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Joe Biden's economic plan prioritizes U.S. jobs over trade – including with Latin America

Trump's protectionism proved to win votes, and Biden is keeping quiet about foreign deals, but a Democratic victory would return diplomatic relations to more normal grounds, say analysts

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The Democratic candidate for the United States presidency Joe Biden laid out this Thursday his $700 billion plan to revive the economy with an U.S.-centered approach and to create 5 million jobs in manufacturing and technology industries. The proposals are telling about the shift in the former vice president’s views on international trade brought upon by his dispute with Bernie Sanders for the Democratic nomination, and by the administration of Donald Trump itself. All of this has obvious ramifications across Latin America.

Joe Biden was actively engaged with policy toward Latin America during his time as vice president and still sees a strong relationship with the region as essential to America. But, seeking a direct challenge to Trump on economic issues as they prepare to compete for working-class voters in the November election, Biden quit overtly defending the free flow of international goods and capital.

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As a senator in 1994, he voted in favor of the creation of the North American Free Trade Agreement (NAFTA), the deal that originated a trilateral trade bloc with Canada and Mexico. NAFTA was recently replaced by the United States–Mexico–Canada Agreement (USMCA), and Biden defended the arrangement, particularly because of its improved labor rights provisions. In a recent past, Biden was a vocal supporter of trade liberalization and a critic of Trump’s tariffs, arguing that Washington should take the lead on creating global trade rules and lowering barriers to commerce worldwide. Now the subject is somewhat absent from his agenda.

“There would be some issues that Biden is going to focus on that are going to be different than Trump’s”, says Michael Shifter, president of the Inter-American Dialogue, a U.S.-based think tank focusing on the region. “But I think it is important not to expect something very big from the United States, given the seriousness of the domestic, economic and political problems of his own party, where the progressive wing of Sanders and [Elizabeth] Warren is very strong.”

Basically, one would expect great energy, a great effort to revive multilateralism, but I think we should have more modest expectations for Biden.

Michael Shifter, president of the Inter-American Dialogue.

The Biden campaign explicitly says his economic plan will reduce dependence on foreign countries to supply critical goods; and implement trade policies that empower U.S. workers. He proposed tightening current “Buy American” laws that are intended to benefit U.S. firms at procurements, but that government agencies can circumvent. 

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His campaign’s policy emphasizes that domestic markets would come before Biden entered negotiations for any new foreign trade agreement – including the Trans-Pacific Partnership (TPP) that Biden advocated when he was Barack Obama’s vice president, and which would include Mexico, Peru and Chile. While not ditching the deal as Trump did, it is not on Biden’s list of priorities anymore: the Democrat says he wants to renegotiate the agreement.

Protectionism among Democrats is not new, but Biden used to have a more centrist approach

To be fair, preoccupations about free trade and globalization destroying jobs in the U.S. have always been present in the Democratic Party ideology. The difference is that Biden used to take a more centrist approach that is now unattractive to voters.

In the past, Republican presidents were regarded as beneficial for Latin American exports due to their party customary pro-free trade platforms. Donald Trump’s protectionism subverted that notion and now his brand of national-conservatism has pervaded the political discourse across the spectrum.

“Biden does not accept the defeatist view that the forces of automation and globalization render us helpless to retain well-paid union jobs and create more of them here in America,” says Biden’s programme. “U.S. manufacturing must be part of the Arsenal of American Prosperity today, helping fuel an economic recovery for working families.”

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Both major U.S. parties are moving away from embracing free trade and toward protecting local workers and revitalizing struggling domestic industries. Those trends have been accelerated by the coronavirus pandemic, which hit hard on the economy.

Trump and AMLO hail the USMCA

Donald Trump did not change his heart on the isolationist approach. Nevertheless, this week he received his Mexican counterpart, Andrés Manuel López Obrador, at the White House, where both presidents, from opposite ends of the political spectrum, signed a joint proclamation hailing the USMCA, which took effect at the start of July, as the beginning of a new chapter in North America’s economic partnership.

The three North American nations signed the USMCA in late 2018 after more than a year of negotiations that began when Trump threatened to pull the U.S. out of NAFTA. Analysts have said the new pact represents a modest reworking of the old deal, but Trump has touted it as a major improvement  – not for multilateralism, though, but for U.S. manufacturing.

Mexico’s president López Obrador and Donald Trump at the White House. Photo: Tia Dufour / White House

Why have Latin America and the U.S. grown distant from each other?

Biden already said he believes that the U.S. distanced itself from Latin America, and while doing so allowed for other global players, especially China, to make deep economic and diplomatic inroads in the region through investment and trade. 

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According to Gerardo Caetano, political scientist and former chairman of the Latin American College of Social Sciences (Flacso), Latin America is also to blame, as the region has put itself “in a situation of great irrelevance”. “The U.S. counts a lot for Latin America, but if the region is unable to build minimum spaces for regional integration, it will have little dialogue, no matter who is in the White House.”

What can be expected if Latin America does not present a minimum framework for its own articulation?

Gerardo Caetano, political scientist and former chairman of the Latin American Faculty of Social Sciences (Flacso)

Shifter points out that, if elected, Biden would shift U.S.’s relations with the Brazilian right-wing administration of Jair Bolsonaro. “I believe that a Biden administration would not be the same as Trump with respect to Bolsonaro – the democratic problems, the human rights problems, the treatment of minorities in Brazil and issues over the environment. There is a lot of concern, clear messages from him”, he says.

One thing that is almost unanimous among observers is that a Joe Biden victory would return U.S. foreign policy to more traditional, less confrontational and less volatile tactics. “There would be a noticeable change in tone and style. The normal diplomatic protocols that have been broken under Trump, they would surely return. This seems important to me”, concludes Shifter.