Xi Jinping inaugurates a megaport in Peru and the USA increases protectionism

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By: Ariela Ruiz Caro. 11/23/2024

Amid a sharp rise in protectionism that began under Donald Trump's first administration and continued under President Joe Biden, a three-day nationwide strike in Peru and protests around the event venue culminated Saturday in Lima in Asia-Pacific. Forum for Economic Cooperation (APEC).

APEC is made up of 21 economies that together represent 62% of global GDP, 48% of global trade and 38% of the world's population. The Forum is in fact the main meeting space in this region. However, given that three conflicting states participate (the United States, China and Russia) and that APEC has no institutional framework and the resolutions adopted are not binding, it is also a sort of fair where businessmen do business and business leaders The State or its representatives conclude bilateral agreements of various kinds.

The highest representatives of its 21 members (Australia, Bruni Darussalam, Canada, Chile, China, Hong Kong China, Indonesia, Japan, South Korea, Malaysia, Mexico, New Zealand, Papa New Guinea, Peru, Philippines) participated in this edition. , Russia, Singapore, Chinese Taipei, Thailand, United States and Vietnam), including 16 heads of state. Partners are called economies, not countries, so that delegates from China, Hong Kong and Taiwan can coincide.

Although Brazil is not a member, it was invited to participate, mainly because of the access to the Pacific that the Chancay megaport, inaugurated by Xi Jinping during his presence at the Forum, could represent for this country. However, President Lula declined the invitation. Likewise, Mexico's President Claudia Sheinbaum, who will attend next week's G20 summit in Rio de Janeiro, also did not attend the event. Chile, Peru and Mexico are the only Latin American economies members of APEC, created in 1989. Russia, which did not participate on this occasion, Peru and Vietnam were the last to join the Forum in 1998.

The confrontation between three member economies and the rise of protectionism in the United States make consensus difficult. Indeed, the first protectionist measures, applied by Trump during his first government, were essentially maintained and reinforced by Biden. During his recent White House campaign, Trump threatened to raise trade barriers with the rest of the world, with a possible global tariff of between 10 and 20 percent on most foreign imports and even as high as 60 percent. for products from China. Additionally, he threatened to impose tariffs of more than 100% on Mexico, saying the country should do more to stop migration flows and shipments of Chinese cars. The president-elect maintains that imposing high tariffs on foreign products will benefit American manufacturing and generate jobs.

It is probably for this reason that, although the declarations issued at APEC are not binding, the one approved by trade ministers reaffirms their commitment to keeping markets open, removing unnecessary barriers and facilitating investment. Likewise, Energy Ministers agree to promote the use of technologies for a clean, efficient and equitable energy transition. Trump doesn't believe in climate change.

The days when leaders of APEC economies committed to ambitious trade liberalization by 2020 in the 1994 Bogor Declaration are long gone.

According to the article From model child to orphan: the rise and demise of APEC (From Model to Orphan: The Rise and Demise of APEC) by John Ravenhill, four years after the Bogor Declaration, internal disagreements prevented leaders from giving a coordinated response to sectoral liberalization in 1998 trade, as well as the Asian financial crisis of 1997. This lack of consensus, according to the author, revealed internal tensions within APEC and marked the beginning of a decline in its influence and of its relevance. Since then, the Forum has undergone a series of changes and reorientations. Instead of exclusively prioritizing trade liberalization, after 2001 they began to focus on trade facilitation, technical cooperation, and emerging issues such as economic security and protection against terrorism.

The protectionist measures imposed by Trump during his first administration in response to the growing trade and technological rivalry with China, the unprecedented effects of the pandemic and the acceleration of climate change determined the need to redefine the objectives of the Forum. It is for this reason that in 2020, the forum defined a new agenda in the so-called Putrajaya Vision 2040, which identifies three pillars: trade and investment, innovation and digitalization, as well as strong, balanced and secure growth and sustainable and inclusive development. This is currently in effect.

Navigating Great Power Rivalries

Even if the presence at APEC of a defeated Biden, accompanied by his granddaughter Natalie, lacks negotiating power, the American government's concern is unanimous about the growing Chinese presence in Southeast Asia and in Latin America. In the host country, Peru, two Chinese companies control the country's entire electricity supply and several from that country have a significant presence in the exploitation of mineral deposits.

But the most important and controversial was Xi Jinping's inauguration of the Chancay megaport, the largest in South America. The success of this port for ultra-modern deep draft ships and the majority acceptance of the population was very poorly received by the American government.

The authorities of this country have repeatedly denounced that it is a dual-use megaport, where China could station its warships. The warnings were of no use. The project is completed and ready for operation and its operation has significant geostrategic implications, allowing deep draft vessels to dock. These have the capacity to load a greater number of containers, reduce transport time and consume less energy, reducing costs. In our region, the project mainly worries Chile, since both countries have a similar export structure to China, which represents a loss of competitiveness.

Peru's geopolitical location is privileged, being the equidistant point of Latin America and the most direct point of Asia. For Brazil, in terms of distance, Peru would be its best option to achieve an exit to the Pacific. The land (rail) routes to connect the port of Chancay have not yet been built. There are also no completed projects to add value to the minerals that will be exported from the port. A leading role from the State is necessary in this area to strengthen this project and adapt the needs for housing and service infrastructure, as well as a productive development plan that can take advantage of the benefits derived from the port. It is a fantasy to think that only the market can achieve this.

The gala, illegitimacy and violence

The APEC gala was accompanied by a national strike from November 13-15, which brought together more than 300 unions to protest the wave of extortion and demand security measures from the Peruvian government. Indeed, at the end of September, the National Confederation of Private Commercial Institutions (Confiep), which welcomes micro, small and large businesses in Peru, assured that organized crime was becoming a threat. parallel government Yes He is winning the battle against the state.

The growing wave of extortion and the collection of illegal commissions in exchange for security in Peru has reached alarming levels. Among the groups most affected are transporters and small entrepreneurs, such as wine growers. It’s a national phenomenon that’s growing every year.

During the APEC Forum, marches were also held at the call of the National Combat Coordinator, an organization that brings together the Transport Corporation Committee and other associations, to show world leaders the situation facing Peru is facing due to extortion.

The objective was that Let the world know that in Peru we do not have legitimate or legal authorities, we lost them a long time ago; that we are governed by criminal organizations who did not win the elections and who, from the Congress, also attacked the government and other state powers some time ago. That those who serve as authorities bear 93% of citizens' contempt, have 4% acceptance and represent no one.

That they have destroyed, on the side of the Executive, Congress and other institutions, democratic institutions, the rule of law and the constitutional order; They violate the laws and the Constitution, they flout institutions and the rights of citizens in a lasting manner; which have lost their legality, even if the formalists do not want to admit it. We have no legal or legitimate authorities, we are at the mercy of crime and its criminal organizations..

In April, a World Bank report noted that violence has become more serious and widespread in some Latin American countries, undermining progress made in attracting investment through macroeconomic stability. The organization said Latin America and the Caribbean is the most violent region in the world.

In this context, the US government should be more cautious about the characterizations it makes of Chinese investments in its backyard.

Ariela RuizCaro* Advisor to the Presidency of the Commission of Permanent Representatives of Mercosur, Montevideo; researcher at the Center for Political, Economic and Social Studies (CEPES), consultant to the Economic Commission for Latin America and the Caribbean, United Nations (ECLAC), Santiago, Chile.

This article was published on the elcohetealaluna portal

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