Latin American leaders will be paying close attention to Chinese President Xi Jinping’s visit to Mar-a-Lago this week.
They’ll be watching the region’s two biggest trading partners to see whether they can smooth out their differences after a difficult U.S. presidential campaign and foster a fair and open trade environment that doesn’t cut out a Latin America trying to sell its own goods on the world stage.
“It would be very difficult to ignore such an important meeting between the president of the United States and the Chinese leader,” Heraldo Muñoz, Chile’s minister of foreign affairs, said during a panel discussion hosted by the Atlantic Council.
It’s the first face-to-face meeting for the leaders of the world’s two largest economies, and while Latin America is not at the top of the agenda, trade is likely to be.
Muñoz said Latin American leaders would be looking for signs of stability and assurances that trade would remain open. He warned that Latin Americans would see any signs of protectionism and nationalism as harming trade prospects and creating more inequities in the hemisphere’s trade relations.
Now that the United States has pulled out of the 12-nation Trans-Pacific Partnership, Xi has made it clear that China plans to seize the moment as an opportunity in Latin America since the U.S. appears to have retreated as the custodian of the hemisphere’s economy.
Trump has said repeatedly that his job is to be the president of the United States – not of the world. He has spoken out against trade abuses and accused China of stealing thousands of American jobs. Last week, he signed two executive orders aimed at combating foreign trade abuses that contribute to the U.S.’s half-trillion-dollar trade deficit.
“The theft of American prosperity will end,” Trump said at the March 31 signing. “We’re going to defend our industry and create a level playing field for the American worker.”
The harsh rhetoric has set up the prospect for change in the economic relationship between the superpowers, and that would have global ramifications, said Sean Miner, a fellow at the Atlantic Council. The United States’ departure from the Trans-Pacific Partnership, whose signatories included several Latin American nations, was a massive opportunity for China to move in.
“This was music to China’s ear, as many in China saw TPP as a way to limit China’s role in economic integration in the Asia-Pacific,” Miner said. “This has opened the door to China to step into Latin America with a larger presence than it has ever had. “
China already is the region’s second-largest commercial partner. It imports 40 percent of the global production of soybeans – the vast majority of which come from Brazil and Argentina – and a third of the iron ore, which also largely comes from Latin America, according to the Council on Hemispheric Affairs, a private research organization.
In 2015, Chinese lending to Latin America reaching $29 billion, more than the World Bank and Inter-American Development Bank combined, according to Boston University’s China-Latin America Economic Bulletin.
Last month, Chinese leaders joined ministers and officials of the 12 nations that had signed on to the Trans-Pacific Partnership for a meeting in Viña del Mar, Chile, to discuss multilateral trade and how to salvage the trade agreement – or at least ideas of the pact.
Jorge Guajardo, Mexico’s former ambassador to China, said Latin American leaders were interested in finding alternatives but did not see China as an answer. He said Latin American nations wouldn’t see much new opportunity in the Chinese market, which already consumes major amounts of Latin America commodities.
Efforts by Chile and other countries to revive the Trans-Pacific Partnership without the United States aren’t realistic, he said.
“It’s not really happening. Without the United States markets, there is nothing there. All of the concessions made by all the countries in the TPP negotiations were contingent on access to the U.S. Once you remove that, the whole negotiation falls,” he said.
Still, China is expected to push its economic relations with Latin America. In November, the Chinese government issued an 11-page policy paper on the “new era” of Chinese-Latin American relations, outlining political, economic, educational and social benefits from closer cooperation with the region.
“The development of China cannot be possible without the development of other developing countries, including countries in Latin America and the Caribbean,” the paper says.