Living in the past: the United States prepares to fumble its way through four more years in Latin America.

"Some look south and see problems. Not me," said U.S. President George W. Bush soon after taking office in 2001. One wonders if he's even looking. During Bush's second term, if he cared to look closely, he would see plenty of problems--some of his own making.

"The Bush administration has no sense of Latin America and no framework for thinking about it as a region," says Peter Hakim, president of the Washington, D.C. think tank Inter-American Dialogue. Latin America will most likely continue to be an afterthought as Bush focuses on the war in Iraq and global terrorism. His new Secretary of State, Condoleezza Rice, is a career Sovietologist who has never shown much interest in Latin America other than seeking opportunities to punish Cuba's Fidel Castro. Nor shall we expect any moves to bolster shaky democracies in Guatemala, Venezuela, Ecuador, Peru and Bolivia.

The only exception to this policy of turning a blind eye will be free trade. Bush will pursue trade deals preferential to U.S. interests, likely conclude negotiations with several Andean nations and pressure Congress to pass a Central America trade pact, known as CAFTA. But increased trade is not enough to address the issue of growing income inequality--the world's worst--which threatens the stability of many Latin American governments.

This neglect comes at a time when there are more reasons than ever to care about the United States' "backyard" As the region's political mood shifts from the so-called Washington Consensus--open markets, privatizations, cutbacks from the International Monetary Fund--Bush will be shaking hands with populist leaders elected by frustrated voters who have yet to benefit from free trade. Some 43% of Latin Americans still live below the poverty line.

Leftist presidents in Argentina, Brazil, Chile, Uruguay and Venezuela have promised more independence from Washington. Some are skeptical of the U.S.-led Free Trade Area of the Americas. The pact, which aims to eliminate trade and investment barriers on virtually all goods and services traded by 34 nations in the Western Hemisphere, was supposed to begin in January but talks have stalled. Hakim of the Inter-American Dialogue fears Bush may even "feel the need to actively oppose" Bolivia's Evo Morales and Nicaragua's Daniel Ortega, whose political parties are gaining ground. These men could become the next elected presidents of their countries.

One thing, historically, has forced Washington to action: a threat to U.S. hegemony. After decades of being the world's only superpower, the United States faces a new giant is prowling in the region. Bush spent just four days in Latin America last November and he has visited just five countries since taking office in 2001, Mexico, El Salvador, Chile, Colombia and Peru. Chinese President Hu Jintao spent 12 days in the region, discussing free-trade pacts with Chile and Peru and promising up to US$100 billion in investments in Brazil and Argentina by 2014. "The China factor will contribute to raising the profile of trade agreements in the region and might make the difference in CAFTA passing Congress" says Miguel Diaz, director of the South America project for the Center for Strategic and International Studies, in Washington, D.C.

Latin America's more astute politicians will insist on trade based on their terms and will work to diversify their markets away from the United States to giants like India, Russia and China. In South America, they are gaining the clout to do so through regional blocs such as the Andean Community of Nations and Mercosur, and the recent merger of those two groups into the new 12-nation South American Community of Nations, modeled after the European Union.

Some more predictions: Latin America can expect more pressure to protect U.S. intellectual property; a new, billion-dollar Plan Colombia to fight drug trafficking and leftist guerillas that will continue to ignore the Colombian military's spotty human rights record; a guest-worker program billed as immigration reform for the hundreds of thousands of the up to 8 million Mexicans illegally in the United States.

The Bush administration must help Latin America alleviate its dreadful poverty. A good start would be redirecting money: The United States now spends almost as much on military and police aid as it does on economic and social programs. Reversing course on aid toward development and away from guns would help stabilize fledging democracies. It also would stave off a rise in anti-Americanism fueled by what many see as a return to the "big stick" era of U.S. diplomacy.

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