n the spring of 2023, representatives from the governments of Ecuador and China met at the Marriott in Quito to sign a Free Trade Agreement (FTA). Outside sat a Chinese CS55 electric vehicle with a sign reading “Welcome to Ecuador China.” The signing ceremony was emblematic of one of the challenges facing U.S.-Latin American relations—the lack of interest from the United States to engage in trade talks with the region. This strikingly bipartisan position hurts the United States and the region while opening doors for rivals to engage in the region instead. As other countries turn to Latin America and the Caribbean with open arms, the United States will miss opportunities to cooperate with the region and expand its own markets in the region.
The United States has a long history of seeking to promote inter-American trade with the nations of the Americas. As far back as 1889, the United States sought to promote deeper trade integration through the development of a shared economic zone at the First Pan-American Conference. Following the passage of the North American Free Trade Agreement (NAFTA), Washington sought to expand trade through the Free Trade Agreement of the Americas. While these larger efforts failed to materialize, today the United States now has FTAs with 12 of the 34 other countries in the Western Hemisphere—representing 60% of total countries with whom the United States has FTAs.
Despite the hopes that NAFTA and free trade had in the 1990s, public opinion on the benefits of free trade has shifted and led to a change of heart among U.S. policymakers. Both Democrats and Republicans have turned against the free trade agenda in recent years with members from both parties actively campaigning on eliminating existing trade agreements and avoiding trade expansion. Despite some efforts to deepen regional linkages through programs like the Americas Partnership for Economic Prosperity (APEP), the United States still faces challenges in promoting freer and fairer trade across the region. This is a shame given the potential benefits of trade and “friendshoring” with the other nations of the Americas, including reducing costs for U.S. consumers (at a time of high, albeit reducing, levels of inflation), creating jobs in the United States, and ensuring access to key resources and markets.
This all comes at the same time U.S. policy makers are expressing deep concerns over growing Chinese economic engagement in the region. While much of the attention on Chinese engagement with Latin America is driven by discussions over China’s Confucius Institutes and debt-trap diplomacy—an issue that analysts debate over whether it is even part of China’s foreign policy—the area where China has seen the greatest strides in the Americas has been in the area of trade. In 2000, Chinese trade with the region accounted for less than 2% of the region’s total trade. Two decades later it accounted for $450 billion. At the same time, U.S. trade with the region has declined in recent years—albeit remaining larger than China in many countries in the region. The United States has failed to provide trade support to countries that are interested in expanding trade with them—including overtures from Ecuador and Uruguay. Both have since sought to negotiate trade deals with China. Although other countries—including South Korea and the European Union—seek to benefit from expanded trade with the region, the United States ignores this opportunity. As the Chinese CS55 sitting outside the signing ceremony in Quito depicted, the green transition is just one area where the United States may lose ground as a result of its free trade reticence. China’s ability to access new markets for their electric vehicles will limit the expansion and development of U.S. alternatives.
The shift against trade within the United States—particularly with its hemispheric neighbors—needs to be addressed or the United States will miss out on the opportunities that would benefit both them and the region. If U.S. policy makers want to compete with China and thrive in a 21st century global economy, they need to listen to what countries in the region are asking for and deepen trade ties. Trade with the region can provide an opportunity to bolster development at home and abroad while supporting stronger democratic and more stable countries across the Americas. The benefits of trade with Latin America and the Caribbean are clear. Yet, U.S. policy makers and the general public continue to have a limited appetite for conversations on trade. Shifting the narrative and discussing the benefits—both for the United States and the region—will be critical to putting U.S. hemispheric policy back on track.
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Bolstering U.S. National Interests Through Heightened Regional Trade
Quito, Ecuador, where China and Ecuador signed a free trade agreement. Image by Patricio Sánchez from Pixabay
September 8, 2023
In recent years, the U.S. has struggled to maintain its influence in Latin America as outside powers, especially China, have made inroads. This is largely due to a striking bipartisan disinterest on the part of the U.S. in broadening trade relations with Latin American countries, writes Adam Ratzlaf
I
n the spring of 2023, representatives from the governments of Ecuador and China met at the Marriott in Quito to sign a Free Trade Agreement (FTA). Outside sat a Chinese CS55 electric vehicle with a sign reading “Welcome to Ecuador China.” The signing ceremony was emblematic of one of the challenges facing U.S.-Latin American relations—the lack of interest from the United States to engage in trade talks with the region. This strikingly bipartisan position hurts the United States and the region while opening doors for rivals to engage in the region instead. As other countries turn to Latin America and the Caribbean with open arms, the United States will miss opportunities to cooperate with the region and expand its own markets in the region.
The United States has a long history of seeking to promote inter-American trade with the nations of the Americas. As far back as 1889, the United States sought to promote deeper trade integration through the development of a shared economic zone at the First Pan-American Conference. Following the passage of the North American Free Trade Agreement (NAFTA), Washington sought to expand trade through the Free Trade Agreement of the Americas. While these larger efforts failed to materialize, today the United States now has FTAs with 12 of the 34 other countries in the Western Hemisphere—representing 60% of total countries with whom the United States has FTAs.
Despite the hopes that NAFTA and free trade had in the 1990s, public opinion on the benefits of free trade has shifted and led to a change of heart among U.S. policymakers. Both Democrats and Republicans have turned against the free trade agenda in recent years with members from both parties actively campaigning on eliminating existing trade agreements and avoiding trade expansion. Despite some efforts to deepen regional linkages through programs like the Americas Partnership for Economic Prosperity (APEP), the United States still faces challenges in promoting freer and fairer trade across the region. This is a shame given the potential benefits of trade and “friendshoring” with the other nations of the Americas, including reducing costs for U.S. consumers (at a time of high, albeit reducing, levels of inflation), creating jobs in the United States, and ensuring access to key resources and markets.
This all comes at the same time U.S. policy makers are expressing deep concerns over growing Chinese economic engagement in the region. While much of the attention on Chinese engagement with Latin America is driven by discussions over China’s Confucius Institutes and debt-trap diplomacy—an issue that analysts debate over whether it is even part of China’s foreign policy—the area where China has seen the greatest strides in the Americas has been in the area of trade. In 2000, Chinese trade with the region accounted for less than 2% of the region’s total trade. Two decades later it accounted for $450 billion. At the same time, U.S. trade with the region has declined in recent years—albeit remaining larger than China in many countries in the region. The United States has failed to provide trade support to countries that are interested in expanding trade with them—including overtures from Ecuador and Uruguay. Both have since sought to negotiate trade deals with China. Although other countries—including South Korea and the European Union—seek to benefit from expanded trade with the region, the United States ignores this opportunity. As the Chinese CS55 sitting outside the signing ceremony in Quito depicted, the green transition is just one area where the United States may lose ground as a result of its free trade reticence. China’s ability to access new markets for their electric vehicles will limit the expansion and development of U.S. alternatives.
The shift against trade within the United States—particularly with its hemispheric neighbors—needs to be addressed or the United States will miss out on the opportunities that would benefit both them and the region. If U.S. policy makers want to compete with China and thrive in a 21st century global economy, they need to listen to what countries in the region are asking for and deepen trade ties. Trade with the region can provide an opportunity to bolster development at home and abroad while supporting stronger democratic and more stable countries across the Americas. The benefits of trade with Latin America and the Caribbean are clear. Yet, U.S. policy makers and the general public continue to have a limited appetite for conversations on trade. Shifting the narrative and discussing the benefits—both for the United States and the region—will be critical to putting U.S. hemispheric policy back on track.
