This is the United States' plan to counteract China's influence in Latin America

Legislators in the US Congress presented this Wednesday a historic bill that promises millionaire investments in Latin America and the Caribbean as strategy to counter China's growing influence in the region as well as a path for countries like Colombia can enter the Free Trade Agreement that exists between the United States, Mexico and Canada (NAFTA).

The project was presented simultaneously in both the Senate and the House of Representatives by congressmen from both parties – Republican and Democrat – and already has the approval of the White House.

The project, according to legislative sources, would allocate up to 150,000 million dollars in various programs that seek to promote the relocation of companies that currently operate from China (near shoring) so that they return to both United States as well as countries in the hemisphereas well as huge credits to promote infrastructure projects in the region.

The funds would come from a modification to the import system that seeks, in the process, to “punish” Beijing..

Currently, Chinese companies that export products below $800 do not have to pay entry fees to USA. Many of them, especially those dedicated to the sale of clothing and other items, evade the tariff by exporting directly and at retail.

The bill, if approved, would impose tariffs on all exports from China regardless of value. The collection of this new tax, which is estimated to be close to $150,000, would be reinvested in programs that benefit the region.

Although the House and Senate versions differ on some points, both have the same name: 'The Act for the Americas'.

“Today is a monumental day. We are redefining American leadership in the Western Hemisphere. We are here for the most important trade and investment project in the history of the United States against our Latin American neighbors. Simply put, this bill will provide the tools to bring manufacturing jobs back to the United States to expand our alliances in Latin America and to counter the threat that communist China represents on our continent,” said Republican Representative María Elvira Salazar, one of the speakers of the law.

Today is a monumental day. We are redefining American leadership in the Western Hemisphere.

According to Salazar, in the last two decades, China has become the region's main trading partner. His plan, he said, is not only to displace the United States in commercial terms, but to ideologically penetrate the region, giving oxygen to dictatorships such as those that exist in Venezuela, Cuba and Nicaragua, but with the intention of expanding that footprint.

“That's what this law is for. To counter China and remove its influence from this hemisphere,” the legislator added.

Democratic representative Adriano Espaillat, who co-sponsored the project with Salazar, said something similar.

“This is the most transformative legislative initiative for the Western Hemisphere in at least two decades. It is a multi-billion dollar tool for job creation in the Central Caribbean and South America. That will help stop the root causes of immigration by attracting jobs and putting more money in the pockets of working families,” he said.

How would it work in practice?

The project would initially allocate some $60 billion for the relocation of companies and another $30 billion in tax incentives for investment in critical infrastructure such as roads, ports and airports.

It also includes funds to promote both the textile industry and medical equipment manufacturers in the region and includes funds for an energy transformation program that seeks to lower costs for consumers.

Likewise, it would create the University of the Americas, a new educational center to train the entrepreneurs and leaders of the future.

But said Representative Salazar, the “crown jewel” of the law is the access that certain countries in the region will have to the existing free trade agreement with Mexico and Canada.

“This is the great prize of this law. We offer a route for countries in the region to enter what is the most important trade agreement in the world. An entry into the club of the greats,” said the representative.

According to legislative sources, access would initially be reserved only to countries that are members of the American Partnership for Economic Prosperity (APEP), which was created at the 2022 Summit of the Americas and of which Colombia is part.

In principle, interested countries would have to make legislative adjustments to reach the same NAFTA standards and then sign a memorandum of understanding to request membership, which did not require approval from the United States Congress.

That said, promotion would be conditional on certain criteria, including solidity and respect for democracy, application of the law and the fight against corruption.

Salazar said, however, that, although Colombia is the number one candidate to enter, the government of President Gustavo Petro would have to demonstrate its seriousness regarding these issues.

“Colombia is more than welcome. I would say that it is the first country that should enter. But there are conditions. The big backdrop is that there must be great respect for democracy and the institutions of the country. Be the president to be able to be within this free trade agreement, which is the great prize of this law. And if they do not follow them, the country can be withdrawn. Unlike other FTAs ​​that cannot be rescinded, this law does allow the withdrawal or expulsion of a country where democracy is not followed,” Salazar told this newspaper.

SERGIO GÓMEZ MASERI

TIME CORRESPONDENT

WASHINGTON