After the American Revolution of 1776 and the birth of the United States as an independent republic, the country’s foreign policy was framed by two clear tendencies: isolationism and neutrality. From these early experiences emerged the new nation’s foreign policy, outlined in the Monroe Doctrine of 1823. This was a clearly a two-way annexationist foreign policy: based on one hand on a policy of non-intervention in European affairs and, on the other hand, on zero tolerance for any new colonial incursions by European countries in the Americas. Further, during the first half of the 19th century, the new nation was occupied with other national priorities in its expansionist policy: the Louisiana Purchase of 1803, the purchase of Florida in 1819, and the annexation of Mexican territory after 1848, based on the Treaty of Guadalupe-Hidalgo. The new nation’s involvement in Latin America and the Caribbean was thus kept to a minimum.

The break with this attitude of isolationism and neutrality, at least in terms of the Caribbean region, occurred in 1898 with the Spanish-American War. The United States won the war and obtained the islands of Cuba and Puerto Rico as spoils. With the arrival of the 20th century, U.S. interests grew as economic interests in the region grew, including defense of the Panama Canal, which was inaugurated in 1914. The United States, in an attempt to control the region and prevent foreign or communist influence, decided to implement a military solution to defend its interests and the interests of U.S. corporations in the region. The new policy implemented by President Theodore Roosevelt, known as “big stick diplomacy,” led to numerous military interventions and occupations in the region. Between 1898 and 1934, the U.S. military occupied half a dozen countries in the Caribbean: Panama (1846), Honduras (1912), Nicaragua (from 1912 to 1933), Mexico (1914 and later from 1916 to 1917), Haiti (1915 to 1934) and the Dominican Republic (from 1916 to 1924). There was also the time of the so-called Banana Wars in 1934-1935, wars that sought to protect the interests of the United Fruit Company, which had important sugar, banana and coffee operations throughout the region.

One of the main problems in the region was its political instability, which was a result of the pattern of exploitation of the working class. In the insular Caribbean, this mainly consisted of sugar cane field workers, a labor force that became a hotbed for labor movements. The problems with the cane workers began to reach significant levels in the early 20th century. Competition from the sugar plantations in the southern United States, as well as the discovery of beet sugar in Europe, along with the Great Depression in 1929, pushed the sugar cane market into crisis, with catastrophic results for the Caribbean region economies and particularly for the working class. As a result, in the early decades of the 20th century, the Caribbean economies registered the lowest workers’ salaries in history and thousands of cane workers and agricultural laborers were displaced and unemployed. With no alternative source of jobs that could absorb the unskilled and impoverished workers, labor revolts erupted throughout the Caribbean and Central American region. Charismatic labor union leaders, sometimes acting within nationalistic, anti-American or civil rights movements, began to emerge. Leaders such as Augusto César Sandino in Nicaragua, Pedro Albizu Campos in Puerto Rico or Tubal Uriah “Buzz” Butler in Trinidad and Tobago arose from the crisis, to mention a few of the best known.

The stage was set for a communist revolution, which did not happen until after World War II: the Cuban Revolution of 1959. The duration of the communist government in Cuba had the effect of transforming the Caribbean, in the years after the revolution, into a laboratory for experimentation with the great ideological and economic debates between the left and the right, between socialism and capitalism. The small size of Puerto Rico and Cuba – the former an unincorporated territory of the United States; the latter, the country with the highest level of state control over economic matters in the world – made it nearly inevitable that the ideological struggle would extend throughout the Caribbean region and even to today.

The United States, in response to the Cuban Revolution, decided to change its foreign policy to what became known as “dollar diplomacy.” Modernization projects aimed at adapting the Caribbean economies to new labor markets were adopted, such as Operation Bootstrap on the island of Puerto Rico. It was an effort to transform an economy based on agriculture into one based on manufacturing or industries such as needlework, tuna processing, pharmaceuticals, and high-technology industries, with the goal of creating jobs for the unemployed population of laborers susceptible to revolt.

The 1970s saw a growing influence of Marxist-communist ideology in the Central America and Caribbean region, as well as the rise of pro-Cuban leaders in the Caribbean and Central America such as Michael Manley and Edward Seaga in Jamaica and Maurice Bishop in Grenada, but even more importantly the successful Sandinista Revolution in Nicaragua in 1979 and the emergence of the Marxist guerrilla group, the Farabundo Martí National Liberation Front in neighboring El Salvador during the early 1980s. The United States remained interested in counteracting the Cuban and Soviet influence in the region, but only in extreme cases did it use military means to achieve that objective. Economic measures were adopted to fight poverty and unemployment and to win support for anti-Soviet policies.

It was in the context of this ideological struggle that the United States created initiatives such as the Caribbean Basin Initiative (CBI) in 1983 and the Free Trade Area of the Americas (FTAA) in 2010. It created a free trade zone with customs benefits equal to those of Mexico and Canada under the North American Free Trade Agreement (NAFTA) that has had an impact on economic development in at least 24 countries in the Caribbean region.

CBI was the name given to a collection of U.S. legislative acts that allowed the creation of a preferential trade agreement with Central American and Caribbean nations for the purpose of alleviating poverty in the region and, as a result, combating communism. The specific legislation included the Caribbean Basin Economic Recovery Act of 1983 (CBERA), the Caribbean Basin Economic Recovery Expansion Act of 1990 (commonly known as the Expansion Act), the Caribbean Basin Trade Partnership Act of 2000 (CBTPA), the Trade Act of 2002, the Haitian Hemispheric Opportunity through Partnership Encouragement Act of 2006 (HOPE) and the Haitian Hemispheric Opportunity through Partnership Encouragement Act of 2008 (HOPE II).

The historic events behind the signing of CBERA in 1983 are distantly tied to the triumph of the Cuban Revolution in 1959 and, more recently, to the growing influence of Marxist and communist ideology in the Central American and Caribbean region, as well as the emergence of pro-Cuban leaders in the Caribbean and Central America during the 1970s. Despite the fact that at the same time it was signing CBERA in 1983 the United States was also financing an anti-revolutionary guerrilla movement known as the Contras against the Sandinista Revolution, as well as invading the island of Grenada in Operation Urgent Fury, there was an implicit recognition by the U.S. government that no Congress would approve a direct military intervention of any significance in the Caribbean or Central American region to overthrow a communist government, at least not at that moment in history. That was in part because a direct intervention would mean a radical change in the “good neighbor” policy that the United States had applied to Latin America since the 1930s and in part because of what was known as the “Vietnam Syndrome,” which had made any military action very unpopular with U.S. voters. Thus the CBI was an initiative designed from the beginning to combat the influence of Cuba and Russia in the region through non-military means.

At the time CBERA was created, 27 nations and territories were designated as “potential members:” Anguilla, Antigua and Barbuda, the Bahamas, Barbados, Belize, the British Virgin Islands, the Cayman Islands, Costa Rica, Dominica, the Dominican Republic, El Salvador, Grenada, Guatemala, Guyana, Haiti, Honduras, Jamaica, Montserrat, the Dutch Antilles, Nicaragua, Panama, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Suriname, Trinidad and Tobago and the Turks and Caicos Islands. For these nations to take advantage of the benefits of CBERA, they had to meet certain conditions: countries with de facto communist governments or the appearance of one and countries that had expropriated property belonging to the United States or to U.S. corporations were excluded from potential benefits. In 1984 (a year after the original creation of CBERA), twenty countries had requested membership as beneficiary countries under CBI. By 2000, the number of members had risen to 24. Anguilla, the Cayman Islands, Suriname and the Turks and Caicos never requested membership. With the implementation of CAFTA-DR in 2004, the number of members fell to 18.

The United States also has an important influence in the region as an export market and is the largest importer of products from the Caribbean, although the percentage of exports to the United States has decreased in recent years compared to European and Asian buyers. The proportion of total exports destined for the United States declined from 44% to 37% during the period from 1990 to 2008, while the percentage destined for China grew from 8% to 10%. At the same time, exports of U.S. products to the Caribbean are also significant and U.S. exporters have also benefitted from the economic activity generated by the CBI. Total exports of U.S. products to CBI member countries reached $25.1 billion in 2008, making the CBI region the 14th-largest export market for the United States, ahead of markets such as Australia, Switzerland and Hong Kong.

As a counterpoint to the CBI initiatives, Cuba and Venezuela created initiatives such as the Bolivarian Alliance for the Peoples of Our Americas-Peoples Trade Treaty (ALBA-PTC, for its Spanish acronym) in 2004 and Petrocaribe in 2005 — both initiatives aimed at counteracting the influence of the United States and ALCA through policies aimed at fighting poverty and social exclusion. The Petrocaribe initiative created an energy cooperation agreement between Venezuela and 14 countries in the Caribbean Basin through which Venezuela allotted the member countries up to 185.000 barrels of oil a day under preferential financing terms.

During the second half of the 20th century, significant migratory movements strengthened the ties between the United States and the Caribbean. Urban enclaves and centers of Caribbean populations emerged in large U.S. cities: Puerto Ricans in New York, Cubans in Miami and, later, Dominicans. The ties these immigrants have with family members in the Caribbean remain strong and the remittances they send to their families in the Caribbean have an important economic impact on the region. The leading country in remittances is Cuba, where the amount is estimated to reach between $800 million and $1 billion per year (in an $18 billion a year economy). Remittances provide nearly 60% of the Cuban population with access to U.S. dollars.


Author: Luis Galanes
Published: May 16, 2012.

Related Entries

This post is also available in: Español


The Puerto Rico Endowment for the Humanities welcomes the constructive comments that the readers of the Encyclopedia of Puerto Rico want to make us. Of course, these comments are entirely the responsibility of their respective authors.