Portugal is back in the cross hairs of an economic battle that has been simmering for the best part of two years between China and the United States.
With the world’s attentions deflected so much by the pandemic, the economic ‘flash point’ developing in the geostrategic deepwater port of Sines has been relegated to ‘back pages’ of the specialist press.
But bit by bit the situation is returning to the mainstream.
Last month Expresso carried a long article on the various pressures at play, and this week India’s Sunday Guardian has given space to former diplomat John Dobson, who worked in UK Prime Minister John Major’s office between 1995-1998, to revisit some of the background and try and predict where things are headed.
As he explains: “Portugal launched an international tender in August this year for a contract to build and operate a new container terminal in Sines and is expected to pick a winner soon.
“There is very strong US interest in Sines, where US firms want to expand the port’s liquid natural gas (LNG) terminal in order to increase gas exports to Europe, which they argue would also help reduce the EU’s energy dependence on Russia. On the other hand, China is fighting hard to build a huge $770 million Chinese-built container port in Sines, a key project in its Belt & Road Initiative of which Portugal became a member in 2018. At the time, President Xi Jinping borrowed an ancient Chinese saying to describe the bilateral relationship: “A partnership forged with the right approach defies geographical distance; it is thicker than glue, and stronger than metal or stone.” Portugal’s President Marcelo Rebelo de Sousa reciprocated with a state visit to Beijing in late April that also coincided with the 2nd Belt & Road Forum.
“So will it be America’s huge LNG terminal, or China’s huge container port? Whoever is the winner, the geopolitical consequences will be massively significant”.
Weeks before president Trump’s election defeat, the United States was being seen to have upped the ante uncomfortably on Portugal (click here).
In what was described at the time as a ‘less than diplomatic’ interview, US ambassador to Portugal George Glass said it was ‘time for Portugal to make a choice’: between business with ‘secure partners, the allies’ or with ‘economic partners, the Chinese’.
If Portugal chose the latter, Mr Glass made it crystal clear the US would have to ‘change the way it communicated with Portugal’.
The spat – which preceded the visit of a US tech envoy who continued to bang the anti-China drum (click here) – was dealt with at the time by both the government and the president of the Republic who said, as diplomatically as anyone could, that Portugal would make up its own mind over with whom it does business.
Now, with the United States having voted against a second Trump administration, Mr Dobson describes “obvious relief in Lisbon”.
But where does that leave the ‘battle over Sines’?
It’s a multi-million dollar question and one that will potentially define how Portugal is seen by the rest of the world.
Back in October, infrastructures minister Pedro Nuno Santos said: “Portugal wants people from the US, China and the rest of the world to invest in Sines, and if the US wants to invest, our arms are open to it…”
Says Dobson: “There are rumours the government will wait until the end of January until deciding” as this should be the point where President Trump finally vacates the White House and Joe Biden and his new administration walk in.