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Concerns over China’s economic clout have created “a hell of an opportunity” for the United States to pass legislation paving the way for more free trade deals with Latin American countries, the president said. special advisor to President Joe Biden for the region.
Former Senator Chris Dodd said he is increasingly optimistic that Congress will pass the Americas Act – which would harmonize and expand existing trade agreements between the United States and countries in the Americas – this year. Latin and would offer incentives for “nearshore” production from China.
“We would love to see the Americas Act passed,” Dodd told the Financial Times on the sidelines of the Concordia Americas Summit in Miami this week.
Asked about the bill’s chances in an election year, he said: “If you had asked me this question at any other time, I would say ‘not much,’ but in this environment it has great odds. You have a bipartisan, bicameral proposal from very well-liked and respected people.”
China has significantly expanded its trade and investment in Latin America this century, supplanting the United States as the region’s largest trading partner. This has raised concerns in Washington about a loss of influence in a region traditionally under its influence.
But the United States lacks the tools to fight back after years of congressional opposition to free trade expansion.
However, lawmakers in both chambers introduced the bill in March with bipartisan support. The think tank Global Americans described the Americas Act as “the most comprehensive U.S. policy attempt to deepen relations with the Western Hemisphere in more than two decades.”
The bill represents an attempt to return to the ambitious vision touted in the 1990s by Presidents George HW Bush and Bill Clinton of a free trade zone stretching from Alaska to Tierra del Fuego.
That dream died when opposition from Latin America’s left-wing governments in the early years of this century torpedoed the negotiations, prompting Washington to turn to deals with individual countries.
Today, the United States has a patchwork of trade agreements with 12 countries in the Americas. The United States-Mexico-Canada Agreement (USMCA) is by far the largest, while Central America and the Dominican Republic have their own pact.
Brazil and Argentina, the region’s largest and third-largest economies, respectively, do not have a free trade agreement with the United States.
Dodd said concerns about China’s growing economic power in Latin America “certainly contributed” to the change in Congressional mood in Washington on trade and investment.
The Americas Act would require participating countries to adhere to standards on democracy and the rule of law as well as trade. It establishes a potential process for countries to join the USMCA, with Uruguay and Costa Rica seen as ideal initial candidates.
Dodd said that if U.S. trade and investment incentives were attractive, the package could be offered to any country willing to accept those terms.
“If you can achieve economic growth even in Venezuela, then you will avoid the next 25 years of another Cuba and 8 million Venezuelans. [migrants] in Colombia, Brazil, Ecuador and the United States,” he said.
The United States eased its tough economic sanctions on Venezuela in October in an effort to encourage progress toward free and fair elections. That gesture was partially reversed this month when Washington said Caracas had “failed to keep its promises.”
Dodd quoted Biden as saying last year to left-wing Colombian President Gustavo Petro at the White House: “I hate sanctions as president of the United States. I think they’re horrible. I don’t think they work.
“I think they are painful for people and I am ready to get rid of them in Venezuela, but it will be tit for tat. . .[if]Venezuela does some things, I’ll start shooting [sanctions] outside.” Petro was “blown away,” Dodd recalls.
