Latin America's new relationship with Asia and the US
Tortilla con Sal, November 24th 2016
Last weekend’s Asia Pacific Economic Cooperation Summit in Peru’s capital, Lima, confirmed that Latin America’s international relations are in a phase of accelerating transition. Latin America is building a clear commercial, economic and diplomatic relationship with Asia independently of whether or how much President-elect Donald Trump follows through on his proposed protectionist trade policy. That shift can be seen in developing trade and economic policy across the region in the case of both right wing governments like Argentina, Brazil, Colombia and Mexico, and too of the progressive ALBA country governments of Bolivia, Cuba, Ecuador, Nicaragua and Venezuela.
The APEC summit offered an extremely high profile example of that change, with different countries, especially China and the US, offering their own interpretations of APEC’s free trade agenda. The meeting's global importance was highlighted by the presence of China’s President Xi Jinping, Russia’s President Vladimir Putin and US President Barack Obama. Prior to the APEC summit, President Xi Jinping visited Ecuador where he signed important strategic trade and cooperation agreements with President Rafael Correa. APEC includes the South East Asian Pacific countries Brunei, Hong Kong (represented in addition to China), Indonesia, South Korea, Malaysia, Papua New Guinea, Philippines, Singapore, Thailand and Vietnam. Also represented were Japan, South Korea and Taiwan as well as anglophone US allies Australia, Canada and New Zealand.
Latin America was represented by all four main countries of the region’s Pacific Alliance, Chile, Colombia, Mexico and Peru. Underlying the summit is the unquestionable reality now of a truly multipolar world. The participation of Russia and China implicitly brought into play the interests of the enormous Eurasian bloc stretching from the Pacific to Eastern Europe and the Mediterranean. The ASEAN countries have made clear for some time that the US government should no longer take their loyalty for granted. Now, US government diplomacy also has to take into account the special interests of Japan, South Korea and Taiwan and their growing economic partnership with China and South East Asia. That reality has very strong implications for trade and economic policy and diplomacy across Latin America and the Caribbean as well.
Venezuela and Cuba already have substantial cooperation and investment relations with China and Russia. But China’s new agreement with Ecuador and recent events in Nicaragua show in practice how far reaching and fast moving the transition now underway is for Latin America. In August, Taiwan’s foreign minister visited Nicaragua after an extended visit to consolidate the two countries' long standing trade and cooperation relationship. In November, shortly after being re-elected, President Ortega received a high level parliamentary delegation from South Korea. Immediately afterwards, South Korea’s trade and industry minister met with President Ortega during the signing of the free trade agreement between South Korea and Central America which took place in Nicaragua’s capital, Managua.
The current importance South Korea attaches to its relations with Central America were further underlined by President Daniel Ortega on November 17th, during a regional forum on broadband internet connectivity. Nicaragua is the site chosen by South Korea for its investment in a regional Center for the Study of Broadband for Development which will train thousands of students from across Central America in skills for applying broadband internet technology to the region’s development needs. President Ortega remarked, “This marks a step up to a higher phase of relations for the Republic of Korea with Nicaragua, with the Central American Region and also with the Peoples of Our America”. South Korea’s growing presence and influence in Nicaragua helps lessen the negative effects of recent bipartisan threats from US politicians to attack Nicaragua’s access to development funding.
Development cooperation and commercial interaction of Asian countries like South Korea, Taiwan and Japan with Nicaragua and the region are steadily increasing. This means the US, as it has done with Cuba, will have to start progressively rethinking its increasingly counterproductive policies in Latin America. Nicaragua in particular manages to maintain close trade and development cooperation relations with US allies like Japan, South Korea and Taiwan, at the same time as it develops relations with Chinese economic interests. These include Nicaragua’s first satellite, as well as telecommunications investments and the enormous Inter-oceanic Canal project. This regional context, in which US President elect Donald Trump will take office, reflects the definitive end of US global predominance.
It also shows how desperate right wing elites are in Latin America and the Caribbean to shore up the demonstrably failed neoliberal model which has reached a categorical dead end in both the United States and the European Union. Now people in Argentina and Brazil, after a long interlude of progressive change, are again experiencing that failure under illegitimate regimes already well down a hopeless policy road towards social collapse and economic depression. Even so, Argentina and Brazil seek to promote strong trade relations with China and Russia in the belief that somehow free trade coupled with elusive private sector investment will alone magically lift their economies into prosperity. History is against them because the development experience of all the Asian countries is the diametric opposite, depending heavily on government intervention and investment.
The US has fervently promoted free trade but fiercely protects its agricultural sector, confirming another history lesson, that imperialist powers only promote free trade when it suits their interests. President elect Donald Trump’s embrace of protectionist rhetoric is another signal that the US no longer rules global trade. The contradictions keep piling up. While Brazil and Argentina rubbish government intervention and argue for fiscal austerity, the US president elect argues for massive infrastructure investment likely to balloon the public sector budget deficit. While Latin America’s right wing call for more neoliberal style free trade, the incoming US government is committed to abandoning the Trans Pacific Partnership.
Whether Donald Trump lives up to his current pronouncements and supposed commitments is an open question. What is certain is that US corporate financial interests will fight to the bitter end to preserve their financial power and political privilege in the unlikely event that the new US government goes after them. The United States is heading into a period of acute political, economic and social tension and conflict which will definitely affect its power and influence in Latin America and the Caribbean, both materially and in terms of perceptions. The uncertainty of the outcomes increase incentives for Latin America and the Caribbean to strengthen trade and development cooperation relations with China, Japan, South Korea, Taiwan and the ASEAN countries.
This is the context in which Latin America must work out the contradictions between socialist inspired, sovereign, inclusive policies defending the impoverished majority and Mother Earth and reactionary, socially exclusive, ecocidal policies favoring the region’s elites and their foreign corporate allies. Progressive countries fully embrace the new multipolar world while even repressive regimes like those in Brazil and Argentina try to build relations with Asia, despite their clear ideological loyalties to the West. The next few years will tell whether Latin America embraces a multipolar world in terms of genuine democracy and complementary solidarity based integration or via the poisonous zombie formulas of brutal, post-Western neoliberal pragmatism.