The Latin American policy of the Bush administration departed sharply from the Cold War concerns of the Reagan years. The Soviet Union gradually withdrew its aid for Cuba, the Sandinista government of Nicaragua, and the leftist insurgents in El Salvador—both because Gorbachev did not want to irritate the United States on an issue of no strategic importance to Moscow and because the USSR had run out of money. The Bush administration, in turn, abandoned the Reaganite military approach to the political problems of Central America and encouraged regional diplomatic solutions and a role for the United Nations. The result was the free election victory in Nicaragua of an anti-Sandinista coalition led by Violeta Barrios de Chamorro in February 1990 and a UNbrokered end to the civil war in El Salvador in late 1991.
Some American liberals urged the administration to open a dialogue with Fidel Castro of Cuba, looking toward a possible lifting of the embargo on trade and the normalization of relations now that the Cold War was over. But on that question Bush held fast to the old policy of tough economic sanctions and verbal denunciation of Castro's totalitarian regime. Castro was no longer a threat to anyone outside of Cuba, but a tough anti-Castro policy was good domestic politics, especially with the well-organized Cuban-American community in Florida.
Elsewhere in the Caribbean and Central America, President Bush dealt with new objectives and problems. The most dramatic episode was the December 1989 U.S. invasion of Panama to oust dictator Manuel Noriega and bring him to trial for his involvement in the illegal drug trade. Noriega's power was based largely on murder and intimidation. He had been on the payroll of the CIA and the Drug Enforcement Agency in the 1980s for assistance in the covert war against the Sandinistas and to help interdict the flow of narcotics into the United States. In fact, he was up to his armpits in the drug trade and money laundering. Finally in 1988 Noriega was indicted on drug charges by a federal grand jury in Florida. The Reagan administration floated the idea, opposed by Vice President Bush, of dropping the indictment if Noriega would give up his power and leave Panama. Noriega was not interested in the deal.
But in May 1989 Noriega, under U.S. pressure, permitted a presidential election in Panama. The democratic opposition, headed by Guillermo Endara, won 68 percent of the vote. Noriega annulled the election. His loyal political roughnecks attacked and severely wounded Endara and other opposition leaders. Noriega was now a bone in Bush's throat. Bush ordered more troops sent to the American base alongside the Panama Canal and tightened economic sanctions. In October 1989 a young Panamanian military officer asked for U.S. help in overthrowing Noriega. The United States hesitated in providing support. Noriega executed the leaders of the attempted coup.
In December, Noriega's puppet National Assembly declared a state of war with the United States. Noriega's army provoked a U.S. response by killing an off-duty marine officer and harassing other Americans. Just after midnight on 20 December, American forces attacked Noriega's headquarters and military installations. Endara, the legally elected president, took office under American protection and declared the Panamanian army disbanded. Armed resistance to the intervention faded quickly, and the great majority of the people of Panama rejoiced in their liberation from a brutal dictator. Noriega took refuge in the residence of the papal envoy to Panama. He soon surrendered and was transported to Florida for trial, conviction, and a long jail sentence. Twenty-five thousand Americans served in the operation, of whom 39 were killed, along with 139 Panamanian troops and about 400 civilians. The Organization of American States condemned the U.S. invasion by a vote of 20 to 1, but Bush, the U.S. Congress, and most Americans, according to public opinion polls, believed the right thing had been done.
Haiti was another nearby problem with no connection to old Cold War issues. The densely populated, impoverished island country had long suffered under corrupt and despotic rule. In December 1990, however, the first reasonably free elections in Haitian history were won by a charismatic hero of the poor, the Reverend Jean-Bertrand Aristide. President Aristide's radical philosophy threatened the army and the wealthy oligarchy. He was overthrown in a military coup on 30 September 1991.
One of the coup leaders, General Raoul Cedras, took over as Haiti's leader. Aristide fled to Venezuela and then to Washington, where he continued to be recognized as the rightful head of government. The United States applied increasing economic pressure against Cedras and supported the futile efforts of the United Nations and the Organization of American States to negotiate Aristide's return. Meanwhile, thousands of poor Haitians tried to escape to the United States in pitifully unseaworthy wooden boats. Many were lost at sea while thousands of others were picked up by the U.S. Coast Guard. The Bush administration denied the refugees admission to the United States and instead established a temporary camp for them at Guantánamo Bay, the American naval base in Cuba. In 1993 the Clinton administration inherited a standoff with Cedras and in 1994 negotiated Cedras' departure and sent in American troops to prevent violence and permit Aristide's return.
Bush's major economic initiative in Latin America, negotiation of the North American Free Trade Agreement (NAFTA), had large domestic economic and political implications. The agreement brought Mexico into the existing free-trade arrangement between the United States and Canada. It called for the elimination of tariffs (taxes charged on imports) for most trade among the three countries. The Mexican government embraced NAFTA as a boon to manufacturing, and American corporations favored it as a means of lowering the cost of production by using low-wage Mexican workers. Organized American labor, on the other hand, denounced it as a threat to employment in the United States, and environmentalists said it would be a way for American companies to escape U.S. environmental regulations. Ross Perot, an independent candidate in the 1992 election, made opposition a centerpiece of his campaign and warned of the "giant sucking sound" of American jobs flowing down below the border. Bill Clinton was a lukewarm supporter. The agreement was signed by Bush, Mexican president Carlos Salinas de Gortari, and Canadian prime minister Brian Mulroney on 17 December 1992. It was approved by Congress in late 1993 and went into effect 1 January 1994.