BUENOS AIRES, (Reuters) – Donald Trump was clear with Latin America during his four-year administration: don’t do business with China. The message failed to hit home.
As President-elect Joe Biden readies to enter the White House on Jan. 20, Beijing has tightened its grip over large parts of the resource-rich region that was once considered the political backyard of the United States.
A Reuters investigation, including interviews with current and former officials and advisers, and analysis of trade data, found that, under Trump, China has left the United States in power and influence drag across most of Latin America.
That is a challenge for Biden, who has vowed to restore Washington’s role as a global leader after years of Trump’s “America First” policies, and has said that slipping US influence into Latin America is a threat to national security.
“They should be on alert that Trump’s incompetence and negligence in Latin America and the Caribbean will end on the first day of my administration,” Biden told Americas Quarterly in March. His team declined to comment on this story.
That promise will not be easy to fulfill.
Since 2018, China has overtaken the United States as the largest trade partner for Latin America – if Mexico is removed from the calculations – in hovering Andean copper, Argentine grain and Brazilian meat.
Beijing has also increased investment and low interest loans to the region, supporting energy projects, solar farms, dams, ports, railways and highways.
Former Bolivian President Jorge Quiroga explained China’s withdrawal during an interview with Reuters in La Paz earlier this year, adding that he along with the local Brazilian powerhouse was the most important partner.
“People ask me who do I prefer, the United States or Europe? I say Brazil. How about in second place? I say China. That’s the reality of South America, ”Quiroga said.
‘TRUMP WILL NOT SHOW ANY INTEREST’
Officials in the region warned that it will be difficult to dismantle China, a major economic and diplomatic partner for many nations. Billions of Chinese dollars have provided vital rescue lines for emerging countries in debt, a need fueled by the impact of the coronavirus pandemic.
“I think China is more interested in Argentina than the United States is in Argentina. And that’s what makes the difference, ”an Argentinian government official told Reuters.
“Trump showed no interest. Hopefully Biden does. ”
China is now the main trade partner for Brazil, Chile, Peru, Uruguay and others. It is much larger than the United States in terms of trade with Argentina.
Outside Mexico, China’s trade with the US region overtook in 2018 and extended that in 2019 to more than $ 223 billion against US trade of $ 198 billion, according to analysis of trade figures from the Comtrade database the United Nations.
The United States remains much larger when it included Mexico – its main global trading partner last year.
Some countries in the region thought the Trump administration was doing little more than wagging Latin American counterparts for getting too close to China, especially through cheap financing or technology links as the race for 5G dominance heats up.
Mark Feierstein, who advised former President Barack Obama, said Trump’s lack of engagement and exit from the Trans-Pacific Partnership trade block created a vacuum that China had filled – and that Biden will look to reverse.
“What Trump has done is make China look like a better partner. That’s all going to change, ”said Feierstein, now senior adviser at Albright Stonebridge Group and CLS Strategies.
‘STRATEGIC BENEFITS’
The Biden Democratic White House would likely give Latin America more priority, say analysts and former advisers, though it will juggle that with a tough pandemic recovery and reset relations in Europe and Asia.
Janet Napolitano, Obama’s former homeland security secretary, said her experience of Biden was that he saw “a strategic advantage to the United States of having very strong ties throughout Central and South America”.
Biden will continue to push similar warnings against getting close to China, but he may be aiming to win back hearts and minds with proposals of more financial incentives and a return to humanitarian aid Trump broke, experts say.
“(His administration will) recognize the dependence in South America on the Chinese market for goods, and seek much more vigorously and generously to offer support,” said Benjamin Gedan, a former National Security Council official under Obama and a now a scholar at the Wilson. Center.
ECONOMIC DIPLOMACY
China took the opportunity during the pandemic to deepen relations across Latin America, sending medical supplies including breathing machines and masks to combat COVID-19.
In Argentina, the government has announced in recent months a host of new or expanded initiatives with China, vaccine trials, extended currency exchange, space cooperation, and a Chinese military studies course for students at the Southern national college of defense America.
The two countries have discussed a possible state visit to China by President Alberto Fernandez and about Argentina joining Beijing’s signature Belt and Road Initiative.
Margaret Myers, program director in China and Latin America, said in the Inter-American Dialogue that while Chinese sovereign lending had dipped slightly, it had been replaced by commercial bank finance.
“China’s economic diplomacy, whether through trade or finance, has opened a wide range of doors,” he said, citing a $ 2.4 billion loan to Ecuador this year from China Exim Bank.
The United States appeared to have changed course in the months leading up to last month’s presidential election, introducing its own set of initiatives in the region in a bid to compete with China, though many thought these were too little, too late.
“This is a great power competition, and it’s playing out all over the world, including Latin America,” said a senior US administration official, who asked not to be named. “We have a strategy and we’re pushing back.”
Francis Fannon, Assistant Secretary of the State Department of Energy Resources, said after visiting Brazil, Chile, Ecuador and Panama, the pandemic risks jeopardizing some countries in the region towards partners like China.
“With COVID, it affects economic decision-making and affects the psychology of countries. We want to encourage countries to continue on the path of thinking they have been on, ”Fannon told Reuters.
“The United States is the partner of choice. It has been, and continues to be. ”