Biden reframes cooperation with Latin America: APEA, between promise and reality

The Alliance for Economic Prosperity in the Americas (APEA) is the Biden Administration's initiative for cooperation with the rest of the Western Hemisphere. Through it, the United States aims to help address the economic challenges of its neighbors, while countering Chinese influence in the region. However, the lack of concrete trade incentives, the absence of players core topic such as Brazil and Argentina, and the lack of strategic definition at the first summit raise doubts about its effectiveness. instructions Although it may not achieve its desired objectives, APEA is perceived as a valuable starting point that could set the stage for future U.S.-led initiatives that better match the aspirations of Latin American countries.

The Economic Prosperity Partnership of the Americas was announced on June 8, 2022 by President Biden at the Summit of the Americas, where he presented it as a legitimate step in building a true and substantive alliance with trusted trading partners in the Western Hemisphere. On January 27, 2023, the member countries signed a joint declaration for the implementation of the initiative. In addition to the United States, they are Barbados, Canada, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, Mexico, Panama, Peru and Uruguay.

With the creation of APEA (known in English as the Americas Partnership for Economic Prosperity, with the acronym APEP), the United States aims to develop a platform that establishes its influence in the continent, through a regional collaboration capable of addressing economic challenges, including recovery from the AIDS-19 pandemic and progress towards more inclusive and sustainable growth, according to official documents.

Previous U.S. attempts to increase its influence in the Western Hemisphere through the creation of a broad free trade zone failed, mainly due to the lack of a general political agreement in the region (the United States has agreements with its North American neighbors and with Central America, as well as with Chile, Peru and Colombia, but there is no continental agreement ). Thus, the Alliance for Economic Prosperity of the Americas emerges as a solution to promote Washington's economic cooperation with the American continent, attracting for the time being those countries willing to a greater commercial interaction, although without reaching the stage of free trade (the government of Uruguay has seen it as a step in that direction, at least bilaterally).

One of the main objectives of the alliance is based on the U.S. claim to act as a counterweight to China's growing influence in Latin America and the Caribbean (twenty-one states in the region are members of China's 'One Belt, One Road' initiative; four have already concluded free trade agreements with China), where it has established itself as the second largest trading partner . Along these lines, APEA aims to offer the Caribbean and Latin American states tangible economic reasons to reduce their dependence on Beijing. In addition, APEA promotes the implementation of multiple infrastructure projects and development, with more sustainable approaches than those promoted by China.

Joe Biden himself recently stated that the alliance aims to ensure that the United States' closest neighbors know that they can choose between 'debt trap' diplomacy (at reference letter to the indebtedness that some countries achieve with China by being at the mercy of this power) and high-quality, transparent approachesat subject for infrastructure and development.

Pillars of APEA

Unlike previous attempts at cooperation promoted by Washington, APEA envisages few trade liberalization mechanisms and structures its action around five thematic pillars: i) revitalizing regional economic institutions and mobilizing investment; ii) strengthening regional supply chains; iii) update basic negotiation between states; iv) creating jobs around clean energy and advancing decarbonization and biodiversity; and v) ensuring sustainable and inclusive trade.

These pillars outline an ambitious vision for sustainable development and regional collaboration. They not only respond to immediate challenges, such as post-pandemic recovery, but also lay the groundwork instructions for a more robust and equitable future in the hemisphere. Cooperation on governance, sustainability and inclusive trade has the potential to catalyze significant change, strengthening economic resilience and promoting a development that benefits the entire region.

In turn, the alliance is intended to serve as an example to other Latin American and Caribbean states, setting the high standards that both the United States and the other member states expect as a prerequisite for closer economic ties.

In the post-pandemic period, strengthening regional supply chains has emerged as a priority goal for the United States. This strategic approach seeks to mitigate the region's critical dependence on Chinese supply chains, with the intention of reducing Asian influence in the Americas. The consolidation of these regional chains not only seeks to diversify sources of supply, but also to reduce the vulnerability of states to global shocks, as well as to prevent possible economic or military threats. This shift from approach reflects the need to strengthen economic resilience and national security in a geopolitical environment characterized by global interconnectedness and volatility.

Effectiveness of APEA

Although APEA promises to be a leading initiative under the direction of the White House for future economic development and social cohesion in the continent, many Latin American governments remain skeptical of a 'Made in America' regional strategy. The name itself has recurring terms and may reflect a certain inertia: Alliance for Progress was the first major proposal of this subject, launched by John Kennedy in the early 1960s (then to undermine the influence of the USSR and international communism).

Previous regional initiatives signed by Washington, such as Barack Obama's Alliance for Prosperity in the Northern Triangle or Donald Trump's America Grows, failed to propose trade incentives that add value to Latin American products and eliminate barriers that, although limited, hinder exports from the region. These are challenges that APEA must face if it is not to perish like previous projects.

It could be argued that the current eleven states that, together with the United States, are part of the alliance have decided to participate more out of fear of missing out on a potential opportunity than because they are convinced of its future effectiveness. Being part of the negotiating table at a reduced opportunity cost offers more advantages than staying on the sidelines.

The absence of Brazil, Argentina and other countries -the Community of Latin American and Caribbean States (CELAC) is made up of 33 states- shows that APEA's project still has some way to go to reach a significant volume of resources and partners that would allow the alliance to generate a real impact in the region. In addition to the lack of members and resources, the fact that, with the exception of Uruguay (and the minor case of Barbados), the alliance only includes states with which Washington has already reached free trade agreements, shows the current ineffectiveness of APEA to define a strategic context for the Americas. In the words of Janet Yellen, administrative assistant of the U.S. Treasury, APEA is nothing more than an example of 'friednshoring' by the White House.

With presidential elections just around the corner, the Biden Administration is unlikely to place special emphasis on implementing agreements on the APEA framework : any advantage Washington can offer to other nations on subject trade easily leads to political controversy on the congress, because of the alleged risk of economic dislocation and losses of employment in the United States. Electorally, the White House's attention to the Latin American neighborhood is more tied to immigration issues.

The first APEA summit, held on November 3 in Washington, D.C., focused on semiconductor production, medical equipment and clean energy as drivers of dialogue. The U.S. organization pointed to an even looser framework than previously established to define the direction of the alliance during the summit, without actually defining concrete strategies or courses of action. Although a series of symposia bringing together regional semiconductor stakeholders to discuss joint development opportunities was agreed upon, the lack of definition and operationalization continues to be a constant tone in the development of the alliance. After the first summit, the general feeling among the countries that attended the meeting is to stand by to observe and evaluate the development that APEA can have.

The moderate participation of Latin American and Caribbean states and the limited funds allocated to the alliance, together with a limited strategic ambition to make APEA an engine of change in the hemisphere, suggest that the desired objectives may not be achieved. In any case, it constitutes an interesting starting point; its viability lies between a commitment as generous and selfless as the United States is willing to assume, and an honest and non-ideologically conditioned partnership on the part of the other American nations.