China Overtakes Japan as the World’s Second Largest Economy and Sets to be the Number One Trade Partner for Latin America

For generations the United States has claimed Latin America as its backyard, but as any good homeowner knows if you do not maintain your backyard you will learn to regret it. News this week on China’s official position as the second largest national economy made headlines as it beat out Japan for the second spot and is making its way to become the largest economy in the world, a statistic that many already believe to be true, even in the US. The last few years since 9/11 has focused much of America’s attention on the War on Terror and has placed the FTAA and other Latin American concerns on the backburner. The only notable praise was for Uribe and Colombia for their advancement on their own internal drug war, then offering an FTA and postponing it for years with no end in sight. With economies such as Brazil and Argentina already refocusing their trade relationship towards Asia and Chinese commodity imports from Latin America fuelling one of the greatest economic growth spurts in the regions history, Latin America might already be seeing China as their first trading partner above the US.
A perfect storm of bad policy from the US has already pushed many of America’s trade partners towards the embrace of the dragon. An impressive move to divide America from its closest ally and trade partner in the region, Colombia, will be challenged by a Sino-Colombian trade pace seeks that seeks to take advantage of the lack of interest the US has in its own backyard, even for the country that had arguably won much of its own War on Terror. In an effort to outsell the merits of the Panama Canal project, Chinese officials have proposed a rail link to bring goods from Colombia and Latin America to shipping ports on the coast of Colombia, and to create a valve for Chinese goods into Colombia and Latin America in return. President Santos of Colombia seemed to promote the idea, as it would be an economic boost for Colombia and offer a reward for the economic progress Colombia has made in recent years, and would also gain American interest and perhaps give Colombia the leverage to get the US-Colombia FTA passed through the internal organs of the US political system. It might be difficult to argue no trade with Colombia for its human rights abuses when the US freely trades with China and its record of rights abuses and has been shown to have supported governments run by Mubarak in Egypt recently. Abuses in China and Egypt are issues that have been brought to light recently and will continue to be a strong point of contention in a debate on trade, Colombia and China. In the end the US will have to address these concerns, and Colombia might have done will to create trade with both China and the US.
This week, the result of this recent trade deal between China and Colombia has pushed some Republicans to pressure Mr. Obama on the US-Colombia FTA and to challenge the lack of US concern for Colombia and South America as a whole. Since 2001 however President Bush, seen as pro-Mexico and pro-trade initially has done little to re-introduce the United States to Latin America and President Obama has either not taken interest or has not taken the opportunity to prepare the United States for a future with Latin America in any meaningful way. With two political generations of leaders looking East for the future of US foreign policy, it neglected the yard that should be seen as a second level of local politics. In order for the United States to not be surprised by the loss of a booming Latin America, the US needs to expand its local politics from inside the beltway towards United States proper, but also create the vision of local politics also involving its direct neighbours and create an Americas that is seen as part of a local strategy as opposed to putting countries like Argentina, Brazil and Colombia as far away as Pakistan and Morocco. Hopefully Mr. Santos can not only create more trade for Colombia, but also assist putting the whole region back on the map inside the beltway. With engagement, maybe human rights and labour rights can be part of the discussion as well, that is the proper strategy of a number one trading partner.