Chances that the United States may retreat from the Latin America and Caribbean (LAC) region raised many eyebrows — why would the United States leave its backyard open to anyone else? China had already been present in the region, predominantly aligned with the socialist regimes in Venezuela, Brazil, Argentina and Ecuador. Lately, however, this has changed with the economic breakdown in Venezuela and with the changes in attitudes towards China owing to centrist regimes in elsewhere in the region. The ever-increasing Chinese involvement in LAC prompted suggestions that it would soon fill the vacuum created with the withdrawal of the United States and engender further conflict between the two.
However, a set of recent events in Latin America and more particularly in Central America tells a different story. In January, newly elected Taiwanese President Tsai Ing-wen undertook a visit to four Central American countries, namely Nicaragua, Guatemala, El Salvador, and Honduras. The visit included the signing of major trade and arms deals.
In June 2017, Panama shifted its diplomatic alignment from Taiwan to China. Two weeks later, the U.S. announced the Trump’s administration’s first arms deal with Taiwan, worth $1.42 billion. A month later, Taiwan announced visa-free entry on a reciprocal basis to Paraguay and a visa waiver to ten allied Central American and Caribbean countries.
The aforementioned cases are not a set of incidents that are related to Taiwan alone, but directed in response to the Chinese presence as well. In 2016, with the election of highly nationalist candidate to the position of president in Taiwan, the long standing truce between China and Taiwan has been strained.
As the China-Taiwan rivalry continues, the U.S. plays a part. The boiling of tension was marked by the December 2 phone call between Trump and Tsai, which many analysts viewed as violating the status quo. In addition, Tsai’s visit to LAC in January 2017 included transit stopovers in Houston and San Francisco, despite Beijing’s pressure on Washington to block it.
In reality, the competition in Central America, as of now, is not between the United States and China, but between China and Taiwan.
This is quite evident from China approach to Taiwan’s regional allies. China believes firmly in the One China principle, which discredits Taiwan’s independence and sovereign status. The underlying story in LAC is Beijing’s pushing of the One China principle more forcefully around Central America and the Caribbean, where Taiwan’s allies are concentrated. Indeed, Taiwan also believes that there can only be One China — though it’s definition of which China that is differs from Beijing’s assessment — a position which in principle stands incompatible with the co-existence of diplomatic relations with both China and Taiwan at the same time.
A group of ten Central American and Caribbean nations, plus Paraguay in South America, form a major chunk of the only 20 countries that presently recognize Taiwan. The conflict between Taiwan and China has indeed become more real as is evident from China’s shifting focus from South America to Central America and the Caribbean.
The number of visits and trade exchanges from both the sides — Taiwan and LAC — have considerably increased. Notably, during Tsai’s visit in January 2017 and the foreign minister of Taiwan’s recent trip, the heads of almost all the Central American countries stood with Taiwan. Guatemalan president Jimmy Morales in January 2017 reiterated his country’s commitment to ward Taiwan. Nicaragua endorsed the international position of Taiwan and its participation in international bodies.
In July 2017, the President of Paraguay Horacio Cartes visited Taipei, in return for the Tsai’s visit last year. His visit, as the head of the only country in South America to have diplomatic relations with Taiwan, among many other reasons, invited attention for its significance.
Some countries in LAC, despite having diplomatic relations with China, also recognize Taiwan. Some regional states finally switched over alignment, receiving Chinese aid while having diplomatic relations with Taiwan has become increasingly difficult. Erstwhile in the Taiwanese camp, Panama, was a perfect example. Tsai’s first overseas visit was to Panama, a month after taking the presidential oath. That China managed to poach Panama within about a year is surprising.
Who is next?
Nicaragua, Paraguay, and St. Lucia are believed to be the next in line, with all three seriously contemplating switching over their relations to Beijing.
China and Taiwan have been competing with each other in LAC region largely via “checkbook diplomacy.” Lately, Taiwan has understood, with recent incidents like the case of Panama and Sao Tome and Principe, that it cannot match China’s spending. Taiwan has instead delved into infrastructure projects, in place of past practice when Taiwan offered hard cash. Recently, Guatemala made a request of $650 billion for the fourth stage of the construction of Jacob Arbenz highway leading to the Atlantic, which as per reports is still under consideration. The request seems likely to be turned down as it exceeds the approved budget of the foreign ministry. This has also led other states, like Belize, to rethink the amount of aid it received from Taiwan, given the asymmetry. Some have started rethinking their relations on Taiwan-China axis.
Most of these exchanges or visits are categorically intended to bring about further closeness in relations. Off the record, the primary purpose of the visit is to keep Taiwan’s allies together and prevent China from poaching them. Last month, Taiwanese Foreign Minister David Lee made a visit to the Dominican Republic and Belize. There were reports that three Caribbean nations, — St. Lucia, St. Vincent and the Grenadines, and St. Kitts and Nevis — declined to host the foreign minister. Such reports were refuted by Taiwan. The foreign minister clarified that those three Caribbean countries were not part of the original itinerary. In the background, it is to be noted that the three nations in discussion have full diplomatic relations with Taiwan. Why those island nations were left off the itinerary remains unexplained, when at least an official visit has been made to other allies in the past year.
With all these changes, only time will tell whether Taiwan will lose all its allies in Latin American and the Caribbean to China.
Binay Prasad is a Ph.D. Candidate in Latin American Studies Programme at School of International Studies, Jawaharlal Nehru University, New Delhi.