The United States is still the principal investor and primary trading partner of Latin America’s vast markets. However, the region is eager to negotiate even stronger ties with the United States, especially being brought into the NAFTA market as free trade zones. But that’s not happening quickly enough for them. And there is a growing Chinese presence in the area that could be called the U.S. backyard.
U.S. President George W. Bush recently spent four days visiting Chile and Colombia. He was greeted by protests and controversy. But it wasn’t his visit that grabbed the attention of Latin American newspapers, because his visit was upstaged by the president of China.
“While Bush is expected to call for greater Latin American cooperation in the war on terrorism, Hu (the Chinese president) is doing what U.S. presidents used to do—raising the region’s hope with massive trade and investment promises” ( Miami Herald , Nov. 18, 2004).
The Chinese have promised up to $100 billion in investments in the region and are flexing their economic muscle for all to see. “South American officials seemed mesmerized by China’s meteoric rise to a world economic power that is promising massive investments in Latin America” ( Miami Herald , Nov. 21, 2004).
Historically the United States has often been preoccupied in preserving its interests in Latin America. The terror attacks of Sept. 11, 2001, have changed the focus of what the United States intends to do.
The scheduled 2005 beginning of the 34-country Free Trade Area of the Americas that has been talked about for at least a decade has fizzled away. This was once seen as a bright star on the economic horizon for the United States. It was to be an expansion of the 1994 NAFTA deal between the United States, Canada and Mexico.
Instead of the United States showing the vital leadership needed to promote the hemisphere-wide trade agreement, indifference is being detected by South American leaders.
“The United States, preoccupied with the worsening situation in Iraq, seems to have attached little importance to China’s rising profile in the region. If anything, increased trade between Latin America and China has been welcomed as a means to reduce pressure on the United States to underwrite economic reforms, with geopolitical considerations pushed to the background” ( New York Times , Nov. 20, 2004).
In today’s fast-paced world, economic pacts and trade are seen as a means for poor nations to lift their countries out of misery. China is seen as a rising star and a welcome partner. The U.S. market, however, remains the prize. “When Latin American companies or corporations seek some form of foreign finance, they [still] go to New York or lesser financial centres in the US” (Simon Woodward, “US Dollar Decline: Who Suffers?”, PriceWaterhouseCoopers, www.pwcglobal.com). WNP