The Melding Americas : Policy : U.S. Trying to Refocus Its Relations With Neighbors in Post-Cold War Era : While trade and political conditions are favorable, crises such as Cuba and Haiti get in the way of progress.

When the Senate Foreign Relations Committee was considering the confirmation of Alexander F. Watson as the State Department’s key official on Latin America last year, all of the questions posed by lawmakers concerned just three countries--Cuba, Haiti and Nicaragua--near flyspecks when laid against the expanse of the Western Hemisphere.

Watson, assistant secretary of state for Latin American affairs, later recalled that he joked to South American journalists that the senators had agreed not to ask about any country with a population of more than 15 million.

With the end of the Cold War, which had skewed U.S. relations with Latin America for most of the last half-century, the United States is trying to refocus its approach to its closest neighbors on trade, investment and the promotion of democracy. Administration officials say conditions in the Hemisphere--especially in the larger countries, such as Brazil, Argentina, Chile and Mexico--are more favorable than they have been for decades for cooperative U.S.-Latin relations on those subjects.

It may yet work out that way, of course, but crises such as the outpouring of Cuban raft refugees and the occupation of Haiti keep getting in the way.

“The great tragedy about Cuba and Haiti is that it was almost predictable that these issues would come up and dominate the agenda and force out broader subjects,” said Kenneth R. Maxwell, director of the Latin America project of the Council on Foreign Relations in New York.

“There is no long-term strategic thinking at all,” Maxwell said. “Americans who don’t focus much on Latin America tend to see Latin America as Nicaragua writ large or Cuba writ large or Haiti writ large. If you go to a huge vibrant city like Sao Paulo (Brazil), that’s where Latin America is dealing with problems.”

Administration officials concede that with about 15,000 U.S. troops deployed in Haiti, it is not surprising that public attention is drawn to that unstable, violent and impoverished Caribbean nation.

“This has always been sort of a neglected area of U.S. foreign policy,” one State Department official admitted. “We only seem to deal with Latin America when there are problems or unsavory dictators.”

But he said the Clinton Administration, driven in part by the hemispherical summit scheduled for December in Miami, “is taking a closer look at Latin America on matters of trade and on our own agenda, like democracy and control of corruption.”

Trade is clearly the most important subject for both the United States and the Latin countries. Commerce between the United States and other hemispherical countries is expanding rapidly, the total figures driven by success of the North American Free Trade Agreement which slashed barriers on U.S.-Mexican-Canadian trade. If present trends continue, the United States will soon sell more goods and services to Latin America than to Germany and Japan combined, trade officials predict.

For years, Latin American nations have raised tariff walls and other restraints to protect weak local industries. After a year of NAFTA, however, most Latin countries are interested in liberalizing their trade with the United States.

“Mexico was the most anti- gringo country in the hemisphere,” the State Department official said. “If they are willing to sign on with the 800-pound gorilla, that is reassuring to others.”

But Washington is not yet ready to invite all of the hemisphere into NAFTA. The official said Chile’s economy is the only one which seems “ready for a free-trade agreement with us.”

Nevertheless, he said, the Administration is looking for some sort of trade liberalization gesture to be unveiled at the Miami summit that will show hemispherical countries “that there is life after NAFTA.”

Brazil, Argentina, Uruguay and Paraguay have formed an economic union that is considered a prime candidate to cooperate with NAFTA.

Maxwell, the Council on Foreign Relations authority on Latin America, said there is a danger that the organization will become a competitor instead of an associate if Washington does not move quickly to establish a new relationship.

An Administration official said Brazil, which has South America’s largest economy, does not aspire to NAFTA membership but does not want to be left behind by hemisphere-wide trade liberalization.

“I call the Brazilians the ‘French of Latin America,’ ” the official said. “They can be a bit prickly. They see us as a rival to their leadership ambitions.”

But even counting a bit of trade friction with the Brazilians, Administration officials and non-government experts agree that U.S. relations with most Latin countries are better than they have been for decades.

“U.S.-Latin American relations have improved significantly over the past three or four years since the Cold War ended, the debt crisis receded and Central America’s wars ended,” said Peter Hakim, president of Inter-American Dialogue, a private organization with close ties to some members of President Clinton’s Cabinet. “The Administration seems ready to incorporate all of Latin America into some kind of economic agreement. Unfortunately, the Administration during this year has not managed to carry forward this momentum. There is an uneasiness that we don’t know how to take advantage of all these good things.”

One purpose of the December summit, the first such meeting of hemisphere heads of government since 1967, is to try to seize the opportunities presented by the economic and political advances of the region. Although some of the governments may fall a bit short of the ideals set out in civics textbooks, 33 of the 35 governments in the hemisphere are at least nominal democracies. Cuba and Haiti stand alone as the only countries without elected governments, and if Haiti’s military leaders keep the agreement they made to avert a U.S. invasion nine days ago, Haiti will switch to the democratic column sometime next month.

U.S. summit planners say they will focus the talks on three areas--trade, democracy and economic development.

U.S. officials said Latin leaders have indicated they are prepared to talk about political corruption at this summit, a topic they previously resisted. And Latin governments are eager to discuss ways of preserving democracy throughout the region.

One official said Washington hopes the summit will produce “a set of initiatives that are important enough to be considered presidential.” He declined to list examples, but he added: “We are absolutely determined to make this a substantive summit.”

Despite the advances, however, the region can still cause headaches for U.S. policy-makers, as the situations in Cuba and Haiti demonstrate.

Administration officials and non-governmental experts say problems remain in Colombia and Bolivia because of the cocaine trade; in Peru because of President Alberto Fujimori’s “auto coup” in which the democratically elected president ousted the Congress and the judiciary, and Venezuela because of economic and political unrest. A State Department official said the Administration is also concerned about Nicaragua because the elected government there has allowed the Marxist Sandinista Liberation Front to retain control of the armed forces.

But overall, Central America, which U.S. Administrations once considered a source of problems almost across the board, is now reasonably stable and ready to take off economically, the State Department official said.

Argentina, once a hotbed of anti-American rhetoric, has become so friendly to the United States that it agreed to contribute soldiers to the U.S.-led military operation in Haiti.

Internally, Washington’s decision to use military force to restore an elected government in Haiti establishes a precedent that could prove troublesome. There are 33 democracies--some new and fragile--in the hemisphere. If any of them face military coups, will Washington feel bound to use force to preserve democracy?

Administration officials insist that there is no obligation, although they say Washington can be expected to exert maximum political and economic pressure if any of the democracies are threatened.

The Council on Foreign Relations’ Maxwell was far blunter in his assessment: “That is an impossible task, and Haiti probably will demonstrate that. This is where rhetoric catches you up.”