Background

Following the Biden administration’s recent launch of a new initiative to boost trade and economic cooperation with Latin America, key lawmakers are encouraging such ties as well.

In January the U.S. officially announced the Americas Partnership for Economic Prosperity, which U.S. Trade Representative Katherine Tai said “will be a new type of economic arrangement” pursued in parallel with ongoing efforts to fully implement trade agreements the U.S. has with some regional partners. Stating that “we need new tools to address new problems that will shape the coming decades,” Tai said APEP will focus on issues such as eradicating forced labor, increasing supply chain resilience, fostering innovation, and tackling climate change. APEP will initially include Barbados, Canada, Chile, Colombia, Costa Rica, the Dominican Republic, Ecuador, Mexico, Panama, Peru, and Uruguay but could be expanded in the future.

House Ways and Means Committee Chair Jason Smith, R-Mo., signaled that U.S. trade with Latin America will be a priority for him this year as well by leading a congressional delegation to three countries in the region earlier this month.

In Mexico, Smith praised the country’s decision to fulfill an obligation under the U.S.-Mexico-Canada Agreement by banning imports made with forced labor and emphasized “the role Mexico can continue to play in reshoring key supply chains from China to North America.” However, he also urged Mexico to honor other USMCA commitments on energy and biotechnology (both of which are the subject of U.S. enforcement efforts under that agreement) and to strengthen efforts to secure its border with the U.S.

During the delegation’s visit to Ecuador, Smith focused on helping that country “counter China’s growing influence in the region.” Smith said he shared concerns with President Guillermo Lasso about “Ecuador’s expanding trade ties with China” and instead urged the two countries to “become less dependent on China by developing resilient supply chains in the Western Hemisphere,” adding that using U.S. trade and tax policy to achieve this goal is one of his priorities. Smith also pushed for changes to Ecuador’s import licensing regime and variable tariffs, which he said “make it very difficult for American farmers, including beef and pork producers, to export to Ecuador.”

(On a related note, a bill was introduced in the U.S. Senate this week that would make Ecuador eligible for designation as a beneficiary country under the Caribbean Basin Economic Recovery Act.)

The delegation also traveled to Guyana, where Smith again emphasized the importance of “outcompeting China” and helping regional countries minimize their exposure to the Asian giant. Guyana is “experiencing a massive increase in offshore oil production” that China is participating in, Smith said, so in response he “highlighted how America can lead the way in developing, extracting, and selling Guyanese oil” to “help thwart China’s attempts to achieve energy dominance.”

For more information on U.S. trade policy toward Latin America, please contact Nicole Bivens Collinson at (202) 730-4956 or via email.

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