Latin America, Caribbean the Focus of China-Taiwan Tussle

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Latin America, Caribbean the Focus of China-Taiwan Tussle

By Dan Erikson
Published in the Dialogue’s Latin America Advisor April 22, 2008

Latin America, Caribbean the Focus of China-Taiwan Tussle

Originally published in Dan Erikson's monthly Eye on the Americas column for the Dialogue's daily Latin America Advisor.

WASHINGTON, DC—On March 22, Taiwan's hard-fought presidential election produced political shockwaves that sent ripples all the way to Latin America when Ma Ying-jeou led the Koumintang nationalist party back to power for the first time since 2000. Unlike his predecessor Chen Shui-bian, who sympathized with Taiwan's independence movement, Ma has pledged to improve relations with the People's Republic of China (PRC). He has said he opposes both pursuing Taiwan's independence and negotiating reunification with China, arguing that "the status quo is the best choice."

Latin America is half a world away from the decades-long conflict simmering in the Taiwan Strait, but the diplomatic tussle between Taiwan and China remains a red-hot issue in the Caribbean and Central America. Beijing rigorously promotes its 'One China' policy, which means that non-recognition of the Taiwanese government is a prerequisite for conducting formal diplomatic relations with the PRC—in effect forcing other governments to choose between Beijing and Taipei. Although Latin American countries involved in this geopolitical chess match have little individual clout, together they make up the most significant group of states caught in the cross-strait tug-of-war, representing 12 of the 23 countries that recognize Taiwan. Today, Taiwan preserves relations with Guatemala, Belize, Nicaragua, El Salvador, Honduras, and Panama, as well as the Dominican Republic, Haiti, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, and Paraguay—the lone holdout in South America.

After nearly a decade of fairly stable alliances, the battle between China and Taiwan in Latin America really began to heat up in 2004, as China's economic growth better positioned it to compete head-to-head with Taiwan in dollar diplomacy.  Dominica defected to China in 2004, followed by Grenada in 2005, but Taiwan struck back in 2007 by wooing the newly-elected government of St. Lucia. Beijing notched a major victory later that year by winning over Costa Rica, which was the first Central American country to recognize China. For China, which is always sensitive to US perceptions of its involvement in Latin America, Costa Rica's benign image in Washington presented a huge advantage. Its president, Oscar Arias, is a Nobel Prize-winner who supports free trade and has tangled publicly with Cuba's Fidel Castro. It would have been far riskier for Beijing to begin its Central American outreach with Nicaragua's left-wing government, for example, which would have set Washington's neoconservatives atwitter.

Now with the change in government in Taipei, coupled with the conciliatory rhetoric of president-elect Ma, China hopes to seize the moment to peel off other Latin American nations—especially Guatemala, the most populous country to recognize Taiwan, and Panama, the most strategically important due to the Panama Canal. Beijing hopes that the defection of Costa Rica marks the beginning of a domino effect that will lead all of Central America to forge ties with China.

Ma has vowed to preserve Taiwan's diplomatic alliances and 17 nations have already confirmed their presence at his inauguration on May 20. Moreover, many of Taiwan's remaining partners, fearful of getting dragged into the political tempest surrounding the Beijing Olympics this August, will likely wait for this event to pass before making any big decisions regarding China.  Still, Taiwan's new president should carefully count which of its allies from Latin America are in attendance at his inauguration: the ones who are missing may never be back. 

Dan Erikson is a Senior Associate for US Policy at the Inter-American Dialogue.