Miami is vital for U.S. trade with Latin America and the Caribbean. Bob: Miami spends quite some time discussing the Free Trade Area of the Americas despite the trade talks having stalled. This blog’s attention remains on the FTAA because negotiations for the trade bloc have been occurring since the first Summit of the Americas in 1994, which by no mere coincidence was held in Miami. In other words, the FTAA was not dreamt up yesterday and has maintained over 12 years of lasting power—at least as an idea. The FTAA is endangered not just because of lack of dialogue and compromise but also by the China Effect.
This is critical for Miami because the People’s Republic of China (PRC) invests little in the city whereas PRC investment in Panama and other Latin American and Caribbean nations is high in comparison. The PRC, with its growing capital influence, can create an economic paradigm shift in the entire region. Already the PRC has recognized the Panama Canal’s significance in its overall trade strategy and as a result the trans-oceanic waterway’s two main ports (Cristobal and Balboa) are controlled by Hong Kong based Hutchison Whampoa Ltd. The managing company’s actual name is Panama Ports Co., but it is a subsidiary of HW Ltd. This replacement of U.S. control with Chinese is symbolic.
This level of PRC involvement is not conducive for economic unification among the south, central, and southern portions of the hemisphere. Instead, PRC efforts in the region are subversive and serve to reduce interest in the FTAA. PRC investments are bolstering the economic stance of cities such as, Panama City and countries such as Venezuela, while at the same time tempting other Latin American and Caribbean nations away from U.S. orbit. The economic pull of the U.S. is weakening in its own backyard. When it comes to U.S. trade with Latin America and the Caribbean, Miami is the focal point. Naturally, the inevitable effects of PRC intervention in Latin America and the Caribbean will be felt there first.