How Mexico, Argentina and Brazil dropped the ball with China

Mexico, Argentina and Brazil failed to take advantage of China’s rise to world economic power, while Peru, Chile and Costa Rica have emerged as the biggest winners, according to Carol Wise, political science and international relations professor at the University of Southern California.

“Mexico, Argentina and Brazil are mocking around the WTO, throwing all kinds of anti-dumping lawsuits against China and it is going nowhere,” Wise said during a China investment webinar held by US-based think tank The Inter-American Dialogue.

In particular, she singled out Brazil and Argentina for “squandering” the opportunity to carry out institutional reforms during the commodities boom (2003-14), which in turn led not only to a worsening of their regulatory scores compared to the rest of the region, but also barred their manufacturing sectors from the Chinese market.

“At the beginning, China was too poor to buy, and during the 90s the tables turned and now the Chinese say, ´We’re sorry but your industrial goods are really bad.´”

While Argentina and Brazil do have Chinese investments, Wise warned that these projects are not well supervised, and in the case of Argentina she said China was “riding roughshod” in the development of hydroelectric dams in Patagonia.  

Wise said Mexico dropped the ball for treating China as an economic rival when it could have sold manufactured goods to the Asian superpower during its trade war with the US.

By contrast, Chile, Peru and Costa Rica were able to reform their institutions and sign free trade agreements with China, which not only allowed them to enter that market but also hold the Asian giant to international standards. 

In the case of Peru, Wise pointed out that the institutional process was still incomplete, as social protests have broken out against projects driven by Chinese investment, as was the case with the Las Bambas copper mining project in 2015.