South America’s Global Power Struggle
South America’s Global Power Struggle
Introduction
South America, a continent endowed with vast natural resources, significant economic potential, and increasing strategic importance, has re-emerged as a pivotal arena for intense geopolitical competition. For decades viewed primarily through the prism of United States influence, the region now finds itself navigating a complex, multipolar landscape. The United States, China, Russia, and the European Union are deploying distinct strategies and tools, vying for economic advantage, political alignment, and strategic depth across the continent.
The dynamics are multifaceted. The United States seeks to reinvigorate its historical presence, counter the growing reach of its global rivals, and promote its economic and security interests. China presents itself as a crucial economic partner, offering immense trade opportunities, substantial loans, and large-scale infrastructure investments, driven primarily by its own insatiable demand for resources and new markets. Russia, with a more limited economic footprint, plays a strategically disruptive role, bolstering allied authoritarian regimes and leveraging information warfare to undermine US influence. The European Union, emphasizing shared values and historical ties, promotes a partnership model focused on trade integration, sustainable development, and regulatory alignment, offering initiatives like the Global Gateway as an alternative development path.
For South American nations, this intricate web of competing interests presents both significant opportunities and considerable risks. The influx of attention and capital offers chances to diversify international partnerships, attract much-needed investment for development, and potentially increase their bargaining power on the global stage. However, it also brings the perils of economic dependency, geopolitical entanglement in great power rivalries, and the potential erosion of national sovereignty.
This report delves into the unfolding global contest in South America. It examines the historical roots that continue to shape contemporary perceptions and policies, analyzes the specific strategies and instruments employed by the United States, China, Russia, and the European Union, and explores how South American nations are responding – navigating the pressures while seeking to assert their own agency and pursue national interests. The central theme is the inherent tension between the external pursuit of influence by global powers and the region's enduring quest for autonomy and self-determined development in an era defined by a shifting international order.
I. Historical Context
The current geopolitical competition in South America did not emerge in a vacuum. It is deeply rooted in historical patterns of foreign influence and regional responses, which continue to shape the perceptions and strategies of all actors involved. Understanding this history is crucial to grasping the complexities of the present-day contest.
The Weight of History
The foundation for US influence in the Western Hemisphere was laid early with the Monroe Doctrine of 1823. President James Monroe declared that European powers should refrain from further colonization or interference in the Americas, framing the US as the region's protector. While initially more symbolic than substantive due to limited US military capacity, the doctrine established a principle of US regional dominance that would be invoked and expanded upon for nearly two centuries. It signaled a clear break between the "New World" and the "Old World," asserting separate spheres of influence. The doctrine was driven by concerns about European imperial ambitions, particularly from Russia, Spain, and France, potentially encroaching on newly independent Latin American nations or US interests.
As the US grew into a global power, the Monroe Doctrine evolved. The 1904 Roosevelt Corollary transformed it into a justification for direct US intervention, casting the US as a regional "policeman" with the right to involve itself in Latin American affairs, initially to prevent European debt collection interventions but later expanding significantly. Throughout the 20th century, US involvement deepened, fueled by economic motives – access to raw materials, opening markets, and controlling strategic routes like the Panama Canal – and geopolitical imperatives, most notably the Cold War struggle against communism.
This era witnessed numerous US interventions, both overt military actions and covert operations, often aimed at protecting American business interests or removing governments perceived as threats to US national security. Infamous examples include the CIA-backed coup in Guatemala in 1954 against Jacobo Arbenz, whose land reforms threatened the United Fruit Company; the support for the 1973 coup in Chile that overthrew Salvador Allende and installed the Pinochet dictatorship; and the backing of Contra rebels against the Sandinista government in Nicaragua during the 1980s. These actions, while sometimes framed as promoting stability or democracy, often came at the cost of Latin American sovereignty, fueled instability, and left a legacy of dependency and dominance.
During the Cold War, the Soviet Union also sought influence in Latin America, but its reach was generally more limited compared to the US. Soviet engagement often predated the Cold War, involving diplomatic and trade relations. Key moments included support for Cuba after Castro's revolution, leading to the Cuban Missile Crisis in 1962 – a high-stakes gamble often seen by scholars as linked to European geopolitics (Berlin) as much as Latin America itself. Moscow also supported the Sandinistas in Nicaragua and maintained ties with regional Communist parties via the Comintern. However, the Soviets were aware they could not compete militarily with the US across the hemisphere. Their influence, while potent in specific contexts, did not constitute the broad economic or military hegemony exerted by the US.Emergence of a Multipolar Contest
The end of the Cold War initially led to a period of reduced US focus and aid flows to Latin America, creating openings for other global players. The most significant shift occurred with China's accession to the World Trade Organization (WTO) in 2001. Fueled by its rapid economic growth and need for resources and markets, China dramatically increased its engagement, transforming from a marginal player into South America's top trading partner and a major investor and lender.
Simultaneously, Russia sought to reassert its influence, particularly as its relations with the West cooled. Moscow capitalized on the rise of left-leaning "pink tide" governments in the early 2000s and pursued a strategy aimed explicitly at countering US presence and promoting a multipolar world order. The European Union also continued to engage, building on historical ties and promoting its model of integration and values-based partnerships.
This confluence of factors – historical US dominance, the legacy of intervention, Soviet strategic plays, China's economic ascendancy, Russia's resurgence, and Europe's consistent engagement – has created the current competitive landscape. South American nations are no longer confined to a single dominant external partner but face a complex array of choices, pressures, and opportunities emanating from multiple global power centers.
The historical record of US interventionism casts a long shadow over Washington's current efforts in the region. Decades of actions perceived as prioritizing US economic and security interests above regional sovereignty have cultivated a deep-seated skepticism among many South American actors. When the US now frames its engagement partly as a necessary counter to the "malign influence" of China and Russia, this narrative inevitably bumps against historical memory. This history provides a fertile ground for rivals like China and Russia to position themselves as alternative partners, perhaps perceived as less burdened by a legacy of direct political or military interference (though they pursue influence through different means, such as economic leverage or disinformation). Consequently, US initiatives aimed at rebuilding trust and fostering partnerships based on shared values face an inherent credibility challenge. Calls within policy debates for the US to learn from past mistakes and genuinely respect regional sovereignty are therefore not merely idealistic hopes, but represent a crucial strategic requirement if Washington is to compete effectively in this new era. Failure to acknowledge and address this historical context risks undermining present-day US diplomacy and inadvertently strengthening the appeal of its competitors.
II. United States Strategy
Faced with the deepening inroads made by China and the persistent disruptive activities of Russia, the United States has been forced to recalibrate its approach to South America. While historical ties remain, Washington now explicitly frames its engagement within the context of global strategic competition, seeking to reassert influence, protect interests, and offer alternatives to rival powers.
Strategic Imperatives
The overarching driver of current US policy is the global strategic competition with China and Russia, which Washington acknowledges extends directly into the Western Hemisphere. There is a clear recognition that the US must actively compete to counter what it terms the "malign influence" of these autocratic rivals. This involves pushing back against China's use of economic leverage to gain political influence and access resources, and Russia's support for anti-American authoritarian regimes, military posturing, and widespread disinformation campaigns designed to undermine US interests.
Economic interests continue to be paramount, though their nature has evolved. Beyond historical access to commodities, contemporary focus areas include strengthening supply chain resilience through nearshoring, securing access to critical minerals like lithium, vital for energy transitions, and promoting reciprocal trade policies. The potential economic benefits of nearshoring for Latin America and the Caribbean, estimated to add potentially US$78 billion annually in additional exports, provide a significant incentive for regional cooperation on this front.
Security cooperation remains a cornerstone, addressing transnational threats such as drug trafficking, illicit networks, and irregular migration, as well as bolstering regional stability. Increasingly, however, security engagement is also framed as a means to counter the military and intelligence activities of China and Russia in the hemisphere.Policy Tools and Initiatives
To achieve these objectives, the US employs a range of tools:
Economic Engagement: The promotion of nearshoring is central, supported by legislative proposals like the Western Hemisphere Nearshoring Act and initiatives like the Americas Partnership for Economic Prosperity (APEP). Financial institutions like the US International Development Finance Corporation (DFC) and the Export-Import Bank are being positioned to offer alternatives to Chinese financing for development and infrastructure projects. The US also leverages its existing network of Free Trade Agreements (FTAs) with countries including Chile, Colombia, and Peru, as well as the Dominican Republic-Central America FTA (CAFTA-DR).
Security Cooperation: U.S. Southern Command (SOUTHCOM) plays a key role in building partnerships, conducting joint exercises, and enhancing regional capabilities. The National Guard's State Partnership Program (SPP) complements this with long-term, state-to-nation partnerships focusing on capacity building, disaster response, cyber security, and professional development. In Fiscal Year 2024 alone, nearly 322 SPP engagements occurred in the region, with over 300 planned for FY2025. Foreign assistance remains a tool, historically significant during the Cold War and Alliance for Progress, and more recently targeted towards addressing migration drivers in Central America, supporting peace implementation in Colombia, and security in Mexico. Arms sales and military training continue, although complexities like the "Leahy Law" (vetting foreign units for human rights abuses) can sometimes hinder swift cooperation.
Diplomatic and Soft Power: Washington has recognized the need for increased high-level diplomatic engagement, including filling vacant ambassadorial posts and more frequent visits by senior officials. Public diplomacy efforts, potentially through outlets like Voice of America (VOA), aim to counter rival narratives and highlight the benefits of partnering with the US. Support for democracy and human rights remains an articulated policy goal, though its application can appear inconsistent with past actions or current partnerships. People-to-people connections are fostered through cultural and educational exchange programs like the Fulbright Program, which offers scholarships for study, research, and teaching abroad. Active participation in regional organizations is also seen as crucial.
Challenges and Contradictions
Despite these efforts, the US faces significant hurdles in South America:
Strategic Neglect: A persistent criticism, acknowledged even within US policy circles, is the tendency to deprioritize Latin America compared to other global hotspots like Europe or the Indo-Pacific. This perceived lack of sustained attention has created strategic vacuums that rivals have readily filled.
Historical Baggage: The long history of US interventionism continues to breed distrust and complicates efforts to build genuine partnerships based on mutual respect. Calls for respecting sovereignty often clash with the memory of past US actions that seemed to disregard it.
Policy Inconsistency: Shifts in US foreign policy between administrations – for example, the transactional approach emphasizing tariffs and bilateral deals under Trump versus the Biden administration's focus on multilateralism and alliances – create uncertainty and make the US appear an unreliable partner at times. Actions like freezing foreign aid or threatening tariffs, as seen in recent dealings with Colombia, can push allies to seek greater diversification, potentially towards China.
Competition Effectiveness: China's economic statecraft, characterized by large-scale state-backed financing often perceived as having fewer political conditions (though potentially carrying debt risks), presents a formidable challenge. US initiatives like nearshoring, while promising, have yet to translate into significant regional growth beyond Mexico, raising questions about their broader impact and appeal.
The nearshoring strategy itself embodies some of these complexities. On one hand, it is presented as a mutually beneficial policy: strengthening US supply chain security by reducing reliance on China while simultaneously fostering economic growth, investment, and job creation in Latin America. It leverages geographic proximity and existing trade agreements. However, realizing this potential requires overcoming substantial hurdles. Many countries in the region lack the necessary modern infrastructure – in logistics (ports, rail, roads), energy (consistent, affordable power), and digital connectivity – to fully absorb large-scale manufacturing shifts. Furthermore, the benefits thus far appear concentrated, particularly in Mexico, leading to concerns about whether the strategy will genuinely lift the entire region or exacerbate existing inequalities. Perhaps most critically, the explicit framing of nearshoring as a tool in the US-China geopolitical competition risks triggering regional skepticism. It can echo historical patterns where US economic initiatives were perceived as primarily serving Washington's interests, potentially creating new forms of dependency rather than fostering genuine partnership. The ultimate success of nearshoring as a tool of US influence will depend not just on economic logic, but on significant infrastructure investment, equitable distribution of benefits, and skillful diplomacy that addresses regional perceptions and historical sensitivities.
III. China's Strategy
China's engagement with South America over the past two decades represents one of the most significant geopolitical shifts in the region. Driven by distinct strategic imperatives, Beijing has employed a multifaceted approach centered on economic partnership, infrastructure development, and expanding diplomatic ties, rapidly becoming a dominant external actor.
Strategic Rationale
China's primary interests in South America are clear and compelling:
Resource Security: The continent's vast reserves of natural resources – including crude oil, copper, iron ore, soybeans, and critically, lithium – are essential to fuel China's massive industrial economy and its ambitions in strategic sectors like electric vehicles and renewable energy. Securing stable access to these raw materials is a core driver of Chinese investment and trade.
Market Expansion: With a large and growing population, South America represents a significant potential market for Chinese manufactured goods, technology (including high-tech products), and services.
Geopolitical Influence: Beijing seeks to build diplomatic partnerships, gain support in international organizations, challenge US influence in its traditional sphere, and advance key foreign policy goals, notably the diplomatic isolation of Taiwan.
Global Connectivity: The Belt and Road Initiative (BRI), formally extended to Latin America and the Caribbean (LAC) in 2018, serves as an overarching framework for infrastructure investments designed to enhance global trade routes and economic integration, positioning China at the center.
Economic Dominance
China's economic presence in South America is undeniable and continues to grow:
Trade: China has surpassed the US to become South America's top trading partner and is the second-largest for the LAC region overall. Bilateral trade between China and LAC exploded from approximately $12-18 billion in the early 2000s to over $450-500 billion in recent years. Projections suggest this could exceed $700 billion by 2035. The trade relationship is largely complementary but asymmetrical: South America primarily exports raw materials and agricultural products (ores, metals, food, fuels being dominant categories), while importing higher-value manufactured goods from China.
Investment and Lending: China has become a major source of Foreign Direct Investment (FDI), particularly targeting the energy, mining (lithium, copper), and infrastructure sectors. Chinese state-owned policy banks, such as the China Development Bank (CDB) and the Export-Import Bank of China (ExIm), have emerged as leading lenders in the region, disbursing over $120-141 billion in loans to LAC governments since 2005. These loans often finance infrastructure projects or are commodity-backed (e.g., loans-for-oil deals), with Venezuela, Brazil, Ecuador, and Argentina being among the largest recipients.
Belt and Road Initiative (BRI) Projects: Infrastructure development is a hallmark of China's engagement. By 2024, 22 LAC countries had signed onto the BRI. High-profile projects include the massive Chancay deep-water mega-port in Peru, majority-owned by Chinese state shipping giant COSCO. Inaugurated in late 2024, this $3.5 billion project is designed to be a major logistics hub connecting Asia directly with South America, potentially reducing shipping times to Shanghai by up to 20 days and bypassing traditional routes like the Panama Canal or US ports. Other significant projects involve railway development, such as the proposed Bi-Oceanic Railway Corridor aiming to link Brazil's Atlantic coast with Peru's Pacific coast and the Lima-Ica high-speed rail line in Peru.
Expanding Footprint Beyond Economics
China's influence extends into other domains:
Military and Security: While military engagement is considered secondary to economic interests, China has steadily increased cooperation. This includes high-level defense forums (e.g., China-CELAC Defense Forum), professional military education and training exchanges (with claims that China trains more LAC officers than the US), institutionalized dialogues, and arms sales. Between 2009 and 2019, China transferred approximately $634 million in major military hardware to Argentina, Bolivia, Ecuador, Peru, and Venezuela, with Venezuela being a key recipient. Cooperation often focuses on non-traditional security areas like counter-terrorism and peacekeeping.
Technology and Space: Chinese companies, notably Huawei, are major players in the region's telecommunications sector, actively competing for 5G network deployment despite significant pressure and security concerns raised by the US. China is also investing in digital infrastructure and has established a significant space presence, including ground stations in several countries and the controversial Espacio Lejano deep space station in Argentina's Patagonia. Operated by the People's Liberation Army (PLA), its secrecy and potential for dual-use (military surveillance, satellite interference) have raised alarms in Washington and concerns about Argentine sovereignty.
Diplomacy and Soft Power: Beijing has established Comprehensive Strategic Partnerships with key regional players like Argentina, Brazil, Chile, Ecuador, Peru, and Venezuela. It actively engages through regional forums, particularly the China-CELAC Forum established in 2014. Soft power initiatives include the proliferation of Confucius Institutes – 44 across LAC promoting Chinese language and culture. However, these institutes face criticism for promoting CCP narratives, censoring sensitive topics (Taiwan, Tibet, human rights), and potentially limiting academic freedom. China also offers thousands of government scholarships to LAC students and expands its media reach through state-controlled outlets like Xinhua and CGTN Español.
Concerns and Criticisms
China's rapid expansion has generated apprehension:
Debt Sustainability: Concerns about "debt trap diplomacy" persist, although the intentionality and extent are debated. Critics point to opaque loan terms, high interest rates on some loans, commodity-backed structures that can disadvantage borrowers if prices fall, and the potential for strategic asset seizure in case of default (though concrete examples of asset seizure in LAC are scarce). The secrecy surrounding many loan contracts fuels these suspicions.
Economic Imbalance: The trade structure, with LAC exporting low-value raw materials and importing high-value Chinese goods, raises concerns about deindustrialization and reinforcing dependency on commodity cycles in South America.
Environmental and Social Standards: Chinese projects, particularly in resource extraction (mining, oil) and large infrastructure, have faced criticism for allegedly lower environmental and labor standards compared to Western counterparts. Impacts on sensitive ecosystems and indigenous communities, especially in areas like the Amazon and the Lithium Triangle, are a growing concern.
Security Risks: The potential for dual civilian-military use of Chinese-built infrastructure, such as ports and the Argentine space station, is a major worry for the US and some regional actors. Concerns also include espionage capabilities, control over critical digital and energy infrastructure, and potential links between Chinese operations and organized crime (e.g., fentanyl precursor imports via Chinese-operated ports in Mexico).
China's extensive infrastructure investments serve as a prime example of the double-edged nature of its engagement. Projects like the Chancay port and proposed transcontinental railways promise undeniable economic advantages for host countries by improving connectivity, reducing transport costs and times, creating jobs, and facilitating access to Asian markets. They are powerful tools for China to secure resource flows and embed itself in regional economies. Strategically, they can reshape trade routes, diminishing the centrality of US-influenced choke points like the Panama Canal. Yet, these very mega-projects are often the focal points for the most significant criticisms leveled against Beijing. They are frequently linked to concerns about unsustainable debt burdens, negative environmental and social consequences, a lack of transparency in contracts and operations, and the potential for strategic leverage or even future military use. The sheer scale of projects like Chancay also seems to contradict China's more recent narrative shift towards smaller, more sustainable "small is beautiful" BRI projects, suggesting either that strategic priorities override this shift or that China employs a flexible, multi-pronged approach. Ultimately, the long-term success and acceptance of China's influence in South America may hinge on the perceived balance of benefits versus risks generated by these transformative, yet potentially fraught, infrastructure endeavors.
Table 1: Comparative Economic Footprint: Major Powers in South America (c. 2023/2024)
*Sources: Based on analysis of available data.*
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IV. Russia's Strategy
Russia's engagement in South America presents a distinct contrast to the economic-centric approaches of China and the EU, and the historically dominant posture of the United States. Moscow operates with different objectives and employs a unique toolkit, primarily focused on asymmetric strategies to counter US influence and bolster its standing among specific regional allies.
Strategic Objectives
Russia's actions in South America are largely driven by its broader geopolitical confrontation with the United States. Key objectives include:
Countering US Influence: Moscow explicitly seeks to challenge and diminish US presence and influence in the Western Hemisphere, often viewing the region as a reciprocal theater to push back against perceived US encroachment in Russia's own neighborhood (Eastern Europe, former Soviet states).
Promoting Geopolitical Neutrality: Russia aims to prevent South American countries from aligning firmly with the West, encouraging a stance of neutrality, particularly concerning international condemnations of Russian actions, such as the war in Ukraine.
Advancing a Multipolar World Order: Moscow actively works to position itself as a central player in a new global order that challenges US hegemony, seeking partnerships with emerging powers and countries in the Global South.
Supporting Authoritarian Allies: A cornerstone of Russia's regional strategy is the maintenance and support of close ties with anti-US authoritarian regimes, namely Venezuela, Nicaragua, and Cuba. These countries serve as crucial political, military, and potentially logistical footholds for Russia in the hemisphere. Russia also cultivates relationships with other states like Bolivia and Brazil.
Methods of Engagement
Lacking the economic weight of its competitors, Russia relies heavily on political, military, and informational tools:
Military and Security Cooperation: Russia maintains longstanding military ties with Venezuela, Nicaragua, and Cuba, involving arms sales (though these have significantly declined recently), military training, joint exercises, and technical assistance. Periodic deployments of Russian military assets, such as nuclear-capable bombers (Tu-160s) and warships to Venezuela and Cuba, serve as symbolic power projection and demonstrations of support for allies. Russia's 2023 Foreign Policy Concept explicitly mentions expanding security and military-technical cooperation with interested LAC states. There have also been reports and concerns regarding the presence of Russian mercenaries (Wagner Group) in Venezuela.
Disinformation and Information Warfare: This is a crucial and pervasive element of Russia's strategy. State-controlled media outlets like RT en Español and Sputnik Mundo actively disseminate anti-US narratives, justify Russian foreign policy actions (like the invasion of Ukraine), promote conspiracy theories, criticize Western institutions, and attempt to undermine democratic processes and social cohesion within Latin American countries. These efforts often leverage social media platforms and may involve networks with ties to Russian intelligence services.
Political and Diplomatic Engagement: Russia engages bilaterally with regional countries and participates in forums like the Russia-CELAC Mechanism and BRICS (which includes Brazil). Its 2023 Foreign Policy Concept explicitly outlines plans to strengthen partnerships with Brazil, Cuba, Nicaragua, and Venezuela, and develop ties with others based on their stance towards Russia. Moscow provides crucial diplomatic backing for its authoritarian allies on the international stage.
Economic Levers: Russia's economic footprint in South America is significantly smaller than that of the US or China. Trade volumes are limited, although Russia leverages dependencies in specific sectors, such as fertilizer exports to major agricultural producers like Brazil and Argentina. Russian energy companies (Gazprom, Rosneft) have investments in countries like Cuba, Brazil, Mexico, and Venezuela. Moscow has also shown interest in critical minerals, securing a lithium development deal with Bolivia. However, economic engagement primarily serves broader political and strategic goals rather than being an end in itself.
Impact and Limitations
Russia's influence in South America is potent in specific niches but geographically and economically constrained. Its power projection relies heavily on its relationships with a small group of autocratic states. The "hybrid warfare" approach, blending disinformation, political subversion, and limited military posturing, focuses more on disrupting US interests and destabilizing the region than on building broad, constructive partnerships. Significant economic limitations prevent Russia from competing head-to-head with the investment and trade packages offered by Washington or Beijing. Furthermore, the ongoing war in Ukraine likely strains Russian resources and diverts attention, although paradoxically, the conflict also increased the perceived importance of cultivating allies and neutrality in regions like Latin America.
While Russia lacks the economic capacity to dominate South America in the way the US historically has or China currently aspires to, its influence should not be underestimated. Its strength lies not in conventional power but in its mastery of asymmetric tactics. By skillfully deploying disinformation through platforms like RT and Sputnik, exploiting historical grievances against the US, and providing unwavering support to regimes actively hostile to Washington, Moscow can act as a significant spoiler. It can amplify anti-American sentiment, polarize societies, and undermine democratic norms at relatively low cost. This strategy allows Russia to project influence and complicate US foreign policy objectives in the hemisphere, even without achieving broad economic integration or military parity. Its approach appears geared towards targeted disruption and maintaining strategic relevance through alliances with pariah states, rather than seeking comprehensive regional leadership. This makes Russia a persistent, albeit geographically limited, challenge to US interests and regional stability.
V. European Union Strategy
The European Union engages with South America through a distinct framework, emphasizing a partnership model built on shared values, deep economic integration, and cooperation on global challenges, particularly the green and digital transitions. It positions itself as a reliable, long-term partner, implicitly contrasting its approach with the perceived transactionalism or geopolitical maneuvering of other global powers.
Core Principles and Interests
The EU's engagement is guided by several core tenets:
Strategic Partnership: The EU officially frames its relationship with Latin America and the Caribbean (LAC) as a "strategic partnership," rooted in common historical, cultural, and democratic values, including respect for human rights and multilateralism. The stated goal is to evolve from being "natural partners" due to historical links to becoming "partners of choice" in addressing contemporary global issues.
Economic Interdependence: Strengthening trade and investment ties is a central pillar. The EU is LAC's third-largest trading partner (after the US and China) and, significantly, the leading source of foreign direct investment in the region, supporting millions of jobs.
Green and Digital Transition: Promoting a "fair, green, and digital transition" is a major priority, aligning with the EU's own domestic agenda, particularly the European Green Deal. This involves supporting renewable energy, sustainable resource management, and digital connectivity projects in South America.
Cooperation on Shared Challenges: The EU seeks collaboration on issues of mutual concern, including combating transnational organized crime, enhancing citizen security, tackling climate change, promoting public health, and upholding democratic governance.
Mechanisms for Engagement
The EU utilizes a multi-layered approach involving various instruments:
Trade and Association Agreements: The EU has established a comprehensive network of trade agreements covering 27 of the 33 LAC countries. These include modern agreements with individual countries like Chile and Mexico, and bloc-to-bloc deals with Central America and the Andean Community (Colombia, Ecuador, Peru). The most significant recent development is the political agreement reached in December 2024 on the EU-Mercosur Association Agreement (covering Argentina, Brazil, Paraguay, Uruguay, with Bolivia's accession pending ratification). This landmark deal, negotiated over 25 years, aims to eliminate tariffs on over 90% of goods, potentially saving EU exporters billions annually and granting Mercosur producers preferential access for agricultural products. However, the agreement still requires ratification by all member states and EU institutions, a process that has faced delays.
Investment and Development Finance: The Global Gateway initiative is the EU's flagship program for global infrastructure investment, aiming to mobilize up to €300 billion worldwide between 2021 and 2027. An investment agenda of €45 billion has been announced specifically for LAC. This initiative focuses on "smart, clean, and secure links" in digital, energy, and transport sectors, as well as health and education systems, presenting a "values-driven, high-standard, and transparent" alternative to China's BRI. Specific projects highlighted include support for green hydrogen and lithium development in Argentina and Chile, port and railway modernization in Brazil, digital connectivity and electric mobility in Colombia, and health infrastructure in the Caribbean. The European Investment Bank (EIB) is a key financial arm, having invested billions in the region over decades and playing a central role in deploying Global Gateway funds. At least 30% of EU financial assistance to LAC targets climate action.
Diplomacy and Political Dialogue: High-level engagement occurs through bi-regional EU-CELAC summits (Community of Latin American and Caribbean States), which serve as the main forum for dialogue. Parliamentary diplomacy is fostered through the Euro-Latin American Parliamentary Assembly (EuroLat). The EU also maintains structured political dialogues with sub-regional groups like Mercosur and the Andean Community, and holds bilateral strategic partnerships, such as the one with Brazil covering over 30 areas of cooperation.
Cultural and Educational Exchange: People-to-people connections are nurtured through cultural diplomacy initiatives and educational programs. The Erasmus+ program is particularly significant, having supported the mobility of over 15,000 students and staff between Europe and LAC since 2014, fostering academic collaboration and intercultural understanding.
Strengths and Weaknesses
The EU's approach has distinct advantages and disadvantages:
Strengths: Deep historical and cultural affinities provide a strong foundation for understanding. The EU boasts a substantial existing economic footprint through trade and leading investment levels. Its emphasis on shared values like democracy and human rights can resonate strongly with many regional partners. The Global Gateway offers a structured, standards-based framework for investment that contrasts with competitors.
Weaknesses: The financial scale of initiatives like Global Gateway is considerably smaller than estimates for China's BRI, potentially limiting its impact. Complex internal EU decision-making processes and the need for consensus among member states can lead to delays in finalizing or implementing agreements (as seen with the EU-Mercosur deal). The EU's focus on high standards (environmental, labor) can sometimes be perceived as protectionist or overly prescriptive by regional partners. Furthermore, the level of sustained high-level political attention from the EU towards the region has sometimes been viewed as insufficient compared to the proactive engagement by China.
The Global Gateway initiative encapsulates the EU's attempt to offer a distinct alternative in the global infrastructure race. It is explicitly designed to promote projects that are sustainable, transparent, and adhere to high environmental and labor standards, positioning itself as a "values-driven" counterpoint to the criticisms often directed at China's BRI regarding debt, opacity, and socio-environmental impacts. The focus on strategic sectors like renewable energy (green hydrogen, lithium), digital connectivity, and health resilience aligns well with both EU priorities (like the Green Deal) and pressing development needs in South America. However, translating this vision into a truly compelling counterweight faces significant hurdles. The €45 billion targeted for LAC under Global Gateway, while substantial, represents only a fraction of the estimated trillion-dollar scale of BRI investments worldwide. Concerns have also been raised about the actual pace of project implementation, the lack of public tracking for project progress, and the possibility that the initiative might primarily channel benefits towards European companies rather than fostering deep local development. For Global Gateway to be perceived as more than a symbolic gesture, the EU must demonstrate its capacity to deliver tangible, mutually beneficial projects efficiently and prove that its emphasis on values and standards translates into superior long-term outcomes for its South American partners, effectively competing not just on principles but also on practical results and scale.
VI. South American Responses
Caught in the crosscurrents of intensifying great power competition, South American nations are not passive recipients of external influence. Instead, they are actively navigating this complex environment, seeking to leverage opportunities while mitigating risks, often guided by long-held aspirations for greater autonomy and driven by diverse national interests and political orientations.
The Quest for Autonomy
A central and enduring theme within Latin American foreign policy discourse is the concept of autonomy. Originating in the context of dependency theory and Cold War pressures, autonomy represents the pursuit of independent decision-making capacity and self-determination, free from the dictates of hegemonic powers. It implies protecting national interests against external economic, political, and cultural interference.
In today's multipolar world, this quest often translates into strategies described as "active non-alignment" or "strategic autonomy". This involves actively engaging with multiple global partners – US, China, EU, Russia, and others – while deliberately avoiding exclusive alignment with any single bloc. The goal is to maximize diplomatic space, diversify dependencies, and pursue national development objectives on their own terms. Regional integration mechanisms like Mercosur, CELAC, the Andean Community, and the Pacific Alliance are often viewed, at least in principle, as potential platforms to enhance collective bargaining power and bolster regional autonomy, although internal political divisions and divergent national interests frequently limit their effectiveness in practice.Balancing Acts - Country Perspectives
The specific ways South American countries navigate this competition vary significantly, reflecting their unique circumstances, economic structures, and political leadership:
Brazil: Under President Lula da Silva, Brazil actively promotes a vision of "cooperative multipolarity," aiming to reform global governance structures to give greater voice to the Global South. It pursues "active nonalignment," maintaining robust economic ties with China (its largest trading partner and BRICS partner) while simultaneously valuing its relationship with the US (a major investor and traditional security partner) and engaging with the EU. Brazil seeks to act as a neutral mediator in global conflicts like Ukraine, though its positions have sometimes drawn criticism from the West. It leverages its considerable size, resource wealth (energy, agriculture), and diplomatic tradition to project influence.
Argentina: Historically a proponent of autonomy, Argentina under President Javier Milei has signaled a dramatic ideological shift towards alignment with the United States and Israel, while expressing hostility towards "communist" countries like China and distancing itself from regional partners and initiatives like BRICS. Milei's government has sought closer ties with NATO and made US defense acquisitions. However, Argentina's deep economic reliance on China – as a major trading partner, investor (especially in lithium), and provider of a crucial currency swap line – creates a significant tension between Milei's ideological preferences and pragmatic economic necessities. This may force a more moderate approach in practice than rhetoric suggests.
Chile: Known for its traditionally pragmatic and open foreign policy, Chile maintains strong relationships with both the US and China, being the first South American country to sign an FTA with China and also participating in the BRI. It carefully balances its significant economic dependence on China, particularly for copper and lithium exports, with its political and security links to the West. Chile generally advocates for multilateralism and free trade, while navigating pressures related to critical sectors and technological choices.
Colombia: Historically one of the closest US allies in South America, particularly on security and trade (US-Colombia TPA). Under President Gustavo Petro, Colombia is actively seeking greater economic diversification and has moved towards strengthening ties with China. This includes formalizing a Strategic Partnership in 2023, expressing interest in joining the BRI, and recently eliminating visa requirements for Chinese citizens to boost tourism and investment. Recent diplomatic friction with the Trump administration in the US may accelerate this trend towards China, although the US remains a vital partner, especially in trade and security.
Peru: Peru's foreign policy navigation is complicated by persistent domestic political instability. Economically, it is heavily intertwined with China, which is its largest trading partner and a dominant investor in mining and infrastructure, most notably the strategic Chancay port. Peru seeks to maintain functional relationships with both Washington and Beijing, but finds itself at the center of their rivalry due to projects like Chancay, which has generated significant US concern.
Venezuela: Under the Maduro regime, Venezuela has become deeply reliant on Russia and China for its political and economic survival, particularly in the face of extensive US sanctions. China acts as a crucial lender and the primary destination for Venezuelan oil (often sold at discounts or via opaque channels), while Russia provides military equipment, training, diplomatic support, and potentially mercenary assistance. This alignment provides a lifeline for Maduro but isolates Venezuela from much of the Western world and many regional neighbors.
Leveraging the Competition
Beyond individual country stances, South American nations employ several strategies to navigate the competitive environment:
Diversification and Bargaining: The presence of multiple powerful actors allows countries to seek better terms for trade, investment, and loans by playing potential partners off against each other. China's rise, in particular, provided a significant alternative to traditional reliance on the US and Europe, increasing regional bargaining power.
Attracting Investment: Competition is particularly fierce in strategic sectors like critical minerals (lithium) and infrastructure. Host countries can leverage this interest to attract financing, technology transfer, and infrastructure development, although they must carefully manage the risks of unfavorable deals or dependency.
Issue-Specific Alignment: Rather than committing fully to one bloc, countries often adopt flexible alignments based on the issue at hand. For example, many democratic South American nations tend to vote with the US and EU on UN resolutions concerning human rights and territorial integrity, while aligning more closely with China and other emerging economies on resolutions related to economic development or sanctions.
Regional Think Tank Perspectives
Recognizing the complexity of these dynamics, regional think tanks and academic institutions play an important role. Organizations like the Brazilian Center for International Relations (CEBRI), the Argentine Council for International Relations (CARI), and networks like the Network of Policy Centers of the Americas (CEPAS) contribute analysis and policy recommendations aimed at helping the region navigate geopolitical competition and advance its development goals.
The pursuit of strategic autonomy remains a powerful aspiration across South America. The emergence of a more multipolar world, particularly with China's rise, theoretically expands the maneuvering room for regional actors, offering alternatives to historical dependence on the United States. Countries like Brazil explicitly articulate foreign policies aimed at maximizing independence and balancing relationships. However, the practical achievement of genuine autonomy faces formidable constraints. Deep-seated economic realities, such as Chile's or Peru's reliance on Chinese markets for key mineral exports, Brazil's dependence on Chinese trade, or Venezuela's near-total reliance on Chinese and Russian lifelines, significantly limit freedom of action. Internal political instability, economic vulnerabilities, and persistent challenges to effective regional integration further curtail both individual and collective leverage. Moreover, the very nature of great power competition exerts its own pressures, often forcing difficult choices. Consequently, while the desire for autonomy is undiminished and the geopolitical landscape offers more options than in the past, the actual practice often manifests as a pragmatic, continuous balancing act – making issue-specific alignments and navigating dependencies – rather than achieving complete independence from external forces. Autonomy, therefore, remains more of a guiding principle and a negotiated reality than a fully realized state.
VII. Key Issues and Outlook
The competition among global powers in South America is not abstract; it plays out intensely across specific sectors and geographical areas, shaping the region's economic development, technological future, and security landscape. The trajectory of this contest remains uncertain, subject to shifts in global power dynamics, the policy choices of external actors, and the agency of South American nations themselves.
Arenas of Intense Competition
Several key domains have become focal points for rivalry:
Critical Resources: The "Lithium Triangle" (spanning parts of Argentina, Bolivia, and Chile), holding over half the world's known reserves, is a prime battleground. China has invested heavily (over $16 billion from 2018-2024) to secure lithium supplies crucial for its dominance in electric vehicle batteries and the green energy transition, acquiring significant stakes in production. This has spurred growing counter-interest and investment initiatives from the US and EU, seeking to diversify supply chains away from Chinese control. Oil and gas also remain vital, with China being a major investor and purchaser, particularly from Brazil and Venezuela, impacting global energy markets and US energy security calculations.
Infrastructure Development: Control over logistics and connectivity is fiercely contested. China's BRI projects, especially ports like Chancay in Peru and railways like the proposed Bi-Oceanic corridors, aim to reshape trade flows and deepen economic integration on China's terms. These compete directly with US-backed initiatives like Américas Crece and the EU's Global Gateway, which promote alternative models for infrastructure financing and development. Dominance in ports and transport networks offers significant economic and potential strategic leverage.
Technology Standards and Deployment: The rollout of 5G telecommunications networks has become a major arena for US-China rivalry. The US has actively campaigned against the use of equipment from Chinese companies like Huawei, citing national security risks related to potential espionage and control over critical infrastructure. Despite this pressure, Huawei remains a significant player in many South American markets, often offering competitive pricing, forcing regional governments and operators to make difficult choices between cost, technology, and geopolitical alignment. Digital infrastructure more broadly is a key focus of both BRI and Global Gateway investments.
Diplomatic Alignments and Multilateral Influence: Competition extends to influencing voting patterns within regional organizations (like CELAC, OAS, Mercosur, Pacific Alliance) and at the United Nations. China actively uses its economic leverage to persuade countries to switch diplomatic recognition from Taiwan. The US and EU emphasize partnerships based on shared democratic values, while Russia and China promote narratives of multipolarity and critique Western dominance.
Security Partnerships and Presence: The US maintains extensive security partnerships through SOUTHCOM and the State Partnership Program, focusing on training, exercises, and capacity building. This is increasingly challenged by China's expanding military diplomacy, including training programs, high-level exchanges, and arms sales, and Russia's focused military support for its key allies. Access for foreign military facilities, such as China's space station in Argentina or potential Russian naval access points, remains a highly sensitive issue with significant geopolitical implications.
Information and Cultural Space: A battle of narratives unfolds through state-sponsored media (RT, Sputnik, CGTN, Xinhua), the activities of cultural centers like Confucius Institutes, educational exchange programs (US Fulbright, EU Erasmus+, Chinese government scholarships), and the influence of think tanks and academic collaborations.
Future Trajectories and Uncertainties
The future direction of this competition is subject to several key variables:
US Policy Consistency and Engagement: The potential for significant shifts in US foreign policy, particularly regarding trade (tariffs), commitment to alliances, diplomatic style, and the level of sustained engagement under different administrations (e.g., a potential Trump 2.0 presidency), creates considerable uncertainty for South American partners. A perceived withdrawal or reduction in US engagement could create further openings for rivals and intensify competition.
Evolution of Chinese Strategy: It remains to be seen whether China will moderate its approach in response to criticisms regarding debt sustainability, environmental standards, and transparency, perhaps fully embracing the "small is beautiful" BRI model, or continue pursuing large-scale, high-impact projects like Chancay. How Beijing manages the potential downsides of its deep economic entanglement will significantly shape regional perceptions.
South American Agency and Integration: The capacity of South American nations to navigate the competition effectively, maintain policy space for autonomous decision-making, and potentially deepen regional cooperation to present a more unified front will be critical. Domestic political stability and economic performance within key regional countries will heavily influence their foreign policy choices and leverage.
The Global Geopolitical Climate: The overall trajectory of US-China relations, the outcome and long-term consequences of the war in Ukraine, and broader shifts in the global balance of power will inevitably reverberate through South America, shaping the incentives and constraints faced by both external powers and regional actors.
Conclusion
South America has unequivocally moved from the periphery to become a central stage in the unfolding drama of 21st-century global power competition. The era of unchallenged US hegemony has given way to a more complex, contested landscape where China's economic might, Russia's disruptive tactics, and Europe's partnership model intersect with Washington's efforts to adapt and reassert its influence. This "new great game" is characterized by intense competition for resources, markets, infrastructure control, technological standards, diplomatic alignment, and security partnerships.
For South American nations, this environment is fraught with both promise and peril. It offers unprecedented opportunities to attract investment, diversify international relationships, and potentially gain greater leverage in pursuit of national development goals. Yet, it also carries significant risks of becoming entangled in great power rivalries, facing economic dependencies that constrain policy choices, and potentially seeing internal divisions exacerbated by external pressures.
The aspiration for strategic autonomy remains a powerful force in the region, driving efforts to balance relationships and resist being drawn into zero-sum choices. However, the practical realization of this autonomy is constantly negotiated against the hard realities of economic interdependence, internal challenges, and the sheer weight of external powers' strategic interests.
