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An End to U.S. Hegemony? The Strategic Implications of China's GrowingPresence in Latin AmericaFrancisco De Santibaesaa Department of War Studies, King's College, London, London, UK

To cite this Article De Santibaes, Francisco(2009) 'An End to U.S. Hegemony? The Strategic Implications of China'sGrowing Presence in Latin America', Comparative Strategy, 28: 1, 17 36

To link to this Article: DOI: 10.1080/01495930802679728URL: http://dx.doi.org/10.1080/01495930802679728

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An End to U.S. Hegemony? The StrategicImplications of Chinas Growing Presence

in Latin America

FRANCISCO DE SANTIBANESDepartment of War Studies

Kings College, London

London, UK

The lack of attention that the United States is paying to Latin America, on the onehand, and the growing levels of economic and political influence China is gaining in

the Southern Cone, on the other, are increasing the number of disputes between statesand allowing governments to distance themselves from Washington. This scenario mightallow Beijing to obtain new allies in its global competition with the U.S. and put anend to the latters hegemony in the Western Hemisphereendangering, then, Americansecurity. If the United States wants to avoid this, it will have to increase its links withstates such as Brazil and Argentina.

. . . the American continent, by the free and independent condition which they

have assumed and maintain, are henceforth not to be considered as subjects

for future colonization by any European power . . .

President Monroes 1823 State of the Union Address.1

The passage above marked the emergence of the United States as a world power.

Although in 1823 the young republic was not ready to impede Europeans from intervening

in the Western Hemisphere, the Monroe Doctrine did set a strategy that would transform the

U.S. into the only state able to maintain control its own continent.2 In effect, throughout the

twentieth century the Western Hemisphere has accepted, explicitly or implicitly, Americas

military domain over it. During World War I and World War II, for instance, no major nation

dared to support an enemy of Washington, while many of them even fought at its side. Later,

Latin Americans would oppose the Soviet Union under the political and military umbrella

that was provided by the multilateral institutions the U.S. helped to create in the aftermath

of World War II, the Organization of American States (OAS) and the Inter-American Treaty

of Reciprocal Assistance (IATRA), at a regional level, and the United Nations (UN) at a

global level, to mention just a few.The American influence, however, was not limited to security matters. Latin American

nations also received investments from U.S. companies, while their governments acquired,

on a regular basis, credits from financial institutions in which Washington was the main

shareholder. Even more, access to the consumer market of the United States fueled the

growth of many economies, including those of Mexico and Brazil, while the dollar became

the currency of choice both for individuals and central banks to save their assets. Naturally,

all these links made Latin Americans vulnerable to foreign pressure.

Then, the collapse of the socialism, as the only alternative to capitalism, created the

conditions for the economic reforms of the 1990s. The Washington consensusas the sum

17

Comparative Strategy, 28:1736, 2009

Copyright 2009 Taylor & Francis Group, LLC

0149-5933/08 $12.00 + .00

DOI: 10.1080/01495930802679728


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18 F. de Santibanes

of these policies were callpromoted free trade and the reception of investments from thedeveloped world. From then on, decisions taken by the Federal Reserve Board could reduce,

just in a few hours, the flow of short-term capital to the region and threaten the stability of

entire countries. These transformations strengthened U.S.Latin American relations even

more.But now the status quo seems to be changing. Chinas increasing demand for com-

modities is promoting the economic growth of many Latin American nations, especially

those situated at its Southern Cone, making them less dependent of the Americans. The

Peoples Republic of China (PRC) is, as a matter of fact, becoming a more important trade

partner for some of these economies than the U.S. is today, while the political and military

links between the continent and China have also gained momentum, as the number of visits

paid by Chinese political and military officials shows.

Meanwhile, distracted by the Iraq War and its fight against al Qaeda, the Bush admin-

istration has not paid enough attention to what is happening in the Western Hemisphere.

The White Houses agenda toward the area has been reduced to discussing subjects such

as drug trafficking, illegal immigration and amodestexpansion of free trade.3 Latin

Americans have reacted to the lack of a stronger commitment by reducing their links with

the American economy and opposing U.S. proposals in international forums. This article

suggests that the strategic consequences of these new developments, although not urgent,

might someday become critical.

The presence of China in the Western Hemisphere might, indeed, be seeding the field

for a series of political alliances that, once unleashed, would endanger American security.

As a result of the reduction in Washingtons involvement in the region, disputes among

Latin American states have grown dramatically. If this trend continues, some nations might

be tempted to change their loyalties from the Americans to the Chinese in search of the

financial and military resources they might need to strengthen their positions. This scenariowould allow the PRC to counterbalance the American presence in Northeast Asia by having

its own allies in the Western Hemisphere. Actually, we might be moving toward a continent

divided into two camps: a northern region that will remain under the economic and political

control of the United States and a Southern Cone more inclined to join Chinas sphere

of influence. Whether this will happen will depend, to a great degree, on the willingness

American policymakers to implement a coherent and active policy toward their hemisphere.

The main objective of this article, then, is to bring to the attention of the reader the

strategic significance of a region that, in recent years, consistently has been overlooked

by academics and policymakers alike. The more specific aims of this study are to analyze

how the developments explained above are affecting both regional security and American

long-term interests. The first section discusses some of the literature in the field of

international relations that might be useful in analyzing this issue. The second part consists

of a short description of the economic, military, and political ties that the PRC has recently

established with the Latin American nations. Next, a review about the events that have

marked the American retreat from the region is presented. Finally, this work evaluates

some of the strategic options Latin American states face and the policies Washington could

implement if it wants to prevent them from establishing an alliance with China.

Global Context

One of the most important aspects of the international system is the fact that United Statesis the only state that controls the region of the world in which it is locatedin this case, the

Western Hemisphere. Even more, recent history shows us that to preserve this condition,


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Chinas Presence in Latin America 19

and prevent other states from achieving regional hegemony, Washington has intervenedin world affairs. American participation in World War I and World War II, for example,

could be explained as a calculated effort to prevent Germany from becoming the European

hegemon and, in the latter conflict, to prevent Japan becoming the hegemon of the Asia-

Pacific. In the same way, the first Gulf War can be interpreted as an effort by the UntiedStates to put a stop to Iraqs attempt to transform itself into the hegemonic power of the

Middle East.4

Although the Soviet Union did represent a challenge to American hegemony for a

time, the United States ultimately was able to prevent the emergence of a major rival

throughout the twentieth century. But things are now changing. If China continues to grow

at rates similar to those that permitted it to multiply its GDP fourfold since 1978, while

the U.S. continues to grow at smaller rates, the Chinese economy will eventually reach

and even surpass the American one.5 Furthermore, Chinas economic success is also being

translated into political and military power. The 2006 Department of States Quadrennial

Defense Report, for instance, states that the PRC has increased military spending by 10

percent every year since 1996, with the only exception being 2003. 6 Chinas militarization

is a natural consequence of the need it has to protect its interests from potential rivals.7

But this process might create conflicts. Beijing is establishing alliances in the Middle East

with nations that the United States describes as rogue states. While these dealings might

come solely from the necessity China has to obtain more oil to maintain its economic

growth, Washington still considers these states to be potential rivals. Thus, Chinas links

with nations such as Iran make the U.S. feel increasingly uncomfortable.8

The most difficult region for U.S.Chinese relations is Asia. The first objective of

China in its search for security is to become the hegemon force of Northeast Asia, and this

is making its neighbors feel threatened. A sign of this phenomenon is that the U.S., Taiwan,

and Australia all have taken steps to strength their military alliances and balance, in thisway, Chinas raising power.9 Nevertheless, and however well calculated these steps might

be, there is always the danger that growing misconceptions and misperceptions about the

nature of the actions states are taking might create high levels of uncertainty, and that this

will ultimately result in a conflict. An action that might be defensive in its nature, such as

Chinas construction of a large submarine fleet, might, for example, be perceived by Taiwan

as an offensive move that can start a war that was not wished by anyone. 10

But a conflict between China and the U.S. might not be limited to Asia or the Middle

East and could, eventually, reach Latin America. In fact, perceiving itself as a victim

of the system of alliances created by Washington in Northeast Asia, Beijing might try

to do the same in the Western Hemisphere by selecting a key ally to disrupt Americas

regional hegemony. Authors such as John Mearsheimer, have mentioned Mexico, Brazil,

and Argentina as three states that, in the future, might be able to balance U.S. power.11

Conceptual Mark

Would, however, any Latin American state dare to defy American power and establish an

alliance with China? Stephen Walts balance of threat theory provides a good starting point

to answer this question.12 Traditionally, experts in the field of international relationsor, at

least, those who consider themselves realistshave thought about disputes among states interms of power. Whether a state will choose to balance an emerging hegemon, they believe,

will depend on the balance of power between these two states and the other members ofthe international system at a given time. After making its own calculations, each state will

decide either to balance or to submit to a raising state. The role played by the British Empire


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20 F. de Santibanes

during the nineteenth and twentieth centuries could be considered a classical example ofoffshore balancingjoining other states to defeat either France or Germany when they had

gained too much power on the continent. Stephen Walt proposes a different approach.

Walt believes that states do not decide to balance others by measuring their power but by

calculating the level of threat they present. In this way he tries, in his own words, to elaboratea refinement of balance-of-power theory.13 Walt proposes four variables to measure the

perceived levels of threat that a state poses to another: its aggregate strength (size of

its economic capabilities, population, and so forth), geographical proximity, offensive

capabilities, and offensive intentions. Once this calculation is made, states will decide how

to act. A very weak state located next to a powerful nation, for example, might have no other

option than to bandwagonaccepting the other states superiorityas the only possible

way to protect its own security, while a more powerful state located further away might

decide to balance the rising power by forming an alliance with other states.14

What, then, are the levels of threat that the U.S. and China present to Latin Amer-

ica? Before answering this question there are some factors that should be noted. First,

the geographic variable mentioned by Walt plays a determinant role in the formation of

alliances, but this is even more the case in the Latin American context. In effect, two of

the factors used to measure perceived levels of threatoffensive intentions and offensive

capabilitiesare closely related to proximity. A state will show itself more offensively in-

clined toward a nation that is located closer to home than to a more distant one because the

threat that a neighbor presents is, generally speaking, more significant. Furthermore, it is

usually easier for a state to exercise its military strength over a country that is located near its

borders.

The second point to be made is that geographic proximity should not be understood

only as impacting the ability of states to move military forces from one place to another,

but also as the level of political and cultural proximity between states. Close political andcultural proximity may allow a state to penetrate another states political system and modify

that nations foreign policy. These kinds of actions might take place through the provision

of funding to political parties or NGOs that share similar worldviews to those that are

defended by the external power. In this way, states are able to become a force in the political

systems of other nations. Thus, in the Latin American context, where security threats

historically have not been high, states will not only try to balance against security threats

but also against the possibility of losing their independence to major powers.

If we apply Walts concepts to our own case study we will see that China and Latin

America do not represent a security threat to each other; in fact, they are located too far

away from each other for that to happen. The case of the U.S. is different. Washington will

always prioritize the strategic aspects of its relations with Latin America because it knows

that there is always be the possibility that one of its southern neighbors might, someday,

represent a real threat to its national security. Lets take the example of the Cuban missile

crisis in 1962, a critical event because of the short distance that separates Cuba from the

United States. If the Soviets had chosen to install nuclear weapons in Africa, the American

reaction would have been quite different. It was the proximity to the American coast that

made the deployment of arms so dangerous.

In a similar way, Latin Americans also feel threatened by the giant they have to live

with. The asymmetry of power between the United States and its hemispheric neighbors

is simply too important. This imbalance of capabilitiestogether with the inexistence of

an alternative world power with which to join forces against the U.S.has made statesin the Western Hemisphere accept American supremacy.15 However, the reaction of each

state will differ. While the most powerful states will be able to present some resistance to


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American pressure, those that are weakereither because of their poor economy or weakmilitaryhave no option other than to submit. In short, the less powerful and the closer a

Latin American state is to the American frontier the more it will tend to remain an ally of

the U.S., while the most powerful states that are located further away from the hegemon

will enjoy more independence in their behavior.There is another theory of international relations that might bring some light to the

question this paper tries to answer, and that is hegemonic stability theory. Charles Kindle-

berger has studied the evolution of states through history and concluded that a hegemonic

power can provide public goods that are beneficial for other states. In fact, if that hegemon

did not exist the cost of providing these goods would be too high. For instance, the pres-

ence of hegemons explains the periods of economic stability that were reached during the

pinnacle of the British Empire and during the American hegemony.16 Instead, the Great

Depression was possible because there was no hegemon able or willing to stabilize the

international economic systemGreat Britain was not able to do it and the U.S. did not

want to. But there are other kinds of public goods that could also be provided by a hegemon,

and international security is one of them. Take the present situation. The overwhelming

superiority of the U.S. military over all its potential competitorstogether with its ability

to deploy troops anywherediscourages states from starting military campaigns with the

goal of regional domination.

Public goods can be delivered in a series of ways, including indirectly. Indeed, a

hegemon, such as the U.S., can use international organizations to serve this purpose as

long as they remain under its control. In the Western Hemisphere, the Inter-American

Development Bank (IDB) and the Organization of American States (OAS) comply with

this condition. The first of these institutions was created in 1959 with the goal of providing

funds to foster economic development, while the second one has the aim of preserving the

security of the hemisphere through the collective action of its members. Although the rulesof these institutions are supposed to give a similar weight to each of the member states, in

practice the power gap between the U.S. and the other states had made true multilateralism

impossible.

Chinas Growing Presence in Latin America

Although the emergence of China as a world power has been one of the most discussed

topics in recent decades, not much attention has been given to the dramatic changes this

phenomenon is provoking in Latin America. Many economies are, indeed, seeing their

patterns of trade being drastically modified; while some countries in the region are enjoyingremarkable rates of economic growth, due to their exports to the Asian nation, others, such

as Mexico, perceive the PRC as a real threat to their development. Sino-Latin American

links, however, have not been restricted only to trade. Political and military relations have

also gotten stronger with the passage of time. But let us focus first on the economic side of

this partnership.

Trade theory allows us to understand why the economic relations between China and

Latin America have grown so much. First of all, it should be noted that, under free trade,

the world economy would make important gains because without trade barriers each state

would specialize in the goods that it produces best. Then it would be able to trade thosesame products for others that come from other nations and satisfy, in this way, the demand

of its population. Overall productivity would increase and, with it, global wealth.17 Theinternational community has accepted the rationality of this argument and, during the last

decades, has taken important steps toward the reduction of trade restrictions. As a result,


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22 F. de Santibanes

nations have concentrated their efforts on the goods for which they have a comparativeadvantage.

The economies of China and those that are located in the Southern Cone of Latin

America are particularly compatible with each other; indeed, trade flows are now reflecting

this fact. On the one hand, China has become a large exporter of manufactures to LatinAmerica due to the comparative advantages its economy has in the production of goods

that require large amounts of labor, such as textiles, clothing, and toys. In effect, an hour

worked in China is less expensive than one hour worked in any Latin American country.

Similarly, Latin America enjoys comparative advantages in the production of goods that

require less labor and more use of the natural resources that are so abundant in that region

of the world. The progressive openness of the global economy is then making commercial

relations between these two partners look more and more as trade theory would predict:

China is expanding the export of its manufactures to Latin America and importing, in

exchange, commodities and natural resource-based manufactures such as copper, iron-ore

agglomerates, and soybean.18

Recent trade data shows the magnitude of the changes that are taking place. China

has gone from importing only $2.5 billion worth of goods from Latin America in 1990

to importing $22 billion in 2005. Moreover, imports from Latin America have grown 44

percent in each of the last four years, a higher proportion than from any other region of

the world.19 The phenomenon can also be appreciated by analyzing bilateral trade figures.

While in 1990 China ranked as the thirtieth-largest commercial partner of Chile, in 2004 it

had already become its third-largest. China also went from being Perus sixteenth-largest

trade partner to reaching the second position, while with Argentina it went from fourteenth

to fourth and in Brazil from sixteenth to third. If the present trend continues, in a few years

China will become the largest trade partner for most South American nations.

Most Latin American leaders have also expressed an interest in Chinese foreign in-vestment. By the end of 2004, Chinese stock investment in Latin America had already

reached $4.62 billion, a figure that represents 14 percent of the total stock investment by the

PRC outside its frontiers.20 Furthermore, according to the Chinese minister of commerce,

Latin America is the region of the world, outside Asia, that receives the most Chinese

investment.21 Nevertheless, with reserves reaching $795.1 billion the PRC can invest more,

and that country seems to be taking the steps necessary to do so. Chinese companies

have signed important agreements with Latin American firms to extract and then transport

commodities to China.22 There are two joint ventures with Chilean mine companies, for

example, that represent an investment of $2 billion, in one case, and $5 billion in the other.23

Nevertheless, Chinas emergence as an economic power does not represent good news

for all Latin American nations. While most countries in the Southern Cone are benefiting

from Chinas new role in the world economy, their northern neighbors are confronting

important challenges. Mexican producers are suffering from competition with Chinese

firms that have been able to take away from them large sectors of the American market and

now are even penetrating Mexico. Other Central American nations seem to confront the

same problems, as they also cannot compete with lower Chinese production costs.

Political and Military Links

But are these new economic ties, positive for most nations, ever going to be translated

into political commitments? And if they do, how will this happen? There are at least twofactors to be considered. First is the fact that the benefits that come from trading and

receiving investments from the PRC might be opening a window of opportunity for Latin


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Americans to end their historical dependence on Western markets. This new partnershipcould, in effect, facilitate their movement away from the American sphere of influence, a

natural outcome, given their desire to become more independent from the main threat

they face. Until now, governments have had no other option than to bandwagon the U.S.

In effect, fear of economic sanctions has been enough to make governments renounce thepossibility of balancing Washington. And those who have tried to do it anyway, such as

Salvador Allende in Chile and Juan Domingo Peron in Argentina, saw their economies

suffer important setbacks. When they were in power there was no state able to offer an

alternative alliance. In fact, throughout the Cold War, and despite all its apparent power,

the Soviet Union remained a weak economy, unable to become a real substitute to the

American presenceits economy was not particularly compatible with the Latin American.

The Chinese phenomenon, as we have seen, is entirely different.

Second, the links between the elaboration of economic and political policies are

stronger in China than in the Western World. In effect, the way the Chinese govern-

ment decides to allocate investments abroad is guided, many times, by strategic priorities.

The official system of cataloguing states as cooperative, friendly cooperative, or strategic

partnerswith the implication that this has for the allocation of economic resourcesis a

clear sign of this practice.24 Even more, the attitudes toward commodities, such as oil, tend

to be mercantilist. Rather than relying on fluctuating international prices, the PRC seems to

be interested in settling broad agreements with other nations, looking for a secure supply of

the commodities its economy needs to maintain its growth rate. This gives a certain lever-

age to the Chinese authorities when they have to address political questions with foreign

dignitaries. Latin Americans should, then, be ready to compromise with the Chinese if they

want to continue receiving the economic benefits that come from dealing with the Asian

country. On the other hand, because of the more fundamental role that private firms play

in establishing economic relations with foreign states and individuals, Western leaders donot have similar tools. To conclude, there are ways by which profitable economic relations

might strengthen the political links that exist between partners.

On Chinas side of the relationship, there are political reasons for Chinas interest in

Latin America. The possibility that a conflict with the U.S. might end with commercial

sanctions on China creates incentives for its leadership to look for alternative trade partners

that, one day, might provide the energy and the commodities the Chinese economy needs to

survive. In fact, Chinas poor endowment with natural resources makes Beijing particularly

vulnerable to the imposition of sanctions. The nature of the political relations with the

new partners should then be strong enough for them to resist American pressure to join a

sanctions regime.

The number of state visits paid by the Chinese authorities to Latin America represents

a clear sign of how fundamental this region has become to Beijing. In 2004, for instance,

President Hu Jintao spent a total of twelve days in Latin America, more time than President

Bush spent in the region during that period. Chinas Vice President, Zeng Qinghong, visited

Latin America a total of nine days, more than Dick Cheney spent during his entire first

term in office.25 Moreover, General Bantz Craddock, Commander of U.S. Forces in Latin

America, testified to the U.S. Senate that, through 2004, Chinese military authorities had

undertaken twenty missions to Latin America, while Latin Americans paid nine visits

to the PRC. The presence of the Chinese armed forces in the region, says Craddock, is

widespread and growing every day.26

However, the possibility of receiving direct military assistance from China may notbe particularly attractive to the armed forces of Latin America, mainly because Chinese-

produced military equipment often is of low quality. Yet, the economic resources Beijing


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24 F. de Santibanes

might provide to its new allies could be enough for them to purchase first-rate weaponsfrom other countries, such as Russia and France. Russians, for example, have already

signed important contracts in the area. Venezuela has agreed to buy, for a total of $3 billion,

24 Sukhoi Su-30 jet fighters and 53 helicopters and to establish a Kalashnikov factory to

produce assault rifles and ammunition. General Craddock expressed his concerns that theserifles might, one day, end up in the hands of the Colombian guerillas.27 Reports also indicate

that Argentina is currently negotiating its first-ever purchase of Russian weaponsMi-17,

Mi-35M helicopters and high-speed missile boats, among others.28 This development, as

many others, would not have taken place if the U.S. government had maintained a more

active policy toward its own backyard.

The American Retreat

Since the end of the Cold War the U.S. has lost much of its influence over Latin America.

In fact, the period between the presidencies of George H.W. Bush and his son, George W.

Bush, was marked by a sustained decline in the level of attention paid by American officialsto the political and economic issues that concern most Latin American states. More than a

calculated decision, this retreat has been the result of Washingtons inability to produce a

broad and coherent policy toward the region.

As long as the Cold War lasted, the U.S. had a strong incentive to become involved

in events taking place throughout the Western Hemisphere. After all, this was one of the

many theaters in the global struggle between Washington and Moscow. The U.S. was ready

to invade neighbors that might represent a threat to its security, as it did in the Dominican

Republic in 1965, Grenada in 1983 and, unsuccessfully, Cuba in 1962. In addition, plots

were organized to overthrow governments that showed sympathy for the communists, as

happened in Chile and Guatemala. Moreover, the Inter-American Treaty of Reciprocal

Assistance (IATRA) promoted military collaboration with the other American states. Thistreaty, which states that an attack on one member should be considered an attack on all, has

indeed been the cornerstone of the American security system in the Western Hemisphere

since it was signed in 1947.

With the end of the Soviet Union, a new era of economic and political collaboration

emerged. Steps were taken by the George H.W. Bush Administration to create the North

American Free Trade Agreement (NAFTA), the Free Trade Area of the Americas (FTAA)

and the Summit of the Americas, a new institution that would allow democratically elected

heads of states to meet every four years. Furthermore, the Bush administration also provided

debt relief to many nations through the 1989 Brady Plan, and successfully pressured

Argentina and Brazil to dismantle the nuclear programs that their militaries had beenrunning for years, leaving, therefore, the Western Hemisphere with no nuclear powers

aside from the U.S.29

President Clinton continued to promote close relations with Mexico but ignored most

of the other states in the region. After leading a difficult fight in Congress, the Clinton

White House signed NAFTAa free trade agreement (FTA) among the U.S., Canada, and

Mexicoand provided Mexico with the incentives that it needed to modernize its political

and economic systems. The ruling party, the PRI, allowed a candidate of the opposition,

Vicente Fox, to win a fair election for the first time in Mexicos modern history. NAFTA also

opened new markets to Mexican producers while importing fiscal and monetary institutionsthat attracted more foreign direct investment to that country. Of course, other nations wanted

to follow Mexicos successful path and to sign free trade area agreements with the U.S.,but complaints from trade unions and other interests compelled the Clinton administration

to ignore their wishes.


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Nevertheless, the most dramatic change in U.S.Latin American relations happenedafter September 11, 2001. With terrorist attacks having occurred on American soil, the

George W. Bush administration focused its attention on fighting terrorist networks, such

as al Qaeda, and on conducting the wars in Iraq and Afghanistan. In this context, the

White House overlooked Latin America because it did not perceive it as presenting animmediate threat to U.S. security. This approach would also have important consequences

for American interests.

The U.S. made its lack of commitment clear by the way it managed two financial crises.

While in 1994 the Clinton administration made every possible effort to provide Mexico with

the financial package its economy needed to avoid a complete debacle after the devaluation

of the peso, Washingtons unwillingness to support Argentina in 2001 created the conditions

for a major crisis.30 Indeed, while the Argentine situation was similar to the one Mexico

had gone through in 1995a devaluation that might be followed by a default of sovereign

debtthe Bush administration, under the leadership of the then-Treasury Secretary Paul

ONeill, let Argentina fall into default and suffer the most severe recession in its modern

history.

A possible justification for this policy would be that the White House simply had a

different view of how to deal with financial crises in emerging marketstrying to avoid the

risk of moral hazard, for examplebut evidence seems to indicate that this was not the case.

In fact, changes in behavior were restricted only to Argentina. The Bush administration

did provide financial support to Turkey when this country was going through similar

circumstances. Latin American leaders interpreted this special treatment as a sign of how

unwilling the United States was to deal with their problems. This sign was even stronger

due to the fact that, during the 1990s, Argentina had become one of Washingtons closest

allies in the region. What, then, could be the benefits of supporting the United States?

After the Argentine crisis criticism emerged about the nature of the fiscal and monetarypolicies the IMF had asked Latin American countries to implement as a prerequisite for

receiving its loans.31 The tight policies demanded by the IMF were, so the argument

goes, the real cause of the economic crisis suffered by emerging markets in recent years.

Following a similar rationale, the presidents of Argentina and Brazil, Nestor Kirchner and,

Luiz Ignacio Lula Da Silva, decided in 2006 to pay their entire debts to the IMF and gain,

in that way, more independence to implement the fiscal and the monetary policies they

wanted; now they would not need the support of the U.S. to obtain the approval of the IMF.

Later, after receiving pressure from the U.S. due to Argentinas unwillingness to join the

FTAA, Kirchner stated that, with all respect to the countries of the world and to the United

States, Argentina knows what it has to do, what the carnal relations were, what it was to be

a dependent country, what hunger is, the collapse of industry, of production and of exports,

which meant subordinating ourselves to policies to which we did not have to subordinate

ourselves.32 The perceptions about the benefits of maintaining close links with the U.S.

have, indeed, changed.

Another of the tools used by major powers to change the behavior of less-powerful

states is to provide funds for their development. This can take place through the partici-

pation of international organizations, NGOs or directly from one government to another.

However, with spending for development assistance of only 0.17 percent of its GDP, the

U.S. ranks last among the twenty-two members of the Organization of Economic Cooper-

ation and Development (OECD).33 More specifically, the destination of U.S. assistance to

Latin America has been restricted to support for the poorest states, without taking into con-sideration the most powerful ones.34 From a political perspective, this policy does not make

much sense. While U.S. rivals, such as Venezuela, are providing large amounts of financial


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26 F. de Santibanes

assistance to middle-income nations to gain their political support, the U.S. has chosen toignore its own interests and to focus only on the humanitarian aspects of assistance.

Aside from a few minor victories, Washington also has been unsuccessful in expanding

free trade to the continentand, therefore, in strengthening its links with Latin America.

The best proof of this might be that the date by which the Free Trade Area of the Americaswas supposed to be signed has already passed. Instead, Washington opted to approve a

Central American Free Trade Agreement (CAFTA) and a FTA with Chile; although these

agreements represent a positive development, they exclude several major Latin American

economies. Meanwhile, the European Union and China have started conversations to reach

commercial agreements with Mercosur, the trade block composed of Argentina, Brazil,

Paraguay, and Uruguay, something that when carried out would redirect South American

trade toward these parts of the world. To sum up, all these developments are making Latin

America increasingly less vulnerable to U.S. economic pressure.

Yankee Go Home

From presidents who denounce Washington in every possible forum to a drastic decrease

in the levels of influence the Pentagon can exercise over Latin American armed forces, the

U.S. political role in Latin American has suffered a dramatic decline.

The most colorful example of this phenomenon might be the emergence of Hugo

Chavez as a leading political figure. Since he became president of Venezuela in 1998,

this former lieutenant colonel in the Venezuelan Army has used the economic resources

oil provides to his nation to finance an active foreign policy. Chavez has spent resources,

among other things, to buy almost a third of the debt Argentina issued in recent years and to

sustain Fidel Castros regime through the sale of subsidized oil.35 During his administration

Venezuela has also denounced American policy in the region as imperialist and expansionistand has even alerted the world about a supposedly prospective U.S. invasion of his country.36

More recently, in a speech to the UN Assembly, President Chavez went so far as to

characterize George W. Bush as the devil.37

Furthermore, Caracas has bought large amounts of military equipment, an action that

has been described by the U.S. as a threat to the military balance of the region.38 The

Venezuelan government has even shown an interest in acquiring the know-how necessary

to develop nuclear energy, something remarkable if we consider that Venezuela is one of

the largest oil producers in the world.39 Moreover, Chavez has also done everything in his

power to escalate a conflict with Colombia, one of the closest U.S. allies, by providing

shelter to that countrys left-wing guerrillas.

40

The Chairman of the Joint Chiefs of Staff,General Peter Pace, has been clear about how dangerous these developments are, There

have been increases in government actions that are not friendly to us, and said that Chavez

has also been sending money to other countries in South America to try to destabilize them

or get elected those who he believes would follow in his footsteps.41 Although the president

of Venezuela might be the most notorious leader opposing the U.S., he is not the only one.

After calling for a profound change in the nature of U.S.Latin American relations

the indigenous candidate Evo Morales won the Bolivian presidential elections of 2006

and, a few months later, nationalist candidate Ollanta Humala reached a victory in the first

electoral round of the Peruvian elections, to then lose against Alan Garcia in a close race. 42

Furthermore, Rafael Correa, a close ally of President Chavez, became president of Ecuador

on September 2007.The appearance of these new actors, mainly in the Andean region, is the result of

marginalized sectors of societyespecially indigenous peoplebecoming part of their


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nations political systems for the first time in history. These movements blame the U.S. forhaving supported oppressive ruling classes, taken natural resources away from them, and

interfered in their countries domestic affairs. This view is palpable in the words of Morales:

I am fully convinced that if we in Latin America regain and exploit our resources, we will

live a better life than the one based on depending on the United States, the World Bank,and the IMF. The president of Bolivia also remarked on his desire to see American troops

leave his country, while considering China a political, ideological and programmatic ally

of the Bolivian people.43

Even more, this new generation of Latin American leaders has also expressed its

willingness to veto any trade agreement with the U.S. and eliminate any program that

looks to eradicate coca, the raw material necessary to produce cocaine. But this is not all.

Daniel Ortega, after more than a decade out of power, was returned to the presidency by

Nicaraguan voters in 2006, and Andres Manuel Lopez Obrador, the leader of the Mexican

left, came very close to taking Mexicos presidency. Dan Burton, Republican chair of the

House Subcommittee on the Western Hemisphere, has said we have concerns: Chavez,

Castro, Ortega, Morales in Bolivia and their connections with China . . . we need to pay

particular attention to that.44

The institutional mechanisms the U.S. has used to maintain control of affairs in the

Western Hemisphere also seem to be crumbling. The Mexican government has formally

withdrawn from IATRA in 2002 after denouncing its obsolescence and calling for a new

agreement that takes better consideration of the problems the continent faces today.45 In

addition, the U.S. has lost influence over the OAS, the political body Washington has

traditionally utilized to promote its views and legitimize its actions. Two recent events

illustrate this development. First, the refusal of the OAS General Assembly to elect the

candidate the U.S. proposed to occupy a place in the Inter-American Commission of

Human Rights. This was, in fact, the first time in the commissions history that an Americanrepresentative would not occupy one of its seven seats. It was, however, the election of a new

secretary general in 2005 what marked the real turning point. A bloc led by the members of

Mercosur imposed the Chilean Jose Miguel Insulza and relegated, in this way, the candidate

sponsored by the U.S. to a second place.46 This result would have been unthinkable years

ago.

The increasing disloyalty shown by Latin American neighbors has also reached

issues that are central to the Bush administration. In 2003 Mexico and Chile voted against

a proposal presented by Washington in the UN Security Council that would have allowed

an immediate attack to Iraq and provided, in this way, international legitimacy for that

action. The positions taken by Mexico and Chile, therefore, helped to cause a major blow

to American foreign policy. The unpopularity of the Iraq War in the region is shown by the

fact that only seven nationsof a total of thirty-foursupported the military action. And,

of those that supported it, six were at the time negotiating a FTA with Washington and one,

Colombia, was in the process of obtaining $600 million in military assistance. 47 This is a

new scenario. During Gulf War I, for instance, the George H.W. Bush administration not

only obtained support from most states in the region but also received a military commitment

from Argentina.

The military aspects of U.S.Latin American relations have also suffered important

setbacks in recent years. The passage of a U.S. law that prohibits the participation of

American military trainers in countries that form part of the International Criminal Court

(ICC) has made it impossible for many Latin American nations to continue receiving thatkind of support. The Mexican armed forces, for example, have lost $3.6 billion in military

assistance since its government decided to join the ICC on October 2005.48 In his testimony


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28 F. de Santibanes

to the U.S. Senate, General Bantz Craddock stated that the new policy creates the incentivesfor states to invite members of the Chinese military to provide the kind of training that they

used to receive from the Americans. In addition, the governments of Argentina and Uruguay

have announced that they are not going to continue sending members of their military to the

Western Hemispheric Institute for Security Cooperation (WHINSEC).49 This institution,located in Georgia, has provided training to approximately 1,000 Latin American officers

per year, being one of the major links between the members of the U.S. military and their

colleagues.50 In addition, President Correa announced, with the overwhelming support of

thenational assembly, that Ecuador wouldnot renewan existingagreementwith Washington

by which the U.S. keeps control of an air base in Mantaits only military presence in South

America. Even more jarring, from an American perspective, is that Ecuador has offered

this base to the Chinese and that other Latin American governments, such as Peru, have

either rejected the possibility of allowing the presence of the U.S. military in their territory

or, as in the case of Venezuela, have warned othersColombiaabout the possibility of

going to war with them if they do so.51 Not even the lack of WMD in the region seems to

be secure anymore. Brazil has not allowed inspectors of the International Atomic Energy

Agency (IAEA) to take a look inside some of its uranium enrichment plants. Naturally,

countries such as Argentina might interpret this action as a sign that Brazil has restarted its

nuclear weapons program, and then might decide to take similar steps.52

However, the most significant sign of U.S. lack of influence in the Western Hemisphere

has been the growing number of disputes among Latin American states. And maybe the

most dangerous development in this trend took place on March 2008 when the Colombian

air force attacked a position held by a terrorist organization, call FARC, inside Ecuadorian

territory. After this action, both the governments of Ecuador and Venezuela decided to

send troops to the frontiers with Colombia, accusing this country of acting as a proxy for

the United States and warning about the possibility of a war. After numerous accusationsbetween these states, a detente was finally reached, but the possibility of a military conflict

is still present. To this dispute we have to add, among others, the recent conflict between

Argentina and Uruguay. These two nations have been discussing, in acrimonious terms, the

environmental effects that the construction of two paper mills in Uruguay might have on

a river that is shared by both nations.53 A more serious conflict is the one that confronts

Bolivia and Chile. The Bolivian government has demanded from Chile the exit to the Pacific

Ocean that it took, together with large amounts of land, during a nineteenth-century war. 54

A New Cold War?

In the years to come the U.S. and China might get involved in a conflict for the control

of Latin America. Indeed, Chinas expanding links with the region, on the one hand, and

the American disregard for what is happening there, on the other, are making this scenario

more possible than ever before. This assertion might sound audacious at first. After all, the

gap in military and economic resources between these two nations is still enormous. But to

modify the status quo in the region the Chinese would not need to reach a similar level of

power to the one Americans enjoy there today. In fact, such a scenario, if the present rates

of economic growth continue, could take decades, even more if we consider the military

aspect of power, in which the U.S. retains an even greater advantage. The path to end theAmerican hegemony would, however, be a simpler one.

The amount of power the United States needs to remain the hegemon in the WesternHemisphereand not just the most powerful state thereis enormous, and as long as

it continuously represents a major potential threat to the security of these states and no


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other world power shows the willingness or capacity to challenge this reality, America willremain the hegemon. But by winning just a couple of allies China might change this. With

growing resources from their Asian partner, Latin American states might one day be able

to initiate conflicts with their neighbors without having to worry about the restrictions the

American hegemon imposes on them.In fact, while wars among Latin American states were common in the nineteenth

century and the first half of the twentieth century, the emergence of the U.S. as a hegemonic

power seems to have put an end to that bellicosity.55 The provision of public goods, such

as financial stability and international security might, indeed, be related to the existence of

a hegemon. Charles Kindleberger has explained that the Great Depression was an outcome

of the vacuum that took place between what was the pinnacle of British power and the

emergence of the American supremacy. Similarly, the peace enjoyed by Latin America

in the last decades might be the result of U.S. influencestronger here than in any other

place.56 There are, however, authors who disagree with this thesis.

Some have noted, for example, that all the participants of recent conflicts in Latin

Americanthe war between Argentina and Great Britain in 1982 for the Malvinas/Falkland

Islands and the territorial dispute between Peru and Ecuador in 1995were allies of the U.S.

This would prove, therefore, that Washington is unable to restrict the behaviors of the states

that are under its influence and to avoid, in this way, military conflicts.57 There must then be

an alternative explanation for the unusually small number of wars that have been fought in

the region. The role played by international organizations in the resolution of conflicts and

the cultural links that unite most Latin American nations have been mentioned as possible

explanations.58 However, a close study of these arguments shows their weaknesses.

The assertion that the U.S. was unable to restrict the behavior of Argentina and Great

Britain during the Malvinas War is not entirely accurate. In effect, Washington made it

clear to London that it did want the U.K. to try to find a diplomatic solution to the disputeand, if a war ever started, for it not to attack the continent.59 Furthermore, there is evidence

that Argentina took possession of the islands in 1982 thinking that the U.S. would support

its action.60 It is then possible to argue that this war would have never taken place in the

first place if Buenos Aires had known what Washington really wanted.

Moreover, and as one of the four guarantor nations that signed the original peace

agreement of 1942, the U.S. played an important role in finding a peaceful solution to the

conflict that confronted Peru and Ecuador. The fact that no multilateral organization, such as

OAS, was actively involved in dampening this conflictas well as that of Malvinascasts

doubts on their ability to resolve major disputes. Realists would argue that international

institutions are unable to enforce their own rules and are incapable of modifying the behavior

of states. This argument is even truer if we consider what has taken place in the Western

Hemisphere, a region where the asymmetry of power between the U.S. and the other states

is so significant. How autonomous could these institutions be from the hegemonic power

that proposed their creation in the first place? Are they going to be able to enforce their own

rules if the main member does not want them to? The history of the OAS shows that this

organization has been used by Washington to modify the behavior of states while, at the

same time, ensuring that the United States itself need not directly participate in disputes.

When the U.S. was able to obtain support from the OAS, such as it did during the Cuban

missile crisis in 1962 or the invasion of the Dominican Republic of 1965, Washington was

able to legitimate its actions, but whenever its views were not approved by the General

Assembly the U.S. chose to ignore the organizations wishes and act unitarily.61 This tookplace, for instance, when the U.S. decided to implement covert operations to destabilize

governments (Chile in 1973 and Guatemala in 1954), to invade or be involved, in some way,


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30 F. de Santibanes

in the invasion of other states (Panama in 1989 and Cuba in 1962), or to provide logisticalsupport to an enemy of a member state that had received the support of the organization

(Argentina in 1982). The asymmetry of power among the states located in the Western

Hemisphere is simply too important for any inter-American institution to really work as a

multilateral forum.The other well-known argument that tries to explain the small number of wars fought

among Latin American states is the heritage that unites them allin fact, most of these

societies are Catholic and speak Spanish. It is their shared identity, the argument goes,

that makes these states see each other as part of the same entity and to consider that any

possible adversary should be located outside their region.62 But this approach does not

pass the test of time. As we have seen, wars were common before the twentieth century, a

period when the cultural links among nations were as strong as they are today. Moreover,

territorial conflicts have remained alive, and although they have not broken out in major

wars, they might do so some day. As Jorge Dominguez has noted, There has been at

least one militarized interstate dispute per year in Latin America and the Caribbean since

1991; the frequency of such militarized disputes actually increased in the second half of

the 1990s.63 There must be another explanation, then.

If we observe recent events in Latin American history, we appreciate an inverse rela-

tionship between levels of animosity among states and the American presence in the region.

A good example of this is the case of Argentina and Chile. After almost going to war at

the beginning of the twentieth century, and then again in 1978, these nations resolved all

their territorial disputes in 1991. Even more, that same year South Americas two largest

states, Brazil and Argentina, created a common market that ended a rivalry that had lasted

for generations. And all this happened under the umbrella of George H.W. Bushs active

policies toward Latin America. It was only when Washington started its retreat from the

region, in the mid-1990s, that rivalry between neighbors emerged again, as Dominguezsstatistics show.

After September 11, the Western Hemisphere has, indeed, been left alone. No one is

there anymore to exercise the political and economic pressure that, sometimes, is necessary

to restrict the behavior of those leaders who want to use their countrys foreign policy as a

vehicle to increase their popularity. Although harmful for themselves, the increasing levels

of rivalry among Latin American states should not necessarily represent a threat to U.S.

security, but what makes this a dangerous scenario is the role that China might play in

the region. If the American influence over the continent continues to decrease and Chinas

continues to rise, Latin American nations might eventually be ready to defy Washington

and break up the status quo by looking for the support of the PRC. But what rationale are

Latin American states going to use to decide if they are going to follow this path? And what

are they ultimately going to do?

If we take a look at the world map, we realize that China and Latin America do not

represent a serious threat to each other; both geographical distances and cultural differences

are great. This fact liberates Latin American leaders from having to consider security matters

when calculating the possible benefits of forming an alliance with the PRC. In effect, there

is a paradox in all this. The weakness of the Chinese armed forces, and, more specifically,

the incapacity of its navy to project military power by sea, provides an important advantage

to the Asian nation. Not concerned about the threat that it might pose, most Latin Americans

can focus on economic issues, such as investments and trade, where China has only positive

things to offer. On the other hand, and because of the proximity that exists among the statesthat form the Western Hemisphere, decisions regarding maintaining an alliance with the

U.S. will be based both on security and economic matters. Finally, another factor that


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should be considered when studying future alliances is the image the U.S. has among LatinAmericans. The lower the American image, the easier it will be for the Latin American

leaders to move away from the U.S. sphere of influence and approach China. We should

now analyze the situation of some specific states.

A Survey of the Continent

Everything seems to indicate that Mexico will remain a close ally of the U.S. Indeed, the

power gap that exists between these countries is simply too important for Mexico to even

consider the possibility of balancing American power. Washington would never allow for

the existence of a competitor that shares its borders; the risks of doing so would be too high.

Moreover, the Mexican economy is more compatible with the American economy than with

that of the Chinese. After the creation of NAFTA, Mexico has taken full advantage of its

proximity to the U.S. and now sends that market 87.6 percent of its total exports.

64

Finally,opinion polls in Mexico indicate that the population has a positive image of the U.S.an

approval ratingof 53 percentafact that would facilitate the continuation of an alliance with

Washington.65

As we move south in the continent things start becoming more complex. Venezuela,

for instance, is a unique case because of the strategic importance of its oil; in a world in

which the provision of energy has become a major concern it is reasonable to think that

Washington would never permit an oil producer located so close to its own borders to ever

form an alliance with a strategic competitor. Doing that would imply the possibility that,

one day, Caracas might decide to stop selling oil to the U.S. and hurt, in this way, the

American economy.66 Furthermore, Venezuelas lack of a strong military makes the power

gap between these two countries enormous. It should be expected, therefore, that Venezuelawill not establish an alliance with China. Future governments might continue providing

rhetorical condemnation to Washington, as Chavez does, but without any serious attempt

to balance the U.S.

Brazil was, throughout the twentieth century, one of the main allies the U.S. had

in Latin America. Brasilia not only accepted American predominance over the Western

Hemisphere but also participated at its side during the two world wars. Nevertheless, its

not clear whether this will continue to be the case. The main reason for this is that the

economic benefits Brazil currently obtains from maintaining close relations with the U.S.

might not be greater than those it could receive from establishing an alliance with China.

Brazilian producers compete both with the Chinese and the Americans in worldmarkets. This competition is so strong that Chinese firms have already taken important

markets away from the Brazilians due to the lower costs they face in the production of

manufacturesthey are now even penetrating Brazils own markets.67 Similarly, the U.S.

competes with Brazil in the production of agricultural goods. On the other side, China has

recently become a great consumer of Brazilian commodities, such as soybean and iron ore,

while the U.S. is Brazils main provider of foreign direct investment (FDI).

The level of threat potentially imposed by the U.S. to Brazil is intermediate. Brazil has

a relatively strong economy and a large population, something that makes it more capable

of resisting American pressure than the average Latin American state. Naturally, as Brazilis the most powerful state in South America, the other states in the area will pay special

attention to what this country decides to do and then choose their own alliances. Argentina,the second-most powerful state, for example, might try to balance Brazil by choosing as an

ally the global power that Brasilia does not select.


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32 F. de Santibanes

One of the most difficult cases to predict is that of Chile. Chiles economy has similardegrees of compatibility both with the U.S. and China, as the fact that they are, respectively,

its first and the third trade partners, shows. Political links with Washington and Beijing

also have been close: Chile was the first Latin American nation, after Cuba, to establish

diplomatic relations and then to sign an FTA with the PRC, but relations with Washingtonalso have been positive, as a U.S. approval rating of 57 percent demonstrates.

What, then, is Santiago going to do? The most probable scenario is that it will continue

the process of economic integration with the world that it started in the 1970s and that has

allowed it to growth at unusually high ratesChile has already signed FTAs with the U.S.,

China, and the European Union. This country likely will try, therefore, to avoid having

to choose among any of the great powers. A conflict between China and the U.S. might

endanger Chiles successful insertion in the world economy.

At the opposite extreme from Mexicos case, we find Argentina. The fact that this

state has historically tried to balance American power and the remarkable compatibility

that exists between its economy and that of China, but not that of the United States, makes

Argentina the best candidate to produce a strong alliance with Beijing. With a public

positive image of the United States of only 32 percent, Argentina is, by far, the nation that

feels the least sympathy toward the U.S. of those that have been analyzed in this study. This

animosity has its roots in Argentine history.

When the British Empire controlled most international commerce, Argentina became

one of the largest economies in the world. The country exported large amounts of com-

modities to the U.K. and received, in exchange, the capital its economy needed to continue

growing. During that time Buenos Aires also presented itself as the representative of Eu-

ropean interests in the Western Hemisphere, trying to resist any attempts made by the

U.S. to institutionalize its role as a regional hegemonArgentina, for instance, vetoed,

on numerous occasions, the creation of multilateral institutions similar to the OAS. Butwith the ascendancy of the United States as a world power, Argentina gained an economic

competitor and political rival. Both countries were, and remain until today, some of the

main exporters of agricultural commodities. Moreover, due to Argentinas neutrality dur-

ing World War II, Washington imposed strict economic sanctions that harmed Argentine

finances after the conflict.68 It was only during the 1990sand after decades of economic

declinethat Argentina decided to establish a strategic alliance with the U.S.; however,

recent administrations have moved away from the American sphere of influence, in part due

to the way Washington handled the financial crisis of 2001. In this sense, the new president

of Argentina, Cristina Kirchner, has taken decisive steps to side the country further away

from Washington. This could be observed, for instance, in the way Argentina supported

Ecuador during its recent conflict with Colombia.

While not presenting a serious threat to its security, the emergence of China as an

economic power represents a great opportunity for Argentina. Indeed, the remarkable

economic compatibility that exists between their economies is creating the basis for a

long-term partnership. Argentina is already exporting large amounts of commodities to

the PRCmainly soybeanswhile it is also an important producer of more sophisticated

products, such as wine and leather, that might be attractive to a China with an ever-higher

standard of living. Moreover, while Brazil is losing international markets due to Chinas

lower labor costs, Argentina does not seem to confront a similar challenge. The wages

Argentine workers receive have always been too high for this sector to become compet-

itive in the international markets. To sum up, there are not many reasons why the SouthAmerican country should remain under the umbrella of Washington and not move closer to

China.


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Conclusion

Trade flows and geographical factors seem to indicate that we are moving toward a Western

Hemisphere divided by two spheres of influence. The northern-region nations will most

likely remain strong allies with the U.S., while the states located at the Southern Conemight have the incentives to establish an alliance with China, largely due to the economic

benefits this partnership might provide. As some nations move toward China and others do

not, a similar situation to the one we saw during the Cold War, in which states supported

by one superpower confronted those that received the support of the other, might emerge.

But will a scenario like this necessarily harm the United States? There are, at least, three

ways by which this might take place.

First, the cost and difficulty of projecting military forces from other continents to the

United States would suffer a drastic reduction. Indeed, while at the present time any great

power that wants to land troops near American soil would have to pass through enormous

bodies of water controlled by the U.S. Navy, the existence of satellite states in Latin America

would facilitate that task enormously. This could eventually take place either by the foreignpower providing assistance to native forces or by power settling its own military bases in the

Hemisphere. Moreover, the American capacity to mobilize forces abroad could be harmed

if its lines of sea communications (SLOCs) become vulnerable to the action of Chinese

ships and submarines based in Latin America. Finally, Latin American states wishing to

develop WMD would not have to face the restrictions the American hegemon now imposes

on them. This scenario, however, does not need to become a reality if Washington chooses

the right policies.

What, then, should the U.S. do to prevent Latin American states from becoming allies

of China and breaking its hegemony over that region? First, it should recognize its past

mistakes. Since the end of the Cold War, American foreign policy has been too focused onMexico and has not paid enough attention to what has been taking place at the Southern

Cone. Strong commitments should then be made. The approval of the FTAA or the signing

of an FTA with Brazil and Argentina could reduce the present tendency that is showing

China to be a more important trade partner than the U.S. for many countries. Moreover,

political and military collaboration with these countries should also be strengthened, not

reduced, as is happening now. Reinvigorating political institutions to which China has no

access, such as the OAS and the Summit of the Americas, would do part of the job. Finally,the U.S. should increase and redirect the funding it provides to the area in a way that better

reflects its own interests, while making it clear to the Chinese that it will not accept eithertheir direct intervention in the domestic affairs of Latin America countries or the use of a

proxy state to do the same job.Without these changes, the United States might lose both its influence and ability

to settle disputes among Latin American states. If this happens, an increase in intrastate

conflicts could create the incentives for states to look to China as a provider of the military

and economic assistance they might need to resolve their own disputes. In exchange, Beijing

would gain strategic partners in its conflict with Washington. The Monroe Doctrine would

then become only an enunciation of distant wishes, just as it was almost two hundred years

ago.

Notes1. See extracts of the Monroe Doctrine in the U.S. Department of State Official Site,

http://usinfo.state.gov/usa/infousa/facts/democrac/50.htm.


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34 F. de Santibanes

2. During the decades that followed Monroes speech, the British fleet took care not to allow

any external powersincluding France and Spainto expand their territorial possessions in the

continent. With the SpanishAmerican war of 1898 and the Roosevelt Corollary to the Monroe

Doctrine of 1904, which stated that the U.S. had the right to intervene in Latin America, the U.S.

was able to take that task on itself. Dexter Perkins, A History of the Monroe Doctrine (Boston: LittleBrown, 1961).

3. Office of the President, The National Security Strategy of the United States of America,

March 2006, p. 37.

4. John Mearsheimer, The Tragedy of Great Power Politics (New York: Norton, 2001), pp.

238261.

5. Central Intelligence Agency, World Fact Book, 2006, http://www.cia.gov/cia/publications/

factbook/geos/ch.html#Econ, updated March 29, 2006.

6. U.S. Department of Defense, 2006 Quadrennial Defense Report, February 2006,

http://www.defenselink.mil/qdr/.

7. Andrew J. Nathan and Robert R. Ross, The Great Wall and the Empty Fortress: Chinas

Search for Security (New York & London: Norton & Company, 1997).

8. David E. Sanger, Chinas Big Need for Oil is High on US Agenda, The New York Times,19 April 2006, A1.

9. Office of the President, The National Security Strategy of the United States of America,

September 2002, and U.S. Department of Defenses Quadrennial Defense Review, February 2006,

pp. 2932.

10. Thomas Christensen, China, the U.S.Japan Alliance, and the Security Dilemma in East

Asia, in Michael E. Brown, et al., The Rise of China: An International Security Reader(Cambridge,

MA: MIT Press, 2000).

11. Zbigniew Brzezinksi and John J. Mearsheimer, Clash of Titans, Foreign Policy vol. 146

(Jan/Feb 2005): 5051.

12. Stephen M. Walt, Alliance Formation and the Balance of World Power, International

Security vol. 9, no. 4 (Spring 1985): 341.13. Stephen M. Walt, Testing Theories of Alliance Formation: The Case of Southwest Asia,

International Organization, vol. 42, no. 2, (Spring, 988): 281.

14. Walt, Alliance Formation: 811.

15. Walt, Testing Theories: 31415.

16. Charles P. Kindleberger, World Economic Primacy: 1500 to 1990 (Oxford: Oxford Uni-

versity Press, 1996), pp. 1453, and Charles P. Kindleberger, The World in Depression: 19291939

(Berkeley: University of California Press, 1973), chap. 14, An explanation of the 1929 Depression,

pp. 291308.

17. Paul R. Krugman and Maurice Obstfeld, International Economics: Theory and Practice

(Boston: Addison Wesley, 2003), pp. 1034.

18. UN Economic Commissionfor Latin America and the Caribbean (ECLAC),Latin American

and the Caribbean in the World Economy, 20042005 Trends, ECLAC Document, Sept. 2005, p. 155.19. Ibid., p. 152.

20. Ibid., p. 157.

21. Half of Chinas Overseas Investments Falls in Latin America, Peoples Daily Online,

January 7, 2005, http://english.peopledaily.com.cn/other/archive.html.

22. World Fact Book, 2006, http://www.cia.gov/cia/publications/factbook/geos/ch.html#Econ,

updated 29 March 2006.

23. See the chart in ECLAC, Latin America and the Caribbean, p. 151.

24. Jorge I. Dominguez, Chinas Relation with Latin America: Shared Gains, Asymmetric

Hopes, Inter-American Dialogue Working Paper(Washington, DC: Inter-American Dialogue, 2006),

p. 23.

25. Andres Oppenheimer, China Seeks Materials, Political Allies, Miami Herald,September 25, 2005, http://www.miami.com/mld/miamiherald/business/international/latin america/

12725748.htm.


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26. Testimony of General Bantz J. Craddock, Commander, U.S. Southern Command, hearing

of the House Armed Services Committee: Fiscal Year 2006 National Defense Authorization Budget

Request, March 9, 2005.

27. Venezuela Rejects US Concerns Regarding Arms Purchases, Associated Press, Septem-

ber 15, 2006.28. Anna Smolchenko, Russia, Argentina in Talks on Arms Deal, The Moscow Times, August

10, 2006.

29. Brazil and Argentina: IAEA Safeguard Accord, U.S. Department of State Dispatch, vol.

2, no. 51, 23 December 1991: 907.

30. The Clinton administration provided $20 of the $40 billion that formed the rescue package

the international community sent to Mexico in 1995.

31. Joseph E. Stiglitz, Globalization and its Discontents (New York: W.W. Norton & Company,

2002).

32. Argentine Presidents Rejects U.S. Threat of Trade Sanctions, BBC Worldwide Monitor-

ing, August 9, 2006.

33. Francis Fukuyama, America at the Crossroads: Democracy, Power, and the Neoconserva-

tive Legacy (New Heaven & London: Yale University Press, 2006), pp. 143144.34. Peter Hakim, Is Washington Losing Latin America? Foreign Affairs, vol. 85, no. 1

(Jan/Feb 2006): pp. 5152.

35. Juan Forero Chavez Uses Aid To Win Support in the Americas, The New York Times,

April 4, 2006, A1, A6.

36. US Planning Invasion, Says Chavez, BBC News, 20 November 2005,

http://news.bbc.co.uk/2/hi/americas/4359386.stm.

37. The World According to Chavez, Venezuela and the United States, The Economist,

September 30, 2006.

38. Todd Benson, Rumsfield, in Brazil, Criticizes Venezuela on Assault Rifles, The New York

Times, March 24, 2005.

39. Larry Rohter and Juan Forero, Venezuelas Leader Covets a Nuclear Energy Program,The New York Times, November 17, 2005, A14.

40. Juan Forero, Capture of Rebel Divides Latin American Neighbors, The New York Times,

January 23, 2005, A9.

41. US General Warns of Unfriendly Forces Brewing in Latin America, Agence France

Press, September 22, 2006.

42. Duncan Campbell, Network of Hugos Friends Links Politics from Mexico to Brazil,

The Guardian, May 6, 2006.

43. Bolivian President-Elect Criticizes Bush, US Policy in al-Jazeera Interview, BBC World-

wide Monitoring, December 27, 2005 and Jack Chang, Morales is Talking to the World State, The

Miami Herald, January 11, 2006.

44. Humphrey Hawksley, Chinas New Latin American Revolution, Financial Times, April

5, 2006, http://news.ft.com/cms/s/c06d4f3e-c43f-11da-bc52-0000779e2340.html.45. Mexico Seeks New Defense Treaty, BBC News, September 7, 2001, http://news.bbc.

co.uk/2/hi/americas/1531733.stm. The treaty can be read in http://www.oas.org/juridico/english/

Treaties/b-29.html.

46. Joel Brinkley and Larry Rohter, Chilean, Once Opposed by US is Elected Head of the

OAS, The New York Times, May 3, 2005, A5.

47. Hakim, Is Washington Losing, pp. 4243.

48. Langton, The Military Balance 2006, 303.

49. Duncan Campbell, Argentina and Uruguay Shun US Military Academy, Guardian, 6

April 2006, http://news.bbc.co.uk/2/hi/americas/2983703.stm

50. See the official site of the institution https://www.infantry.army.mil/whinsec/about.asp?

id=33


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36 F. de Santibanes

51. For the offer of the Ecuadorians to China, see El Ecuador Intensificara sus Relaciones

Comerciales con Asia,El Comercio, November 12, 2007. For Chavezs threats to Colombia, Chavez

Tells Colombia No to US Base, The Associated Press, May 15, 2008.

52. Ira Straus, Emerging Proliferation Threats in Latin America, National Interest vol. 77

(Fall 2004): 67.53. Larry Rohter, Gualeguaychu Journal: A Back-Fence Dispute Crosses an International

Border, The New York Times, February 13, 2006, A3.

54. Juan Forero, History Helps Explain Bolivias New Boldness, The New York Times, May

7, 2006.

55. Indeed, only one war has taken place between Latin American states in the last eighty

years: the one-month conflict between Ecuador and Peru in 1995. Still, it is not clear whether this

conflict had the number of deaths (one thousand) necessary for a dispute to qualify as a war. Some of

the major wars in Latin American history have been the Cisplatine War between Brazil and Argentina

(182528); the Triple Alliance War (Argentina, Brazil, and Uruguay against Paraguay, 186570); the

War of the Pacific (Chile against Peru and Bolivia, 187983) and the Chaco War (Bolivia against

Paraguay, 193235). For a history of these wars, see Miguel Angel Centeno, Blood and Debt: War

and the Nation State in Latin America (University Park: Pennsylvania State University Press, 2002).56. Bryce Wood, The United States and Latin America Wars, 193242 (NY: Columbia Uni-

versity Press, 1996), pp. 815.

57. Jorge Dominguez, David R. Mares, Manuel Orozco, David Scott Palmer, Francisco Rojas

Aravena, and Andres Serbin,Boundary Dispute in Latin America, Peaceworks vol. 50 (Washington,

DC: United States Institute of Peace, 2003): p. 25.

58. Dominguez, Boundary Dispute, p. 25.

59. Argentina took possession of the Malvinas in 1982 after claiming its sovereignty for 150

years. Then, the government of Margaret Thatcher sent a task force to retake them, and after two

months of war, it did so. For more information about the conflict see Lawrence Freedman, The Official

History of the Falklands Campaign 2 volumes, London: Routledge, Taylor and Francis Group, 2005).

60. Ibid., pp. 36061, 51011.61. Abraham Lowenthal, The Dominican Intervention (Cambridge: Harvard University Press,

1992).

62. Morgenthau, Politics Among Nations, pp. 1678.

63. Jorge I. Dominguez, The Future of Inter-American Relations: States, Challenges, and

Likely Responses in Jorge I. Dominguez, ed., The Future of Inter-American Relations, (New York:

Routledge, 2000), p. 13.

64. Central Intelligence Agency, World Fact Book 2006, http://www.cia.gov/cia/publications/

factbook/geos/mx.html.

65. For this and all other polls, see http://www.latin.barometro.org/

66. A sample of what could eventually happen took place in 2004, when a labor strike in

Venezuela disrupted the oil supply to the U.S., increasing gasoline prices. For an analysis of U.S.

dependency of Venezuelan oil, see Michelle Billing, The Venezuelan Oil Crisis, Foreign Affairs,vol. 83, no. 5 (Sept/Oct 2004): 27.

67. Falling Out of Love, The Economist, August 4, 2005, http://www.economist.com/

world/la/displayStory.cfm?story id=4249937.

68. Carlos Escude, US Political Desestabilization and Economic Boycott of Argentina During

the 1940s, in Guido Di Tella & Cameron Watt, eds., Argentina Between the Great Powers, 193946

(London: The MacMillon Press, 1989), pp. 6365.

comparative strategy - china in south cone

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