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Reshaping Perspectives and Catalyzing Diplomatic Evolution

Thursday, September 28, 2023


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WorldEuropeLatin America increases its dependence on China after Washington's "reluctance"

Latin America increases its dependence on China after Washington’s “reluctance”

On the other hand, last April da Silva traveled to China, where his visit lasted three days, accompanied by a larger delegation including dozens of business leaders and state governors. The result of this visit was about 20 agreements worth 10 billion dollars.

This comparison reflects the reality of the rise of Chinese influence in Latin America, which is one of the most important strategic regions for the United States, which is generally described as “the backyard of Washington”, in exchange of a sharp American withdrawal from this region, and the reluctance to many trade and investment agreements on the part of American and European companies, thus strengthening the presence of China in one of the arenas of the new cold war between the great powers.

And from Brazil, where Da Silva, who said no one can hinder his country’s relations with Beijing, to “Ecuador”, which also gave a clear example of the scale of the Chinese presence. Quito recently signed a trade agreement with China and received $1.4 billion from Beijing last year in debt relief.

Ecuador’s experience with China

A report by Britain’s Financial Times said that Ecuador’s experience with China “shows how the United States and other Western countries stand to lose more ground in Latin America to Beijing, unless Washington cannot offer better trade and investment opportunities”.

▪ China is Latin America’s largest trading partner ▪ Chinese trade with Latin American countries has grown from $12 billion in 2000 to $495 billion in 2022. ▪ Chile, Costa Rica and Peru have free trade agreements with Beijing, and Ecuador signed its deal this month. Panama and Uruguay are considering other agreements. However, the US administration has ruled out new trade deals, frustrating Latin American countries. The European Union has spent 20 years negotiating a free trade agreement with South American bloc Mercosur but has yet to ratify it.

And as China seeks to increase its influence in this region of strategic importance to it in the context of economic and political competition with the United States, the latter risks losing more areas of influence, taking steps in rear, clearly expressed by the series of withdrawals on the part of some European and American companies from the region, While the Chinese are seizing the opportunity as a suitable alternative.

▪ Many sectors have seen the withdrawal of American and Western investments from Latin America, in particular (renewable energies and key minerals) towards the Chinese company Three Gorges Power in 2016, to focus first on the domestic market. The Canadian company Nutrien sold its 24% stake in SQM in Chile, one of the world’s largest lithium producers, to a Chinese company in 2018. Italian company Enel announced last month that it would sell its assets for 2.9 billions of dollars to the power grid in southern China. The Spanish company Naturgy sold the energy distribution company in Chile to the Chinese in 2020. Ford plans to sell one of its factories there to the Chinese company BYD for the manufacture of electric cars.

Latini was keen to expand alliances

Eric Hirshberg, a professor at the American University of Washington who specializes in American policy in Latin America, says in exclusive statements to “Economy Sky News Arabia”: “Whether or not he has trade deals with the United States, Latin American governments remain mostly eager to expand economic relations with China.

▪ The United States of America already has six free trade agreements in place. ▪ The six agreements cover 12 South American countries. ▪ These agreements lack a common framework, which has led to a number of problems. And if he said that “there is no support for the expansion of free trade agreements. The Washington office of the Council of the Americas (a regional trade group) warned of the consequences of not having an active US trade agenda for Latin America. He said Washington was not effective there, according to the British newspaper’s report.

And on whether (Sino-Latin) relations would affect Washington’s influence there and its economic interests, Hirshberg says, “No, not often, although some US policymakers already believe so.”

▪ China, for its part, has been able to achieve more effective breakthroughs thanks to the series of funds it provides to countries in the region. ▪ These funds mainly targeted “infrastructure”, building roads, bridges and airports. ▪ Over $136 billion. has been provided by Beijing to governments and government enterprises in Latin America since 2005. ▪ More than 20 countries in the Americas and the Caribbean join China’s Belt and Road Initiative.

On the other hand, Washington has focused, according to the Financial Times report, on the files of corruption, democracy, the environment, human rights and the risks linked to relations with China. . The European Union’s Global Gateway initiative has pledged “just” $3.5 billion to Latin America.

Among the talking points between the US and Latin America is a demand to avoid 5G phone networks built by Chinese company Huawei, which are sanctioned by Washington – but US and European alternatives to Huawei are often more expensive .

Theater of competition between great powers

Furthermore, Mohammed Atif, a researcher in international relations at the Mohammed V University in Rabat, specializing in Latin American affairs, underlines in statements exclusive to “Economy Sky News Arabia”: “The Latin American region is a theater of competition between great powers, especially the United States and China. And in light of the changes taking place in the global economic system, the pace of this competition is accelerating in order to expand influence and s seize markets in this region, as is happening in other regions of the world, Africa and Asia.

He continues, “Latin America is the back garden of the United States, and represents a particular strategic importance (..)”, explaining that the economy represents the main pillar of the foreign policy of the countries of the region, which enjoys various economic benefits. exchanges with a number of regional and international parties, at a time when the United States seeks to expand its economic influence, but it comes up against China as a superpower which is also trying to increase its influence by concluding numerous agreements with Latin countries.

Atif added: “South America includes a group of countries that enjoy an important economic position, such as Argentina, Chile, Mexico and even Brazil”, explaining that Beijing has close relations with some of these countries to compete with Washington in this regard and keep it away from the region as part of the strategic competition between the two powers, deducing It is the BRICS bloc, in which Brazil participates alongside China (which is the bloc that competes with the Group of Seven).

And the specialist in Latin American affairs explains, in his interview with “Sky News Arabia Economy”, that there are changes in the foreign policy orientations of some countries in the region, as they try to link their economic relations. with China (considering the economy as the main engine, far from political criteria), and by virtue of Beijing is a huge strategic force, and the Latin countries see that the future is with China, which can have a place of economic leadership, and so comes the Latin opening in Beijing to benefit from the economic experiences of the latter in terms of development and others, and many Chinese companies are investing in the region.

As China invests heavily and builds trade relations, the United States has launched one initiative after another, to no avail. Meanwhile, European leaders are trying to address nearly a decade of neglect by hosting a summit with Latin American presidents in July. But the British newspaper quoted a European Union diplomat as saying: “If we fail, there may not be another summit… This is one last chance to revive the relationship.”

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Arab Desk
Arab Desk
The Eastern Herald’s Arab Desk validates the stories published under this byline. That includes editorials, news stories, letters to the editor, and multimedia features on easternherald.com.

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