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An End to U.S. Hegemony? The Strategic
Implications of China's Growing Presence
in Latin America
Francisco De Santibaes
a
a
Department of War Studies, King's College, London, London, UK
Version of record first published: 10 Feb 2009.
To cite this article: Francisco De Santibaes (2009): An End to U.S. Hegemony? The Strategic
Implications of China's Growing Presence in Latin America, Comparative Strategy, 28:1, 17-36
To link to this article: http://dx.doi.org/10.1080/01495930802679728
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An End to U.S. Hegemony? The Strategic
Implications of Chinas Growing Presence
in Latin America
FRANCISCO DE SANTIBA

NES
Department of War Studies
Kings College, London
London, UK
The lack of attention that the United States is paying to Latin America, on the one
hand, and the growing levels of economic and political inuence China is gaining in
the Southern Cone, on the other, are increasing the number of disputes between states
and allowing governments to distance themselves fromWashington. This scenario might
allow Beijing to obtain new allies in its global competition with the U.S. and put an
end to the latters hegemony in the Western Hemisphereendangering, then, American
security. If the United States wants to avoid this, it will have to increase its links with
states 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 transformthe
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 themeven 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 inuence, 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 nancial 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 Santiba nes
of these policies were callpromoted free trade and the reception of investments from the
developed world. Fromthen on, decisions taken by the Federal Reserve Board could reduce,
just in a few hours, the ow 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 ofcials shows.
Meanwhile, distracted by the Iraq War and its ght 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 trafcking, 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 eld
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
nancial and military resources they might need to strengthen their positions. This scenario
would allowthe PRCto 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 inuence. 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 signicance of a region that, in recent years, consistently has been overlooked
by academics and policymakers alike. The more specic aims of this study are to analyze
how the developments explained above are affecting both regional security and American
long-term interests. The rst section discusses some of the literature in the eld 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 States
is 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 intervened
in 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 conict, to prevent Japan becoming the hegemon of the Asia-
Pacic. In the same way, the rst Gulf War can be interpreted as an effort by the Untied
States 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 conicts. 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 difcult region for U.S.Chinese relations is Asia. The rst 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 this
way, 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 conict. An action that might be defensive in its nature, such as
Chinas construction of a large submarine eet, 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 conict 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 eld of international relationsor, at
least, those who consider themselves realistshave thought about disputes among states in
terms 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 of
the 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 Santiba nes
during the nineteenth and twentieth centuries could be considered a classical example of
offshore 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 elaborate
a renement 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. Avery 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 signicant. 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 and
cultural proximity may allowa state to penetrate another states political systemand 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 states
in 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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Chinas Presence in Latin America 21
American pressure, those that are weakereither because of their poor economy or weak
militaryhave 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 benecial 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 rst 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 rules
of 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 modied; while some countries in the region are enjoying
remarkable 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 rst 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 those
same 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
The
international 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 Santiba nes
nations have concentrated their efforts on the goods for which they have a comparative
advantage.
The economies of China and those that are located in the Southern Cone of Latin
America are particularly compatible with each other; indeed, trade ows are now reecting
this fact. On the one hand, China has become a large exporter of manufactures to Latin
America 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 gures.
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 gure 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 rms 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 beneting
from Chinas new role in the world economy, their northern neighbors are confronting
important challenges. Mexican producers are suffering from competition with Chinese
rms 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 two
factors to be considered. First is the fact that the benets that come from trading and
receiving investments from the PRC might be opening a window of opportunity for Latin
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Chinas Presence in Latin America 23
Americans to end their historical dependence on Western markets. This new partnership
could, in effect, facilitate their movement away from the American sphere of inuence, 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 the
possibility 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 ofcial 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 uctuating 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 benets that come from dealing with the Asian
country. On the other hand, because of the more fundamental role that private rms play
in establishing economic relations with foreign states and individuals, Western leaders do
not have similar tools. To conclude, there are ways by which protable 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 conict 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 rst
term in ofce.
25
Moreover, General Bantz Craddock, Commander of U.S. Forces in Latin
America, testied 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 not
be 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 Santiba nes
might provide to its new allies could be enough for them to purchase rst-rate weapons
from 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 ghters and 53 helicopters and to establish a Kalashnikov factory to
produce assault ries and ammunition. General Craddock expressed his concerns that these
ries might, one day, end up in the hands of the Colombian guerillas.
27
Reports also indicate
that Argentina is currently negotiating its rst-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 inuence 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 ofcials
to 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. This
treaty, 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 been
running 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 difcult ght 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 rst time in Mexicos modern history. NAFTAalso
opened newmarkets to Mexican producers while importing scal and monetary institutions
that 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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Chinas Presence in Latin America 25
Nevertheless, the most dramatic change in U.S.Latin American relations happened
after September 11, 2001. With terrorist attacks having occurred on American soil, the
George W. Bush administration focused its attention on ghting 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 an
immediate 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 nancial crises.
While in 1994 the Clinton administration made every possible effort to provide Mexico with
the nancial 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 justication for this policy would be that the White House simply had a
different view of how to deal with nancial 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 nancial 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 benets of supporting the United States?
After the Argentine crisis criticismemerged about the nature of the scal and monetary
policies 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 scal 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 benets 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 specically, 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 nancial
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26 F. de Santiba nes
assistance to middle-income nations to gain their political support, the U.S. has chosen to
ignore its own interests and to focus only on the humanitarian aspects of assistance.
Aside froma fewminor 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 Americas
was 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 inuence 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 gure. 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 nance 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 expansionist
and 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 conict 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 followin 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 rst
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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Chinas Presence in Latin America 27
nations political systems for the rst time in history. These movements blame the U.S. for
having supported oppressive ruling classes, taken natural resources away from them, and
interfered in their countries domestic affairs. This viewis 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 inuence 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 rst time in the commissions history that an American
representative 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 frommost 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 that
kind of support. The Mexican armed forces, for example, have lost $3.6 billion in military
assistance since its government decided to join the ICCon October 2005.
48
In his testimony
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28 F. de Santiba nes
to the U.S. Senate, General Bantz Craddock stated that the newpolicy creates the incentives
for states to invite members of the Chinese military to provide the kind of training that they
used to receive fromthe 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 ofcers
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
the national assembly, that Ecuador would not renewan existing agreement with 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 signicant sign of U.S. lack of inuence 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 accusations
between these states, a d etente was nally reached, but the possibility of a military conict
is still present. To this dispute we have to add, among others, the recent conict 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 conict is the one that confronts
Bolivia and Chile. The Bolivian government has demanded fromChile the exit to the Pacic
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 conict 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 rst. 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 the
American hegemony would, however, be a simpler one.
The amount of power the United States needs to remain the hegemon in the Western
Hemisphereand 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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Chinas Presence in Latin America 29
other world power shows the willingness or capacity to challenge this reality, America will
remain 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 conicts 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 rst 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 nancial 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. inuencestronger 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 conicts 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 inuence and to avoid, in this way, military conicts.
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 conicts 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 nd a diplomatic solution to the dispute
and, 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
rst 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 nding a peaceful solution to the
conict that confronted Peru and Ecuador. The fact that no multilateral organization, such as
OAS, was actively involved in dampening this conictas 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 signicant. How autonomous could these institutions be from the hegemonic power
that proposed their creation in the rst 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 fromthe 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 took
place, 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 Santiba nes
in the invasion of other states (Panama in 1989 and Cuba in 1962), or to provide logistical
support 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 conicts 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 Dominguezs
statistics 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 inuence 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 fromhaving to consider security matters
when calculating the possible benets 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 specically,
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 states
that 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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Chinas Presence in Latin America 31
should be considered when studying future alliances is the image the U.S. has among Latin
Americans. The lower the American image, the easier it will be for the Latin American
leaders to move away from the U.S. sphere of inuence and approach China. We should
now analyze the situation of some specic 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 rating of 53 percenta fact 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 Venezuela
will 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 benets 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 world
markets. This competition is so strong that Chinese rms 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 Brazil
is 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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One of the most difcult cases to predict is that of Chile. Chiles economy has similar
degrees of compatibility both with the U.S. and China, as the fact that they are, respectively,
its rst and the third trade partners, shows. Political links with Washington and Beijing
also have been close: Chile was the rst Latin American nation, after Cuba, to establish
diplomatic relations and then to sign an FTA with the PRC, but relations with Washington
also 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 conict between China and the U.S. might
endanger Chiles successful insertion in the world economy.
At the opposite extreme from Mexicos case, we nd 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. But
with 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
nances after the conict.
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 fromthe American sphere of inuence, in part due
to the way Washington handled the nancial 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 conict 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 South
American country should remain under the umbrella of Washington and not move closer to
China.
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Chinas Presence in Latin America 33
Conclusion
Trade ows and geographical factors seem to indicate that we are moving toward a Western
Hemisphere divided by two spheres of inuence. The northern-region nations will most
likely remain strong allies with the U.S., while the states located at the Southern Cone
might have the incentives to establish an alliance with China, largely due to the economic
benets 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 difculty 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 foreign
power 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 on
Mexico 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
reects its own interests, while making it clear to the Chinese that it will not accept either
their 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 inuence and ability
to settle disputes among Latin American states. If this happens, an increase in intrastate
conicts 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 conict with Washington. The Monroe Doctrine would
then become only an enunciation of distant wishes, just as it was almost two hundred years
ago.
Notes
1. See extracts of the Monroe Doctrine in the U.S. Department of State Ofcial Site,
http://usinfo.state.gov/usa/infousa/facts/democrac/50.htm.
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2. During the decades that followed Monroes speech, the British eet 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: Little
Brown, 1961).
3. Ofce 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. Ofce 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. UNEconomic Commission for 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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Chinas Presence in Latin America 35
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 MoscowTimes, 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 (NewYork: 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, Rumseld, in Brazil, Criticizes Venezuela on Assault Ries, The NewYork
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, BBCWorld-
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 ofcial site of the institution https://www.infantry.army.mil/whinsec/about.asp?
id=33
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51. For the offer of the Ecuadorians to China, see El Ecuador Intensicara 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 conict between Ecuador and Peru in 1995. Still, it is not clear whether this
conict 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 Pacic (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 conict see Lawrence Freedman, The Ofcial
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.
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