In the early 20th cent., U.S. manipulation to secure the Panama Canal and its intervention in the affairs of other Latin American states, combined to create Latin American resentment toward the United States. There was progress, however, in the codification of international law, acceptance of peace machinery, and creation of scientific and social agencies. Troubles nonetheless continued to flare. A major war was fought (1932–35) between Bolivia and Paraguay over the Chaco (see Gran Chaco). Strained relations between the United States and Panama were temporarily resolved by a treaty signed in 1936. Although it still restricted Panama's sovereignty, it ended the American right of intervention.
With the administration of Franklin Delano Roosevelt a policy of determined cordiality toward Latin America—the "Good Neighbor" policy—bore fruit. As World War II approached, the nations of the Western Hemisphere drew closer together. Conferences held in 1936 and 1938 provided for consultation in case of outside threat. Accordingly, after the outbreak of World War II the Inter-American Neutrality Conference was held (1939) in Panama. A conference of foreign ministers at Havana produced (1940) the Act of Havana, declaring against changes of sovereignty in the Western Hemisphere. Most of the Latin American nations (with the notable exception of Argentina) supported or actually joined the Allies after the Japanese attack on Pearl Harbor.
A significant step was taken at the Inter-American Conference on the Problems of War and Peace in Mexico City in 1945. The Act of Chapultepec, adopted there by 20 republics, called for joint action in repelling aggression against an American state, including that by another American state. Acceptance by Argentina established machinery to enforce peace in the Western Hemisphere. This was formalized by the Inter-American Treaty of Reciprocal Assistance (the Rio Treaty). In other fields, too, cooperation advanced, as in commercial and financial matters (e.g., the Inter-American Bank). As a consequence of the growing awareness of interdependence the Bogotá Conference of 1948 produced the Organization of American States (OAS) to promote hemispheric unity. In the late 1950s the United States took steps toward an international price agreement on agricultural products and minerals, a measure long advocated by Latin American republics plagued by one-product economies. The Inter-American Development Bank began operations early in 1960.
Since the 1960s one of the most persistent issues facing the inter-American system has been the Communist government in Cuba and the strong opposition to it in the United States. Fidel Castro's support for Communist guerrilla forces in other Latin American countries led, in 1962, to Cuba's expulsion from the OAS. The vote, however, was not unanimous; Argentina, Bolivia, Brazil, Chile, Ecuador, and Mexico abstained. Nonetheless, in the same year Latin American nations backed the United States in its blockade of Cuba following the construction of missile bases there. By the 1990s, however, almost all Latin American countries had resumed trade and diplomatic relations with Cuba. In 1989, in yet another clash with Panama, the United States invaded to remove its de facto leader, Manuel Noriega, and to establish an elected government, despite the OAS's calls for U.S. withdrawal.
With the introduction of the Alliance for Progress in 1961, the United States undertook a long-term plan of economic assistance. In partial recognition of the weakness of this program, the Declaration of the Presidents of America was signed (1967) in Punta del Este, Uruguay, expressing commitment to Latin American economic integration, i.e., the creation of a common market (see Central American Common Market; Latin American Integration Association). Although economic cooperation has not proceeded as quickly as originally planned, there has been progress toward the lowering of trade barriers in both North and South America, especially with the creation of Mercosur in 1991 and the North American Free Trade Agreement (NAFTA) in 1992. These developments kept alive hopes for ultimate inter-American economic integration, and in Apr., 2001, 34 Western Hemisphere nations committed themselves to the creation of a Free Trade Area of the Americas, but negotiations toward its creation subsequently stalled.
The Columbia Electronic Encyclopedia, 6th ed. Copyright © 2012, Columbia University Press. All rights reserved.