Trump Administration Warns LAC to Beware of China’s Predatory Practices in the Hemisphere

Trump Administration Warns LAC to Beware of China’s Predatory Practices in the Hemisphere

Ambassador Curtis A. Ward

(26 Oct. 2018) — First, it was U.S. Secretary of State Rex Tillerson and now his successor Secretary Mike Pompeo has repeated the warning to Latin American and Caribbean (LAC) governments to beware of China’s “predatory” interests in the hemisphere. During an onboard exchange with the media while returning from his recent trip to Panama, on October 18, 2018, U.S. Secretary of State Mike Pompeo repeated a warning given by his predecessor to LAC governments about China’s intentions in the region. Pompeo characterized China’s engagements in the hemisphere as “predatory economic activity.”

Pompeo said that in his remarks to Panamanian local media during his brief visit to Panama he reminded “the entire region, that when China comes calling it’s not always to the good of your citizens, and when they show up with a straight-up, legitimate investment that’s transparent and according to the rule of law, that’s called competition and that’s something that the United States welcomes, but when they show up with deals to be too good to be true it’s often the case that they, in fact, are.” He said China’s investments in Panama were a part of the conversation he had with Panama’s President Juan Carlos Varela.

While stating that he did not wish to give details on which projects were of concern, Pompeo acknowledged to the travelling press corps that he was looking at specific Chinese investment and intervention projects in Panama. He noted that the U.S. welcomes China competing in the world. He drew distinction between fair competition and what he viewed as predatory. He said, “It’s when the state-owned enterprises show up in a way that is clearly not transparent, clearly not market-driven, and is designed not to benefit the people of Panama but rather the Chinese Government.” Pompeo stressed that the Trump Administration views such investments as “both inappropriate and not good for the people of Panama or any other country where China is engaged in this kind of predatory economic activity.”

This second warning to the region in nine months coming from the U.S. top diplomat signals intent by the Trump Administration to reassert U.S. hegemonic role and undermine China’s growing influence in the hemisphere. In February 2018, then Secretary Tillerson first posited at the start of his five country tour of Latin America and the Caribbean that China and Russia were “potential predatory actors that are now showing up in our hemisphere.” His warning was largely ignored by governments in Latin America and the Caribbean. Now, with a repeat by Pompeo of the same warning, governments should pay heed and revisit Tillerson’s words which were more detailed than Pompeo’s. There is irony in Tillerson’s earlier warning, “Latin America does not need new imperial powers that seek only to benefit their own people.”

According to Tillerson, “China is gaining a foothold in Latin America. It is using economic statecraft to pull the region into its orbit. The question is: At what price?” In his highly critical remarks about China’s hemispheric economic objectives, Tillerson answered his own question. “China’s state-led model of development is reminiscent of the past. It doesn’t have to be this hemisphere’s future.” He said. Pointing to differences between the China model of economic development and that of the United States, Tillerson warned that, “China’s offer always come at a price – usually in the form of state-led investments, carried out by imported Chinese labor, onerous loans, and unsustainable debt. The China model extracts precious resources to feed its own economy, often with disregard for the laws of the land or human rights.”

Arguably, Tillerson’s observations may have some credibility, but he did not suggest an alternative for LAC countries starved of foreign investment and development funds and lacking in modern infrastructure to facilitate economic growth and development. Likewise, Pompeo has not outlined a Trump administration development policy for cash-starved governments in the region and the desperate need for investment in infrastructure development. We are almost two years into the Trump presidency and his Administration has yet to articulate a coherent hemispheric policy.

Since the Trump administration has mooted the question, “At what price?” the U.S. must be prepared to offer alternatives to China’s investments and loans, in particular investments in infrastructure development. Instead, what Donald Trump’s Administration offers is trade on America’s terms which will exacerbate the region’s trade disadvantages; disdain for the existential threats to island states and coastal regions from climate change, and increasing threats from natural disasters; discriminatory immigration laws and practices which destabilize countries in the hemisphere, and inhumane treatment of immigrants fleeing violence and poverty seeking refuge in the United States; budget cuts which affect crime and security in the region; and  coercive diplomacy, threats of military interventions, and “America First” geopolitics.

Traditional relationships between the U.S. and LAC countries were conducted on the fiction of partnerships. However, it was always on Washington’s terms and there was no equality in the relationships. Whatever Washington offered was take it or leave it. A friend of mine used to remind me that Caribbean governments when told to jump had no choice from what height. Their only hope was how hard they would hit the ground. The landing was also determined in Washington. Unlike prior U.S. administrations, under Trump there is very little hope of cushioning the landing.

America has already lost the competition with China and no threat or castigating of China’s hemispheric presence will make one iota of difference. At least, as long as the Trump Administration’s response remains words only, the region’s governments have little to fear. If the Trump Administration decides otherwise, the region will have plenty to fear. The trade war between China and the U.S. means both economic behemoths will compete for available markets no matter the size. Trump is not prepared to play by traditional rules, and, in this context, only America First matters. As Tillerson pointed out in February, China is now the largest trading partner of Chile, Brazil, and Peru. China trade with these countries continues to grow as the Trump initiated trade war forces China to find new sources for products originally sourced in America and new markets for Chinese products. Other countries in the region are on track to join them. This is a reality despite Tillerson’s ominous warning about the ultimate outcome of China’s investments and economic engagement. “China – as it does in emerging markets throughout the world – offers the appearance of an attractive path to development. But in reality, this often involves trading short-term gains for long-term dependency.” He said.

As Tillerson also warned, “Our region must be diligent to guard against faraway powers who do not reflect the fundamental values shared in the region.” In other words, the Trump administration’s outlook is reminiscent of the Monroe Doctrine. The United States will not compete for geopolitical and economic influence in Latin America and the Caribbean.  The Trump Administration will insist on it. The onus is on the governments of the hemisphere to reject China, Russia, or any other “faraway power.”

The Trump administration has already warned of consequences for those governments who fail to support the U.S. What will be the next step from Washington, and will the region be prepared for Washington’s next move?

© 2018 Curtis A. Ward/The Ward Post

Please follow me on Facebook and Twitter

#TheWardPost