Economics

¿Prosperidad “hecha en las Américas”?

Nov 23, 2017 Luis Alberto Moreno

WASHINGTON, DC – Mientras Canadá, México y Estados Unidos se embarcan en la quinta ronda de negociaciones para modernizar el Tratado de Libre Comercio de América del Norte –una empresa de pronóstico incierto–, en el resto de las Américas los gobiernos afrontan un dilema mucho más fundamental: ¿quién será su principal socio comercial en el futuro: Estados Unidos, Europa o China?

Durante más de un siglo, la respuesta a esa pregunta caía de maduro: “EE UU”. Su proximidad geográfica, su grado de influencia, y su enorme poderío económico lo convirtieron en el centro natural de atención en materia comercial para América Latina. De hecho, la región es el primer o segundo socio comercial para 37 de los 50 estados de la Unión.

En 2016 las empresas estadounidenses exportaron a América Latina y el Caribe bienes y servicios por un total de US$515.000 millones, casi el triple de lo que le vendieron a China. Además, mientras que EE UU tiene un déficit comercial recurrente con China, Washington por lo común se anota un superávit con sus socios del sur, que suelen mostrar gran predilección por los productos de alto valor y los sofisticados servicios que proveen las empresas estadounidenses.

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j. von Hettlingen Nov 26, 2017

Luis Alberto Moreno urges the US to rethink its Monroe doctrine and reclaim leadership, amid its renegotiation to update the North American Free Trade Agreement (NAFTA) with Canada and Mexico. The US has made demands that other members deem unacceptable. They are not willing to accept proposals like a five-year "sunset" clause and tightening so-called rules of origin etc. Without a compromise a satisfactory agreement will not be reached, and they will ask who are going to be their "dominant trade partner in the future: the US, Europe, or China?"
Although the US introduced a policy for Latin America known as the Monroe Doctrine as far back as 1823, decreeing that no foreign power could have more influence there than the US itself, in recent years it has been alarmed at increasing Chinese influence in its backyard. Yet Trump's voters say free trade failed American workers, citing NAFTA as a top reason they supported his candidacy. Trump hates losing money, saying reducing trade deficits with Canda and Mexico is his top priority.
The author says, "in 2016, US companies exported a total of $515 billion worth of goods and services to Latin America and the Caribbean – nearly three times as much as they exported to China." While the US has a "large and recurring trade deficit with China," it has a surplus with Canada and "its southern neighbors," except for Mexico. Although consumers in Latin America "traditionally favor the high-value goods and sophisticated services that US companies provide," imports from China have surged in recent years.
Due to rapid growth, China is interested in commodities like agriculture, energy and mining projects in Latin America, which together with the Caribbean "will have a combined population of around 720 million people," and a GDP of "around $9 trillion" by 2030. Alone the six economies – Brazil, Mexico, Argentina, Colombia, Chile, and Peru – account for "86% of that total." China's global expansion to the region reflects its "long-term strategy to cement its position in one of the world’s most attractive emerging markets."
The two largest regional trade blocs - Mercosur and the Pacific Alliance - with each including the region’s six largest economies, are well integrated. The EU is also keen on improving trade with Latin America, reversing the downward trend. Even if China is working hard to gain a foothold in "sectors that generate higher-wage jobs and transfer much-needed skills to host economies," the EU and the US may still have an edge over others with its high-end products and sophisticated services.
The author says, "China has become a major underwriter of the new infrastructure that Latin America urgently needs. It is framing these investments within the narrative of its Belt and Road Initiative, a global vision for connectivity, cooperation, and prosperity that resonates powerfully with Latin American leaders." While President Xi Jinping's Belt and Road Initiative is the revival of the ancient Silk Road taken by merchants from China across Central Asia to Europe, China lacks the historical tie to Latin America, China's infrastructural engagement in Latin America may be limited, as the Belt and Road Initiative will drain on much of its resources.
If the US wants to regain its backyard, it must not let China and the EU "seize opportunities" in Latin America and the Caribbean. It could "easily propose a similar integration initiative" and take a "strong incentive to pursue a strategy of active re-engagement" with Latin America. The author says - according to the Inter-American Development Bank - the US would regain its former prominence, creating around "one million" jobs at home.
The question is whether Americans ever have the appetite for joint forces with their Latin American counterparts. It makes sense to forge a "unifying agenda" with the slogan - "made in Americas" - in a time of "global uncertainty." China's Belt and Road Initiative seeks to boost trade across Asia and burnish its image as a global player. By the same token, the US could "reassert its historical leadership among a group of countries that share its fundamental values, as well as an interest in inclusive economic growth and rising living standards." This may still happen, but certainly not under Trump.
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Nicolas Cornejo Nov 24, 2017

This is not true. A dissolution of Mercosur is more possible than the convergence of Mercosur and the Pacific Alliance.
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Michael Fairbanks Nov 24, 2017

China has a 75 year plan for Latin America. It culminates in using the region as a staging point to dominate brands, distribution and retail establishments in the United States. The United States has no plan for Latin America. This article by Luis Alberto Moreno conveys the fear and hope that United States leadership requires. But the current administration doesn’t have the desire or ability to listen. Michael Fairbanks
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Steve Hurst Nov 23, 2017

Stuff from China is cheaper than the same stuff from the US and the EU hence the reduction in trade for the last two and the gain for the first. It will be difficult to reverse that dynamic. In terms of technology there is nothing to stop China moving to parity in technology with the EU and the US, and for China buying into things is a good way of helping that along, it overcomes the resistance to enlarging activity. Essentially China is playing a different game and it is difficult for the EU or US to emulate it, they need a different game and in particular they need a game that benefits them just as much as other partners.
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