What is the ‘New Silk Road’ and Who’s Involved?
The ‘New Silk Road’ is a project led by China, aiming to strengthen its economic ties with Europe, Asia, Africa, and Latin America. It focuses on enhancing global connectivity through infrastructure, transportation, energy, and technology investments, thereby promoting international trade and economic development.
Carlos Ronderos, a consultant in International Trade and Business, clarifies that this is merely a “memorandum of understanding with absolutely no commitment from Colombia or China. It’s a declaration of willingness to cooperate for better development, promote exchange, and does not touch sovereignty or decision-making nor details on specific projects.”
Latin American Participation
Currently, 146 countries are part of this project, with 20 from Latin America: Antigua and Barbuda, Argentina, Barbados, Bolivia, Chile, Costa Rica, Cuba, Dominican Republic, Ecuador, El Salvador, Granada, Guyana, Honduras, Jamaica, Nicaragua, Peru, Suriname, Trinidad and Tobago, Uruguay, and Venezuela. Panama withdrew from the Belt and Road Initiative in February of this year.
Colombia has yet to officially sign on, but President Petro affirmed that it will. He stated, “We will sign the Silk Road, both Latin America and Colombia are free, sovereign, and independent. Our relations with any people in the world, north, east, or south, must be under conditions of freedom and equality.”
Expert Opinions on the Initiative
Remi Stellian, a professor at the Economic and Administrative Sciences Faculty of Pontificia Universidad Javeriana, explains that for China, the New Silk Road is crucial in its ambition to become a global power. It aims to reinforce connections with other countries, secure sales opportunities for its massive production capabilities, and reduce dependence on the United States.
Is it a Type of Free Trade Agreement?
Experts agree that this is not a free trade agreement (FTA) since an FTA requires negotiation and includes certain tariff advantages. “They are two entirely different things,” Ronderos emphasizes.
Stellian adds that, “For now, we don’t know the content of cooperation between China and Colombia within the Belt and Road Initiative framework.”
However, Stellian anticipates that based on the precedents of other involved countries, “we can expect an agreement on infrastructure construction in the country with certain counterparts.”
Benefits vs. Risks
The New Silk Road is expected to have more benefits than risks. Ronderos points out that this presents a good opportunity for Colombia to address its significant trade deficit with China, which stood at US$12.391 billion (FOB) last year.
“Colombia has a substantial trade deficit with China, and streamlining protocol procedures for pork and Tahitian lime imports would expedite agricultural product entry into China,” Ronderos explains.
He also acknowledges potential U.S. sensitivity but clarifies that the memorandum contains “absolutely nothing that could jeopardize or cast doubt on our relationship with the U.S., unless the government decides otherwise.”
Stellian concludes that “diversifying international relations towards Asia can become an opportunity if discussions with China are conducted correctly, seeking consensus and aiming to stimulate national development.”
Key Questions and Answers
- What is the ‘New Silk Road’? It’s a China-led project to strengthen economic ties with various regions through infrastructure, transportation, energy, and technology investments.
- Which Latin American countries are involved? Fourteen Latin American nations participate, including Argentina, Chile, Colombia, and others.
- Is it a Free Trade Agreement (FTA)? No, experts agree that it’s not an FTA as it lacks negotiation and tariff advantages.
- What are the expected benefits for Colombia? The initiative could help address Colombia’s substantial trade deficit with China and streamline agricultural product imports.
- Are there potential risks for Colombia? There might be U.S. sensitivity, but the memorandum does not jeopardize existing relationships unless the government decides otherwise.
