WASHINGTON – President Joe Biden is trying to increase trade with Latin America, meeting on Thursday with the heads of the Dominican Republic and Chile as part of a broader effort to disrupt China’s dominance in global manufacturing.
“There’s really is no reason why this hemisphere shouldn’t be the most prosperous Democratic hemisphere in the world,” Biden told Chilean President Gabriel Boric Font. “We have all the makings of that.”
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The U.S. president on Friday will welcome national leaders from across the Western Hemisphere for the first Americas Partnership for Economic Prosperity Leaders’ Summit. The event was announced last year at the Summit of the Americas in Los Angeles as Biden has made it a priority to expand U.S. alliances to counter competitors such as China and rivals such as Russia.
“The Dominican people are your friends. The Dominican people are your allies,” Dominican President Luis Abinader told Biden in the Oval Office.
Chilean President Boric said he would discuss migration and development issues with Biden, saying that they both shared the goals of “respecting human rights and fighting for democracy.”
Treasury Secretary Janet Yellen outlined the Biden administration's goals in a Thursday speech at the Inter-American Development Bank. The U.S. wants to diversify supply chains with "trusted partners and allies," a strategy that she said had “tremendous potential benefits for fueling growth in Latin America and the Caribbean."
Yellen, who regularly talks about her “friendshoring” strategy for increasing supply chain resilience by working primarily with friendly nations as opposed to geopolitical rivals like China, laid out her vision of new U.S. investment in South America at the development bank on Thursday.
Latin American businesses “will increasingly have the chance to lead in new areas of clean energy, for example, helping create vertical supply chains by using locally extracted lithium in local battery production,” Yellen said.
“Medical equipment and pharmaceutical companies can grow and innovate to meet increased demand,” Yellen said, and skilled workers can produce automotive chips necessary for electric vehicles.
The Inter-American Development Bank, which is the biggest multilateral lender to Latin America, would support new projects through grants, lending and new programs. The U.S. is the bank's largest shareholder, with 30% of voting rights.
Increasingly, policymakers in the U.S. have expressed concern about China's influence at the bank. While the Asian superpower holds less than 0.1% voting rights, it holds large economic stakes in some of the 48 member countries of the bank.
In 2022, Latin American and Caribbean trade with China rose to record levels, exporting roughly $184 billion in goods to China and importing an estimated $265 billion in goods, according to a Boston University Global Development Policy Center analysis.
And diplomatic relations between Latin America and China have also increased. In March, Honduras cut diplomatic ties with Taiwan in favor of China, following the steps of El Salvador, Nicaragua, Panama and the Dominican Republic in turning their backs on Taiwan. China claims Taiwan as its own territory and has been increasingly sending ships and warplanes across the Taiwan Strait in an effort to intimidate the population of 23 million, who strongly favor the status quo of de-facto independence.
The IDB's president, Ilan Goldfajn, told The Associated Press that the U.S. is still a most influential member of the bank.
“Whenever we have a U.S. company in the bidding process, the probability of winning is 70 to 80%," he said. "So what we need is more U.S. companies involved. But if you’re not involved, this opens the door for anybody” to invest in Latin America.
U.S. lawmakers this year proposed the Inter-American Development Bank Transparency Act, which would require the Treasury Department to issue a report every two years on the scope and scale of Chinese influence and involvement in all aspects of the bank, including a list of Chinese-funded projects and an action plan for the U.S. to reduce Chinese involvement at the bank. The bill has not moved out of committee.
Latin America will be a region of increased focus in the next year, as Brazil takes the presidency of the Group of 20 international forum.
A Treasury official told the AP that Yellen will be traveling frequently to South America and Latin America over the next year, due to Brazil's G-20 presidency.