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Thursday, March 4, 2021

March 04, 2021

Lucas Leiroz, research fellow in international law at the Federal University of Rio de Janeiro.

Once again, trade relations show that they are close to reaching the status of center of contemporary geopolitics. More and more, National States are adopting alliances and economic sanctions as ways of, respectively, approaching and combating other nations, with the current trade wars being something similar to what armed conflicts and military alliances have meant in the recent past. This time, a curious rapprochement between Central America and the Eurasian nations is arousing the interests of many experts and certainly disturbing Washington's plans.

The Eurasian Economic Commission (EEC) - an organization that regulates the common market comprising Russia, Armenia, Belarus, Kazakhstan, and Kyrgyzstan - and the Secretariat for Central American Economic Integration (SIECA in its Spanish acronym) - which promotes Central American regional economic integration - signed a memorandum of understanding aimed at intensifying ties between their respective countries, establishing as a goal to deepen economic ties and international cooperation.

The document was signed by EEC Minister for Integration and Macroeconomics, Sergey Glaziev, and SIECA Secretary General, Melvin Redondo. Among the highlights of the agreement, we can mention the mutual commitment to work towards the elimination of economic and commercial obstacles, which will certainly be considered in the future to review tax and tariff issues in trade between these regions. It is expected that from now on, Central America and Eurasia will come closer and closer in order to relax their regulatory rules to facilitate common trade.

In addition to mere economic ties, another point discussed among the diplomats involved in the agreement is the issue of medical cooperation. The first secretary of the Russian Embassy in Guatemala (the Central American country most involved in the negotiations) emphasized the importance of medical diplomacy for the region to recover as quickly as possible from the effects of the pandemic. It was also highlighted that bilateral cooperation has already led to excellent results, such as, for example, Mechnikov Latin American Institute of Biotechnology, currently operating in Nicaragua. The institute acts as a vaccine and medicine factory using Russian technology, being a promising project for a possible vaccination program in Central America in cooperation with Moscow.

Although the topic has received little attention in the international media, this can be a very promising step for both regions. Sergey Glaziev said that the Central American are "old and good partners” and that he believes there is a great potential for cooperation, although the current levels of trade between both regions are moderate - albeit upward. Since 2015, trade flows between Central America and Eurasia have increased by 22%. And this growth has proved to be really solid, not being a matter of mere temporary interests, considering that last year, even in the midst of the pandemic and the natural disasters that devastated Central America, the index of economic relations fell only by 2% in relation to 2019 - far below what was expected.

In fact, Central America is a region of promising economic potential and its plans have always been limited by the US agenda. Washington has always subordinated Central America to a status of economic and political subservience, being the great power that most interferes in the region and exploits the local wealth the most. Central American countries have a long agrarian tradition, and their greatest potential is concentrated in the agro-industrial sector - where relations with Eurasia are expected to intensify. Apparently, what is happening is a simple opening of these nations to other economic horizons of cooperation, but that may be enough to awaken Washington's dissatisfaction.

As one of Biden's largest electoral audiences was the Latin population on American soil, the new president has accumulated a series of promises for his voters' homelands, including financial aid for some Central American nations, mainly Guatemala, Honduras, and El Salvador, which makes up the so-called North Central American Triangle, a region that Biden has pledged to send 4 billion dollars as humanitarian aid due to various local social problems. Biden is slow to provide on his pledges to help his neighbors, since he has other priorities. The Latins, however, are not interested in Biden’s plans and have no commitment to Washington other than their own strategic benefits. Therefore, if the Americans are not keeping their promises, they will seek support from any other country, including Russia and the rest of the Eurasian bloc.

Either the new American president tries to reconnect with the Latins by fulfilling his campaign promises and cooperating for local development, or he will have to deal with the growth of the activities of some of his greatest enemies in the region. In addition to Russia, China has extremely profitable and well-structured businesses in Central America and the Caribbean and this is only going to increase. Alliances with Russians and Chinese seem more profitable to Central Americans because these countries, unlike the US, do not subject their economic ties to political interests and subordination, as has been the practice in Washington for decades.

However, it would be naive to think that a president with a strong interventionist attitude like Biden will deal with this situation peacefully. The reaction of the new president is likely to be other: starting a strong trade and tariff war, imposing sanctions on all Latin countries involved in business with US’ geopolitical rivals. With that, we will have a trade war going on inside the American continent, but this scenario will only push the Latins towards even deeper relations with any country or bloc that offers them cooperation proposals.

Source: InfoBrics

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