China pivots to Latin America [Asiatimes]

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The United States keeps on looking to Asia, but it had better watch its back, where China’s penetration in Latin America is intensifying. Meanwhile, region’s countries are taking their countermeasures to minimize the Sino-Western dispute, using multilateral regional and sub-regional institutions as the first line of defense.

During her latest roadshow in Asia, US Secretary of State Hillary Clinton shifted the debate over the much-trumpeted United States “pivot” towards the Asian-Pacific region from military confrontation to trade competition with China. Over the past decade, trade assertiveness has turned out to be the master key to another, often underestimated, geopolitical pivot: that of Beijing to Latin America – Washington’s historical and geographical backyard.

China’s drive for enhancing its vested positions across Central and South America is not without pitfalls, much as those the US faces in its efforts to protect its strategic interests in East Asia.

China is Latin America’s third-largest trading partner, immediately after the United States and European Union (EU). Beijing’s commercial exchanges with Latin-American countries were worth more than US$241 billion in 2011, according to data released by the Chinese Trade Ministry in April.

Of US$153 billion from foreign direct investments which Latin-American and Caribbean nations attracted in 2011, $8 billion came from China (down $7 billion compared with 2010), the Economic Commission for Latin America and the Caribbean (ECLAC) reported in May. That puts Beijing well behind the EU, US, Latin America and Caribbean and even Japan. The EU, top investor in this region, has funneled an average of $30 billion a year into Latin America since 2002.

Recent trade and economic tensions between the United States, Canada and Europe on one side, and some Latin-American countries on the other seem to be playing into Beijing’s hands. In May, the EU filed a complaint with the World Trade Organization (WTO) against Argentina’s import barriers, after it had already challenged Buenos Aires’s decision in April to nationalize YPF, the local energy company which until then was controlled by Spain’s oil and gas major Repsol.

Left-leaning governments such as Venezuela, Bolivia and Ecuador have made numerous nationalizations over the past years, which have affected mostly North American and European companies.

Western investors also have to deal with native populations in Latin America whose claims to their ancestral lands have been aggravated by environmental concerns. Among them, demonstrators in the north of Peru are standing out against the Conga project, a multi-million dollar gold mining venture by US-based Newmont, blaming it for the destruction of water supplies in the area. Similar se, environmental concerns are behind protests in Malku Khota (Bolivia) against a silver-mining project managed by Canada’s South American Silver Corporation.

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