Latin America Between a Rock and a Hard Place: A Second Cold War and the Active Non-Alignment Option
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Global Policy, October 2020
Latin America Between a Rock and a Hard Place: A
Second Cold War and the Active Non-Alignment Option
Carlos Fortín, Jorge Heine and Carlos Ominami
Emerging Global Governance
The COVID-19 pandemic has brought to the Although it may last a couple of years, this
fore the helplessness of a fragmented Latin pandemic will eventually pass. What will not
America, unable to cope with global pass is the helplessness of a fragmented
challenges. Although the virus took time to region that finds itself in its weakest position
reach the region, once it arrived, it did so in many decades. Far from reducing
with a vengeance. It triggered a chaotic international tensions, the pandemic has
response, with each country haphazardly exacerbated geopolitical rivalry. It has also
acting on its own. Borders were closed given a strong boost to a Second Cold War,
overnight, tens of thousands of travelers this time between the United States and
were left stranded, governments competed China. While US authorities talked about the
for medical equipment, and almost no inter- "Chinese virus," and the "Wuhan virus," a
governmental coordination took place on an Chinese foreign ministry spokesperson
issue that, by definition, transcends national suggested that the virus might have been
borders. In September of 2020, with 8 per generated by the United States. Washington
cent of the world’s population, Latin America has expelled numerous Chinese journalists
had 30 per cent of world’s fatalities from the from the United States, an action Beijing has
pandemic. reciprocated. Several bills have been
introduced in the United States Senate to
That shouldn't have been the case. A decade
restrict trade, investment and scientific
ago, there were regional cooperation
research and student flows with China.
agreements on health under the Unión de
Naciones Suramericanas (UNASUR) and the What will the impact of a Second Cold War
Mercado Común del Sur (MERCOSUR, which be on Latin America?
could have helped alleviate the impact of this
Will we see a repeat performance of what
crisis, the largest that humanity has
happened in the four decades of the first
experienced since World War II, according to
Cold War, in which the lack of regional unity
United Nations Secretary-General Antonio
and collective action left it at the mercy of
Guterres.
the two superpowers of the time, paying a
1Global Policy, October 2020
very high price for it ? Or is it that, seventy Warren and Senate Minority Leader Chuck
years later, these countries, now presumably Schumer, favor an even tougher policy
more mature and developed, can manage toward China. Those who believe that the
their own affairs without being manipulated election of a Democrat to the presidency in
by others ? What should they do to achieve the November election would bring about a
this goal? drastic change in US-Chinese relations are
wrong. According to a Pew Research survey,
The purpose of this essay is to answer that
the perception of China in U.S. public opinion
question, perhaps the most important
has deteriorated in recent years. While in
facing the region today. The first section
2017, 47 per cent had a unfavorable opinion
below examines what is triggering the
of China and 44 per cent an favourable one,
Second Cold War; the second outlines why
in 2020, these figures had changed to 73 per
this puts Latin America at a crossroads; the
cent and 22 percent respectively. Focus
third proposes active non-alignment as the
groups consulted by Democratic candidates
sensible global policy option; and the fourth
report anti-China positions are popular. A
elaborates on what this would entail, in
Harris poll in early April 2020 showed that 66
terms of policy recommendation, and
per cent of Republicans and 38 per cent of
provides some brief concluding thoughts.
Democrats are in favor of Trump adopting an
A movie we have already seen even tougher policy against China on trade.
During a visit to the United Kingdom in On the other hand, the increased
February of 2020, US Secretary of State Mike concentration of power held by President Xi
Pompeo remarked that "the Chinese Jinping in China, the nationalist positions
Communist Party is the central threat of our taken by China under his leadership, and
time." The phrase, uttered only a few weeks China's more assertive foreign policy in
after the United States signed an agreement recent years makes it difficult for the Chinese
with China that seemed to signal a truce in government to accommodate Washington's
the trade war they have waged since 2018, growing demands. The more personalized
reflects the extent to which tensions leadership style of Xi Jinping (in contrast to
between Washington and Beijing are no the collective leadership exercised by Jiang
longer just about trade. They have moved Zemin (1992-2002) and Hu Jintao (2002-
from trade to foreign investment, 2012), means he cannot ignore the very same
technology, and cyber and espionage, as the nationalist embers he has stoked.
United States ordered the closing of the
We are at the dawn of a Second Cold War,
Chinese consulate in Houston in July of 2020,
this time not between the United States and
which was reciprocated by China ordering
the Soviet Union, but between the United
the closure of the US consulate in Chengdu.
States and the People's Republic of China. In
This downhill course in US-China links is not this new version, the year 2020 is the
just due to President Trump's idiosyncrasies equivalent of 1950.
or personal preferences. If there is one
That said, there are at least two differences
aspect of US foreign policy that garners
between the current situation and the one
bipartisan support, it is China. Democratic
seventy years ago. On the one hand, China's
Party leaders, such as Senator Elizabeth
12Global Policy, October 2020
economy is much larger than the Soviet has relied too much on U.S. investment and
economy ever was. In fact, China's economy technology. The Chinese leadership is putting
is already larger than the US economy in more emphasis on developing China’s own
terms of purchasing power parity. Projections scientific and technological capacities, as well
indicate that it will be larger than the US as on indigenous innovation, and seeking to
economy in nominal terms by about 2030. reduce reliance on the United States and
On the other hand, in a globalized world, Western suppliers amid more “hostile
both economies are much more imbricated external world conditions.” They are also
than the American and Soviet economies calling for boosting growth based on
ever were. In 2018, bilateral trade exceeded domestic consumption, more than on
US$700 billion, and mutual investments in exports, long the engine of the Chinese
both countries are also very significant, in the economy.
hundreds of billions of dollars. Apple, the
Latin America at a crossroads
world's most valuable company, with a
market capitalization of US$2 trillion, This is the international scenario that
manufactures much of its flagship product, confronts Latin America at the start of this
the iPhone, in China. new decade. From 2010-2019, the region's
growth did not exceed an average of 1.9%
In technology, China has made great strides.
per annum, the worst of any region in the
Although the United States holds the lead in
world (Africa achieved 4.4 per cent growth
many areas of high-tech, including the
during the same period). This performance in
production of chips, China is at the forefront
Latin America was even lower than that of
of telecommunications with 5G technology,
the so-called "lost decade" of the 1980s. In
leading Washington to an international
2019 it grew a mere 0.8. Given the impact of
campaign to ban its deployment by Huawei, a
the pandemic, projections for 2020 are of a
Chinese company. In its approach to global
negative growth of 9 per cent, the worst
trade governance, the Trump administration
performance of any developing region.
has taken a protectionist and isolationist
stance, hand in hand with the application of From a broader global perspective, the most
unilateral trade sanctions and embargoes, to significant fact regarding the region´s
the detriment of the liberal international international political economy in the new
order it once championed. This has left China century, has been the increased presence of
in the curious position of defender of global China. Today, China is South America's
economic multilateralism and rules-based leading trading partner, having displaced the
resolution of differences between nations. United States and the EU. Trade between
China and Latin America grew rapidly, from
One proposal on the table in the United
$10 billion in 2000 to $310 billion in 2018.
States has been the “decoupling” of the two
Something similar can be said about Chinese
economies. This means discouraging and
investments in the region since 2010, and the
reducing trade, investment and even the
financial flows from Chinese banks, which in
flows of people between the two countries
some years have been higher than those of
(which in January 2020 reached 10,000
the World Bank, IMF, the Inter-American
people daily). But conditions have worsened
Development Bank and the Corporation of
as China’s leaders have concluded that China
13Global Policy, October 2020
Andean Development (CAF) combined. For of “mask diplomacy” activities in the wake of
Argentina, Brazil, Chile, Peru, and Uruguay, the COVID-19 pandemic.
China is its number one trading partner, and
This puts the region between a rock and a
for most other South American countries, it is
hard place. The relationship with the United
number two.
States, part of the Western Hemisphere and
Since 2017, three Latin American countries the world's hegemon, is of long-standing and
(Panama, Dominican Republic, and El reflected in close ties along many
Salvador) have broken diplomatic ties with dimensions. If there is one thing these
Taiwan and established diplomatic relations countries cannot do, it is to break up with
with the People's Republic of China. Nineteen Washington. At the same time, relations with
countries in the region have signed China, while much more recent, and focused
Memoranda de Understanding on the Belt mainly on economics, have become crucial to
and Road Initiative, China's flagship foreign the region’s foreign trade, its economies, its
policy project under Xi Jinping. Eight South infrastructure and energy sector
American countries have joined the Beijing- development. A quarter of the agricultural
based Asian Investment and Infrastructure products that China imports come from four
Bank (AIIB) -- although only Ecuador and Southern Cone countries (Argentina, Brazil,
Uruguay have fulfilled the requirements to Chile and Uruguay). China is the largest
become full members. investor in the mining sector in Peru and the
largest buyer of copper, iron, oil and
But conditions have changed under the
soybeans in South America. The region's
Trump presidency. Although the Chinese
boom between 2003-2013, during the
presence in the region was tolerated by
commodities super-cycle was largely due to
Washington during President Obama's
Chinese demand. Breaking up with Beijing is
administration, this has changed under the
also a no-no.
Trump administration. Visits by the US
Secretary of State and the Secretary of What is to be done?
Defense to various countries in the region to
Active Non-Alignment as the Option
denounce the Chinese presence are now the
rule. Washington's message is that the In the 1950s, at the beginning of the First
traditional position of Latin American foreign Cold War, countries in Africa, Asia and Latin
ministries, of wanting to have good relations America faced a similar dilemma. Stuck then
both with the United States and China, is with a choice between Washington and
unacceptable, and that the time has come to Moscow, some opted for a "third way." A
choose between Washington and Beijing. For total of 29 heads of state from Asia and
Washington, Latin America must align itself Africa met at the Bandung conference in
with its positions, restrict trade with China, 1955, in Indonesia, under the leadership of
and not accept any further Chinese President Sukarno of Indonesia, Jawaharlal
investment. China, for its part, has increased Nehru of India, China’s Prime Minister Zhou
its charm offensive in the region, with Enlai, and Gamal Abdel Nasser of Egypt. This
initiatives such as the China-Community of meeting led to the founding of the Non-
Latin American and Caribbean States (CELAC) Aligned Movement (NAM), as formally
Ministerial Forum, and an ambitious program announced at its First Summit in Belgrade.
14Global Policy, October 2020
The NAM led to subsequent related entities, the North or the advanced Western nations,
such as the Group of 77 in the United the diplomacy of the cahier des doleances
Nations, which is still active today, albeit with practiced by the NAM and related entities,
a lower profile. An English sociologist, Peter with proposals such as the New International
Worsley, taking a page from the role played Economic Order (NOEI) in the 1970s,
by the so-called Third Estate in the French demanding massive transfers of resources
Revolution, would later baptize these from North to South, were futile exercises
countries as the “Third World”, with the First that showed little understanding of how the
being that of developed countries, and the world economy works.
Second that of the socialist camp.
Yet, there is little doubt that for more than
NAM did not have the same regional-wide three decades, the non-aligned movement
buy-in in Latin America as it did in Africa and was seen by its proponents as an alternative
Asia, though there were exceptions. Cuba to automatic subordination, whether to
was the one country in the region present at Washington or Moscow, and provided a
the Belgrade Summit. It also hosted the 1979 valuable platform for developing countries to
and 2006 summits. Chile joined in 1971, but represent their own interests. It played a key
was suspended after the coup d'etat in 1973, role in pressing for the decolonization agenda
and it resumed its membership in 1991. In in Africa, Asia, and the Caribbean. It allowed
Argentina, which joined in 1973, Juan for the creation of differing international
Domingo Perón saw it as providing a coalitions of various kinds, as well as for a
benchmark for Argentine foreign policy, rationale for meeting for countries on three
alluding to the traditional Peronist "third very different continents. Its basic principles,
position". However, in 1991, during the the “ten principles of Bandung”, including
government of Juan Carlos Menem, support for the independence and autonomy
Argentina withdrew from the Movement. of developing countries, the United Nations,
Colombia, in turn, chaired it from 1995-1998. defending the principle of non-intervention
Venezuela hosted the NAM summit in 2012. and the peaceful resolution of disputes,
Brazil and Mexico have had an ambivalent remain current, even if their economic
attitude toward NAM, and participated as demands no longer do.
observers, but never joined as full members.
At a time when a new Cold War is beginning,
As of 2020, 14 Latin American and 13
when Latin American regionalism is going
Caribbean countries are members of NAM,
through a deep crisis, and when the region’s
which now has 117 member countries.
ministries of foreign affairs have no answers
However, the three largest countries in the
on how to deal with this geopolitical
region, Argentina, Brazil and Mexico, are not
dilemma, a policy of active non-alignment
members of NAM.
should be considered.
The NAM has received its fair share of
Do not get us wrong. This is not a question of
criticism. According to the skeptics, non-
resurrecting anachronistic foreign policy
alignment was merely a thinly veiled disguise
approaches. On the contrary, we are
for countries like Nehru’s India and Castro’s
proposing an up-to-date alternative, attuned
Cuba, that were allegedly nothing but Soviet
to the imperatives of the new century. The
fellow travelers. For other critics, often from
15Global Policy, October 2020
key notion is to maximize the benefits for the disintegration and a concomitant reduction
region’s integration into international trade, in the ability to influence global affairs.
investment and financing flows, but also to
preserve policy space and policy instruments CELAC, whose pro tempore presidency has
that allow the countries of the region to been taken over by Mexico, in a
define and implement their own national commendable effort to rescue it from
development models. In turn, such an oblivion, is the most inclusive of these
approach should also help to build a entities. In January 2020, Mexico presented
democratic and inclusive international an ambitious work plan for the year at a
governance arrangements that combine meeting attended by 29 countries. It includes
global interdependence and national and 14 projects, including aerospace and
regional autonomy. aeronautical cooperation, natural resource
risk management, sustainable ocean
An agenda for active non-alignment
management, and an anti-corruption
In these terms, rather than trying to simply program. Mexico also called for the
“make do” with existing international resumption of joint initiatives in international
arrangements, Latin American countries organizations, as well as to strengthen
should realize the depth of the current crisis, contacts with extra-regional partners, such as
the degree to which the region risks being the European Union, China, India, Russia,
marginalized, and embrace a new approach Turkey and South Korea.
to their international relations. This should
include the following: However, CELAC's balance sheet over its first
decade is modest, and any effort in this
1) Strengthening regionalism. Right now,
direction must include all fronts, including
Latin America could hardly be more
Mercosur and the Pacific Alliance, and a
fragmented. Unasur has ceased to exist.
possible convergence between the two.
Mercosur is at its weakest moment in many
years. The newly created Prosur is little more
The de minimis approach to regional entities,
than a WhatsApp group. In times of major
with no budget and no permanent
change in the international order, this is a
secretariat, has been a failure, and should be
problem. To paraphrase Henry Kissinger, "If I
reconsidered. The notion, already part of
want to talk to Latin America, what number
conventional wisdom, that 33 countries, with
should I dial? ", does not have an obvious
a total population of 650 million people, are
answer. The great danger is that individual
unable to pay for any sort of regional body is
Latin American countries may seek ways, on
no longer credible.
their own, to deepen their integration with
the main centers of the world economy. The
2) Reorienting foreign policies: Despite
result may well be a subordinate integration
considerable changes in the global economy,
of some countries to the main world centers,
and the fact that South-South trade and
and permanently reproduce ad aeternum the
investment flows now make up about half of
current primary-export model. This would go
such global flows, Latin American foreign
hand in hand with deepening regional
ministries still seem trapped in a time warp.
The bulk of its budgetary, human and
16Global Policy, October 2020
administrative resources are allocated to its plan announced by President Trump in early
traditional partners of yesteryear, i.e. North 2020, designed to support the re-election of
America and Western Europe. Asia and Africa PM Benjamin Netanyahu of Israel, was
remain as an afterthought. A foreign policy profusely praised in statements from the
that gives priority to current realities is long ministries of foreign affairs of both Brazil and
overdue. Chile-- although the plan contradicts long-
standing policies followed by both countries
3) Grasping that there are new towards the Israeli-Palestinian conflict. The
international financial institutions. Few things fact that both countries lay claim to
better reflect the power of inertia and the traditions of independent and relatively
capture of the region's ministries of finance consistent foreign policies, and that by
by the World Bank and the IMF, than the fact undertaking such rash actions they merely
that of eight prospective members from the diminished their own standing and credibility,
region in the Asian Investment and only aggravates the problem.
Infrastructure Bank (AIIB), five years after
committing to join, only three have passed Something similar can be said in relation to
the required national legislation, and only Chinese policy on foreign investment and
two have paid their dues and are now full international cooperation issues. In
members: Ecuador and Uruguay. The December 2017, at the WTO, in Geneva,
amounts involved are nominal so it is not a China signed a Joint Ministerial Declaration
matter of resources. Refusing to be part of calling for "initiating structured discussions to
these new entities, despite the many develop a multilateral framework on
opportunities they offer, reflects an investment facilitation". China thus
anachronistic mindset, one fixed on the abandoned its traditional opposition to the
world as it was in 1945, rather than in 2020. inclusion of investment among WTO
Something similar could be said of the disciplines. The reality is that it is very
capitulation of a majority of the countries of difficult to separate the issue of investment
the region in the face of pressure from the facilitation from issues of investor access to
United States, to elect, in September of 2020, the domestic market and investment
for the first time since its inception in 1959 a protection. A possible facilitation agreement
U.S. citizen to the presidency of the Inter- could impair the ability of host nation-states
American Development Bank. This broke a to select foreign investors and investment
long-standing, albeit unwritten, agreement and could open the door to indiscriminate
that the head of the Bank would always be a liberalization of FDI flows and the
Latin American. It is part of the current White penetration of foreign capital into developing
House’s effort to exert full control over the economies. An active non-alignment
Bank to better harness its resources to keep approach should reiterate the opposition to
China and other extra-regional powers out of establishing international obligations that
the Western Hemisphere. deprive nation-States of the ability to select
and impose obligations on foreign investors.
4) Keeping an equal distance from both
Superpowers in fueling geopolitical and In turn, China has also been reluctant to
geoeconomic rivalry. The Middle East peace accept recipient requests to apply global aid
17Global Policy, October 2020
effectiveness measures to China’s aid, different situation from that of the Soviet
including agreeing to external third-party Union in its days. This is not a question of
evaluation, in other words to make its aid ideology. Conservative governments have as
subject to independent international review. much to lose as progressives or centrists. The
An active non-alignment approach should challenge lies in how to convey this message
underscore the importance of all aid-givers and how the region perceives the global
abiding to a universal and transparent challenge it now faces.
development cooperation mechanism, such
as the United Nations Forum on Cooperation
for Development, to assess the effects of
international development cooperation. Carlos Fortín is an Emeritus Fellow at the
Institute of Development Studies (IDS),
University of Sussex. He is a former UNCTAD
To conclude, the first Cold War had dire
Assistant Secretary General, and a former
consequences for Latin America, some of
Director of Research at the South Commission
which reverberate to this day. Guatemala in
in Geneva.
1954, Dominican Republic in 1965, Chile in
1973, Granada in 1983 and Panama in 1989,
Jorge Heine is a Research Professor at the
are just some of the most visible examples.
Frederick S. Pardee School of Global Studies,
Cuba continues to pay a high price.
Boston University. He has served as Chile’s
ambassador of Chile to China, to India and to
There is no reason to think that the Second
South Africa, and as a Cabinet minister.
Cold War would not have similar
consequences. The difference is that, this
Carlos Ominami is Director of the Chile 21
time, the economic stakes are much higher,
Foundation. He has served as Chile’s minister
given the size of the Chinese economy and its
of Economic Affairs, and as a Senator in the
considerable presence in the region, a very
Chilean Congress (1993-2009).
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