Peripheral Revision

Unfiltering history as we live it

Colombia’s Santos Seeks to Increase Economic Ties with China, Pressure U.S. to Pass Free Trade Agreement

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Sebastian Castaneda, World Politics Review, April 1, 2011

A number of recent overtures by Colombian President Juan Manuel Santos toward China have caused concern in Washington and put pressure on Congress to finally pass the free trade agreement (FTA) with Colombia. Although this is probably Santos’ intention, the highly publicized moves should actually be understood in the context of his broader efforts to diversify Colombia’s foreign policy posture.

In September 2010, one month after his inauguration, Santos accepted $1 million in aid from China to be used to acquire Chinese logistical military equipment. The Chinese government also invited several senior military officers to participate in training courses in China. Although the deal is insignificant when compared to the more than $7.3 billion Bogota has received from Washington under Plan Colombia, the optics of the agreement are far more important than the dollar amount involved. Santos is well aware of the impact that such a deal will have in Washington given China’s efforts to become as a major arms supplier to Latin America.

A more recent example of Santos’ strategy to capitalize on the “China threat” rhetoric prevalent in Washington is illustrated by his comments on what he characterized as a “real proposal” by China to build a so-called dry canal to connect ports on the Pacific and Atlantic oceans by rail. The $7.6 billion project would threaten the U.S.-built Panama canal’s monopoly on trade passing through the region. At least on paper, the 136-mile link would turn Colombia into an important regional hub for trade with the world’s No. 2 economy.

Judging by Santos’ effort to publicize the dry canal proposal, and to a lesser extent the Chinese military aid, Bogota’s intention was to spur support on Capitol Hill and in the White House for ratification of the FTA, which has been languishing since its signature by George W. Bush in 2006. But although Santos’ shift to a less U.S.-centric foreign policy is evident, his maneuvering is designed not to end the close alliance with Washington that has been instrumental in fatally weakening the FARC guerrillas, but rather to diversify Colombia’s trade and thus promote rapid economic growth.

Once in office, Santos’ cabinet officially articulated a noticeable shift in foreign policy. Colombia’s foreign minister, María Ángela Holguín, explained to the Colombian Congress that the government’s new emphasis would be on “geographic and thematic diversification of the foreign policy agenda in order to promote the nation’s interests and open up opportunities for investors, industrialists and businessmen in our country.”

This pragmatic foreign policy shift produced swift results. In the regional sphere, Santos re-established diplomatic ties with Venezuelan President Hugo Chávez after just three days in office. Relations had been severely damaged during the previous administration of President Álvaro Uribe. Since then, Colombia has also integrated its stock market with Chile and Peru, a prelude to closer political and economic cooperation, including a free trade deal that also includes Mexico. These countries seek to form a bloc to exploit the Asian market.

Internationally, Bogota is attempting to join various multilateral bodies that would expand the country’s global reach. On Oct. 12, Santos achieved Uribe’s goal of winning a two-year term on the United Nations Security Council. Santos is also calling for Colombia to join the Organization for Economic Cooperation and Development, and the Asia-Pacific Economic Cooperation forum, both of which currently include Chile and Mexico as members, with Peru belonging to the latter. According to Santos, joining these organizations would allow Colombia to implement internationally recognized practices that would increase foreign direct investment and open new markets for Colombia’s exports.

Colombia’s diversification of trade with Asia, and especially China, was a direct result of the U.S. recession following the global financial crisis and the diplomatic spat with Venezuela. Over the past three years, the fallout from both incidents affected trade with the Andean country’s two largest exportmarkets, which accounted for a combined 54 percent of total exports in 2008. Thus, in 2009, Colombia’s exports to China increased by 114 percent over the previous year, even if its exports to the developed nations of East Asia actually decreased by an average of 30 percent. As a result, China now follows the U.S. as Colombia’s second-largest export market, although exports are limited to commodities. Moreover, in 2010, Colombia’s exports to Singapore, South Korea, China and Japan increased by 303, 248, 107 and 52 percent respectively compared to a year earlier. This trend is set to accelerate after FTAs currently being negotiated with Singapore, Korea and Japan come into effect.

Bogota’s rapid embrace of Beijing, together with Colombia’s diplomatic inexperience, has had unintended consequences. The most significant example, diplomatically speaking, was Colombia’s initial decision to abstain, along with 18 other countries, from attending the Nobel Peace Prize ceremony last year for jailed Chinese human rights activist Liu Xiaobo. Most of the other 18 countries have either authoritarian governments or close relations with China. Due to global media attention generated by the initial decision, Colombia’s foreign minister unconvincingly explained that Bogota had only one ambassador responsible for relations with all the Scandinavian countries, but that the government would send a lower-ranking official to the ceremony.

Colombia’s new foreign policy, with strengthened trade and diplomatic ties with countries in Asia playing a central role, is not a result of Washington’s failure to ratify the FTA, as some U.S. lawmakers and commentators have claimed, nor is it an effort to alienate Washington. Rather, this policy shift is part of Bogota’s efforts to improve its economic and diplomatic standing in a changing global economy. That said, Bogota is not above exploiting the “China threat” rhetoric in Washington in order to push for prompt ratification of the FTA.


Written by peripheralrevision

04/02/2011 at 12:37 am

Posted in China, Colombia, Venezuela

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