How should Latin America deal with Trump chaos?

In its last issue, the magazine ‘The Economist’ described the Commerce policyl of Trump as “the era of chaos” (The Age of Chaos). Actually, USA He has been turning against free trade since 2017, with the beginning of the first Trump administration, which raised Tariffs to China unilaterally and retired from Transpacific Agreement (TPP). It should be remembered that the then Democratic candidate, Hillary Clintonhe also opposed that agreement. Subsequently, the administration Biden He maintained that position and his advisors argued that free trade had not benefited the United States: He harmed the workers and favored his main geopolitical rival.

With Trump II, however, the changes have been even more drastic. United States’s commercial policy has become much more chaotic and inacdecible. Chaotic because it contradicts the International Order: Trump has no interest in respecting international commitments or multilateral institutions. Unpredictable because it is not clear if their decisions respond to trade deficitto the Rivalry with Chinaor other reasons; nor is it known how additional tariffs are calculated.

But there is an even more worrying novelty, The United States has decided to forget its allies. Already from the era Obama The intention of move to China In the commercial field, through initiatives such as TPP, which sought to establish rules before the Asian giant did. Biden, on the other hand, launched the Indo-Pacific Economic Framework for Prosperity (IPEF) and the American Partnership for Economic Prosperity (APEP), with the aim of building a new Commercial policy focused on prosperitybut with the intention also to separate China. These initiatives assured that the United States would not leave their allies aside. However, Trump II has broken with that premise. He has affected Canada, the European Union, the United Kingdom, Australiaits main allies.

In Latin America, Many countries have been affected by tariffs, even those with Free Trade Agreements (FTA) in force with the United States. In South America: Chile, Colombia and Peru; in Central America and the Caribbean: Costa Rica, Guatemala, Honduras, El Salvador, Dominican Republic, Panama and Nicaragua. In North America, of course, Mexico. Biden tried to include several of these countries in APEP and explore other ways to promote trade and investments. Trump, on the other hand, has completely ignored these efforts and tax Tariffs unilaterally.

What should these countries do and the rest of Latin American economies before this scenario?

For Trump’s statements and his officials, it seems that The United States expects countries to go to offer you something elseaddition to what has already been agreed in the FTAs ​​and consolidated in the WTO. That “something else” is not less. The negotiated, including tariff sales, intellectual property standards, services, technological transfer restrictions and investment protection.

However, the Latin American economies They should resist quickly give up these pressures. Of course, it is useful bilateral conversations To better understand the posture of the northern power, but offering concessions rapidly can be an error for at least three reasons: first, because Trump does not act according to the rule of law, but according to the Law of the strongestwhere power imposes its will without guarantees of compliance; second, because those who have negotiated trade agreements do not necessarily have the ability to evaluate geopolitical and strategic implications involved, which go far beyond commercial; And third, because many countries are facing similar challenges and more than one could benefit from Coordinated response.

In Latin America there are several countries that have FTA with the United States. Some have grouped into the Pacific Alliance and all held meetings within the framework of APEC. Except for the case of Mexico, due to its integration with the United States, none is in a special position. All, however, share a common objective: that the agreed is respected and that the region is recognized by their commercial and strategic weight.

More than redefining its negotiation strategy, the region needs balance relative power and raise the cost of breach For the United States. That is why it is essential that countries with FTA – and ideally – coordinate their answer. The same should do the representatives of the private sector, not only to reinforce the position of their delegations, but also to mobilize their commercial networks and allies within the United States.

In a chaotic environment, like a jungle, the strongest win. Especially if the weak act separately. Latin American countries with TLC have Block negotiating spaces: The Pacific Alliance is one, Apep is another, where Uruguay and Ecuador also participate.

The guideline is already marking the countries of the Southeast Asia That, although they have maintained bilateral dialogues, they have also coordinated responses and policies through ASEAN (Association of Nations of Southeast Asia). This Regional strategyalthough more expensive in the short term, it can be the best in the medium and long term. Especially if, as The Economist affirms, we have entered an era of chaos.