Written evidence submitted by Néstor Osorio Londoño *(INR0060)
- Since the early days of the independence of the Latin American countries, two centuries ago, the United Kingdom has played an important role in the region, fostering political and economic relations. The degree of intensity has been quite uneven, and it is well known that since the second world war Latin America has been distant from British strategic priorities worldwide.
- In the past ten years, a fresh approach and engagement has emerged within the framework of the so called “Canning Agenda” originated in the policy formulated in 2010 by the British Foreign Secretary William Hague. Since then there has been more visibility and attention to the region and a much more dynamic interaction has improved the relationship.
- High level political dialogue and exchange in key areas of interest has increased significantly. New British Embassies and Consulates have been opened in the region and ministerial delegations have increased in frequency in both directions. Special Trade Envoys have been appointed and London has seen the arrival of more Latin American Presidents on official visits. In 2015 and 2016 the Presidents of México and Colombia came on State Visits.
- At the same time, efforts to increase trade and investment in both ways have also been successful. However, bilateral trade between Latin American countries and the United Kingdom is still low in comparison with other markets. Today, less than 2% of UK exports go to Latin America and in return, less than 3% of Latin American Exports come to the UK. Progress have been made but there is still significant room for improvement.
*Former Colombian Ambassador to the United Kingdom, to The United Nations, to the World Trade Organization and former Executive Director to the International Coffee Organization.
- Most of the effort in the implementation of the Canning Agenda has gone into increasing bilateral trade and investment. This should continue to be a priority, particularly in the context of Brexit, but there are other fields of cooperation that can and should be addressed at a regional level. With that objective in mind, this document suggests seven areas of cooperation that can invigorate the foreign policy of the United Kingdom regarding Latin America, towards the next decade and beyond:
1- Trade and Investment Post-Brexit
2- Partnership for Sustainable Development
3- Energy Security
4- Partnership for Security and the Rule of Law
5- Partnership for Education, Science and Technology
7- Public Health
1-TRADE AND INVESTMENT POST-BREXIT
- Britain’s trade and economic links with Latin America are conducted mainly through preferential and free trade agreements between most countries in the region and the European Union. As the United Kingdom is disengaged from the European Union, these agreements should be the starting reference for future improvement and enhancement of trade exchange, either bilaterally or with trading blocks.
- In addition to regional political mechanisms, over the years, Latin America has developed different economic integration models, like the Andean Community, Mercosur or the Pacific Alliance in South America, as well as the Integration System of Central America (SICA). Most of the countries in the region have already a free trade agreement with the European Union and some are in the process of negotiation. On this basis, a future agreement with the United Kingdom could be achieved swiftly.
- The potential for increasing trade and investment with Latin America is huge. The region represents a market of 625 million people with increasing purchased power. While in 1990 half of the population lived in poverty, today the proportion has been reduced to a third. The region has consistently increased its middle class, which doubled in the past ten years to up to 180 million people and the trend indicates that by 2025 another 10 million will be added.
- The sustained growth trend of the region in the las decade has been significantly affected by the financial crisis and the fall of commodities prices. In 2019 the Latin American growth was 0.6% The expectations of some recovery in the next years have been completely shattered by the current pandemia, Covid-19. The capability for recovery will depend very much on the individual capabilities of the different countries to provide resources to re-start the economy and to attract investment.
- In the coming years Latin American countries will require to find new sources of investment in order to update infrastructure networks, improve the quality of education, reshape the health services and develop capabilities in more technology intensive activities that will reduce their dependency on exporting commodities. The United Kingdom could play a prominent role as a partner creating great opportunities for British business.
- Knowledge sharing in entrepreneurship and access to financial institutions are essential fields. The Foreign and Commonwealth Office (FCO) is well equipped to play a key role in facilitating and helping to expand the outreach of the Latin American diplomatic representations to relevant stakeholders. Embassies would profit from deeper links in the multiple financial services institutions, particularly in the City of London.
- Latin American countries are keen to increase its trade and investment exchange with the United Kingdom. Once the transition period of the Brexit process is completed, the UK will be able to sign new trade agreements. In the meantime, both sides will need to identify the main negotiating issues and to decide about the appropriate moment to start negotiations that will provide a smooth transition from the European Union agreements to the UK agreements.
2- PARTNERSHIP FOR SUSTAINABLE DEVELOPMENT
- Latin America is the most biodiverse region on earth and is home to six of the world’s 17 megadiverse countries. It holds 1/5 of the world’s forests, 1/3 of the water reserves and 12% of its arable land. For this reason, sustainable development in Latin America is not just a regional but a global priority in which the United Kingdom can make a great contribution.
- Biodiversity protection. The UK can strengthen its position as a key ally of Latin America in the protection and sustainable use of the region’s biodiversity. Institutions like Kew Garden are already conducting important projects that should be maintain and expand.
- Climate change. Latin America has seen the terrible consequences of climate change and the region is one of the most vulnerable to natural disasters. The United Kingdom can support regional efforts to reduce climate change effects and strategies for protecting forests and ecosystems that contribute to balance CO2 emissions.
- Implementations of the Sustainable Development Goals (SDGs). The United Kingdom played a significant role in putting in place the SDGs, and several Latin American countries were pioneers in promoting this developing agenda towards 2030. It is important to enhance this alliance to comply and implement these goals.
- Prosperity Funds. Many countries in the region are recipients of British resources for projects of social content in specific areas of interest for the UK. A comprehensive analysis of the results of these funds should be conducted in order to be more efficiently allocated through better coordination with the receiving countries.
- Energy security is one of the most pressing challenges for Latin America and according to the Interamerican Development Bank (IDB) the region will need to double its energy output in the next twenty years in order to cope with increasing demand by business and homes.
- Sustainable use of conventional energy sources. Latin America holds 20% of the world’s oil reserves and one of the largest reserves of shale gas. Three of its countries are in the top ten worldwide. UK cooperation training and advising on best practices and regulations for efficient and sustainable use of these resources, can contribute to the region’s energy security, while creating business opportunities for British companies.
- Development of renewable energy projects. Many Latin American countries are net importers of oil, gas or coal. For those countries as for the rest of the region it will become increasingly important to gradually expand the renewable component of their energy mix. As the world transitions into low carbon emission, sustainable development models, cleaner and more sustainable energy production will gain more relevance.
- Without prejudice of the already remarkable achievements in renewable energy investments and production in certain Latin American countries, the UK, being a global leader in the sector, can provide valuable support to the region in the development of these types of projects that will make a long term, sustainable contribution to the region’s energy security.
4- PARTNERSHIP FOR SECURITY AND THE RULE OF LAW
- In order to strengthen the Rule of Law, the United Kingdom and Latin America have promoted the exchange of knowledge and good practices as well as to increase the links between legal systems. These exchanges could contribute to reinforce the region’s institutions.
- Latin American countries have implemented important open government reforms in recent years. A renewed common effort would certainly boost achievements in the field. Latin America’s participation in the global anticorruption strategy established in the Anticorruption Summit in London 2016, should be enhanced.
- Organized crime has consolidated as the main security threat for Latin American countries and their citizens. This problem is a global challenge in which a shared responsibility approach is welcome. From illicit drugs to human trafficking and contraband, rings of transnational organized crime in Latin America are linked with criminal activity in Europe and in the UK. It is in the interest of both, to work together in strengthening the cooperation to counter these criminal organizations.
5- PARTNERSHIP FOR EDUCATION, SCIENCE AND TECHNOLOGY
- The commodity price crisis forced governments throughout Latin America to put in place plans to diversify their economies and make them less dependent on commodities exports. Strategies to build new capabilities and skills for the work force and to develop and expand science and technology based economic sectors will be the key to more diversified and robust economies.
- The UK being a global leader on education and scientific research and development, can provide valuable support in training and education for skills development; innovation culture for entrepreneurs and development of scientific research capabilities, all of them, fundamental elements of the global economy.
6- LATIN AMERICA AS A TOURIST HUB
- According to the World Tourism Organization by 2030 there will be 1.8 billion international tourist arrivals worldwide. Emerging destinations are expected to increase at twice the rate of those in advance economies and will account for 57% of the global tourism market share.
- Latin America is well positioned to consolidate its status as an emerging destination and capture an important part of the global market share. UK could play a role in developing a modern tourism industry and hotel infrastructure in Latin America, as well as working together to attract more British tourists to the region.
- The extraordinary event of the Covid-19 has exposed the weakness of the public health services of many countries around the world, and the Latin American ones have not been an exception. The lack of adequate infrastructure and equipment to fight the disease and the contamination has been notorious. As a consequence of the necessary lockdown of the world population for a prolonged time, the economies of all countries have suffered the most severe backlash in a century. The recovery will be very slow and painful and the capacity of the States to inject resources to activate the economy will be very scarce.
- Given the expertise of many British companies in the health sector, their contribution in helping Latin American countries in shaping a public health policy and investing in hospitals and services related, could be a substantial component of the British Foreign Policy.
- Looking forward to the next decade, Latin America rises as a relevant player in world affairs. In a world increasingly battered by conflict and terrorism, Latin America remains a peaceful region upholding a long-standing commitment with international peace and stability. The region has shown leadership around key issues of the global agenda like climate change, sustainable development and global governance. In shaping a British Foreign Policy, Latin America should appear as a reliable partner to tackle global challenges and to seize opportunities for economic growth, social prosperity and cultural exchange.