The Biden administration said Friday that it would begin negotiations with 11 mostly Latin American nations on an agreement designed to promote regional economic cooperation without offering greater access to the U.S. market for their goods.
The initiative is intended to spur broad prosperity and tackle some of the Western Hemisphere’s toughest problems, including mass migration to the United States.
But the Americas Partnership for Economic Prosperity (APEP), which President Biden launched in June at a summit with regional leaders, falls short of the traditional trade agreements the United States has negotiated in the past.
“It’s reasonable for people to be skeptical about how much real impact this will have,” said Matthew Goodman, a former White House official in the Obama administration who is now at the Center for Strategic and International Studies.
APEP reflects the administration’s efforts to reconcile its desire for stronger regional ties with congressional opposition to further trade liberalization, which many lawmakers — and the president’s labor union allies — blame for the loss of millions of American manufacturing jobs. Biden aides are pursuing a similar deal, the Indo-Pacific Economic Framework for Prosperity, in talks with 12 countries in Asia.
The administration’s Latin American push comes as China has significantly expanded its influence in the region. Chinese customers now purchase almost 15 percent of the region’s exports, up from just 1 percent in 2000, according to the International Monetary Fund. A total of 21 Latin countries — including eight APEP members — participate in Beijing’s global infrastructure investment program known as the belt-and-road initiative.
The United States already has trade agreements with nine of the countries that have agreed to participate in the initial APEP negotiations. The APEP group includes Barbados, Canada, Chile, Colombia, Costa Rica, the Dominican Republic, Ecuador, Mexico, Panama, Peru and Uruguay.
Notable absences from the first round of talks include Brazil and Argentina, two of the region’s largest economies.
No date has been set for the start of the formal talks, though U.S. officials said they would begin soon.
“We’re going to move very quickly,” said an administration official who insisted on anonymity to brief reporters before the official announcement.
Rather than offering greater access to the U.S. market, the partnership is designed to promote labor standards, supply chain resilience, decarbonization and pandemic recovery, officials said.
The administration also hopes to breathe fresh life into the Inter-American Development Bank, a multilateral financial institution that has been criticized for ineffective lending.
Officials who briefed reporters offered few specifics about the partnership, which they described as a “flexible framework” that will include “high standard agreements.”
Regional officials and analysts said they were puzzled by the lack of concrete results following Biden’s remarks last summer.
“Of course, we are happy to participate,” said a senior official from a participating nation. “But it’s an invitation to talk. There’s no proposal, for example if you compare it to … when trade treaties were negotiated. This is much more modest and limited.”
Many countries want greater investment, said the official, who asked not to be quoted in order to be candid.
“But it is not clear how the United States, in this very competitive world, will push for this to happen. The Chinese are everywhere, and the Europeans are very active in Latin America today,” said the official, who questioned whether the partnership would meet the region’s investment needs.
The Biden administration’s proposal represents a sharp contrast with earlier efforts to boost U.S. trade with its southern neighbors. In 1994, 34 nations agreed to launch negotiations aimed at a Free Trade Area of the Americas (FTAA). The deal would have gradually lowered tariffs and other trade restrictions across a massive territory stretching from northern Canada to the southern tip of Argentina.
After the talks collapsed in failure, the United States turned to negotiating smaller deals with countries such as Colombia.
In a recent appearance at CSIS, Jose Fernandez, the undersecretary of state for economic growth, energy and environment, defended the Biden administration’s approach to trade deals.
“What we’re trying to do is to craft new rules of the road, create rules of the road where our workers can compete — not a race to the bottom,” he said. “Our agreements try to establish a new global code of conduct.”
Voters will hold the administration accountable if Biden’s new approach to trade ultimately favors corporate interests, according to Lori Wallach, a trade expert with the American Economic Liberties Project, a nonprofit that opposes concentrated economic power.
“It could have major policy and political impact because millions of Americans who were slammed by past corporate-rigged trade agreements hear that this administration is creating a new trade policy to help them and that creates expectations that can turn to anger,” she said.
Unlike a traditional trade deal, whatever emerges from the negotiations with regional countries will not require congressional approval. Such an executive agreement would not be legally binding and would lack the reciprocal benefits of a full trade pact, according to Goodman.
“This kind of agreement doesn’t have the same kind of credibility and durability of a trade agreement,” he said.
