An Emerging Southern Threat? No.

After spending the last three decades primarily focused on Europe, the Middle East, and Asia it appears U.S. foreign policy will see a sharp increase in attention to Latin America. Though light on details, Marco Rubio’s Western Hemisphere Security Strategy Act of 2022 signals a clear shift in posture. Given the track record of those regions of the world unfortunate enough to find themselves of increased interest to Washington, the end of its relative holiday from northerly attention may soon complicate a region whose politics, societies, and economies, are already unstable.

Unnerved by increased trade and investment by China in the region, unwelcome election results, and unfavorable public polls, the temptation to start aggressively interfering to reassert its influence in the western hemisphere now that Washington is focused will be intense.

The impulse should be restrained.

An Emerging Southern Threat?

The comfortable victory of Chile’s new radical-left president Gabriel Boric in the second round of elections can admittedly be cast as a potentially worrying sign of things to come in the southern cone. His election is being seen as a rejection of the Washington Consensus model of lower taxes, fewer regulations, privatization of government services, and open markets, which Chile gradually adopted beginning in the 1970s. Next door, in Argentina and Brazil, the existing left-wing populist Kirchner regime looks increasingly likely to be joined by that of fellow traveler Lula da Silva following Brazil’s 2022 presidential election. As an advisor to the Argentinian Parliament, Chamber of Provinces (Corrientes Province MPs), has recently pointed out the ideologies and perceived interests of all three leaders resurrect the possibility of a once fleetingly imagined tripartite union among the three that would counterbalance the United States.

While their combined GDP is a fraction of the United States, at just over 2 trillion dollars they would form a not insignificant independent economic bloc. With the help of more Chinese infrastructure investment the hitherto geographically imposed relative isolation of the three could be dissipated. Between them they already likely produce enough agricultural and manufacturing output, as well as possess the natural resource wealth, to survive any temporary geopolitically induced disruption to trade. Their integration would cause an economic boom. This could translate into eventual revanchism by the powers involved – such as Argentina against the Falklands, or other destabilizing events in the region.

This hypothetical emergence of a potentially large and autonomous bloc in the western hemisphere, open to partnership with rival great powers, is Washington’s absolute worst nightmare.

Close examination, however, reveals that such effective bloc is just that: a dream.

First, it isn’t clear any of the three political leaders would want to engage in a pan-state project. The observable international trend over the past decade, from London to the Philippines, Baghdad to Washington, has been staunchly nationalistic.

Second, even were the three leaders to come to an agreement as to a prospective union’s desirability it isn’t clear they would be able to overcome the likely resistance of entrenched economic and political elites within their own countries to such a union, even an informal one.

Third, just as during his first spell in Brazil’s top job Lula was ultimately constrained by the facts of his wider political environment, Boric already found himself needing to tack to the center to win the election in Chile.

Lastly, the existing conditions and future prospects of each of the three countries differ tremendously. Because of this, their interests may diverge in irreconcilable ways. Brazil, for example, with its corruption, crime, poor demographics, and obstacles to economic growth, might not look attractive as an equal partner to say, Argentina, which like Chile is simply in need of better governance – perhaps through reformed institutions – to get it on the track to prosperity.

But – China!

Yes, China has invested heavily in these countries over the past two decades. Had they been good investments US firms would have been doing the same. They didn’t – and for those watching closely, Beijing has stopped, too. Apart from any considerations of graft or corruption, the general business environment can be quite abysmal, with poor infrastructure, labyrinthine regulations and conflicting standards.

Further weighing into considerations is China’s decreasing dependence on South American countries. Apart from Made in China 2025, efforts have been made to decrease its dependence on the lengthiest and most vulnerable leg of any trade route to China: South America. It is the longest route, and the waters are entirely dominated by the US Navy. In the event of a conflict, whether over Taiwan or the Senkaku Islands, China could be effectively and easily cut off. It will never, therefore, make the region an integral part of its economic strategy.

In short, if Rubio’s bill is aimed at counteracting Chinese influence in Latin America it couldn’t have come at a more apparently pointless time. While combined efforts may be justified to combat drug smuggling and human trafficking, good money should not be thrown after bad and interference in the domestic politics of the region should be eschewed.

Learning from the Past

The last time the US policy establishment showed this level of paranoia about goings on in Latin America, it was the 1980s: a decade that saw multiple coups, arming of brutal paramilitary groups, mining of civilian harbors, facilitation of the drug trade, poverty, and economic depression. It took decades for anti-American sentiment in Latin America to come down, to the point that by 2015 the US was viewed overwhelmingly positively. It has since taken a hit, down to below 50% on average in the region.

This isn’t to suggest that for thirty years the US didn’t involve itself in the region, it did. Apart from economic and humanitarian aid, it militarily intervened in Haiti and supported a coup in Honduras, for example. But at least by US standards, that is taking things easy.

It should continue to do so.

Much of the decrease in public opinion coincided with the election of Donald Trump – likely a one-off event in its impact. Beijing’s interest in the region has already peaked, and the forces of geo-economic gravity and comparative advantage likely spell a move back toward the pre-China-WTO balance of trade between China, the US and the countries of Central and South America regardless of any deliberate attempt at recalibration by Washington.

A graduate of Spring Arbor University and the University of Illinois, Joseph Solis-Mullen is a political scientist and current graduate student in the economics department at the University of Missouri. An independent researcher and journalist, his work can be found at the Ludwig Von Mises Institute, Eurasian Review, Libertarian Institute, Journal of the American Revolution, and the Journal of Libertarian Studies. You can contact him through his website or find him on Twitter.