Trade is a geopolitically charged subject, and nowhere more so than in Latin America.
While the US attempts to reclaim an influence it thought it had on the region, China has been offering much-needed financing and trade links. Over the past few months, the US has made both public and private efforts to moderate Beijing’s influence on Latin America, from touting the return of the 19th century Monroe Doctrine, widely seen as an excuse for military intervention to keep any other great powers out of its southern backyard, to questioning the Washington-based Inter-American Development Bank’s decision to hold its 2019 annual meeting in Beijing.
Meanwhile, China has continued to pour funds into the region’s infrastructure and across other sectors – a total of $150bn has come through policy banks’ finance alone since 2005, according to think tank the Inter-American Dialogue – and offered the prospect of even closer trade ties, logistics and financial integration through its One Belt One Road initiative.
The importance of these opposing stances is not lost on Latin America.
US attacks on immigration and trade with Mexico have not exactly promoted a trusted partner image, and its continuous adversarial position in the renegotiations over the North American Free Trade Agreement is compounding that. Politicians such as leading presidential candidate Andres Manuel Lopez Obrador have been fired by Mexicans’ distrust of their northern neighbour. Others, such as former finance minister Jose Antonio Meade, have long discussed Mexico’s various other trade options.
In Brazil, China is buying raw materials and energy companies and is investing in infrastructure, to the delight of many. The governor of the state of São Paulo, Geraldo Alckmin, a centrist politician and a potential candidate in Brazil’s October presidential elections, told The Banker: “I defend [the idea] that Brazil has to seek to have China as its main partner in public-private partnerships that build infrastructure.” But being welcomed by all might require even greater efforts, and not just of the financial kind. Former military officer and right-wing presidential hopeful Jair Bolsonaro has called the Asian country “heartless” and wishes to restrict its access to Brazil’s key industries.
So while the US and China display, respectively, the characteristics of a capricious ruler in decline and a rising superpower that strives to be seen as benevolent, Latin America is making up its own mind. At this time, the region’s views are pivotal to a shift to a new geopolitical order. Latin America might end up consolidating far more than just global trade policy.
