The Bald Eagle hovers over the hemisphere with his prominent beak held high and his eagle eye fixed on Mercosur’s presidential summit. But an enormous mythological beast also lurks on the sidelines, ready to steal the show. The Dragon is not offering bright mirrors and trinkets but enormous imports of commodities, multi-billion investments to construct infrastructure and a high-speed and cheap 5G network. Never, not even during the Cold War, has the hemispheric leadership of the eagle been so threatened.
The Dragon is strong in both attack and defence but the countries of the region observing this dispute from outside fear being compelled to choose between one and the other. Hence they face a dilemma: whomever they pick, they will have annoyed one of these powerful rivals. What would happen if they opt for the Dragon and the Eagle punishes them? Or the reverse?
Tension has not made itself present at Mercosur’s virtual presidential summit so far but it lies in the head of all participating. If the bipolarity emerging between Beijing and Washington becomes ever more conflict-ridden, as some international analysts warn, those strategic decisions taken by the Casa Rosada and Planalto will mark a before and after for Argentina and Brazil respectively.
What will the cooperation be like between the two countries who today are Mercosur’s main trading partners but whose bilateral trade has been crumbling steadily for years? How will they share information in a world where the White House, the hemispheric superpower, singles out China, the main trading partner of Southern Cone countries, as a threat to their national security and international hegemony?
From São Paulo, Professor Oliver Stuenkel of the Getúlio Vargas Foundation points out that this is the worst time for bilateral relationships since the 1980s.
“The region has no process for coordinating its strategy in a world increasingly marked by geopolitical tensions between the United States and China. There’s a danger of countries becoming part of different spheres of influence,” he explained.
“We are talking about not only commercial and geopolitical but also technological spheres of influence with a risk that they may be incompatible,” he adds.
Mercosur is undergoing a perpetual endogenous crisis – open markets versus protectionism – which it does not know how to manage. While Brazil, Uruguay and Paraguay want to sign new free-trade agreements and reduce the Common External Tariff, Argentina is opposed.
Historically, crises have been resolved by a dose of political consonance between Buenos Aires and Brasilia. Mercosur today cannot count on that asset. The paralysis and lack of coordination between the two governments exposes them more to an external vulnerability – becoming one of the regions where the US and China settle their differences.
Francisco de Santibañes, the secretary-general of CARI (the Argentine Council of International Relations), says that a military confrontation between China and the US would be suicidal because both have nuclear weapons.
“Logic indicates that they will resolve their disputes at other levels – cultural, technological and diplomatic. In the event of a military resolution, that will unravel in other regions via proxy states responding to China or the US,” he assures, while warning: “That could be transferred to Latin America and in particular to South America.”
That seems remote. Ever since the times of José Sarney and Raúl Alfonsín, Argentina and Brazil have shelved their hypotheses of conflict and their mistrust, creating the Agencia Brasileño Argentina de Contabilidad y Control de Materiales Nucleares for mutual nuclear inspection.
Nevertheless, the danger is that the two countries act in future in function of the interests of the superpowers, engrossed in a global dispute for hegemony, transforming themselves into their proxies.
A probable scenario in the short term. Brazil, consistent with the “carnal relations” of Jair Bolsonaro with the United States, is moving to bar the Chinese telecommunications giant Huawei in its tender to construct its 5G network. Alberto Fernández, in contrast, is contracting the cheapest supplier: the company headed by Ren Zhengfei. Argentina and Brazil thus find themselves in two different technological spheres of influence and their strategic association is signing its death certificate. What will Planalto and the Casa Rosada do to avoid that?
“Nobody knows exactly what the strategy of each country will be with regard to Huawei. If both define very different strategies, this will inescapably have a negative impact on the relationship,” considers Stuenkel.
“What worries me greatly is that there will be no coordination. South America will be a rule-taker. Its disunity, with no institutional cooperation, will make it very vulnerable and susceptible to this new trend towards geopolitical tension between the two superpowers,” he warns.
De Santibañes highlights the importance of the decision too. “5G is an example of the strategic decisions which our countries have to take and where the positions of the US and China are different. These are questions which complicate the possibility of having a strategy of getting on well with both powers, which is to what we should aspire as far as possible.”
In order to achieve that, the Argentine specialist, a Global Fellow of the Wilson Center, recommends “strengthening multilateralism so that middleweights like Brazil, Mexico and Argentina influence the formulation of the new international context and the bipolarity does not sweep all aside.” He further underlines the importance of boosting the strategic association with Brazil, emulating France and Germany in Europe.
Stuenkel describes the shape of “the new normality” for South American geopolitics in the next few months: “Brazil and Argentina are going to lose their capacity to influence what happens in the continent. The US and China will be more influential in all the capitals of South America. We’ve already seen that since 2013 in Venezuela.”
For Argentina and Brazil this decision means geopolitical survival. If they do not understand and cooperate, the dispute between the Eagle and the Dragon can hurt them.