatives on Cuba and guns, backed up by his now-stated interest in pursuing a major second-term move on immigration, the president can free up considerable diplomatic capital in the region to focus on issues that really matter. The Obama administration seems to recognize that the major regional issues are not problems Washington can fix alone but rather transnational challenges that the United States faces with other nations of the Americas—whether energy security, education, social inclusion, global competitiveness, climate change, citizen security, or China’s political and economic rise. Paradoxically, at a moment when Latin Americans have never been more cognizant of their human ties to booming Latino populations in the United States, most of the resilient democracies and growing economies of the region prize their autonomy and do not—with the exception of Haiti—expect big-ticket assistance packages Washington cannot afford. Thus, by choosing to slay the domestic political dragons that bedeviled his first term, Obama can create the running room to align his analysis with policies that finally reflect new regional realities as well as his country’s national interest.

Julia E. Sweig is the Nelson and David Rockefeller senior fellow for Latin America studies and director for Latin America studies at the Council on Foreign Relations.

Image: Pullquote: Latin America and the Caribbean, with a population of roughly six hundred million and a GDP of more than $5.6 trillion, continue to represent a missed U.S. opportunity, economically, politically and diplomatically.Essay Types: Essay