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Mercantilism With Chinese Characteristics in LatinAmerica

Dr. Evan Ellis is Senior Non-Resident Fellow at CSIS and Professor ofLatin American and Caribbean Studies. His work focuses on securityand defense issues, including transnational organized crime, populismand the region's relationships with China and other non-WesternHemisphere actors. Dr. Ellis has published over 250 works, includingthree books and has presented his work in 26 countries across fourcontinents. He has testified on multiple occasions regarding LatinAmerica and the Caribbean before the U.S. Congress and his workregularly appears in the media in both the U.S. and the region. Throughhis work, Dr. Ellis calls attention to the strategic importance of LatinAmerica and the Caribbean for the United States through bonds ofgeography, commerce and family and how the prosperity and securityof the U.S. are tied to that of its partners in the region.
This article has been published with the permission of Dr Evan Ellis.  This is his copyright and may not be used without his permission.

The U.S., Latin America and China know mercantilism well. Britishrestrictions on direct trade between its colonies and Europe to advantage itsown industry was a driving factor in the American Revolution.
The "Boston Tea Party," taught to U.S. children from grade school, was aniconic protest against British mercantilism. Similarly, for Latin Americans,Spain's use of mercantilist regulations, including the famous
"Quinto" tax on mineral exports, was part of a system to extract the wealth of its colonies,while its  protected manufacturers sold them finished goods.
In Asia, from the 16th through 19th century, mercantilism through the DutchEast India Company and British East India Company included the dominationof ports, supply routes and markets to capture as much of the value addedas possible in the trading system, later with political and military involvement
to protect the system from challengers.
In the 20th century, Latin American dependency theorists and promoters of autonomous development
essentially argued that the structure of economicrelations between the region and the developed world was "rigged" againstthe developing world, locking in a disadvantageous relationship in which foreign corporations paid relatively little to buy (or directly extract) theregion's commodities, while selling it their own high value-added goods,condemning Latin Americans to work as their employees, or worse, ratherthan reaping the benefits of ownership and production for themselves.
In this view, local elites sold out their societies by agreeing to the lopsideddeals which often benefitted them personally, and enforcing the order that those nontransparent, often corrupt deals produced.
Today, it's China, once victims of mercantilism themselves, who are exploiting international trade
and investment to reorient the world to theiradvantage through a predatory coordination between their national championcompanies, well-resourced financial partners, and their government.
The PRC discourse of mutually-beneficial " win-win" relations superficiallysounds more attractive than some of the rhetoric from Washington in recentyears. Yet my Latin American colleagues understand well the differencebetween platitudes that warm the ear, versus actions that serve theirinterests and benefit their countries. The more than $137 billion China has loaned to the region, the $122 billion its companies have invested in theregion over the past two decades, and $278 billion in bilateral trade soundslike a good deal.
Yet as I have watched the dynamic play out in the 16-plus years I havefollowed and written on Chinese engagement with the Americas, myresearch has mostly found Latin American manufacturers displaced byChinese ones, and PRC-based owners replace U.S. and European ones inmines, oilfields, ports, agro-industrial firms and electric companies, withnegative implications for those who work there, the communities with whomthey interact and the environment.

My work has brought me to the stories of businessmen tied to populistleaders from Hugo Chavez and Nicholas Maduro to Rafael Correa and Evo Morales enriching themselves in corrupt, non-transparent deals which conferbenefits to their Chinese partners, without furthering sustainabledevelopment in their countries. Latin America, tragically, is expert in tradingone form of exploitation and domination for something worse.