Introduction
A commonly held view of Latin American countries’ international economic and political relations would emphasise that the region was subject to British hegemony during the nineteenth century, and US hegemony in the twentieth. Even though they might differ about precise dating, historians would normally explain this shift in terms of British failures and US successes, in the context of the two world wars and the Great Depression, all of which weakened Britain and strengthened the United States. In one of the best-known texts on US-Latin American relations, for example, Brian Loveman comments that the impact of the First World War was such that ‘the United States replaced European and British investors in much of Latin America, substituting its products for those of European origin’, having already obtained British recognition of US political hegemony throughout the hemisphere.1 Alan Knight ends his survey of British informal empire in Latin America in 1945, commenting that ‘the Second World War and its aftermath … brought to an end the long cycle of British “imperialism” in Latin America’, and that ‘after 1945 there was no British trade offensive as there had been after 1918’.2 Similarly, in an essay on the historical relationship between Britain and Latin America, Leslie Bethell concludes that, in the years following the Second World War, ‘Britain finally abandoned its role as a significant actor in the economic and political affairs of Latin America’.3
On the British side, explanations for its loss of hegemony might include, in terms of geopolitics, the government’s growing focus on strengthening ties with the Empire following the adoption of Imperial Preference in the early 1930s, and then, from the 1950s, on the process of decolonisation and the rethinking of Britain’s global role. The British government thus focused primarily on its relationship with continental Europe, resulting in three attempts to join the Common Market, which eventually succeeded in 1973, and the country’s role in NATO and the Cold War struggle with the Soviet Union. These priorities marginalised Latin America. The failure of British politicians to develop any coherent policy towards the region subsequently became evident in the near-coincidence of the Falklands/Malvinas War and the Latin American debt crisis in 1982, both of which took officials by surprise. Like Loveman, economic historians would stress the impact of the First World War on Britain’s financial capacity, which limited its ability to invest further in Latin America, and the country’s long-term industrial decline, as the United States, Germany and Japan developed new technologies and products, challenging Britain’s nineteenth-century commercial pre-eminence.4
In explaining the growing dominance of the United States, in contrast, economic historians point to the rapid expansion of US industrial capacity from the late nineteenth century, its capture of markets in Latin America during the First World War when European exports declined sharply, and the growth in US foreign investment that accelerated in the 1920s.5 Diplomatic historians emphasise the more aggressive foreign policy that the United States pursued from the 1890s, when it began to strengthen its naval capacity. This resulted in more persistent attempts to implement the Monroe Doctrine of 1823 and exclude other powers from the western hemisphere. The decade saw the US capture of Cuba and Puerto Rico during the Spanish–American War of 1898, followed by the period of ‘Dollar Diplomacy’ and several military interventions in Central America and the Caribbean in the early twentieth century. The ‘Good Neighbor’ policy of the 1930s then introduced a sustained attempt by Washington to create a more positive image of its role in the region in order to counter perceived threats first from European fascism and then from Soviet communism.6 Political historians would then emphasise the importance of the Cuban Revolution and the Soviet threat during the Cold War in pushing successive US administrations towards a policy of backing right-wing dictatorships in Latin America that would protect US business interests and its geopolitical power against the threat of socialism.7
With the perspective of hindsight, this all appears very neat and inevitable. On the surface it seems fair to assume that the British would eventually recognise that they could never compete with US power in its own ‘backyard’, once Washington had begun to assert its naval, diplomatic, and economic muscle in Latin America from the 1890s, and that they would therefore withdraw gracefully in order to exploit greater opportunities elsewhere, initially in the Empire/Commonwealth and later in continental Europe.8
It did not appear this way to many contemporary observers and commentators. Joseph Tulchin emphasises how concerned US officials were at the end of the First World War about the possibility that Britain might exploit its control of transatlantic cables, shipping, merchant networks, and banks to recover its commercial position, especially south of Panama.9 In 1931, after a decade when US commercial and financial interests had expanded rapidly, the New York Times could still warn of the ‘unprecedented efforts’ Britain was making in order to ‘regain … the Latin-American trade leadership wrested from her by the United States’.10 Three years later, after the signing of the Roca-Runciman agreement between Britain and Argentina, the same newspaper pointed to the success of British diplomats in persuading Argentina to follow a policy of ‘Buy from those who buy from us’, and the threat that this would reverse the advance of US business in its most important South American market.11 At much the same time, a US historian of Brazil, Alan K. Manchester, pronounced Britain to be ‘still a decisive factor in the life of Portuguese America’.12
An awareness of a lingering British presence in Latin America, especially in Argentina, in fact encouraged a strong US push between 1938 and 1941 to enhance the strength of the Pan-American movement. US investment and subsidies, especially through the Export-Import Bank, encouraged most Latin American countries first to join a hemispheric alliance to preserve their neutrality, and then, after Pearl Harbor, to declare war on Germany and Japan. However, both Chile, for a time, and Argentina (until 1945) held out against US pressure. One of the main reasons for Argentina to do so was precisely to escape entanglement with the United States, which might have disrupted its commercial ties with Britain.13 Although US goods now dominated Latin American markets, Britain still had 10 per cent of Argentina’s import market in 1945, more than in other countries, and the souring of relations between Washington and the Peronist regime, together with the continued sale of Argentine foodstuffs to Britain, helped this figure to recover to almost 16 per cent in 1949.14
After the Second World War, the British liquidated many of their older investments in Latin America, but as part of a deliberate policy intended to improve commercial relations by removing ‘bones of contention’.15 They did not simply leave the field to US business. They sold arms to Argentina in the late 1940s in defiance of Washington, and continually attempted to rebuild Britain’s trade in the region, supported by the British business communities which remained in countries like Argentina and Brazil.16 Foreign Office archives from the 1950s and 1960s contain streams of correspondence on attempts to secure large infrastructure projects for British firms, using the resources of the City of London to finance bids. It was not just that the commercial interests of Britain and the United States did not coincide. The Foreign Office explicitly hoped to benefit from increasing Latin American dislike of US arrogance, which became most evident in the riots provoked by Vice-President Nixon’s visit to Caracas and Lima in 1958 and then the catastrophic US response to Castro’s victory in Cuba.17 Like other European countries, the British never broke off diplomatic relations with Cuba after 1959, and indeed continued to trade with the island. Britain followed an independent policy in response to the Argentine invasion of the Falklands/Malvinas in 1982, undermining US attempts to mediate between its two allies.18 Political differences between Britain and the United States with regard to Latin America were especially marked when the Labour Party was in power in Britain (1945–51, 1964–70, 1973–79, 1997–2010), for example over policy towards the Pinochet regime in Chile and his later arrest in London.19
The transition from British to US dominance in Latin America was not, therefore, as neat and unchallenged as is commonly portrayed. Br...