In 1968 Henry Kissinger wrote: “A mature conception of our interests in the world … would deal with two fundamental questions: What is it in our interest to prevent? What should we seek to accomplish?” (Kissinger, 1974: 92) Whatever its general relevance, that passage is an apt description of the lens through which American policymakers have contemplated the phenomenon of political change in the Third World. Those are the first questions they tend to ask.

The rationale for this particular concept of foreign policy tasks has its roots (1) in the complexities of an increasingly interdependent world in which world politics have become truly global for the first time in human history, and (2) in the deep antagonisms embedded in the US/Soviet relationship. Because nuclear realities .have placed a cap on the way in which the two superpowers confront and contend with one another, conflict between them tends to get pushed to the periphery and to take place in indirect ways.

Plunging Petroleum Prices have elevated Mexico into the position of de facto leadership of Latin American, and perhaps of other, debtor nations in their negotiations with international creditors. Once regarded as a model debtor, Mexico has emerged as forceful spokesman for debt relief. Although Mexican authorities often couch their statements concerning foreign debt repayments in conciliatory, and even contradictory, terms, the underlying fact is that Mexico's demand for some debt relief is tantamount to an unspoken repudiation of a portion of its $96 billion foreign debt. If Mexico, the world's second largest debtor, succeeds in wresting debt relief from its lenders, then it must be recognized that debtor-creditor relationships have undergone a fundamental change: political realities, not contract law, ultimately determine how debt is to be repaid, if at all. Mexico, more by circumstance than by choice, has led debtors and creditors alike into a brave new world.

In the late seventies and early eighties the Mexican economy was in a crisis situation. This crisis, however, did not manifest itself until August 1982 when the Mexican government sent shock waves through the international financial community by declaring a temporary moratorium on external debt payments. Six years earlier, during the waning months of the Echeverría administration, a similar financial and economic crisis had taken place amid rumors of an impending military coup. These adverse economic developments - and their challenge to the country's long-term political and social stability - stand in stark contrast to the so-called “miracle years” of the late fifties and sixties. During these years M éxico enjoyed high rates of economic growth coupled with annual rates of inflation (below 5%) which were the envy of the developing world.

This paper will argue that, on closer examination, the rapid economic growth of this period was achieved as a result of economic and financial policies which, by exacerbating existing structural weaknesses endemic to the Mexican economy, paved the way for the crises of 1976 and 1982.

Socio-Economic or General Cultural Similarities between Brazil and the rest of Latin America would seem sufficient to support similarities of interests and close cooperative relationships. Yet Brazil's Lusophone culture, the immensity of the country, the geographical distance of much of its population from Spanish American population centers, and middle and upper class fascination for things American or European led instead to a sense of separateness and distinctness which impeded serious Brazilian selfidentification, beyond rhetoric, as a Latin American nation despite its geographical location. Thus the question of how Brazil should relate to the rest of Latin America has been a topic of domestic and continental debate, with increasingly practical consequences as the South American development process continues. The recent shift toward more intense, collaborative relations, in particular, invites analysis of current trends and speculation on possible outcomes.

Prime Minister Brian Mulroney requested the opening of trade talks with the United States on September 26,1985. He did not use the words “free trade,” but that was the gist of the request. He explicitly rejected a common market or a customs union and implicitly dismissed the sectoral free-trade approach. The US administration responded positively and requested permission from the Congress to open negotiations. Negotiating teams have been appointed and discussions are taking place. All the actors noted that the negotiations will be difficult and may last several years. After more than a decade of avoiding the issue, Canada has acted. The context is complex because of growing US protectionism, including concern over certain imports from Canada, especially lumber. Fear of this protectionism was one reason for the Canadian decision. Another was concern about the future of Canada's economy. The Canadian economy has performed poorly for much of the past ten years.

Canadian Prime Minister Brian Mulroney is faced with a number of difficult choices concerning Canada's foreign policy in Central America. These choices are particularly problematic because their repercussions may have an important impact on Canada- US relations. On the one hand, the Prime Minister must heed public opinion in Canada which favors increased government concern about human rights and economic development in Central America. On the other hand, he must consider American security interests and not irritate or embarrass the United States and President Reagan in particular.

Canada's middle power status puts it in a difficult quandary, for it seeks to retain an independent role in Central America, while it finds its influence circumscribed by its proximity to the US superpower. Its ability to wield tangible authority is thus severely attenuated. Canada's asymmetrical relationship with the United States allows it a certain degree of latitude in formulating foreign policy but imposes important constraints as well.