Mexico: You, Too? China Ransacks Biden Administration’s Backyard

Continuing boycotts of the Summit of the Americas reflect a decline in America’s ability to act as a unifying force.

Even the Mexican President Boycotted the Conference

The Summit of the Americas took place the week of June 6 in Los Angeles, California. The first Summit of the Americas was held in Miami in 1994 at the suggestion of the Bill Clinton administration. Since then, countries have served as host on a rotating basis every three years. This was the first time in 27 years that the conference was held in the United States.

Latin America is often referred to as the backyard of the United States. It is a region where the influence of the United States -- geographically close -- is particularly strong. Something went wrong at this year’s gathering of the region’s leaders. One country after another boycotted the event.

Joe Biden's administration, which conditioned participation on respect for democracy and human rights, did not invite the leaders of communist Cuba, dictatorial Venezuela or Nicaragua. You can imagine how difficult it would have been to include these countries given the protests against them in downtown Los Angeles on the day of the conference.

However, a number of countries objected to the exclusion of the three countries. Mexican President Andrés Manuel López Obrador and other leaders of countries in Central America including Honduras, Guatemala and El Salvador, announced they would not attend. Immigrants from these countries to the United States continue to raise issues concerning poverty and safety, and they play an important role in United States immigration policy.

The most significant blow came when the Mexican president refused to attend. Through the United States-Mexico-Canada Agreement, formerly known as the North American Free Trade Agreement, this major country in the Americas has built a strong economic relationship with the United States. The non-participation of the Mexican president signaled a change in America’s status in Latin America.

That's not all. Leaders who attended sharply criticized the United States. Chilean President Gabriel Boric, also criticized the United States in Los Angeles, saying, "If the U.S. excludes certain countries, it will only strengthen the actions that the leaders of those countries have taken at home." Although President Boric is a leader of a progressive government in the most democratic country in Latin America, even he was critical of the summit.

As was readily apparent at this Summit of the Americas, the United States has been losing its ability to unify nations in the Central and South America regions.

One of the reasons is the U.S. government's long-standing indifference. In 1994, the same year NAFTA was established, President Clinton proposed the concept of a free trade area covering the Americas (34 countries, excluding Cuba) at the first Summit of Americas held in Miami. It was around that time that U.S. influence over Latin America peaked.

Subsequently, the second George W. Bush and Barack Obama administrations developed diplomatic policies centered on the Middle East and the Asian region, deflecting attention from Central and South America. Donald Trump, who advocated for addressing America first, had almost no Latin American policy, except for the tightening of immigration restrictions.

Latin American Belt and Road Initiative Signed by 21 Countries

The Biden administration remains indifferent, although expectations among countries in Latin America have risen to some extent since Biden took office in 2021. Some hope was possible with anyone but Trump.

However, it is clear that although the United States may impose values related to democracy, respect for human rights, immigration and environmental issues, so far there are no policies to benefit the economies of those countries in Latin America severely impacted by COVID-19 and unable to climb out of the doldrums.

It is into this situation that China has intervened.

In inverse proportion to the United States, China's economic and diplomatic presence in Latin America is increasing. Economic assistance and trade are steadily expanding, and unlike the United States, China is not making demands that countries about democracy or human rights.

The number of countries in Latin America countries that participate in the One Belt One Road initiative promoted by China is increasing every year, with 21 countries having signed on as of May 2022. Chinese companies are making considerable investment in the infrastructure sectors: energy, transportation and transportation, as well as in mineral resources.

Of particular note are moves to strengthen ties with Cuba and Venezuela, both suffering under United States sanctions. China is investing in Cuba's port facilities and power grid and continues to provide generous loans to Venezuela.

Brazil’s Largest Trading Partner Is Now China

Although the Chinese government has not disclosed its involvement, there has been word of plans to build a canal linking the Pacific Ocean to the Caribbean and Atlantic Ocean in Nicaragua, Central America, considered a counterpart to the Panama Canal built mainly by the United States.

China also has a strong trade presence in the region. According to U.S. government sources, trade between China and Central and South American countries was only $18 billion in 2002, but grew to $449 billion in 2021.

China is already the largest trade partner in Brazil, Chile, Peru and Uruguay. In addition, China has already signed free trade agreements with Chile, Costa Rica and Peru. Negotiations were initiated with Ecuador in February of this year.

COVID-19 vaccines increased the tilt to China, as it’s worth noting that China has become the largest supplier of vaccines in the region.

Even the United States government has concern about China’s rise. In 2021, the Biden administration announced the Build Back Better World program, which aims to expand its own environmental spending in Build Back Better. Naturally, Latin America will be included; however, given that Build Back Better proposals stalled in Congress, progress is not expected.

In Latin America, the poor response to COVID-19, the economic recession since then and inadequate support for the poor have led to increased opposition to incumbent governments and have fostered a rise in populism.

Mexican President López Obrador's government in Mexico, as well as the new governments of Gabriel Boric in Chile, Pedro Castillo in Peru and Alberto Fernandez in Argentina, are all progressive populist administrations.

In Colombia, former guerrilla Gustavo Petro was elected in the presidential runoff election on June 19. In Brazil's presidential election this fall, former President Luiz Inácio Lula da Silva of the liberal Labor Party has the upper hand.

At the Summit of the Americas held in Argentina in 2005, it was decided that FTAA negotiations would be abandoned; however, many of the participating countries at that time had liberal governments, such as Brazil's administration under Lula da Silva. It was also about this time that China began to expand its influence. In other words, the leftward drift of Latin America and the Caribbean has historically not been good for the United States.

The Americas summit in Los Angeles in June was one of the few opportunities for the United States to rebuild its relations with countries in Latin America. To that end, it was necessary to renew advocacy for a regional free trade agreement covering the United States and all of Central and South America and a concrete plan for BBBW.

China's Presence Grows in Mexico

Against this backdrop, President Biden has proposed the Americas Partnership for Economic Prosperity.

What is APEP? Although Biden provided no details, APEP appears to be a project that will build on existing United States free trade agreements to strengthen supply chains, create clean energy jobs, promote decarbonization and biodiversity and ensure sustainable and inclusive trade. It is thought to be similar to the Indo-Pacific Economic Framework that President Biden announced during his recent visit to Japan.

Past Summits of the Americas have been historic events. The first summit in Miami produced the FTAA; and the 2018 meeting in Lima, Peru, featured a summit between President Obama and Cuban President Raúl Castro, who was seeking to normalize diplomatic relations.

Although we need to wait for more details about the APEP proposal, it is likely to be little more than a veneer for existing frameworks, and is unlikely to go down in history. In addition, countries that are not presently free trade agreement partners may be excluded from the proposal, and it is difficult to say if it will be a catalyst for improved relations with Latin America.

The president of Mexico, who ought to be a partner in developing Latin American policy for the United States, boycotted the Summit of the Americas. In Mexico, there seems to be a constant stream of visitors from the Chinese government and businesses. China's presence is growing in Mexico.

For Mexico, where approximately 80% of exports go to the United States, the United States will remain the most important country for the future. But the populist administration of Mexican President López Obrador does not fit well with the Biden administration. We need to be concerned about the kind of changes this will produce.