Biden confronts deep skepticism of U.S. agenda in Latin America

President Joe Biden is facing growing pressure from fellow Democrats and foreign allies to flesh out an economic partnership with Latin America that the White House has promised will tackle immigration, regional trade and China's efforts to expand its influence in the region.

That pressure will be on display in Washington on Friday, when Biden hosts leaders from the Western Hemisphere to discuss the pact, which he first rolled out in June 2022. It was supposed to respond to Latin American leaders' calls for more trade and investment opportunities with the U.S. But the lack of detail and shifting format of the agreement are drawing criticism from lawmakers and skepticism from regional leaders.

The White House’s efforts to tie the agreement to its own domestic agenda — suggesting better economic integration in the region will help address the root causes of migration from the South — are likely only to deepen Latin American negotiators’ concerns that what was supposed to be an economic package for the region is getting hijacked by U.S. election politics. All the while, China continues to expand its economic reach in the hemisphere.

Costa Rican minister of foreign trade Manuel Tovar Rivera gave a nod to the concern that domestic U.S. politics have crept into the economic initiative known as the Americas Partnership for Economic Prosperity. He told POLITICO this fall that his government has “had a larger sense of desire for progress” in the negotiations “than we have found so far” from the Biden administration.

“It doesn’t mean that there’s no progress. It's just that right now, the U.S. has entered a few months ago into the electoral mood, and certainly this could have impacts on progress under APEP,” Tovar said.

The Biden administration is now unveiling more details on the agreement as it hosts the first APEP summit since the pact’s June 2022 launch, with a focus, to start, on creating a more competitive system of supply chains in the region. The White House is also hoping to rally private investment in partnership with the Inter-American Development Bank, a D.C.-based multilateral development bank.

A senior administration official, who was granted anonymity because they were not authorized to speak publicly, denied that the program has shifted away from its initial conception, and said “there’s been no pivot with respect to that.”

But increasingly, Biden administration officials have been focusing on migration — which promises to be a key flashpoint in the president’s reelection bid — during their discussions with their regional counterparts, according to three diplomats familiar with the discussions, fueling concerns that the issue could come to dominate the framework and distract from regional development projects.

“The summit and the whole idea of APEP, which is good on paper, I think, is something the United States is pretty much just doing to check the box. To say that they are doing something about Latin America, that they remember Latin America exists, to pretend to have a plan," said Jorge Guajardo, a partner at Dentons Global Advisors and Mexico’s former ambassador to China.

U.S. officials, however, argue the two issues are indeed intertwined: the more economic opportunity in Latin America, the less irregular migration.

“Migration and economic security, those are all a backdrop to the partnership,” a senior administration official told POLITICO. “And I don’t think that there’s been any change to the fact that driving sustainable economic growth is connected to the migration question and the economic security question.”

So far, their Latin American partners seem unconvinced. “Many countries in the region still don't have a very clear sense of how this jigsaw puzzle fits into the larger U.S. engagement with the Americas,” said Arturo Sarukhán, a retired Mexican diplomat and former ambassador of Mexico to the United States.

And that could leave an opening for China, which is making inroads in Latin America through its own infrastructure investment and new trade deals. In the past two decades, Beijing has inked free trade agreements with Chile, Costa Rica, Peru and most recently Ecuador, while more than 20 countries in Latin America have signed on to join China’s Belt and Road Initiative.

“There's been a lot of attention from China, in particular, but we’re fiddling while Rome is burning,” said Eric Farnsworth, vice president at the Council of Americas, a coalition of businesses from the Western Hemisphere.

“The region isn't necessarily in love with China or the model that they present. They want alternatives. They want the United States to be there, so basically, we need to rethink our approach,” argued Farnsworth.

Lawmakers of both parties have echoed that criticism. Sen. Tim Kaine (D-Va.) sent a letter last month to Biden administration officials slamming the agreement's shift away from binding trade commitments, as outlined in a recent briefing for lawmakers.

“I encourage you to ensure that the level of ambition of the original proposal is not diminished by the recent pivot in its structure. Pursuing mutually beneficial economic goals with Western Hemisphere countries that share our values, as well as providing a viable alternative to China, should remain a priority for current and future administrations,” Kaine said.

Some lawmakers have taken matters into their own hands. Sens. Bill Cassidy (R-La.) and Michael Bennet (D-Colo.) are co-sponsors of legislation known as the Americas Trade and Investment Act, which could incentivize companies to move supply chains from China to the U.S. and Latin America and chart out a path toward expansion of the updated version of the North American Free Trade Deal known as the U.S.-Mexico-Canada Agreement, according to a discussion draft.

Still, the White House’s partnership proposal is “better than nothing,” says Benjamin Gedan, former South America director of the National Security Council, and the current director of the Latin American program at the Wilson Center, a D.C.-based think tank. “It is a potentially useful platform for building supply chains in the Americas and for knitting together the economies of this region.”

That echoes the attitude of many of the region’s diplomats. “We have a wait and see approach if we can get anything from this,” said one Uruguayan official familiar with negotiations, who spoke to POLITICO on background because he is not authorized to speak on record. The official added that they did not expect “many deliverables” from the current discussions.

“We don’t reject the program, we think it’s a good idea, but we have to take a closer look at how it could work,” agreed a Mexican diplomat familiar with the negotiations, who spoke on the condition of anonymity. “For now, it’s not there yet.”