Why does Washington reach out to Africa but not to Latin America? China is poised to fill the ‘influence gap’

Aug 27, 2014 | 0 comments

By Andres Oppenheimer

Watching President Barack Obama at his mega-summit with nearly 50 African heads of state in Washington, D.C., in which he announced $33 billion in investments and vowed to increase access to electricity to 60 million African households, many of us asked ourselves the same question — why doesn’t he do the same with Latin America?

The conventional wisdom among the thousands of dignitaries and business people who converged on Washington for the Aug. 5 U.S.-Africa Leaders Summit was that the Obama administration organized the event in a desperate effort to catch up with China. In recent years, China has become Africa’s top business partner.

Well, I’ve got news for U.S. policy makers: if Washington continues to pay little attention to Latin America, the same will happen there. It’s already happening in several countries in the region.

Not only China, but also Russia and Japan — whose heads of state visited Latin America in recent weeks — have announced big plans to expand their presence in the region. While some of us are skeptical of China’s promises — more about that later — Beijing’s rise in the region has been impressive.

The U.S. share of Latin America’s trade has dropped from 53 percent of the region’s world-wide trade in 2000, to 35 percent in 2013. Meanwhile, China’s share has soared from 1.9 percent to 12 percent over the same period, according to Inter-American Development Bank figures.

What’s more, if current trends continue, by 2025 Latin America’s trade with the United States will have declined further to 17 percent of its total trade, while Latin America’s trade with China will have reached 17 percent, says chief IADB trade economist Mauricio Moreira.

And these figures include Mexico, a huge Latin American economy that does relatively little business with China. If you exclude Mexico, China’s presence in the region will dwarf the United States by 2025, the projections show.

Asked why there’s no U.S.-Latin America Summit in Washington, like the Africa summit, Washington insiders point out that the United States holds a regular Summit of the Americas every three or four years. The next Summit of the Americas is to be held in Panama in 2015.

But recent Summits of the Americas have been a flop, to a large extent because of Venezuela’s petro-dollar diplomacy, which virtually controls the votes of at least 16 Central American and Caribbean countries through its Petrocaribe-subsidized oil shipments, and because of Brazil’s reluctance to work for the success of any summit it does not lead.

So what can the United States do? Here are three things, for starters:

First, the Obama administration should show the region that it cares. Everybody understands that Secretary of State John Kerry is tied up with more urgent matters in the Middle East and Ukraine, but so far this year only two of his 21 trips abroad were to the region.

And for last week’s second-term inauguration of Colombia’s President Juan Manuel Santos, which was attended by the presidents of Mexico, Peru and several other countries, the White House sent U.S. State Department counselor Thomas Shannon, a highly respected diplomat, but hardly a celebrity.

Second, Obama could build his legacy in the region by proposing a new plan to deepen trade and investment relations with the 11 countries in the region with which the United States has free trade agreements, including Mexico, Colombia, Peru and Chile.

The White House is currently negotiating free trade agreements with mostly Asian Pacific Rim countries and the 28-nation European Union. Kerry told me in an exclusive interview in December that he is “exploring” a regional trade initiative in the Americas, starting with deepening ties with Mexico and Canada, but that’s the last I heard of it.

Third, Obama should counter PetroCaribe with a U.S.-Caribe initiative, taking advantage of the fact that Venezuela has gone bankrupt and its oil facilities are crumbling, while the United States will soon become self-sufficient in energy, and may even become an oil exporter.

Petro-diplomacy may be used by Washington, just as it has been used by Venezuela, some Washington insiders are thinking.

My opinion: I don’t buy right-wing Republican claims that Obama has “lost Latin America.” Former President George W. Bush’s cowboy diplomacy and conservative Republicans’ current anti-immigration stands have done much more harm to U.S. foreign policy than Obama’s efforts to be a peacenik.

But Obama should engage with Latin America, at least with the 11 countries that have free trade deals with Washington. The U.S. economy is recovering, and China’s is slowing down. It’s time for Obama to focus on Latin America, much like he did on Africa last week.

Credit: The Miami Herald, www.miamiherald.com.


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