Home » US Losing Ground to China in Latin America Policy and Must Prioritize Investment in Region: Senators

US Losing Ground to China in Latin America Policy and Must Prioritize Investment in Region: Senators

Democratic senators on Wednesday took the Biden administration to task for its foreign policy approach towards Latin America, accusing it of losing ground to China as the Asian giant keeps building its clout in the region.

Bob Menendez, Democrat of New Jersey, raised the alarm over Beijing’s influence during a hearing of the Senate Foreign Relations Committee, echoing the sentiments of a former Panamanian foreign minister who asked about an American global economic agenda in the face of Chinese inroads.

Tim Kaine, Democrat of Virginia, referenced a recent trip he took to Latin America with Menendez and voiced concern about China’s Belt and Road Initiative, which entails significant investments in 21 of the 34 Latin American and Caribbean countries.

“We’ve got to have something on the table to counter it,” Kaine said of Beijing’s scheme comprising 40 projects involving port construction or upgrading.

The Virginia senator lamented what he termed a failed opportunity with Ecuador, which in 2021 switched to a pro-American stance upon the election of Guillermo Lasso. Kaine believed Washington’s neglect was enabling China to run roughshod over the Americas.

Describing a Lasso overture months after his election, Kaine recalled: “He came to me [asking for] a trade deal with us. Ecuador is the only nation on the Pacific coast that doesn’t have a trade deal with the United States … We didn’t do it.”

“That government has collapsed,” the senator continued. “It is likely to go back to a pro-China government in the [next] elections … We had two and ½ years to try to show this erstwhile ally that wanted to lean towards the United States. And we really did nothing”.

Kaine further noted the difficulties Ecuador’s president faced in arranging a meeting with US President Joe Biden when visiting Washington last December. Lasso, he said, had to “practically beg to have a few minutes” with the American leader in the Oval Office.

Jose Fernandez, the State Department’s undersecretary for economic growth, said on Wednesday he agreed with the senators’ criticism. And in his testimony, he stated that the Biden administration was focused on issues it identified as barriers to growth, including corruption, a lack of transparency, inadequate infrastructure and government instability.

But Kaine argued that while China presented no-strings-attached investments, the US was insisting on reforms before offering more engagement, a dynamic he called concerning. He urged the administration to prioritize investment in a region widely regarded as the US’s own neighborhood.

Menendez seconded Kaine’s view, expressing frustration that Washington could not offer as much immediate aid as Beijing. The US would hold greater sway in Latin America if it could combine reform proposals with economic incentives, he said.

Argentina could give Washington an opportunity to refine its approach, with its next general election set for October. Economy minister Sergio Massa has led presidential polling so far, but rising disapproval over high inflation, unemployment and worsening poverty have boosted the prospects of far-right candidates.

In May, Argentine President Alberto Fernández asked the US to help mediate renegotiations of its sovereign debt with the International Monetary Fund. The Biden administration, however, has been reluctant to offer support.

The country has been pummeled by a historic drought that slashed agricultural exports and depleted its international reserves to their lowest level in seven years.

Facing silence from Washington, Buenos Aires in June reached a new agreement with China’s central bank, granting access to US$10 billion to reinforce Argentine reserves.

Argentina was experiencing “an economic challenge at the moment”, Menendez said, and in its president the country had someone who was “doing a pretty decent job of trying to right the ship and meet their responsibilities”.

“But we’re in the midst of creating pressures before an election,” the senator added, saying it was possible the US would “end up with adversaries instead of allies”.

The senators’ criticisms extended to US policy towards Brazil, with James Risch, Republican of Idaho, noting Brasilia’s deepening connections with Beijing over lithium resources. Fernandez assured the panel that the US was working on multiple critical mineral projects in the region.

“We provided technical assistance to Brazil, and we intend, going forward with the new Brazilian administration, to explore ways to pursue critical mineral projects,” said Fernandez.

“Brazil could be a very valuable partner in finding critical minerals, [since] 80 to 90 per cent of them come from the PRC.”

Brazil holds 8 per cent of the world’s lithium reserves. To boost production and exports, its government in June last year issued a decree loosening regulation on the sector and expecting investment to reach US$3.7 billion by 2030.

In May, the governor of the state of Minas Gerais, where Brazil’s largest lithium deposits are located, unveiled an ambitious plan called Lithium Valley, aiming to accelerate exploration of the resources.


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