Strategic Coherence in the Western Hemisphere Starts with Supply Chains
Unfortunately for those of us whose AOR (area of responsibility) is Latin America, the only time the Western Hemisphere enters a political discussion is in two contexts: a migratory crisis reaching the United States or talk of Russia or China “messing about” in “America’s backyard.” There are a number of problems with these formulations, and taking a moment to look at them helps point us in the direction of productive decision making that is better for American businesses and Latin American communities.
First of all, in diplomacy and in business, you have have to engage people on their terms, on shared turf. No one appreciates being called anyone’s “backyard,” and no one likes to be treated merely as a bone fought over by two opposing dogs: China or Russia on one side, and the United States on the other. Everyone wants to be treated with respect, as a dignified and autonomous agent. (This was the starting point of our CEO Dr. Vanessa Neumann’s TEDx talk in 2018, “Brains, Balls, and Infrastructure.”)
Secondly, there is little point in continuing to complain about migration crises year after year, if there is no plan to address their causes. As OAS Secretary General Luís Almagro told our CEO with great cogency at the Homeland Security Enterprise Forum on September 14th, 2021, Western Hemisphere migrants are fleeing violence, corruption, a failure of government services (including food, healthcare, and security), poverty or a lack of gainful employment, and repression under a dictatorship. The way to stem migration is to address the root causes and promote development with strong institutions that address the needs of the respective country’s citizens.
Currently, in 2021, US thinking on Latin America is at the crossroads of those two concerns (migration and the influence of adversaries in our near abroad) plus another one: post-Covid-19 supply chain resilience. If you’re wondering how the pieces fit together, fortunately, there’s an Executive Order for that.
There’s an E.O. for That
On February 24, 2021, US President Joe Biden signed Executive Order on America’s Supply Chains (E.O. 14017) to ensure resilient supply chains in light of both the Covid-19 pandemic and a deterioration of relations with China. Many of the raw materials specifically identified in this Executive Order as strategically important are in Latin America.
Create 21st century standards for the extraction and processing of critical minerals at home and abroad: The government, working with private sector and non-governmental stakeholders, should encourage the development and adoption of comprehensive sustainability standards for essential minerals, such as lithium, cobalt, nickel, copper, rare earth elements, and other materials.June 08, 2021, Fact Sheet: Biden-Harris Administration Announces Supply Chain Disruptions Task Force to Address Short-Term Supply Chain Discontinuities
At Asymmetrica we have had as one of our guiding principles that the best form of development is clean and productive business that engages the local community where it operates, with dignity: makes employees feel valued with technical training and a living wage, helps mitigate environmental impact, and respects indigenous traditions. The United States, ‘the West,’ or indeed anyone can gain traction with local goodwill by transacting with these principles as part of their standard practice. The Fact Sheet goes on to specify these investment conditions.
To secure a reliable, sustainable supply of critical minerals and materials, the United States must work with allies and partners to diversify supply chains away from adversarial nations and sources with unacceptable environmental and labor standards. U.S. investments abroad must incentivize environmentally and socially responsible production. The United States must also invest in sustainable production, refining, and recycling capacity domestically, while ensuring strong environmental, environmental justice, and labor standards and meaningful community consultation, including with Tribal Nations through government-to-government collaboration.June 08, 2021, Fact Sheet: Biden-Harris Administration Announces Supply Chain Disruptions Task Force to Address Short-Term Supply Chain Discontinuities
Putting Your Money Where Your Policy Is
The way to bring the pieces together is simple: for US government support to follow the priorities and edicts stated in that Executive Order by helping US corporations that invest (honorably and productively) in Latin America with cheap financing, tax breaks, or other incentives, particularly if their investment improves the resilience of supply chains that are strategic to the national interest, such as pharmaceuticals, electric batteries, and semiconductors. That is simply a good return on investment all around, for the business and for both countries involved.
So in Q4 2021 and into 2022, where do US strategic interests (as per E.O. 14017) meet an investment-friendly environment? Meet Ecuador, the newest kid on the LatAm FDI block.
In the environs of the UN General Assembly, we attended the luncheon with new Ecuadorean President Guillermo Lasso, as well as two of his ministers. The message was unmistakable: Ecuador is open for business.
Ecuador’s currency is the US dollar, so there is no exchange risk. It has deep water ports in the Pacific, facilitating exports to China and the rest of Asia. It is phenomenally rich in minerals, from the traditional gold, silver, copper, and uranium, to the newer strategic minerals like lithium and rare earth varieties, including antimony, fluorspar, indium, and gallium. The difference now is an administration that has passed a new budget and a new investment law that lowers the barriers to investment while promoting development across a broader swathe of Ecuador’s citizens.
Ecuador is putting into practice the point made by our CEO in that 2018 TEDx talk. It is determined to sign over 20 new free trade agreements, free of political or ideological bias: it will sign with the US, as well as with China and Russia. Latin American countries want to be dealt with on equal business terms, and those who do so, stand to reap the rewards, both within their host country and in the US.
If you wish to discuss the ways in which Asymmetrica may help your business in Latin America, email us: firstname.lastname@example.org