Watching President Barack Obama at his mega-summit with nearly 50 African heads of state in Washington, in which he announced $33 billion in investments and vowed to increase access to electricity to 60 million African households, many of us asked ourselves the same question — why doesn’t he do the same with Latin America?
The conventional wisdom among the thousands of dignitaries and business people who converged on Washington for the U.S.-Africa Leaders Summit last week was that the Obama administration organized the event in a desperate effort to catch up with China. In recent years, China has become Africa’s top business partner.
Well, I’ve got news for U.S. policymakers: if Washington continues to pay little attention to Latin America, the same will happen there. It’s already happening in several countries in the region.
Not only China, but also Russia and Japan — whose heads of state visited Latin America in recent weeks — have announced big plans to expand their presence in the region. While some of us are skeptical of China’s promises, Beijing’s rise in the region has been impressive.
The U.S. share of Latin America’s trade has dropped from 53 percent of the region’s worldwide trade in 2000, to 35 percent in 2013. Meanwhile, China’s share has soared from 1.9 percent to 12 percent over the same period, according to Inter-American Development Bank figures.
What’s more, if current trends continue, by 2025 Latin America’s trade with the United States will have declined further to 17 percent of its total trade, while Latin America’s trade with China will have reached 17 percent, says chief IADB trade economist Mauricio Moreira.
And these figures include Mexico, a huge Latin American economy that does relatively little business with China. If you exclude Mexico, China’s presence in the region will dwarf the United States by 2025, the projections show.
Asked why there’s no U.S.-Latin America Summit in Washington, like the Africa summit, Washington insiders point out that the United States holds a regular Summit of the Americas every three or four years. The next Summit of the Americas is to be held in Panama in 2015.
But recent Summits of the Americas have been a flop, to a large extent because of Venezuela’s petro-dollar diplomacy, which virtually controls the votes of at least 16 Central American and Caribbean countries through its Petrocaribe-subsidized oil shipments, and because of Brazil’s reluctance to work for the success of any summit it does not lead.
So what can the United States do? Here are three things, for starters: