In early April, President Xi Jinping sat down with President Trump at Mar-a-Lago in what was a highly anticipated event between the leaders of the world’s two largest economies. Coming off a campaign in which then-candidate Trump criticized China, the first meeting between the two was intended to focus primarily on the uneven trade relations and North Korea’s nuclear threat.
Prior to the meeting, Adrienne Arsht Latin America Center’s Fellow and the Associate Director of the China – Latin America Initiative, Sean Miner, spoke with Chile’s foreign minister and permanent representative to the UN, Heraldo Muñoz, and Jamie Metzl, senior nonresident fellow at the Atlantic Council’s Brent Scowcroft Center on International Security. The trio discussed the ramifications of US and China trade relations for Latin America. Listen to the whole conversation here.
The panel acknowledged that between harsh critiques of NAFTA and Trump’s executive order withdrawing from the Trans Pacific Partnership (TPP), the United States has undergone a stark shift in rhetoric about both its trade policy and its economic ties towards many Latin American counties. To some, these are positive developments. Miner and Muñoz stated that China is eager to become Latin America’s primary economic partner, and the Chinese are trying to take advantage of the potential void in US’s current flirtation with protectionism.
Even if the US’s withdrawal from TPP left many signatories unsure about the future of the trade deal, Muñoz insisted that “there is optimism to move forward with Pacific economic integration.” This attitude, he said, was exemplified in last month’s meeting held in Santiago, Chile between all the signatories of the TPP as well as China, Colombia, South Korea, and Canada to discuss the potential of future initiatives focused on trans-pacific economic integration. In this summit, Muñoz argued, there was a general understanding that “multilateral trade and economic cooperation must prevail over calls of protectionism and nationalism.” Moreover, he mentioned that Pacific Alliance members are in the process of forming a trade bloc with Asian partners.
The Trump-Xi meeting wrapped up without any major announcements when it came to the future of trade between the two nations. There were some positive signs: Trump was pushed for “an economic relationship that is fair on both sides”, according to a statement by Secretary of State Rex Tillerson”, hinting to a more positive recognition of bilateral trade.
China expert Jamie Metzl argued that the stakes were high for Xi. Although the Chinese president holds more economic leverage than ever before, he had to show consistency when meeting with Trump ahead of the country’s 19th National Congress Party, an assembly held twice a decade in which the future leaders of China are chosen.
Indeed, Xi did not appear to take any risks regarding China’s interest in the Western Hemisphere at Mar-a-Lago – the meeting with Trump reportedly ended with no mention of Latin America.
It is no secret that China and Latin America are both eager to continue developing their relatively new economic relationship. However, Metzl offered some words of caution. China’s rapid growth over the past few decades is “in large part due to the access it was provided in the US, Europe and, Latin America; but as China’s economy continues to emerge and these [trade] imbalances continue to grow, these partners will not simply be willing to put up with mercantilist behavior.”
Chinese leaders realize that their era of inequity with its trade partners cannot last for forever. Still, “in the run up to the party congress, there is a desire among Xi Jinping and top leaders [to insist] that there cannot be any economic dip” says Metzl. Such a dip would inevitably happen if there was any sudden shift in economic trajectory. Metzl concluded that though the western Hemisphere would be happy to see China make some reforms, they should not expect anything substantial just quite yet.