(Bloomberg) -- President Joe Biden’s top trade negotiator suggested Brazil should consider the risks of joining China’s Belt and Road Initiative before making any final decision regarding the Asian country’s massive infrastructure program.
Speaking at Bloomberg New Economy at B20 in Sao Paulo, US Trade Representative Katherine Tai said she “would encourage our friends in Brazil to look at the risks in today’s economy” through “an objectivity lens, through a risk management lens” and to “really think about what the best pathway is forward for more resilience in the Brazilian economy.”
Any final decision is up to the Brazilian administration, and sovereignty is an aspect that the US government is trying to preserve in the world economy, Tai said Wednesday in an interview with Bloomberg’s Head of Economics and Government Stephanie Flanders.
Late on Tuesday, Brazil Agriculture Minister Carlos Favaro said Latin America’s largest country should join China’s Belt and Road Initiative to counter protectionist measures from the US and European Union.
The US is continuing to duel with China for economic influence across Latin America. The Asian giant is the top trading partner for nations including Brazil, Chile and Peru, snapping up the region’s natural resources including soybeans, iron core and copper while increasingly investing in local infrastructure.
Chinese President Xi Jinping will spend several days in Latin America next month immediately following the US election. He will inaugurate a mega port near Lima, Peru and travel to Brazil for both the G-20 Leaders’ Summit and a state visit with counterpart Luiz Inacio Lula da Silva.
Tai is kicking off a multi-day visit to Brazil, where she is scheduled to participate in the G-20 Trade and Investment Ministers’ Meeting in Brasilia. Her priorities in Latin America also include Mexico, where new reforms — such as a judicial overhaul and changes in rules for autonomous bodies — are drawing scrutiny from the world’s largest economy.
Going forward, her office will carry out a review the free-trade pact known as US-Mexico-Canada Agreement, or USMCA. Asked about that review on Wednesday, Tai did not go into specifics of what the process will look like, saying that “the whole point of having that review is for us to use it.”
“There is a lot ahead of us, in terms of our work with Mexico, a lot of it, I think, very positive,” said Tai, who has spent most of her career in public service shaping US trade law, negotiations and strategies on agreements including USMCA.
Still, Tai said that the US has seen “some potentially concerning developments in terms of Chinese company acquisitions in Mexico to build factories.”
One important question that needs to be asked about the challenge of the Chinese economy’s place in the world concerns “that very nebulous and often non-transparent connection between the state and the economic actor, and trying to understand that connection, to get to the issue of trust in an increasingly geopolitically tense world,” she said.
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