President Andrés Manuel López Obrador has a plan to deal with Donald Trump’s intransigence, as the American president seems hell-bent to force the construction of a wall on the US-Mexico border.
First of all, he refused the arrangement proposed by the White House that Mexico be deemed a “safe third country,” which would have forced it to host tens of thousands of Central American migrants while the US courts decided their fate, and would have meant setting up refugee camps in Mexico.
Furthermore, he has put forward a plan to ensure economic development in the so-called ”Northern Triangle” of Central America (Honduras, El Salvador and Guatemala), in order to address the economic causes and the structural violence of capitalism that are pushing tens of thousands of people from this area to emigrate northward. It is a sort of Marshall Plan, which will also involve the southern states of Mexico and which will be based on four pillars: migration, trade, economic development and security, at a total cost of $30 billion, aimed at creating what Mexican Foreign Minister Marcelo Ebrard has called “a region of prosperity.”
According to other highly-placed Mexican officials who have spoken about this plan in interviews, if it turns out to be impossible to persuade Trump to participate in such a project—which represents the very opposite of the cuts in aid that he has been threatening—López Obrador would be ready to put forward the option of another powerful actor, one who would be willing to fill the leadership void: China.
The Asian giant is gaining ground and influence in the Central American region, which it intends to include in its New Silk Road project. Beijing is currently either the second or third largest trading partner for each of the countries in the area: Chinese enterprises are implementing infrastructure projects in Honduras, Nicaragua, Costa Rica and Panama, and have already formulated investment plans in El Salvador and Guatemala worth over $2 billion—not counting the inter-oceanic canal project in Nicaragua, whose future is uncertain, and which would involve funding to the tune of $50 billion.
China has already signed a free trade treaty with Costa Rica and is in advanced talks for one with Panama. Both of these Central American states have made a strategic choice to turn towards Beijing, breaking off relations with Taiwan. In Costa Rica, the Chinese firm China Harbor Engineering Company (CHEC) is responsible for the project of expanding the main road linking the capital, San José, with the Gulf of Mexico, and there are advanced-stage plans to create a Económica Especial Zone (EEZ – “Special Economic Area”) where Chinese products would be manufactured.
It is in Panama, however, that Chinese penetration has reached an even more impressive level. In April last year, a direct flight was inaugurated between the capital and Beijing. CHEC has already started construction on a port for cruise ships and another for container vessels in the Colón Free Trade Zone, with a planned investment of over $1 billion, while the Chinese giant Huawei Telecommunications has set up its sixth worldwide distribution center for its products in Colón.
Chinese enterprises are competing for contracts to build a new bridge over the Panama Canal and for the construction of a railway line between the capital and the border with Costa Rica. The ties between China and the “ruling families” of the Panama elite, including that of President Juan Carlos Varela, have given Chinese companies an advantage over their competitors. Even more, the Panamanian government plans to issue bonds for the Chinese market—known as “Panda bonds”—for a value of $500 million.
As various analysts have pointed out, China is interested in a strong presence in a geographical area that provides easy access to two oceans, the Pacific and the Atlantic. “This gives an enormous potential for economic development,” says Enrique Dussel Peters, head of the Centro de Estudios China México at the Universidad Nacional Autónoma de México. Most importantly, Beijing is “showing the world, most prominently the US, that it is a global competitor. It’s as if they were telling Washington: we are here, in your backyard, so we should treat each other as equals.”
It’s no wonder that the White House is seeing red. Last October, Secretary of State Mike Pompeo made an impromptu visit to Panama in order to warn President Varela—in pure neocolonial style—to “keep [his] eyes wide open” when it comes to relations with China, and be wary of deals which are “too good to be true,” because of the “predatory economic activities” that Beijing is engaged in.
The message was “loud and clear,” according to former Panamanian Foreign Minister Jose Raul Mulino, to the extent that Panama has recently sought to hit the breaks on its China dealings. However, as Rafael Fernandez de Castro, a professor at the School of Global Policy & Strategy at the University of California at San Diego, pointed out, it is precisely such an “isolationist and threatening policy towards the Central American countries” that is leading the region’s governments to seek a counterweight to the US’s influence in the first place.
