U.S. friends in Latin America are turning to China

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The US is losing Latin America to China without a fight, Ecuador’s ambassador to Washington told Nerdshala, highlighting his frustrations with the Biden administration’s early absurdity.

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why it matters: Ecuador is not alone. China has deepened its engagement in the region, and is now a top trading partner for many of the region’s largest economies. This gives Beijing a considerable advantage in a region historically dominated by the US, and makes Latin America a dominant front in the global competition for influence.

  • Without much attention from Washington, even US-friendly governments will conclude that “we are still just backyards,” Ambassador Ivonne Baki said in an hour-long interview in his office.
  • “And China is waiting, saying, ‘We’re here. We’re paying you.’ They certainly want control, but they don’t say so.”
Data: The World Bank and the Observatory of Economic Complexity; Chart: Kavya Behraj/Akshayo

zoom in: Ecuador’s new centre-right president, Guillermo Lasso, currently has a 75% approval rating after a successful vaccination push. His top economic priority is to secure trade deals with all of the world’s largest economies, first and foremost the US – a responsibility that falls on Bucky’s shoulders.

  • “If we don’t do something right away they don’t see the urgency of the problems that could happen,” says the rest of the administration.
  • The skyrocketing approval of the lasso won’t last long. The country has become polarized and the economy has been badly damaged by the pandemic. A signal from Washington could go a long way, she argues.
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On the other end: Beijing is set to move swiftly on a free trade agreement with Ecuador, which governments hope to finalize by March.

  • “We don’t want to go there, [Lasso] Don’t want to,” Bucky says of a shift toward China. But he may be “obliged.”
  • “Xi Jinping is calling the president. He wants to speak with him. [Vladimir] Putin wants to talk to him,” she adds. And they are calling with concrete offers.
  • Ecuador was grateful for Biden’s donation of 2 million vaccine doses in July, the rest say. But China had already given 13 million.

zoom out: Bucky’s comments may be unusually candid, but his feelings are widely shared.

  • “It’s a narrative that we’re hearing across the region, and I think it’s not without reason,” says Margaret Myers of Inter-American Dialogue.
  • Reflecting on the political turmoil across the region and what he saw as limited US engagement, another South American diplomat told Nerdshala that the US would one day see and realize it had no friends left in the hemisphere.
Data: The World Bank and the Observatory of Economic Complexity; Chart: Kavya Behraj/Akshayo
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big picture: Like Donald Trump and Barack Obama, Biden has looked to the Indo-Pacific to counter China’s growing influence.

  • yes but: Daniel Runde of the Center for Strategic and International Studies says, “Great power competition has arrived in America, even though Washington hasn’t woken up yet.
  • America needs friends in its hemisphere with whom to cooperate on issues like migration or crisis like Venezuela and Haiti.
  • China’s trade dominance could allow it to thwart those US objectives, drive countries away from Taiwan, influence the way politics and trade are conducted, and, down the road, potentially even establish a military presence.

“The way they’ve found to do this “Trade is through agreements, but of course China’s interests in the region go far beyond that,” says Nicolas Santo, author of the China Notes newsletter on Sino-Latin America political and business dynamics.

  • “I’m amazed at how little attention the United States has paid to the subject in the past 10 years, and even now,” says Santo.

Bucky says he still has hope That Biden would take a more proactive approach.

  • “He believes in the field,” she says, noting her work in the Senate and as Barack Obama’s point man in the hemisphere. “So I thought he would put that as a priority.”
  • A National Security Council spokesperson told Nerdshala, “What happens to our neighbors affects the United States and vice versa, which is why we take an active interest in the safety, security and prosperity of Latin America and the Caribbean.” ”
  • The spokesman said senior officials would soon travel to Latin America to meet with stakeholders, “to better understand their needs and help people deliver the infrastructure.”
how the trade winds changed

America was the top trading partner of nine out of 12 The country of South America two decades ago, and top partners across the board from outside the continent.

break it: China has now overtaken the US in all except Colombia, Ecuador and Paraguay, and it could soon be the biggest partner for those countries as well.

  • China is mainly importing raw materials and building infrastructure. In terms of culture and tourism, and dealmaking in the region’s growing technology hubs, ties with the US run deeper.
  • “It’s not that the US is no longer an important ally for countries in the region. It’s just that China is very much present … in areas where the US is not,” Myers says.
  • China is willing to trade in authoritarian-leaning countries that are far from the US, and it has the advantage of speed, whether in infrastructure or providing vaccines. Many similar dynamics have helped China become a major power in Africa.

America often hesitates to react to China’s steps, Instead of running the agenda.

  • The one exception is an unusual deal in the final days of the Trump administration, to which the US International Development Finance Corporation agreed. for investment in Ecuador’s oil and infrastructure if those funds were used to pay off debt to China, and if Ecuador kept Huawei out of its 5G network.

what to watch: It is unclear whether Biden will make similar deals – or whether several countries in the region would be willing to explicitly side with the US over China.

choose china by default

Uruguay’s President Luis Lacalle Po to announce on prime time TV earlier this month that his country would explore free trade talks with Beijing, despite concerns that it would undermine the regional Mercosur bloc.

Lacley Po. Photo: john angelillo-pool/Getty Images
  • The centre-right, pro-business leader has also proposed trade talks with the US but has little interest, say Eric Farnsworth and Carlos Mazal. write in baron.
  • “Montevideo would prefer to develop a relationship with Washington rather than Beijing. But so far, that option is unavailable. And Uruguay is far from unique in the whole of America,” he writes.

Between the lines: It may surprise US observers that, in an environment of US-China tensions, the US-friendly President Lacley Pau would see a political advantage in launching a potential deal with China so prominently.

  • But since the announcement, “the only thing people talk about is China,” says Santo, who is from Uruguay but spent two years working for the government of the Chinese city of Foshan.
  • “The toxic political issues involving China are not of concern to countries in the region,” he says. When it comes to “Yanquis,” everyone has a political opinion, he says. Not so for China.

“Every Latin American country are seduced by the potential of China’s economic opportunity,” he says.

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