Further Amendments to Executive Order No. 12757 Implementation of the Enterprise for the Americas Initiative

Background

Before President George W. Bush revoked Executive Order 13028 in 2004, the order notably impacted several areas of U.S. policy by enhancing the framework established under Executive Order 12757, which implemented the Enterprise for the Americas Initiative (EAI). This initiative aimed to promote economic growth and poverty reduction in Latin America and the Caribbean by facilitating investment and debt reduction agreements. The amendments instituted under Clinton’s 1996 order allowed for a more flexible interpretation of laws governing debt reduction, specifically by amending legal references to include additional legislative acts, thereby enabling a broader set of actions to support the initiative's goals.

The impact of the 1996 amendments included operational adjustments by U.S. agencies involved in foreign aid and investment in Latin America. Agencies such as the U.S. Agency for International Development (USAID) and the U.S. Department of the Treasury were able to accelerate their programs relating to debt conversion and sustainable development. These adjustments allowed financial resources to be redirected towards environmental conservation and socio-economic development programs, expanding the reach and effectiveness of the EAI. The order widened the scope and increased the frequency of cooperative agreements between the United States and participating countries, stimulating bilateral economic activities.

On a regulatory level, the further amendments streamlined governmental processes associated with the initiative by reducing bureaucratic bottlenecks. This change facilitated quicker implementation of debt agreements and ensured smoother bilateral negotiations. Additionally, it helped in promoting the establishment of Enterprise for the Americas Environment Funds (EAEFs), which financed local environmental projects in Latin America, thus promoting environmental conservation alongside economic development. Socially, the order underscored the U.S.’s commitment to resolving the interconnected issues of debt, poverty, and environmental degradation in the region, bolstering its diplomatic ties with Latin American nations.

Reason for Revocation

The revocation of Executive Order 13028 by the Bush administration in 2004 needs to be understood in the context of broader shifts in U.S. foreign policy post-9/11. Under Bush, there was a growing emphasis on security and counter-terrorism efforts, which increasingly dominated foreign policy. The administration's priorities shifted towards stronger bilateral relationships that emphasized political and military alliances over economic assistance and multilateral initiatives such as the EAI. This redirection potentially diminished the administrative focus and funding towards programs embedded in Executive Order 13028.

Another critical factor in the revocation could be the growing ideological pivot within the U.S. government towards prioritizing free trade agreements (FTAs) as the primary tool for economic engagement with Latin America. The Bush administration favored direct trade deals, as exemplified by the negotiation of the Central America Free Trade Agreement (CAFTA), which offered an alternative strategy for economic development and integration with the region. This approach leveraged broader economic liberalization and market access over the more paternalistic debt relief mechanisms characteristic of the EAI.

Additionally, internal evaluations of the program’s effectiveness may have influenced the decision to revoke the order. Given the lengthy diplomatic and legal procedures involved in debt reduction agreements, the process could have been seen as too cumbersome or resource-intensive compared to other policy instruments. The Bush administration might have viewed the time-consuming nature of the EAI efforts as less impactful relative to direct, faster-to-implement economic policies through trade and investment opportunities.

Moreover, the revocation might have reflected underlying political changes in key Latin American countries, where shifts towards left-leaning or populist governments began to contrast sharply with U.S. interests at that time. This geopolitical landscape possibly made it less appealing for the U.S. to continue engaging in initiatives primarily designed to encourage economic cooperation and reform under the previous frameworks that the Clinton administration emphasized.

Winners

The financial institutions and corporations that offered services related to free trade agreements saw an immediate benefit from the shift away from EAI-related initiatives. By moving towards trade agreements, the Bush administration opened opportunities for U.S. financial services, agricultural exports, and manufacturing sectors to access new markets in Latin America under more direct and favorable terms. This shift likely improved prospects for large agribusinesses and multinational corporations that advocated for reduced trade barriers and were eager for broader market penetration without the complexities of restructuring debt agreements.

Additionally, certain Latin American governments and industries that preferred engaging economically via trade and market liberalization rather than through conditions tied to debt relief benefited from the revocation. For example, countries that prioritized foreign direct investment as a means to drive economic growth found trade-based mechanisms more viable and advantageous. This approach provided local businesses with more immediate access to U.S. markets without the political strings often attached to aid programs.

Furthermore, regulatory adjustments that bolstered direct trade also led to a rise in legal and consulting sectors engaged in navigating the new trade agreements. Law firms and consultancies specializing in trade law or international business transactions benefited from an increase in work associated with FTAs. This increase in demand facilitated an inflow of expertise and investment towards regions preparing to integrate business practices that could better take advantage of such trade engagements.

Losers

Non-governmental organizations (NGOs) and advocacy groups focused on environmental conservation and social equity lost significant support following the revocation of the order. As one of the hallmarks of the Enterprise for the Americas Initiative was to integrate environmental sustainability within its debt agreements, the roll-back meant fewer resources and less institutional backing for promoting ecological programs across Latin America. These NGOs often relied on the framework provided by the EAI to fund projects and build capacity that aligned with broader socio-environmental goals.

Communities in Latin America, especially those who had previously benefited from debt swap programs under the EAI, could have found themselves disadvantaged. The withdrawal of dedicated support for projects aimed at sustainable local development and poverty alleviation might have limited their abilities to address such challenges. These populations no longer experienced the direct advantages of initiatives tailored to bolster economic resilience and environmental stewardship within their regions.

Moreover, U.S. government agencies that gained expertise and operational capacity in implementing complex, multi-faceted foreign aid programs saw their budgetary allocations and institutional focus shrink. The strategic shift left agencies like USAID with fewer resources dedicated to long-term development initiatives in favor of more security-oriented missions. This affected programs focused on fostering sustainable economic growth through cooperative debt reduction and may have diluted the U.S.'s diplomatic engagement across numerous Latin American countries.