OPEU Interview with EVAN ELLIS: ‘CHINESE ENGAGEMENT HAS TAKEN ON A MORE POLITICAL AND STRATEGIC TONE IN LATIN AMERICA’
By Yasmim Abril M. Reis* [OPEU Entrevista]
In this OPEU Interview, we converse with Robert Evan Ellis, who holds a PhD (1995) in Political Science with a concentration on comparative political studies from Purdue University. He is also a research professor of Latin American Studies at the U.S. Army War College’s Strategic Studies Institute, focusing on the region’s relations with China and other non-Western actors in the hemisphere. Along with organized crime and the populist movement in the area.
He was a member of the Secretary of State’s policy planning team in the Donald Trump administration, focusing on the Latin American and Caribbean region. Also on international issues related to drugs and law enforcement.
Professor Evan Ellis is known for his studies on Latin American security issues and their relationship with the Chinese presence and other external actors in the region. This and other topics are the subject of this conversation. Below are the main excerpts of the conversation:
OPEU: Good morning, Professor Evan. Firstly, I would like to thank you for accepting the invitation to give us this interview. To begin with, you are a known professor who studies Latin American issues from different points of view. Given this, we’d like to ask why you became interested in academic studies on this relationship?
I begin to follow Chinese activities in Latin America in approximately 2003 as an analyst with the consulting firm Booz Allen Hamilton, in conjunction with my work on Latin American issues. In November of 2004 I was at a research engagement in Talca, Chile, when then Chinese President Hu Jintao traveled to the region to participate in the APEC leaders summit. I realized, from the favorable response in the region to China’s promises of then $100 million over the next 10 years, that something important was going on, especially with respect to the receptivity of Latin American governments which were then at a low point in the receipt of Western foreign direct investment. I also realized that the issue was below the radar screen at that time for senior US policymakers, so I began to write on it and had the fortune of coming out with some of the early published articles when business and government organizations were trying to understand what was happening. That led to a number of open doors for me, including participation in events in various countries in the region on the topic, an opportunity to teach one of the first graduate level classes on the topic, at the University of Miami. Over the years, as I joined government, my perspective in following the issue has evolved, and the community of businesspeople, academics, and others, and the level of knowledge about the topic has also evolved. But my commitment to it has deepened over the years because of my understanding of the importance of the effects of this engagement on the political and economic system of the region to which the United States is most closely attached by bonds of commerce, geography, and family.
OPEU: Reflecting on your academic journey in Latin American studies, from the perspective of the United States’ historical relationship with the Latin American and Caribbean region… How do you analyze the impact of the Chinese presence in the LAC region over the last five years, particularly on strategic partners of the United States?
China has engaged with, and continues to engage with, a broad array of types of governments, at the national, sub national, and multilateral level, not necessarily limited to those with an anti US orientation, adapting its approach to the level of institutionalization, political receptivity, and other attributes of the government as it finds it. The period from the end of the global financial crisis in approximately 2008, until COVID in 2020, saw a dramatic advance of pierce presence on the ground across Latin America, and with it, a combination of conflict, and learning by Chinese companies and local partners. Some of the Chinese momentum was lost even before COVID with the slowing of the Chinese economy in approximately 2015, but certainly the pandemic opened up new opportunities for China to engage through vaccine diplomacy, while suspending some of its projects in other areas.
In the post COVID, China’s projects have shifted away from large scale mergers and acquisitions in traditional commodity sectors, and large state to state construction projects, Greenfield investments, and the state-to-state loans, to what the Chinese now call small and beautiful. The projects that are going forward now are at a smaller scale, in areas that economically make more sense, and especially concentrate on strategic industries of interest to the Chinese such as green energy generation and transmission, and the digital sector. With mixed results, the Chinese have also sought to use commodity transactions and bank swap agreements to internationalize the RNB, with success in Brazil, and at a smaller scale in Chile and Bolivia, and with more mixed results in Argentina. Chinese engagement has taken on a more political and strategic tone through increased emphasis on the global development initiative, as well as the global security initiative as it applies to Latin America, and the global civilization initiative. The Chinese have progressed but also received significant pushback with respect to military sales and, losing important bids in selling their gear to Argentina and Uruguay, and also seeking to expand their presence in space collaboration, also with significant pushback in countries such as Argentina, but with continuing progress at a lower level in countries like Venezuela and Nicaragua.
In the multilateral domain, the Chinese have increasingly worked through CELAC to advance their agenda, including multiple China-CELAC related forums such as the China-CELAC defense forum, the China-CELAC think tank forum, and the China-CELAC space forum. The Chinese have continued to use the negotiation of free trade agreements, and the pursuit of special economic zones with some success, including the signing of a new free trade agreement with Ecuador, the finalization of one with Nicaragua, and FTA’s in progress with El Salvador and Honduras. The Chinese have had some success in changing diplomatic relations of smaller states in the region from Taiwan to the PRC, particularly Honduras and Nicaragua, and has moved forward fairly aggressively and expanding their influence in these states, including diplomatic training programs, media outreach, and promised infrastructure projects. With increased tension between the US and China, and the associated commercial decoupling phenomenon, Chinese companies have also sought to invest in Mexico, to preserve access to the US market by reinventing themselves legally as Mexican companies, within the framework of USMCA, although this has recently received increasing focus and pushback by the Biden administration.
OPEU: Over the last few decades, we have witnessed significant growth in the Chinese presence in the region. Mainly through indirect investments, infrastructure, and civil works, and now, finally, a massive investment in the energy transition towards a green economy, as some authors refer to it. Given this, how do you analyze the Chinese government’s recent decision to invest in electric vehicle factories, such as BYD, in the region?
The Chinese government has identified a number of sectors in the digital arena, as well as green energy, space, and others as strategic both to their economic advance, as well as for other purposes. In the context of the green energy transition, the effect of state support and initiative by Chinese companies in winning ground in an array of areas such as photovoltaic panels, electric cars, and supporting industries such as lithium is thus not surprising. In the context of accommodation of subsidies, appropriated technology, and significant effort, BYD, among other Chinese electric vehicle manufacturers, has begun to project itself internationally. Local assembly operations in countries with tariff barriers such as Mexico and Brazil are one vehicle by which such companies have always penetrated those markets. Thus, it is not surprising to see BYD bidding to construct an electric vehicle plant, or at least a hybrid vehicle plant, in Mexico, both with an eye to establishing itself there, but also eventually targeting the sales into the US market, as a competitor to Tesla and others, as long as U.S. policy from either the Biden or future trump administration do not see it as a threat. I personally suspect this will be a symbolic battle because get involves the dethroning of the key US producer, Tesla, and the danger that US green energy subsidies could benefit the Chinese, a major strategic, as well as a political problem in the US during a polarized election year.
OPEU: In addition to the previous question, according to data from the Mexican government, in the year 2022, Chinese investment in Mexico alone increased by 50%, amounting to the equivalent of 587 million dollars in the economy. According to Susan Strange, the economy is one of the components of US structural power. What would you highlight as the main challenge for the next few years, both in terms of the economy and politically, for the relationship between the United States and Mexico?
The US, China, Mexico strategic triangle, in the context of USMCA, is complex. Although the Trump administration successfully increased US domestic content provisions and otherwise improved and modernized the old NAFTA agreement in moving to USMCA, there are still substantial vulnerabilities of China-based companies reinventing themselves as Mexican companies to preserve access to the US market, as a natural result of decoupling. This has been the primary incentive for the flood of Chinese companies to set up light manufacturing and distribution operations in the north of Mexico, or otherwise integrate themselves into US focused supply chains in Mexico. Recent events, including proposed substantial increases in US tariffs on electric vehicles and other items, illustrate how the Biden administration has taken note and is just beginning to respond to these vulnerabilities, for both technical trade reasons, and national strategic reasons. Addressing the vulnerability of Chinese companies entering the US market in strategic sectors through Mexico is primarily a technical issue, although it will have political repercussions.
The nature of the relationship will likely be dramatically changed by the almost certain election of Claudia Sheinbaum to succeed Andres Manuel Lopez Obrador, AMLO, on June 2nd. Sheinbaum brings a technocratic expertise oriented to environmental issues and a willingness to engage on the fine points of trade in ways that AMLO, as an old-school politician, arguably did not. Some of the implications include the opening up of Mexico’s green energy sector, where China already has a presence through Zuma energy, technical engagement with the US to preserve USMCA, especially when its review occurs in two years’ time, and also dealing with non-economic issues such as Mexico’s security challenges, drugs, weapons, and migration, to name a few. I suspect that the Sheinbaum relationship with the US may actually become more fluid and positive, although Sheinbaum may also be willing to engage with the already expanding Chinese business presence in ways that AMLO was reluctant to do, yet still within the framework of Mexico’s assertion of its national sovereignty. Sheinbaum’s relationship with the liberal [prime minister Justin] Trudeau administration in Canada, in a way that is likely more comfortable than AMLO’s relationship with Trudeau was, will also impact the dynamics.
OPEU: In recent decades, US foreign policy has focused on the Middle East as a result of the Global War on Terror. On the other hand, China has made significant advances in various regions, particularly throughout Latin America and the Caribbean. Given this, since the Trump administration, the former president’s rhetoric on China has driven changes not just in speech, but also in policy. What do you see as the outlook for Sino-American and Latin-American relations in the coming years?
Under either a Trump or Biden administration, US China relations will continue to be tense, across a range of global issues, as well as in commercial and technology competition, and in other areas. This is driven in part by the increasingly authoritarian and aggressive orientation of the PRC globally under President Xi Jinping, with respect to his orientation towards Hong Kong, Taiwan, the militarization of the South and East China seas, the assertion of Chinese sovereignty over the territorial waters of numerous neighbors and associated use of the Chinese Coast Guard and maritime militia to enforce those claims, China’s increasingly overt backing of the aggression of other minor partners such as Russia in the Ukraine, and Iran in the Middle East, including armed support, and China’s increasingly frontal push back against the rules based international order in a range of domains. China’s increasing military power, especially its capabilities in the cyber and space domains and its projection of that military power globally, will also raise concern for both Republican and Democratic Administrations. Its bids to dominate key technologies, including electric vehicles, artificial intelligence, telecommunications, and other areas will raise strategic concerns. The temptation of Xi Jinping to obtain Taiwanese autonomy through coercion or other means could lead to miscalculation that could unleash a disastrous conflict. Despite such issues, many Governments in Latin America will continue to turn a blind eye to China’s posture in the hopes of securing economic benefits from selling their commodities and receiving loans and investment from the PRC, while calculating that they can control the risks, and still maintain positive relationships with other actors. China’s engagement will help to sustain anti US populist actors like Venezuela, Nicaragua, Cuba, and Bolivia, while also leading to a deterioration of governance and willingness to work with the United States of a range of others, even though the benefits of that collaboration with China will be less than promised. A continual group of States will seek paths separate from China, as Argentina, Paraguay, and to an extent Ecuador and Costa Rica are doing now. The ability of The United States to provide adequate alternatives will be one important consideration in the trajectory of such US friends, and others in the region.
OPEU: In an election year, one of the expectations is the new political direction of the Government, both in terms of security policy and foreign policy. Because of this, how do you think security policy will develop in the coming years in the face of so many events?
The Western Hemisphere is facing an unprecedented series of elections, which include recent ones in El Salvador, Panama, the Dominican Republic, Mexico, perhaps Venezuela, Uruguay, and of course the United States. Ironically the outcome of those elections thus far suggests continuity. In the case of the United States, both a Republican and Democratic Administration are likely to continue to resist the advance of the PRC, to support Israel, to support Ukraine in various degrees against Russian aggression, among other policies. Of course a Trump versus Biden victory in the US in November will impact the management of each of those areas, as well as the approach to fundamental items such as drugs, the border, and the specific balance between US strategic interests in supporting its partners, and US pressure on those partners over their imperfections.
OPEU: Which academic research projects do you have for the next few years?
As the Latin America research professor for the US Army War College, my focus will continue to be the strategic dynamics in the region to which the United States is most directly connected by those ties of geography, commerce, and family. The activities of China, Russia, Iran and surrogates such as Hezbollah, as well as the dynamics of transnational organized crime in the region will likely continue to be areas of emphasis for me. I also expect to continue to focus on the dynamics of populism in the region, and particularly the trajectories of Venezuela, Nicaragua, and other anti US regimes. Understanding the strategic dynamics of the region and how it is evolving will continue to be an important focus, including the way in which the United states can more effectively work with like-minded democratic partners, mobilize both the public and private sector, and adapt its policies and laws to more effectively help the region resist some of the more predatory aspects of engagement by China and others, in the framework of a path that shows partners that democracy and free markets is the best approach to preserving the combination of security, liberty, and prosperity that the region seeks, even if democracy and markets at times appear chaotic. This in the context of a PRC model that suggests the viability of a state-led model of development, and technology solutions that emphasize the State over the individual. I also anticipate looking at the impact of market-led solutions, like those being pursued by Javier Milei in Argentina and Santiago Pena in Paraguay, as well as the importance of partners such as Ecuador and El Salvador in controlling violence and corruption to convince citizens that a market-led democratic model is viable.
OPEU: One last question, what are the criteria and/or variables that can be taken into account to consider a country that is anti-US, in your analysis?
While there is no clear line between “pro-U.S.” and “anti-U.S.”, it is necessary as an analytical shorthand to identify a group of countries whose objectives and activities fundamentally challenge core U.S. interests, including the U.S. advocacy and work toward (however imperfect) democracy, fundamental human rights, and a rules-based international order. This is not to say that countries which “disagree” with the U.S. in pursuit of its foreign policy objectives, which are critical in their rhetoric of the U.S., or which are imperfect in their adherence to democracy, human rights and the rules based international order are inherently “anti-U.S.” Rather, “anti-U.S.” states are those which actively work to undermine those values, not only in their own countries, but in the broader international system, and which deliberately make common-cause with U.S. geopolitical rivals such as the PRC, Russia and Iran, in ways which undermine U.S security. In Latin America, this suggests a core group of regimes including Cuba, Venezuela, and Nicaragua as clearly “anti-U.S.” whatever their rhetoric to the contrary. It also suggests states leaning in this direction, such as the current regime in Bolivia. This definition does not resolve, but I believe casts new light on regimes such as that of Lula in Brazil which may “coincide” with the U.S. on certain issues such as environment or social justice, and which may be mostly democratic, but which repeatedly act in ways that facilitate the entry of U.S. geopolitical rivals in the region, and their activities in other parts of the world such as the Middle East (support for Iran), and the Ukraine (Russia), or which aid and abet US rival in the region such as Venezuela and Cuba. To this end, this definition is a hybrid of “realist” state interest pragmatism, with the recognition of certain “values” as strategic. It is not designed to produce an undisputable set of categories and states in each…but rather, facilitate thinking about how such categories are constructed…
OPEU: Professor Evan Ellis, thank you very much for your time, knowledge, patience, and availability. Would you like to comment further?
I appreciate your interest in my perspective, and the opportunity to share it with the group represented by OPEU.
* Yasmim Abril M. Reis is a PhD candidate in International Relations at the San Tiago Dantas Postgraduate Program in International Relations (UNESP/UNICAMP/PUC-SP), a master’s degree from the Postgraduate Program in International Security and Defense at the Escola Superior de Guerra (PPGSID/ESG), collaborating researcher at OPEU and deputy leader and volunteer research assistant at the Simulations and Scenarios Laboratory in the Biodefense and Food Security research line (LSC/EGN).
** Review and final editing: Tatiana Teixeira. Interview carried out on May 15th 2024. Its content does not necessarily reflect the opinion of the OPEU, or the INCT-INEU.
