Kings, cabbages and other times


Evan Vucci / AP

The time has come, and Juan Gonzalez, special assistant to U.S. President Joe Biden and senior director for Western Hemisphere affairs at the U.S. National Security Council, is retiring in mid-March. He will be replaced by Daniel Erikson, deputy assistant secretary of defense for the Western Hemisphere, who also served as Biden’s adviser during his vice presidency.

Gonzalez could well be considered the Chinese Stirlitz of the Biden administration. Sure, the figures are not the same. But the White House has never been at such a disadvantage in its Latin American policy thanks to its advisers.

During the Biden administration, adviser Gonzalez led America systematically toward the end of pax americana and its replacement with pax china. Biden’s outgoing top advisor did a good job for China in exchange for the opportunity to «spend more time with his young children». So, he has a reason to go.

«Who lost Latin America?» — is the almost Hamletian question that the next contender for the U.S. presidency can legitimately ask. The answer to it also seems to imply an answer to the question: does the White House even control the situation, and how? Does it control and use Latin America in its «cabbage» interests?

Some analysts believe that the U.S., still living the Monroe Doctrine and confident in the inviolability of its position in the southern hemisphere, is simply confident in its status-quo.

They are not at all embarrassed (rather, just annoyed) by the attempts of the new White House administration to change the Venezuelan, Nicaraguan and Cuban regimes with the help of all kinds of sanctions. They do not care that the left and right in Latin America won or lost general elections on their own, without looking at their northern neighbor.

What does the United States fear? China. China has taken advantage of the U.S. «immaculate» right to Latin America and created a powerful «Chinatown» on the continent, where America is left with, among other things, the unfettered right to sell arms.

Chinese banks are financing Chinese construction of highways, ports, hydroelectric dams, solar power plants and power grids in more than 20 countries. China has broken into energy and mining projects across the region, including a nuclear power plant worth eight billion dollars in Argentina and a copper mine worth nearly $10 billion in Peru. Growing trade, financial and infrastructure ties have filled the coffers of many Latin American governments and attracted much-needed capital.

Today, not because of, but in spite of the U.S., many Latin American countries already boast advanced pharmaceutical industries, major projects in energy, transportation, finance, mining and manufacturing, etc., etc., which are controlled to varying degrees by Beijing. China has recognized Latin America’s potential and is rapidly gaining momentum, increasing its trade with the region from $12 billion in 2000 to nearly $500 billion in 2022.

Yes, China is still in second place. Just for now… Today, Beijing has already practically become the main banker of the southern part of the Western Hemisphere. And the printing press can switch from dollars to yuan.

What about Washington? It is still the first «guy in the village». But it’s already worried, because its competitors have grown up. And its allies — Old Europe — want to tear off their piece of the Latin American pie.

«The overall goal is to build our economies from the bottom up and in the middle», an unnamed senior White House official told Foreign Affairs. In other words, this represents a historic turn in trade and economic relations from protectionist policies to purely commercial ties.

The Oval Office has identified for itself four extremely important areas «for U.S. security and prosperity in trade with Latin America». They are minerals, semiconductors, pharmaceuticals and high-capacity batteries. Mr. Gonzalez, who developed this program, was not smart enough to do more. The main thing is to leave the southern neighbors in the role of extractors, not producers.

According to some estimates, the «lithium triangle» alone contains 60 percent of the world’s lithium reserves, while LAC as a whole contains 23 percent of the world’s graphite and more than 15 percent of manganese and nickel. Latin America has historically produced a significant amount of the world’s copper, which is critical to the production of electric cars, wind turbines and other clean technologies. The opportunities and riches are over the top.

What does Latin America want? Real free trade agreements. And not unilateral — in the direction of the U.S. — but broad development of its infrastructure. This lowers costs for importers and exporters and protects investment. It also allows suppliers of critical minerals to take advantage of the same U.S. subsidies for electric cars. Mexico, for example, is already replacing the North American auto industry in this area. Brazil, Costa Rica, Mexico and Panama are well positioned to take the place of America’s far-flung Asian countries in testing, packaging and other less capital-intensive and technology-intensive phases of semiconductor manufacturing. The United States also does not need to look beyond the Western Hemisphere horizon to rapidly improve the sustainability of its pharmaceutical supply. The region produces tens of billions of dollars worth of vaccines, active pharmaceutical ingredients, and ready-to-use drugs each year, and hosts advanced research institutions: the Brazilian Butantan Institute and the Oswaldo Cruz Foundation are among the top 15 vaccine manufacturers in the world. Even smaller producers like Argentina and Uruguay produce more than 30 percent of the drugs they consume. U.S. smartphones are equipped with chip technology tested and packaged in Panama. And there are super prospects for all 32 LAC states.

Moreover, the United States remains the region’s largest trading partner, exchanging more than $1.1 trillion worth of goods and services annually. It is also Latin America’s largest foreign investor, accounting for nearly 40 percent of all foreign direct investment into the region.

So why does the United States neglect Latin America’s commercial or strategic engagement? There is a simple answer to such a question — the U.S. lives and “thrives” on the siege mentality of the Monroe and «kings and cabbages» days.

Last spring, National Security Advisor Jake Sullivan spoke at the Brookings Institution in Washington, DC. He argued that the Latin America agenda of more than just President Joe Biden reflected a set of ideas he called «the new Washington consensus». Analysts found this «audacious».

«Washington Consensus», a concept, if not just a phrase, came into use in the very late 1980s (thanks to the collapse of the Soviet Union) and characterized the nascent two-party American belief in globalization, its own monopoly on world domination, deregulation and the wisdom of markets under exclusive American control. But that era has fallen into disrepair faster than the Monroe Doctrine. Or, as Sullivan puts it, «the last few decades have revealed the cracks in these foundations». The U.S. has actually under double B (Biden-Blinken) lost its influence in South America.

«Washington Consensus» is interested in developing Latin America in the old way — as a raw material appendage of the US. Latin America does not see it that way anymore. An example is the Community of Latin American and Caribbean Countries (CELAC), which includes all the countries of South America without North America.

How Latin Americans can now balance between the U.S. and China without falling into a trap remains an open question.