For the past decade the Middle East has dominated our attention.  In terms of national security and economic stability (oil), the region is indeed very important.  However, that is very likely to change in the coming years.  It won’t be long before the U.S. will have a more balanced orientation in terms of foreign policy.  From a global perspective, there is one region that shows tremendous promise in terms of new energy and trade potential - and it is in our backyard.

There U.S. will inevitably decline its involvement in the Middle East.  First, our efforts to stabilize the region and keep oil prices low have largely failed.  In addition, new sources of petroleum are being found throughout the world.  Second, we are withdrawing from Iraq and Afghanistan in the next five to ten years.  Although Iran and Al Qaeda remain threats, on the whole the importance of the region is in decline.  Finally there is a general Middle East fatigue among the American people, which is putting pressure on Washington to pull away from the region and avoid further entanglements.

As a matter of policy, the U.S. must begin gradually disengaging itself from the Middle East.  An analysis of the region provides a long list of reasons why the U.S. should not be expanding economic and political ties.  Relying on Arab oil is a major strategic vulnerability that is largely responsible for our large military presence.  Despite our efforts, the region remains unstable and hostile.  To make matters worse, the U.S. is closely aligned with tyrannical governments that oppress their people and are on the verge of collapse.

The question is where should our attention be refocused?  In terms of strategic threats, the U.S. must always be weary of Russia and China.  Economically Europe is stagnating and many economists predict the rapid growth in China will hit a wall.  In either case our trade relationship with China is already extensive.  Africa remains a risky investment.  That leaves Latin America.

Unlike the Middle East, Latin America is politically stable and democratic.  In the last thirty years the region has transitioned from authoritarian dictatorships to new liberal democracies.  The region is also growing rapidly in terms of economic power.  For the most part they have escaped the recent global recession.  Oil production in the region is also increasing with the discovery of vast new oil reserves in Colombia and Brazil.

For the past ten years the U.S. has for the most part neglected Latin America diplomatically.  The Free Trade Area of the Americas (FTAA) stalled due to a lack of American leadership.  President Bush failed to improve relations and even fed a growing anti-US, anti-imperialist sentiment in the region.  Leaders like President Hugo Chavez and Evo Morales capitalized on the unpopularity of the Iraq War, claiming American imperialism and capitalism were on the decline.  Instead they offered the traditional socialist model, and sought to act as a new alternative.  Countries like Cuba, Guatemala, Ecuador, and Argentina seemed to like the idea.

But things have changed in recent years.  Countries like Colombia, Peru, and Chile (the Andean countries) stayed the course and continued free market reforms and strengthened ties with the U.S.  As a result the Andean countries have flourished while Venezuela and Bolivia are struggling.  The appeal of Chavez-style authoritarian socialism started to wear off.

With the recent news of President Chavez’s medical problems and upcoming Venezuelan elections in 2012, it looks like the “Bolivarian Socialism” fad is on its way out.

While this is all good news for the U.S., it seems we are not taking advantage of the shift in Latin American attitudes.  Instead China has moved in, dramatically increased investment and strengthened economic ties.  In fact China is now Brazil’s largest trade partner.

The U.S. should initiate a new comprehensive effort to improve trade relations with Latin America and further open up their markets.  As the U.S. commits to increasing domestic oil production, it should also actively seek to invest in increased oil production in stable democratic countries like Colombia and Brazil.  If Venezuelans vote out Chavez in 2012, his successor will likely be friendlier.  The potential for reforms in that country should also offer hope for the neglected Venezuelan oil sector.  Venezuelan oil production has been in decline due to mismanagement, crumbling infrastructure, and corruption.  A new President presents the possibility of addressing these problems.

The U.S. currently has free trade agreements with Costa Rica, Panama, Colombia, Peru, and Chile but it has failed to strengthen economic ties with the largest market in the region: Brazil.  Brazil is a $2 trillion plus economy that is eager to improve relations with America. Unfortunately it has a tradition of protectionism and inefficient socialist policies.  However, this doesn’t mean progress can’t be made to gradually open Brazilian markets to American goods and vice versa.

There is a lot of potential in Latin America.  It is a region on the rise.  It is politically stable, growing economically, and is eager to further integrate itself into the global economy.  The U.S. should disengage itself from the turbulent and hostile Middle East and refocus itself on more promising regions like Latin America.  The next President should re-energize diplomatic initiatives in the region through either new bilateral trade agreements or by resurrecting the FTAA.  Most importantly, the U.S. should seek to strengthen diplomatic, economic, and strategic ties to Brazil.