The U.S. has failed to deliver on its promises, and the rest of the hemisphere is drumming its fingers

By TIM PADGETT /SAN JOSE

uring much of the 20th century, the favorite mantra of protest in the western hemisphere was "Yankee, go home!" As the second Summit of the Americas approaches, the chant, as likely as not, is changing to "Yankee, where are you?" Specifically, where is the promise of American leadership in the process that is supposed to result in a free-trade zone from pole to pole in the New World?

Undoubtedly, U.S. President Bill Clinton is wondering the same thing. He has repeatedly failed to persuade a wary Congress to renew his fast-track authority to negotiate international trade deals, which is a virtual prerequisite for getting a complicated hemispheric free-trade agreement passed by the target date of 2005. Failure to win fast track is also the reason for America's embarrassing failure to welcome Chile to the NAFTA partnership, a reward promised as far back as 1994.

The rest of the region, meanwhile, is drumming its fingers. By lowering trade barriers, privatizing industries, stabilizing currencies and consolidating democracies, most of Latin America has met its end of the deal, says Thomas Carothers, research director at the Carnegie Endowment for International Peace in Washington. "Our part of the bargain," he notes, "was a free-trade agreement."

Since the U.S. still accounts for 76% of the hemisphere's economy, more than a third of its population and the overwhelming preponderance of its military and technological firepower, the issue is not one of diminished American power. But power and influence aren't always the same thing. While the U.S. is still obsessed with tightening the screws on Cuba, for example, Brazil has spearheaded Latin America's largest and most dynamic common market, Mercosur, which--including Argentina, Paraguay and Uruguay--represents 80% of South America's gross domestic product and does 48% more trade with Europe than with the U.S.

The rise of Mercosur is not, as many U.S. spin doctors insist, merely an extension by other means of the free-trade principles that Washington has long held dear. It represents a different set of trade rules, much less rigorous in many cases and subject to interpretation only by its membership. It also represents an important talking shop in which the U.S. has, at best, merely an observer status. As a result, the U.S. can expect to confront far less deferential neighbors during FTAA negotiations that are set to begin at this week's summit.

A clear example of that came at a presummit meeting of trade ministers last month in San Jose, Costa Rica. There the Clinton Administration's bid to make Miami the permanent seat of the FTAA negotiations--to help convince free-trade skeptics in the U.S. that Washington is in control of the process--lost out to a proposal to rotate the site between Miami, Panama City and Mexico City. The U.S. also accepted Brazil as a co-chair during the critical final phase of FTAA haggling that begins in 2003. The concession was a triumph for the dark-suited professional diplomatic corps in Brasilia, which favors a slower approach to the FTAA negotiations in order to let Mercosur undertake further consolidation as a common market without U.S. interference. Brazil's nomination also heartened a number of weaker Latin American economies, which look to Brazil and Mercosur as a counterpoise to America's formidable leverage.

For their part, U.S. officials insist that what looks like waning influence is in fact a more constructive, less imperious style that still ensures a leading place for America in determining the hemisphere's course. "We're not particularly concerned about the growing leadership of other countries in the hemisphere," insists U.S. Trade Representative Charlene Barshefsky. "We welcome it." It isn't hurting commercially, she argues: U.S. exports to Brazil alone have jumped from $5.5 billion in 1994 to more than $16 billion today--resulting in a more than $6 billion trade surplus.

Latin American leaders, many of them admittedly thin-skinned on the issue, agree that U.S. officials are learning to treat them as full partners. They hold Barshefsky in particularly high regard. After one Costa Rican session ran long into the night, a Latin American Cabinet minister took Barshefsky aside and said appreciatively, "Charlene, you're charming when you're flexible."

And they want more of that charm. America's partners still complain that the Clinton White House, on many fronts, has yet to scrap what a Canadian official derides as America's "inflexible, Group of One view of the hemisphere." There is, for example, the issue of Helms-Burton trade sanctions against certain countries doing business with Cuba, which will likely turn into a case before the World Trade Organization in the near future.

But heavy-handed or no, the U.S. is still the region's (and the world's) strongest driving economic force and a progressive influence behind desperately needed changes like reform of corrupt and corroded judicial systems. And that points up another potential problem with the current lack of American leadership: "The steam goes out of the reform process in the region," says Bernard Aronson, a former Assistant Secretary of State for Interamerican Affairs under George Bush. Clinton, for example, has put press freedom in Latin America--where more than 20 journalists were murdered last year--high on his summit agenda. But how closely will Latin American Presidents pay attention to that when they're not yet certain of America's commitment to strengthening its regional trade ties?

Clinton is at least trying to convince them of his personal sense of engagement. The Santiago summit marks his third trip to Latin America in less than a year (though he didn't make his first presidential visit there until last May, four months into his second term). But at this point, merely traveling south won't convince America's neighbors that the U.S. intends to play as strong a role as possible in the Americas. The best way Clinton can do that is to muster the votes he needs for free trade and other hemispheric issues back home.

--With Reporting by Jay Branegan /Washington and Elizabeth Love /Santiago