The visit by Foreign Minister John Baird to Mexico, Cuba, Peru, the Dominican Republic and Panama is a welcome development. The same goes for the one by Minister of State for the Americas and Consular Affairs Diane Ablonczy to Nicaragua, Ecuador, Colombia and Chile, also this week. Both visits give a badly needed fresh impetus to the priority given to Latin America by Prime Minister Stephen Harper in 2007.
It should also give Canadian officials a first-hand impression of what is happening in the region. Over the past decade — the region’s most successful — there has been a sea-change in its politics, its economies and its foreign relations. Yet many observers continue to look at Latin America through a Cold War lens. Since 2000, the middle class has increased by 50 per cent, and poverty has fallen to 28.8 per cent. Leaving underdevelopment behind seems within the grasp of several countries. A key source of this takeoff has been the region’s changing international ties.
Since 2007, the region’s foreign trade in goods has increased by 40 per cent — from $1.55 trillion (U.S.) to $2.19 trillion in 2012, during the worst international financial crisis in 80 years, which left the region unscathed. While unemployment in Spain and Greece clocks in at 26 per cent, and the U.S. rate is 8 per cent, in Brazil it has reached an all-time low of 4.6 per cent, in Peru 6.7 per cent, and in Ecuador 4.8 per cent. In 2013, Panama’s economy is projected to grow 7.5 per cent, Peru 5.8 per cent, the Dominican Republic 4.3 per cent and Colombia 3.8 per cent. Chile has grown at an average rate of 5.9 per cent over the past three years and attracted a record $26.4 billion in foreign direct investment in 2012 — more than Mexico and second only to Brazil.
The business opportunities for Canadian companies are enormous. South America’s largely natural-resource-based economies are strong in areas where Canada has comparative advantages and can move in swiftly. Mining companies like Barrick Gold have been at the forefront of this, while banks like Scotiabank have also made significant inroads. Yet many Canadian companies still regard Latin lands as terra incognita. Given the good will toward Canadians out there, and how much beckons, this is a pity.
Latin American regionalism has also been growing in leaps and bounds, and is one of the secrets behind the region’s success. The latest entity is the Pacific Alliance. It was launched on May 6, 2012, in Paranal, northern Chile, in the presence of the presidents of Chile, Colombia, Mexico and Peru. Originally mooted by former Chilean president Michelle Bachelet (2006-2010), the grouping came formally into being with the Lima Declaration of April 2011. Its main objective is to “create an area of deep integration . . . as well as greater growth, development and competitiveness.” It aims to do so through the gradual liberalization of the circulation of goods, services, capital and people, including the integration of its members’ stock exchanges (though this has run into some difficulties).
Canada may want to explore closer ties with the Pacific Alliance, though it should keep in mind that imposing visas on Mexicans (a NAFTA partner) in 2009 went over like lead balloon. It would need sorting out if serious progress is to be made on this front.
Minister Baird’s visit to Havana is especially encouraging. Though much hope was placed on the possibility of the Obama administration’s coming up with a new Cuba policy, it is stuck in neutral, held hostage to Miami’s Cuban-American lobby.
Canada’s long-standing, special relationship with Cuba puts it in a good position to act as a broker to sort out Cuba’s overdue rejoining the inter-American community as a full member. Few issues command such unanimous support throughout Latin America and the Caribbean. A breakthrough on this thorny issue, a Cold War relic that should have been disposed of long ago, would be a real feather in Canada’s cap.
Jorge Heine is CIGI Professor of Global Governance at the Balsillie School of International Affairs, Wilfrid Laurier University. His Oxford Handbook of Modern Diplomacy, co-edited with Andrew F. Cooper and Ramesh Thakur, is published by Oxford University Press.