Joe Biden acknowledged a few days ago that China, not Russia, is his number one concern; the biggest nuisance for the United States in a long-term perspective. Now that headache is with him at the Summit of the Americas in Los Angeles, which he is hosting. The US president, already in a hurry due to the absence of eight of the 30 invited heads of state and government, in protest at the exclusion of Cuba, Venezuela and Nicaragua, yesterday launched a strategy for the recovery of investment and commercial positions in the area. The goal is to offset the energetic expansion of the eastern giant in a South America that is increasingly China’s western vein and less and less America’s backyard.
Not counting Mexico, whose trade agreement with its northern neighbor makes it an important and priority partner, Latin America as a whole has traded more with China than with the US for a few years. And the gap, opened in 2018 under the presidency of Donald Trump, has not stopped widening with Biden at the helm.
According to a report published yesterday by Reuters, the total trade flows (imports and exports) between China and Latin America, with the aforementioned exclusion of Mexico, totaled almost 247,000 million dollars last year compared to 174,000 million with the US.
A previous report, the one that the Center for Strategic and International Studies (CSIS) presented to the US Senate on March 31, indicates that Chinese trade with all of Latin America – this time including Mexico – amounted to 314,000 million in 2020, which multiplies “by more than 17” the amount of the year 2001, when the eastern power was accepted in the World Trade Organization.
“Only in terms of trade, the People’s Republic of China is now the number one partner of all the countries south of Costa Rica, or number two behind Brazil,” adds the CSIS report.
When the enormous trade flow between Mexico and the US is included (607,000 million compared to 110,000 with China), the Western power maintains its leadership. But the trend in the region is the opposite; in the rest of Latin America, Chinese products are gaining ground. And importers from Beijing are the big buyers of soybeans, corn and copper produced in the region.
To stop this dynamic and recover positions, Biden presented yesterday at the Los Angeles summit an “Association of the Americas for Economic Prosperity” aimed at promoting recovery after the pandemic based on existing trade agreements with southern partners. According to Administration sources, it is about mobilizing investments, reinforcing the Inter-American Development Bank, creating clean energy jobs and strengthening supply chains within the Americas. Negotiations will start in the fall. Meanwhile, China continues to tighten.
