America’s Multilateral Blues

November 26, 2024 Topic: Security Region: Americas Tags: BRICSSouth AmericaChinaU.S. Foreign PolicyAPEC

America’s Multilateral Blues

Even in the Western Hemisphere, U.S. diplomatic influence is decidedly on the wane.

 

A picture is worth a thousand words. The recent photo of world leaders assembled at the recent Asia-Pacific Economic Cooperation (APEC) summit in Lima, Peru, reflected the ascendance of the Chinese leadership on the global stage. China’s Chairman Xi Jinping was strategically placed at the center of the action on the front row, while the president of the United States of America was consigned to the rear corner of the photo line-up. The photo was adroitly staged to promote the idea that China is ascending—and the United States is declining.

This should come as no surprise for those familiar with South America. China has become that continent’s largest trading partner. It is also the region’s biggest lender. This is a far cry from the twentieth century when the United States was dominant and Beijing barely registered. In 2000, China accounted for less than 2 percent of all Latin American exports. Since then and over the next twenty years, China’s trade with Latin America has grown twenty-six-fold

 

While Washington expresses concern over the military implications of China’s $1.3 billion financing and construction of a major port facility in Chancay, Peru, Beijing’s angle of attack for influence in South America and beyond remains more economic. General Laura Richardson, the outgoing U.S. combatant commander for SOUTHCOM, has aptly warned that to compete effectively with China, Washington must concentrate more on developing nonmilitary policies that will help create commercially attractive alternatives to what Beijing offers. 

Professor James Holmes of the Naval War College has reminded us that the “humble merchantman is just as important a part of Chinese sea power as a ship of war—arguably more.” The U.S. military, even its robust State Department-like regional combatant commands, cannot fix this soft power problem with military tools. China is gaining power around the world by using commercial clout, and not so much the PLA except along its immediate borders. Across Africa and Asia, as well as South America, China has become the central trading partner

Meanwhile, U.S. influence appears to be on the wane, a power shift reality exemplified by the organization of BRICS. BRICS was initially founded by India, Brazil, China, and Russia in 2006. It has since added five more countries: first South Africa, then Egypt, Iran, Ethiopia, and the UAE, becoming BRICS+. Almost half the world’s population comprises the membership, accounting for about 28 percent of the global economy and 44 percent of its oil supply. Another thirty countries have expressed interest in joining (such as Saudi Arabia), and thirteen have become associated with BRICS as “partners,” including notably Turkey, Belarus, Kazakhstan, Uzbekistan, Thailand, Indonesia, Nigeria, and others. 

BRICS was created primarily to force changes in the existing international financial system long dominated by the United States and its allies since World War II. A core mission of BRICS is to supplant the role of the dollar as the world’s primary vehicle for payments. It aims to promote the use of local currencies in trade. Along with that, BRICS intends to develop a financial banking alternative to the World Bank. Finally, BRICS is attempting to develop, however challenging, an alternative international payment mechanism that is independent of SWIFT, from which Russia was excluded after the Ukraine invasion. The growing stature of BRICS as a new assembly of influential countries was underscored when the UN Secretary-General, Antonio Guterres, attended the recent BRICS summit conference in Kazan, Russia, in October 2024. He called on “the bloc to help forge a more equitable global finance system…”

As a new administration prepares to take office in January 2025, its focus on long-term economic challenges facing the United States, both domestic and international, is strategically timely. Washington will have to assess carefully the manifold implications of BRICS as a rising counterweight to Washington’s traditional domination of the international financial system. With China, Russia, India, Iran, and Brazil as core members, it will not be easy for the United States and its Western European and Asian allies to find common ground to cope with the rising expectations and demands of this new coalition of players. 

The influence of BRICS has already worked its way into the diplomatic national security sphere. The RIO G20 Summit, composed of the world’s twenty largest economies, went even less well for the United States than the Lima economic cooperation confab. The G20, hosted by Brazil’s President, Luiz Inacio Lula da Silva, took rocky turns for Western participants, particularly when it came time to draft the final summit communique. Brazil’s President took good care of his fellow BRICS members, Russia, China, and Iran, by successfully watering down tougher, pro-Western language on the Ukraine and Middle East wars.

The show was certainly not run by Washington and its European allies, underscoring major shifts underway in the global balance of power. India’s leader, Narendra Modi, and China’s Chairman Xi were seen comfortably interacting on the sidelines, continuing to boost ties just a month after the two countries appear to have worked out a resolution of their long-standing Himalayan border disputes. Once again, just like in Lima, America’s president was “out of the picture” when President Biden missed the official summit photograph taken on the first day, awkwardly requiring a redo later in the conference. While he eventually made it into the picture, the retake used a less impressive billboard of Rio for the background rather than the live backdrop of Rio’s beautiful Sugar Loaf Mountain.

As a new administration takes office, rising sentiments of protectionism and “reshoring” will collide with a growing coalition of countries that have powerful and growing economies of their own. The way forward for the United States in this new world may well end up testing American power as much or more in the economic sphere than it already has in the military. 

Ramon Marks is a retired international lawyer and Vice Chair of BENS. The views expressed here are his own.

 

Image: Jonah Elkowitz / Shutterstock.com.