The link with the United States after Trump | Topic…

Production: Florencia Barragan

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Back to normal”

By Pablo Kornblum

Back to normal’. This is what the government that Joe Biden is going to lead is trying to achieve. Under a carefully selected discursive discourse, it has already excited many nostalgic people who dream of the return of the neoliberal order led hegemonic from Washington. A “harmonious globalization”, in which its old allies and potential new partners would work to maintain a “win-win” under the leadership of the United States.

To this end, the foreign economic policy agenda will focus on certain short-term priorities: unraveling geoeconomic relations with China, returning to friendly multilateralism with its European partners, and easing financial pressure on the “ axis of evil. (Iran, North Korea). What is relevant for those who really hold the power? The establishment is delighted to think of a return to economic liberalism which allows it to boost its business with these more authoritarian and / or paternalistic states, where – with a certain efficiency and sufficiency – the logic of capital accumulation has clearly become accelerated.

In our region, we can say that the economic scenario will not vary too much from what the history books show. Those who support the Washington Consensus with a South American face with the greatest affection and determination – primarily members of the Pacific Alliance – will continue to enjoy certain privileges when considering deepening pro-market bilateral relations. (with socio-economic deficiencies). productive that this implies). In contrast, to the greatest skepticism with the most reluctant Mercosur, is added a new Latin Americanist rational pragmatism (Argentina + Mexico + Bolivia) which will seek a greater dialogue of “ equal to equal ”, but which will be far from generating structural economic changes.

Nothing is going to change, at least in substantial terms (read our historically negative current account balance), for Argentina. Can we blame our main provider of foreign direct investment and our third trading partner for being “followers” ​​of profit shifts or tariffs / subsidies? Auction of interstate capitalist interests, my friend, they would say from north of the Rio Bravo. Our usual response? Certain cycles of government with greater capital controls, frequent devaluations derived from the structurally deficient scarcity of foreign exchange, certain “ carnal relations ” of a government nostalgic for the Monroe Doctrine (although at present, it is impossible – and highly counterproductive – to buffer the Asian giant’s economic containment). It would not be surprising to experience a “light” medley of all of this in the short to medium term. Not much more.

From now on, man lives on hope (especially to wait for the “rain of dollars”). Could there be an indirect positive “tail”, such as a reflection on the potential rise in soybean and ethanol prices, consistent with an elected president for alternative fuels? It is plausible. Is this what matters most to our government? Barely. It is now the turn of our political waistline and our chance, always necessary and often rare on the international scene, to get the majority shareholder of the IMF to congratulate the technicians of the board of directors so that we have the greater flexibility. possible – a difficult homeland under the Extended Facilities Agreement – when negotiating the demands of macroeconomic prudence, fiscal adjustment, contained inflation. It only remains to hope that Keynesian Janet Yellen, with the printing machine in hand, increases the monetary stimulus and keeps interest rates low for a few years so that we can take advantage of the rate differential and a world more conducive to growth. economic and trade.

In conclusion, the enormous French playwright and politician, Victor Hugo, argued that “utopia is the future that strives to be born. While the routine is the past which persists in continuing to live ”. If the latter seems to be a faithful reflection of what will happen next January in the United States, from the south of the continent we hope that, once and for all, idealism will win the battle against the routine and the doctrinal history of a bilateral relationship that has been perpetuated as an obstacle to equitable and inclusive socio-economic development for our poor majorities.

* Economist and doctor in international relations. Author of the book “La Sociedad Anestesiada. The world economic system from the perspective of citizens.

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Glass half full

By Gabriel Balbo **

With the arrival of the Democrats in power in the United States, the South American economic context seems to be lightening slightly. There is reason to be optimistic and also for this optimism to be moderate. Beyond the political color that can reign in the White House, American diplomacy in general and economic diplomacy in particular have low elasticity to change.

Thus, it is difficult to assume better trade terms with the United States for any of the countries in the region. And if we waited for more flexible conditions in the relations: the administration of Joe Biden will surely put the club aside and pursue objectives similar to those of the outgoing government, with more flexible tools: no one imagines the next president tweeting the restitution of aluminum rates, as Donald Trump did exactly one year ago.

To a certain extent, Argentina will have a good relationship with another brand. Just as Trump has maintained affinity ties with the Mauricio Macri administration, the next US president will surely have them with Alberto Fernández. This is a plus for an orderly exit from what the first pair generated and / or encouraged: indebtedness to the IMF.

Chances are, the Biden government will back a debt renegotiation, it might even get more money. The appointment of Janet Yellen to the post of Secretary of the Treasury of the United States is excellent news for the government of Alberto Fernández, since the Treasury is a key element in the decisions of the IMF, due to its weight in the body, of which it is its main contributor with a quota which is worth 16.52 percent when voting on a decision.

In comparison, the situation of our Brazilian neighbors is somewhat different. Economic and commercial ties between the United States and Brazil are more intense and have (due to their greater specific weight) a much greater relevance: North American exports to Brazil represent 32% of the South American total. , Brazil’s imports 35% (comparatively, the figures for Argentina are 9 and 5 percent respectively). As part of this, Jair Bolsonaro loses his best ally to Trump and currently has no close relationship with Biden, in fact, he has yet to acknowledge his election victory.

But the light of Brazil comes from elsewhere: from the Far East. In this sense, Bolsonaro will not have as much commitment to Washington as those he would have outlined to the Trump administration in the “Huawei affair”. The pressure Brasilia endured by the North American government to ban the Chinese from its 5G networks would not have the same burden with the Biden administration: the Brazilian government could rethink its veto of the Chinese for 5G and avoid the risk of possible trade retaliation from China. Currently, the Chinese market as a destination (64.3 billion dollars) is more than double that of the North American market (29.3 billion). Thus, one of the best gains for Brazil in this process will be to have the most competitive (and cheapest) 5G networks on the current market, and therefore to increase the global capacity of its economy by a notch.

Unlike Brazil, Argentina’s engagements with the United States are more intense and on the other side, China is also pressing. And this is where 5G also appears as a variable. Washington will maintain its global demands for the Huawei veto also for Argentina, even if it is implicitly configured as a condition for future financial support. Beijing will not be outdone in its demands either, especially after the renewal for three years of the swap for the equivalent of 18.7 billion dollars held by the Central Bank.

In the end, we can see two different situations at the regional level regarding the arrival of the new guest at the White House. Both of the Planalto Palace and of the Casa Rosada, there are advantages in this regard (the glass is half full) in terms of industrial modernization in the first case, and financially in the second. In both contexts, skills and diplomatic effort will have to be taken into account, whether from Itamaraty or from the San Martín Palace, its officials will have to work overtime.