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US no longer towers over Latin America

As America became distracted by the war on terror after 9/11, the region sought other partners.

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Instead, the idea of a US-centric hemispheric free-trade area has faltered, and Brazil has become one of the world's top developing powers and emerging markets. Moreover, three Latin countries – Brazil, Mexico, and Argentina (which are part of the Rio Group) – are members of the Group of 20, which met earlier this month to reform the global financial system.

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Politically, the region demonstrated last year its growing independence by expanding the Rio Group to include Cuba – creating a kind of rival to the US-dominated Organization of American States, which at Wash­ington's insistence excludes Cuba.

Indeed, that deepening independent streak may be on display in Trinidad this weekend if Mr. Chavez follows through on his pre-summit promise to confront the US over what most Latin leaders believe is an outdated and counterproductive policy towards Cuba.

Perhaps most significant, Latin America has managed to cut its poverty rates over the past decade – evidence for the region that progress is not dependent on the goodwill and focus of Uncle Sam.

"Between 2003 and 2008, we had average annual growth of 4.5 percent – growth we had not seen since the late 1960s," says Inés Bustillo, director of the Washington office of the Economic Commission for Latin America and the Caribbean, a United Nations agency. "That growth, and some really sound fiscal policies and expanded social initiatives, led to a 9 percent drop in the poverty rate – 40 million people moving above the poverty line."

None of this means the US has become irrelevant in the region. The US remains the largest single source of foreign direct investment in Latin America, although its share of the pie has shrunk as Europe and Asia have expanded theirs.

Colombia, an American favorite during the Bush presidency, has managed to pull itself out of the dregs of a narcotics-fueled civil war – with multibillion-dollar backing from the US. And Mexico remains inextricably tied to its giant neighbor to the north, sending 78 percent of its exports to its free-trade partner – down from 89 percent in 2000.

An attenuated US dominance has opened the door to a new level of political, economic, and diplomatic maturity in the region. "The US will always be a preeminence in Latin America, but the fact that its influence is weakening means these countries are growing up," says Norman Gall, executive director of the Fernand Braudel Institute of World Economics in São Paulo, Brazil.

The new reality of Latin America's relations with the US, some regional experts say, is more in tune with the approach of Obama, who recognizes the US is no longer an unfettered superpower and who uses words like "equality," "exchange," and "listening" to describe his diplomacy.

"The region is ready for a new dialogue, and there is considerable excitement about a new president who uses the word 'dialogue' more frequently than it was used in the past," Ms. Bustillo says. Added to that is a sense in much of the region that Obama speaks a "common language" with the region on economic development, she says. After swinging too far into market deregulation, the region is "looking for the right combination of the state and the market," she says.

Obama's approach to the region will be on display at the Summit of the Americas, which brings together 34 countries. He "doesn't go to Trinidad with all the answers," as the US might once have done, says Jeffrey Davidow, Obama's adviser for the summit and a former US ambassador to Mexico and Venezuela. Instead, it's "Let's see what other countries have to say."