Chilean President, Michelle Bachelet and Argentine President, Mauricio Macri want greater economic integration across countries in Latin America

Prompted by Trump, Brexit and the rise of China, Argentina and Chile are working together to unite the two big regional blocs of Latin America – the Mercosur and the Pacific Alliance – according to La Nacion.

As the United States turns in on itself, Argentine President and current residing President of Mercosur, Mauricio Macri, and Chilean President and acting President of the Pacific Alliance, Michelle Bachelet, will meet in Santiago this Sunday to formalize plans for a special meeting of the two blocs, due to take place in April. 

Mercosur. Full members are Argentina, Brazil, Paraguay, Uruguay and Venezuela (which was suspended on December 1, 2016).
Mercosur. Full members are Argentina, Brazil, Paraguay, Uruguay and Venezuela (which was suspended on December 1, 2016).

 

According to analysts, this represents the two leaders’ attempts to not only increase economic integration across the region, but to also politely signal to the rest of the world the potential and power a united Latin America proposes. Figuring out an amicable position in regard to a protectionist United States and responding to the rise of China will also be topics of conversation, according to La Nacion.

This Sunday, President Macri, Foreign Minister, Susana Malcorra and Defense Minister, Julio Martínez will be greeted by Michelle Bachelet and her cabinet, as well as 300 other invitees in Santiago, as part of the bicentennial celebrations of the Battle of Chacabuco (a decisive moment in Chile’s fight for independence). It is expected that the two countries will use the opportunity to officially summon the various countries of the Mercosur and the Pacific Alliance – made up of economic powerhouse México, along with Chile, Colombia and Perú – to meet in Buenos Aires in early April.

The Pacific Alliance trade bloc, made up of Chile, Colombia, Mexico and Peru

From the Argentine perspective, it’s the latest in a series of actions that President Macri has taken to strengthen ties with his Latin American neighbors. While the first phase of his Presidency focused on wooing the United States, changing political tides have dampened those dreams, prompting him to step up his pro-trade agenda further down south. Earlier this week, Macri travelled to Brasilia to meet with his Brazilian counterpart, Michel Temer, where both men signed a series of minor agreements and spoke publicly about the importance of Argentina and Brazil strengthening commercial ties. They also agreed it was important to bring the Pacific Alliance and Mercosur trade blocs together, according to Brazilian newspaper, O Globo.

Macri has also reportedly been courting Mexico, according to TN. Hours before he departed to Brazil, he spoke on the phone with Mexican President, Enrique Peña Nieto, reportedly lending his sympathy and solidarity to Mexico in the wake of the United State’s repeated hostility to the Mexican people. Then, when in Brazil, Macri emphasised the importance of strengthening relations with Mexico, the second biggest economy in Latin America behind Brazil, according to El Financiero.

President Macri with Mexican President, Enrique Peña Nieto. Photo via TN.
President Macri with Mexican President, Enrique Peña Nieto. Photo via TN.

“With the Pacific Alliance we have the opening of an important opportunity, as we do with Mexico,” said Macri in Brazil.

Sunday’s encounter would appear to be the next step in this pro-market charm offensive. What will be on the agenda?

United States

One aim of the countries will be to figure out a coordinated response to a new closed-in United States. Once known as “America’s backyard,” Latin America seems to have been displaced to the other side of the picket-fenced wall. In this context, “the intention of the chancellor’s meeting [set for April] is to give a strong display of the power that Latin America will have with both regional blocs unified,” according to Martín Dinatale in La Nacion.

Flashes of Patria Grande, or the dream of an economically and politically independent South America ‘free’ from ‘North American imperialism’?

Neither, not exactly at least. According to La Nacion’s sources, an “important official allied with Macri” has clarified that “this is not about forming a front against the United States or anything that looks like Bolivarianism (a reference to last decade’s alliance between what many describe as the “populist leftist” governments of Ecuador, Venezuela, Argentina and Bolivia, inspired by Simón Bolívar’s dream of a united South America.)

Instead, it’s about finding an “intermediate position“: flexing muscle without courting conflict with the powerful neighbor to the north.

Diplomacy is shaking hands. President Macri with China’s President Xi Jinping
Diplomacy is shaking hands. President Macri with China’s President Xi Jinping

China

Another topic of interest is China, which has been moving to fill the vacuum left by the United States since it upped and left Planet Earth. Last November, for instance, shortly after the election of Trump, President Xi Jinping spent a week in Latin America praising the Asia-Pacific free trade deal, and —  according to Luke Patey in Foreign Affairs Magazine – attempting to “expand on China’s growing economic and political influence in Latin America.”

This would represent an intensification of what is already a big trend. According to Daniel Capurro in the Telegraph, bilateral trade between China and Latin America grew 2,400 per cent between 2000 and 2013. It is a relationship that is evolving, as China goes beyond just buying Latin America’s commodities and inserting itself into big infrastructure projects, like the two new nuclear power plants in Argentina, financed by Chinese banks. 

Many believe China is keen to capitalize on the US-withdrawal from the TPP deal, a free trade deal between 12 Pacific Rim countries, including Mexico, Peru and Colombia, that was all but killed by President Trump when he pulled out of it during his first week in office. Chile, who has signalled it is keen to continue pursuing free trade deals with Pacific Rim countries, will be hosting discussions between the remaining countries in Viña del Mar the 14 and 15 of March, and China will be in attendance. It is expected that the exact nature of the relationship between China and Latin America will be better fleshed out there.

Does the future of Latin America belong to China? We’ll have to wait and see.