I spent last week at a fascinating conference sponsored by the South Korean Foreign Ministry on South Korean-Latin American relations. While this was the tenth iteration of the annual three-day event that brings together scholars, government representatives and businesses, this year the conference had a particular urgency.
[reportPullQuoteRight]Faced with the withdrawal of the budding partnership’s economic anchor, Pacific nations are trying to move on—U.S. lack of leadership be damned.[/reportPullQuoteRight]
With the Trump administration’s jettisoning of the 12-member Trans-Pacific Partnership (TPP) and its stated plans for re-negotiating the North American Free Trade Agreement (NAFTA)—both products of his America First agenda—there was a palpable sense among the Asian and Latin American representatives of anxiety over what comes next. Countries like South Korea, Singapore and Vietnam in Asia, as well as Chile, Mexico and Peru in Latin America, have staked their economic and political futures on a more commercially and politically integrated cross-Pacific partnership, led by the United States.
As one Korean participant said when I mentioned the now-defunct 12 member TPP, “no, you mean the 11 member TPP.” Faced with the withdrawal of the budding partnership’s economic anchor, Pacific nations are trying to move on—U.S. lack of leadership be damned.
The problem is, as New York Times columnist Thomas Friedman has argued, despite the best intentions of more liberally-oriented countries and U.S. allies like South Korea and Japan, China is seizing the initiative in Asia and Latin America. While it continues to push its alternative/shadow TPP, the Regional Comprehensive Economic Partnership, it is also pledging to be a huge benefactor in infrastructure investment and lending, through its One Road, One Belt initiative, the Asian Infrastructure Investment Bank, and its ramped up outreach to Latin America and the Caribbean. According to a new white paper issued by the Chinese government, China plans to increase trade with the region by $500 billion and foreign investment to $250 billion by 2025. According to Global Americans contributor Kevin Gallagher of Boston University, in addition to bilateral loans, China has also set up $35 billion in multilateral finance platforms for Latin America. Parallel to its economic efforts, China has increased up its diplomatic presence in the region; as another contributor—R. Evan Ellis—has pointed out, China is systematically getting Latin American countries to switch their recognition from Taiwan to the People’s Republic of China, often through the inducement of investment. In June, Panama became the most recent member of the region to switch.
This is where South Korea comes in. The small Asian Tiger already has active free trade agreements (FTAs) with Chile and Peru, recently concluded an agreement with Colombia, is negotiating another with Mexico, and is considering FTAs with Central America (Nicaragua, El Salvador, Honduras, Costa Rica, Panama, and Guatemala) and MERCOSUR (Argentina, Brazil, Paraguay, and Uruguay).
There was no doubt from the beginning of the conference: South Korean investors are ready to expand business in Latin America, based both on their belief in the success of the South Korean development model and a desire to expand their own export markets and profits.
These forays into Latin America and the Caribbean work economically (especially for South Korean business and investors), but do they matter politically and diplomatically for the region and for broader geostrategic considerations? To be sure, the South Korean success story is a compelling one, especially as countries like Brazil and Argentina seek to shift course and the Pacific Alliance (Chile, Colombia, Mexico, and Peru) seeks to carve out its own path. But the pull of South Korea (and even a coalition of liberally focused, ex-TPP participants—such as Australia, Canada, Singapore, Japan, and Vietnam, for example) still can’t replace the economic power and influence of the high-end market of the U.S.’s 320 million consumers.
All said, the liberal world order—trade, human rights, democracy—needs shoring up. Can U.S. allies, absent the U.S., do it? My three days in Korea, during which I was seated alongside representatives from around Latin America and East Asia, indicate that nations on both sides of the Pacific are trying to pick up the pieces of a potentially post-U.S. (or America First) world. Can their collective weight maintain the architecture of liberal global trade? On second thought, maybe they only need to hold the line for three or so years, until the U.S. re-gains its internationalist orientation, with or without the Trump administration.
