By Nick Corbishley

January 24, 2023  Naked Capitalism


“In a lot of our countries in this region, [the People’s Republic of China] is the number one trade partner, with the United States number two in most cases”: General Laura Richardson, USSOUTHCOM.

As regular readers are by now probably aware, the Commander of US Southern Command (USSOUTHCOM), General Laura Richardson, has a rare talent for saying the quiet parts out loud. That talent was on full display in a recent interview with Washington-based think tank, the Atlantic Council last Thursday (Jan 19). In one 90-second clip (featured below) Richardson laid out in disarmingly frank terms why the US is showing a renewed interest in Latin America: the region’s abundant natural resources.

“Our” Countries in Latin America

Those resources include rare earth elements, lithium, gold, oil, natural gas, light sweet crude (huge deposits of which have been found off the coast of Guyana), copper, abundant food crops, and fresh water. And the US government and military, and the corporations whose interests they serve, have their eyes on all of them. As the Argentinean journalist and news presenter Carlos Montero lamented in a tweet, it would be nice to live in a would where the US wasn’t interested in Latin America for the riches it could plunder but to help it break free from being the world’s most unequal region.

Of even greater concern to the US is that many of Latin America’s resources are now being sold to its number-one adversary, the People’s Republic of China (PRC).  Its number-two adversary is, of course, Russia, with whom a number of LatAm countries have close military ties. As Richardson told the Atlantic Council’s virtual audience (emphasis my own), “in a lot of our countries in this region, [the PRC] is the number one trade partner, with the United States number two in most cases.” She then clumsily corrected herself: “Not in most cases, I would say in some cases.”

Tellingly, she did not correct the Freudian slip, “our”. As I said, she has a gift of saying the quiet parts out loud. Rare earth elements, lithium, oil, light sweet crude, copper, gold, the Amazon, and fresh water.

The reality is that China is already South America’s biggest trading partner. The US still holds sway over Central America and is still the region’s largest trading partner as a whole. But that is primarily due to its gigantic trade flows with Mexico, which account for 71% of all US-LatAm trade. As Reuters reported in June, if you take Mexico out of the equation, China has already overtaken the US as Latin America’s largest trading partner. Excluding Mexico, total trade flows — i.e., imports and exports — between China and Latin America reached $247 billion last year, far in excess of the US’ $173 billion.

The US is now in a desperate race to turn back the clock. To do so, it is rejigging the Monroe Doctrine, a 200-year old US foreign policy position that opposed European colonialism on the American continent. It held that any intervention in the political affairs of the Americas by foreign powers was a potentially hostile act against the United States. Now, it is applying that doctrine to China and Russia.

General Richardson detailed how Washington, together with US Southern Command, is actively negotiating the sale of lithium in the lithium triangle to US companies through its web of embassies, with the goal of “box[ing] out” out adversaries (clarifying comments in parenthesis my own):

Just yesterday we had a — I had a — zoom call with the US ambassadors from Argentina and Chile, and then also the strategy officer from (Pennsylvania-based Tesla lithium supplier) Livent and also the VP for global operations from Albermarle for lithium (the US’ largest provider of lithium for electric vehicle batteries) to talk about the lithium triangle in Argentina, Bolivia and Chile, and the companies and how they’re doing and what they see as challenges and things like that in the lithium business. And then the aggressiveness and coercion from the PRC.

And so the ability to get those groups together to leverage what’s really happening on the ground and, you know, how we can help and, you know, who else we can bring to the table to help us to figure the problems out and (here comes the crunch) box out our adversaries.

Each time Richardson uses the word “we” in the second paragraph, she is referring, presumably, to USSOUTHCOM, the command unit of the US Department of Defense that she heads, which is responsible for providing contingency planning, operations, and security cooperation for Central and South America, and the Caribbean. So, essentially the US military is trying to figure out ways of preventing the US’ biggest adversaries, China and Russia, from being able to purchase strategic resources in Latin America and the Caribbean.

It is not just the US that is taking a tougher stance on Chinese trade and investments in the so-called “critical minerals” sector, which generally includes aluminum, lithium, nickel, cobalt and rare earth elements. So, too, are fellow “Five-Eye” nations Canada, Australia and the UK. As readers may recall, in June last year the Biden administration signed, to minimal fanfare, a “minerals security partnership” (MSP) with some of its strategic partners, including the European Commission, Canada, Australia, Japan, the Republic of Korea and the UK.

In a press statement, the US Department of State said:

“The goal of the MSP is to ensure that critical minerals are produced, processed, and recycled in a manner that supports the ability of countries to realise the full economic development benefit of their geological endowments.”

As NC reader Sardonia put it sardonically, this is “surely some of the most polite language ever heard from someone holding a gun to someone else’s head as they demand the contents of their victims’ purse.” The US describes the partnership as a coalition of countries that are committed to “responsible critical mineral supply chains to support economic prosperity and climate objectives.” In what is almost certainly a more fitting description, Reuters dubbed it a “metallic NATO.”

Unused Russian-Made Weapons for Ukraine

Washington is also working with countries in the region that have Russian military equipment to “either donate it or switch it out for United States equipment.”

Three Latin American countries — Venezuela, Cuba and Nicaragua — already have close military ties with Russia. Those ties are, if anything, getting closer. All three countries are currently the target of US sanctions. Another six countries in the region apparently have stocks of Russian weapons. Discussions with those six countries “are in the works,” said Richardson, adding that sanctions against Russia mean its allies in the region “are having a hard time getting the spare parts [needed]… to keep the weapons systems capable.”

As I reported back in August 2022, Latin America is back on the grand chessboard as the race for strategic resources and influence intensifies in the new cold war. Days earlier, Vladimir Putin had offered Russia’s allies in Latin America, Asia and Africa advanced Russian weaponry — all in the name of safeguarding “peace and security” in the emerging multi-polar world.

Speaking at the opening ceremony of the International Military and Technical Forum 2022 and the International Army Games-2022, the Russian leader heaped praise on non-aligned countries for not kowtowing to the global hegemony and instead choosing to steer a more independent course of development:

“We highly appreciate the fact that our country has many like-minded allies and partners on different continents. These are the states that do not succumb to the so-called hegemony. Their leaders show a real masculine character and do not bend.”

Needless to say, Putin’s invitation did not go down well in Washington or Brussels. As I warned back in August, the US and the EU are beginning to ratchet their response to China and Russia’s growing influence in Latin America.

The fact that senior US military officials are pressuring LatAm countries to give up their Russian-made materiel could be construed as yet more evidence that the NATO alliance is more resource constrained than most Western media outlets will let on. According to Voice of America, other top U.S. officials have underscored the importance of “supplying Russian-made equipment that is already familiar to Ukrainian troops”, as it may not be “possible to fully train Kyiv’s forces on the new Western systems in time to counter possible Russian offensives in the coming months.”

Latin American countries with significant stockpiles of Russian-made military hardware include Peru, Mexico, Ecuador, Colombia and Argentina, according to Ryan Brobst, a research analyst at the Center on Military and Political Power at the Foundation for the Defense of Democracies (FDD). To what extent those countries will be willing to donate or “switch out” those stockpiles to the Ukrainian cause, no doubt under significant pressure from the US, remains to be seen.

Over the past eleven months, most countries in Latin America, including the two largest, Brazil and Mexico, have steadfastly refused to take any kind of active role in the West’s war against Russia. In late December, just before his recent inauguration, Brazilian President Luiz Inacio Lula da Silva met with representatives from Russia and Ukraine and called for an end to the war between the two countries.

Most governments in the region have also resolutely opposed US-EU sanctions against Moscow. Many are terrified, understandably, by the precedent the U.S., EU and friends have set by attempting to excise Russia from the global financial system.

Another Shot Across the Bow

The warnings and threats are not just coming from US Southern Command. A couple of weeks ago, Dr. Evan Ellis, a research professor of Latin American studies at the U.S. Army War College Strategic Studies Institute, published a paper in the Center of Strategic Studies of the Peruvian Army. Titled “The Strategic Role of Latin America in a Global Conflict Over Taiwan,” the paper explores the role Latin America might play as an object of Chinese military activities, in the context of a hypothetical conflict with the United States and allied Western powers over Taiwan, in 2027, triggered, of course, by an unprovoked Chinese invasion of the island state.

Ellis, like General Richardson, is at pains to stress that the US government considers any Chinese commercial or infrastructure project in Latin America as “dual” use. In other words, both Chinese infrastructure and commercial projects in the region could be used for military ends. In the projected global conflict China could use them as “intermediate staging bases” for attacks against the US supply of food and other critical minerals, or perhaps directly against the US homeland.”

And here is the shot across the bow:

“It is in the interest of political leaders and others in the region to consider how military interactions with the PLA, as well as commercial projects with PRC-based companies in strategic sectors such as ports, space and the digital domain, may indirectly contribute to the way the Chinese might look to exploit opportunities created by such projects.”

Let us be clear: this is a threat, of the barely veiled variety, to all LatAm countries that have forged significant trade ties with China and are thinking of further strengthening those ties. But it remains to be seen just how those countries will respond.

One possible early indicator came yesterday from Argentina’s president Alberto Fernández, who is currently hosting the seventh summit the Community of Latin American and Caribbean (CELAC). Some heads of state in the region, including Mexico’s Andrés Manuel López Obrador, have envisaged CELAC as a potential replacement for the US-dominated Organization of American States (OAS), which has played a part in recent US-sponsored soft coups. Fernández himself has applied for Argentinean membership of the soon-to-be enlarged BRICS grouping.

Yesterday (Jan 23), he said he was confident that CELAC “can help deepen links with China.” He also lambasted the US for its constant demonization of China, wrongly attributing the start of US escalations with China to Trump when it was actually Obama who “pivoted” to Asia (h/t Louis Fyne):

“Since Trump the United States has sponsored and encouraged the ”demonization“ of China, but I have never bought that idea. Argentina is a sovereign country and has the right to hold ties and relations with those it considers friends, and with those who offer the best opportunities to develop.”

And this is arguably the US’ biggest problem. To borrow from Michael Hudson, its model of finance capitalism is struggling to compete with China’s model of industrial capitalism, even in its own “back yard”. For the moment, China is handily winning the resource race in the region, thanks largely to its well-honed strategy of offering many of the perks of trade and investment with little in the way of conditions.

What’s more, its financial terms and conditions are generally less onerous — or at least have been until now. In her interview with the Atlantic Council, General Richardson said as much, admitting that when the US offers new infrastructure or equipment to LatAm governments, whether military or civilian, the invariable response is: “what about the financing? That’s more important to me right now.”

Which begs the question: what happens if the US is unable to “box in” China and Russia? I’ll let Richardson answer that question (emphasis my own): “in some cases our adversaries have a leg up. It requires us to be pretty innovative, pretty aggressive and responsive to what is happening.” Given the US’ long history of interfering in its neighbors’ affairs while sowing discord, conflict and chaos across the region, this is a threat that should not be taken lightly.