US can’t cite China’s ‘economic aggression’ in LatAm

By Tang Jun Source:Global Times Published: 2018/4/10 22:13:40

Illustration: Luo Xuan/GT



 

Acting on behalf of US President Donald Trump, Vice President Mike Pence will travel this week to South America, after Trump cancelled his planned visit to deal with issues in Syria.

In a telephone briefing on April 5, an unidentified senior US official said China's trade policies had "not been productive for the hemisphere and that the US should remain the partner of choice" for Latin American countries, according to Reuters.

The US has already accused China of "economic aggression" while it announced trade investigations on Chinese products in March. The US is trying to pressure Latin American countries to spurn China, adding more bargaining chips amid its trade friction with China.

However, the Latin American countries are quite likely to give Pence the cold shoulder. The term "economic aggression" the US is using to describe China is best-suited to its own behavior.

Comparing roles in the region, the US is the one that has adopted "economic aggression" as its main policy for more than 200 years. This term probably reminds the Latin American people of the US, which has been engaged in economic exploitation, political infiltration and military intervention in the region.

The US has appeared as the consistent hegemon in the region. The Monroe Doctrine, established by the fifth US President James Monroe in 1823, viewed Latin America as the "backyard" of the US. Through unfair treaties, the US occupied large areas of Mexico. During the 1970s, neoliberalism represented by the Chicago school of economics turned Latin America into a testing ground for its theories, resulting in high risks in the financial sector. Since the region's ability to cope with risk didn't keep pace with its financial opening up, Latin America experienced capital flight, and state-owned assets were drained away.

Meanwhile, the US applied "competitive liberalization" as its trade strategy, convincing some countries to reach bilateral or multilateral trade agreements with the US in exchange for more US market access and investment. This strategy created differences among Latin American countries that hindered the integration process in the entire region.

The US has a long history of trade protectionism in Latin America. Trump keeps triggering trade disputes all over the world. The "fair and reciprocal trade" he claimed can only favor the US.

In the recent years, some Latin American countries' trade surpluses with the US have been widening. Trump started renegotiating the North American Free Trade Agreement (NAFTA), targeting mainly Mexico. The US has set a bad example by starting trade friction with China. So it will be hard to convince Latin American people.

The comparative advantage of Latin America is its rich resources and relatively cheap labor. It is at the lower end of the global industrial chain. The US, on the one hand, has gained from these resources and workers; on the other hand, it doesn't want its trade partners to have surpluses.

By beating the drum for a united opposition against the so-called "aggressive external powers," the US is actually intent on limiting Latin America's trade diversification efforts so as to keep exploiting the region. Through political and military infiltration, the US has backed pro-American right-wing governments in Latin America while pressuring left-wing governments such as those in Cuba and Venezuela over the years. It even intervened in the internal affairs of Latin American countries with the excuse of fighting drugs while turning a blind eye to rampant drug use within the US.

Given the above, it is ironic for the US to accuse China of economic aggression while its exploitation and intervention have kept the Latin American economies in trouble for years.

The accusation is rooted in envy of China-Latin America relations. The diplomatic choices for Latin America have become more diverse since the start of the 21st century. Relations with China have developed rapidly since China neither has no political intentions, nor tries to gain regional influence.

China has replaced the US as the top trading partner of many Latin American countries including Brazil, Peru and Chile. Cooperation with China is a better fit for Latin America, apparently.

In February, then US Secretary of State Rex Tillerson warned Latin American countries of China's presence before his visit to Latin America. His visit did not yield much progress. Instead, there was backlash in the region. Pence's visit is very likely to end on the same note.

The author is a professor at the School of Humanities at Jiangxi University of Finance and Economics, deputy secretary-general with the Chinese Association for Latin American Studies, senior research fellow with the Pangoal Institution and senior research fellow with Statecraft Institution. bizopinion@globaltimes.com.cn



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