Business As Usual?: UK’s Relationship With Latin America In 2011 – Analysis

By Liam Whittington

Last year marked the 200th anniversary of Simón Bolívar’s visit to Britain, during which the revolutionary leader sought support for the independence movement in Latin America.[1] Although the British government initially remained neutral in the struggle between Spain and Latin America, Britain became a valuable source of troops and weapons for Bolívar’s revolutionary army.[2] Despite this historical link between Britain and an independent Latin America, a strong cooperative relationship between the two has not been maintained.

Two centuries later, in his speech at Canning House on November 15, 2010, UK Secretary of State for Foreign and Commonwealth Affairs, William Hague commented, “History teaches us that Britain has a track record of underestimating Latin America and neglecting its opportunities. It is this neglect that the British government is determined to address.”[3] Hague further observed that the British coalition government under Prime Minister David Cameron must recognize that “Latin America must be a key focus of a foreign policy that seeks, as ours does, to build up new and strengthened relations in the world in pursuit of prosperity and security…so it will be under this government.”[4] This proclamation was designed to assert the new coalition government’s dedication to gloriously re-establishing Britain’s links with Latin America, and effectively redressing the “steady decline” in British presence in the region over the past century.[5]

Three areas in which cooperation could be possibly strengthened between Britain and Latin America were identified in the speech: trade, diplomacy, and security. But despite inevitable governmental rhetoric, Britain’s attempts to strengthen links with Latin America have focused largely on developing bilateral trade links, a policy that harkens back to the days of Empire. While trade is undoubtedly a crucial cornerstone of any relationship between Latin America and the UK, both parties have much more to offer each other than simply economic benefits.[6] The current British administration’s policy towards Latin America neglects important political and social commonalities that are capable of fostering beneficial effects on both sides of the Atlantic. As global order continues to undergo a fundamental shift with the influence of newly constructed, developing third-world economic behemoths increasing exponentially on the world stage, British leaders must be cognizant of the limits of their sway and recognize that many Latin American nations are moving away from the traditional U.S. sphere of influence. These countries no longer need to actively seek out the patronage of the long-established first-world powers. In order to carve out a truly meaningful engagement with Latin America, it is essential that the coalition government take account of this shifting balance of global power, and that the current limits of the UK’s influence be recognized. A simple trade relationship is no longer enough, Whitehall must widen the focus of its foreign policy in the region.

“Business as Usual”

In his speech, Hague attempted to illustrate the close ties that the UK and Latin America enjoyed in the past. He particularly emphasized Britain’s historical contribution to Latin America’s march to independence, highlighting the British Legion troops that fought in Bolívar’s army, and the role Britain played in the formation of an independent Uruguay and Brazil.[7] Although there was an influential body of Liberal opinion in Britain that supported the independence movement, trade remained the crucial motivator, as British policymakers contended that a Latin America independent of Spain and Portugal’s colonial presence would provide a more readily accessible market, particularly as the nascent nations stabilized in the second half of the nineteenth century.[8], By 1808, 40 percent of British exports were sent to Latin America.[9] A century later, savvy British entrepreneurs, who saw the potential for profit-making in newly-industrializing Latin American states, were still amassing fortunes in business ventures in the region. For example, Weetman Pearson became arguably the most important British businessman in Latin America in the early years of the twentieth century, as he benefited from Porfirio Díaz’s developmentalist desires for some of the Mexican state, and secured contracts for a number of Mexico’s most important public works projects, such as the building of the Gran Canal, the modernization of the port of Veracruz, and the reconstruction of the Tehuantepec National Railway.[10] The close links Pearson was able to develop with select members of the Mexican political elite enabled him to develop an engineering and oil business empire that made him one of the richest men in Britain at the time.[11] However, these kind of strong commercial links were not maintained throughout the twentieth century. In fact, UK exports to Latin America in May 2011 accounted for barely one percent of all international exports to the Americas.[12] Britain also trails behind the Cayman Islands, the Netherlands and Luxemburg as a source of Foreign Direct Investment (FDI) in Brazil.[13]

Reversing this sharp decline in trade appears to be the British coalition government’s priority in developing new relations with individual Latin American states. British delegations to Latin America, headed by Foreign Office Minister Jeremy Browne and Deputy Prime Minister Nick Clegg, visited several nations believed to be amenable to increased trade in November 2010 and March 2011, respectively. Speaking before his trip, which included stops in Mexico, Panama and Guatemala, Browne clearly outlined his goals: “The trade and investment relationship between our two countries [Britain and Mexico] is a key theme for my visit…there is a huge amount of unrealized potential for further trade between our two nations.” According to Browne, the purpose of his trip was to “highlight the potential for business opportunity, and to speak to business directly, to understand what [the British] government can do to support trade and investment.”[14]

The Browne visit laid the foundation for an expansion of economic ties between Britain and Mexico. During Deputy Prime Minister Clegg’s visit, Mexican President Felipe Calderón announced that the two countries aim to double their bilateral trade to GBP 4.2 billion by 2015.[15] Furthermore, a Mexican Chamber of Commerce was opened in the UK on June 23, 2011. Mexican Ambassador to the UK Eduardo Medina Mora commented that the new Chamber was “a clear sign that Mexican companies are increasingly active in the UK” and that, “this new Mexican institution in Great Britain will contribute to strengthen further the commercial relationship between the two countries.”[16]

In June 2011, Clegg also took a delegation to the most economically powerful nation in Latin America — Brazil — where a similar expansion in bilateral trade deals between British and Brazilian companies was announced: more than GBP 2.5 billion in 2011.[17] The development of such trade links should prove mutually beneficial for both trading partners. Britain can provide a strong market for Latin American nations looking to export their vast natural resources, and as those nations develop, they in turn can provide markets and beneficial terms of trade for British companies involved in advanced and precision manufacturing, and petroleum production. For example, between January and May 2011, gold, iron ore, and petroleum exports from Brazil to Britain increased by fifty-nine, seventy, and twenty-nine percent respectively in comparison to the same period in 2010.[18] However, these bilateral agreements should not form the entirety of British foreign relations with Latin America. The British government needs to seek complementary initiatives that aim to build a truly concrete and long-lasting association.

Diplomacy and Democracy – Hand in Hand

As global economic power shifts away from North America and Europe and towards resource-rich developing nations in Asia and Latin America, it is likely there will be a corresponding shift in global political influence. China, whose nominally communist regime is infamous for its suppression of dissidents, repression of information, and human rights abuses, is likely to become more politically powerful as its economic power base expands. Indeed, China is currently investing vast sums into resource-rich developing countries around the world, and has become the third largest foreign investor and trading partner in Latin America.[19]

As Peter John Cannon, Latin America Section Director of the Henry Jackson Society has commented, with the growing influence of China and other pseudo-democratic regimes in Latin America (such as Iran), it is crucial that the UK generate stronger diplomatic links with Latin American countries based on common values of democracy, strong civilian governmental institutions, and the enhanced observance of human rights.[20] In the past, Latin American nations have received proportionally small amounts of Official Development Assistance from the UK; according to Organisation for Economic Co-Operation and Development statistics, between 2002 and 2009 the Americas received less funding than Europe, Africa, and Asia.[21] If the UK truly wishes to further develop its relationship with Latin America, it is elemental that development assistance should be increased, with a significant portion directed towards strengthening representative state institutions and ensuring they operate under democratic principles. This would help demonstrate to Latin American governments that the UK does not exclusively regard them as useful trading associates, but as democratic partners operating on the global stage. Britain should also strain to provide personnel and training to ease initial problems that often occur with new programs. Two centuries ago British citizens assisted in the liberation of Latin America from colonial powers – today UK policymakers can further the cause of freedom in the region through the promotion of constitutional solutions.

While issues of political freedom, press censorship, and human rights abuses are still prevalent throughout the region, Latin America today is comprised of more nations operating as multi-party democracies than ever before. The UK, along with its closest democratic allies in the European Union and the United States, should be energetically working on a multilateral basis to help strengthen the democratic process in Latin America, focusing in particular on tackling the culture of venality and corruption which still plagues many nations in the region, and promoting the establishment and protection of a truly free press. In so doing, the American hemisphere and Western Europe would present a strong geopolitical block that could ensure democratic values are upheld at the international level – certainly an appealing initiative as uncertainty and instability continues to grip the Middle East. Indeed, the events of the ‘Arab Spring’, and Britain’s largely trade-based relationships with countries in the Middle East, provide an interesting backdrop to any effort to improve relations with Latin America. In attempting to develop closer ties with nations in the region, Whitehall must not simply take the mercantilist foreign policy adopted towards the Middle East and apply it to Latin America. For example, the sale of millions of dollars worth of arms to repressive regimes in Libya and Syria (which were subsequently used by national security forces against the civilian population) is a policy which simply cannot be replicated in the Western Hemisphere.[22] While Latin American nations are becoming more democratic, the UK cannot decry the mounting influence of pseudo-democratic regimes such as Russia and China in the region, while simultaneously launching trade deals with corrupt, repressive and incompetent governments in Latin America, particularly if those deals involve the sale of arms.

Democratic global multilateralism was strongly advocated by Nick Clegg in a March 2011 speech given at Chapultepec Castle in Mexico City, in which the British Deputy Prime Minister commented that “modern politics must be multilateral politics,” and “the profound challenges we face today can only be met together, as an international community.”[23] However, this rhetoric is pointless without concerted action. The coalition government must be set to initiate closer diplomatic relations. In a step indicating initial progress on the diplomatic front, the Foreign and Commonwealth Office announced on May 11, 2011 that the British Embassy in El Salvador, which had been closed since 2003, would re-open in 2012.[24] Such moves are important steps in the direction of redressing the UK’s historic diplomatic retreat in Latin America, upon which the coalition government must capitalize and now preserve.

Global Security Challenges

Aside from broader politico-ideological cooperation, the UK and Latin America may both benefit from working more closely to ensure security and combat global criminal activity, the effects of which are now being felt on both sides of the Atlantic. The most obvious example is the present surge in cocaine trafficking, where the drug, produced in Latin America, is smuggled to the UK via southern Europe, the Netherlands or West Africa.[25] The Guardian reported on August 3, 2011 that British police and border authorities intercepted a record 1.2 ton cocaine shipment, hidden inside a pleasure boat at the Southampton docks. The cocaine had been loaded onto the boat in Venezuela.[26] Multilateral cooperation and intelligence sharing between British, French, and Dutch authorities led to the seizure of the drugs, and the arrest of six of the European traffickers.

Thus, greater cooperation between British (and other European) police authorities, and their Latin American counterparts may lead to more effective counter-trafficking efforts. Addressing the Mexican Senate in March 2011, Clegg praised President Calderón and the Mexican government for its present stance on tackling the drug trade, and stated that, “the UK government is determined to assist you in any way we can. Not least through working with Mexican law enforcement to share our experiences and the techniques we have learnt to combat organised crime.”[27] Yet despite this rhetoric, there is little evidence to suggest that British and Mexican (or indeed any other Latin American) law enforcement agencies have begun to work closely together to combat organized crime and the drug trade. Aside from a memorandum of understanding on cooperation against drug trafficking, signed with Bolivia in January 2011, and visits by members of the Metropolitan police and National Police Improvement Agency to Mexico, there seems to have been little meaningful cooperation.[28] Intelligence coordination and crime-fighting cooperation requires concerted effort and trust on behalf of British and European agencies. Unfortunately, these agencies have been reluctant in the past to share intelligence on organized crime and terrorism with each other, let alone with Latin American authorities, which are often justifiably viewed as corrupt.[29] Nevertheless, greater multilateral cooperation can help bring British and Latin American countries closer together and may help reduce the flow of drugs from the region to the UK. At the same time British policymakers must also be realistic about the inherent difficulties of tackling the illegal drug trade. The U.S. has for years devoted vast resources to stopping the flow of drugs from Latin America, and yet has had little meaningful, long-term success. The fact that, unlike its transatlantic neighbor, the UK does not share porous land borders with Latin America, however, increases the potential for UK and Latin American authorities to mount successful cooperative interdiction efforts.

Differing strategic defense requirements, resources, and capabilities may preclude close military cooperation between Britain and other Latin American countries outside of a United Nations coalition force. Britain could, however, provide assistance in the form of training to Latin American militaries and police authorities, and there are some indications that the UK and Brazil are becoming more contiguous as they look to ensure national security. Hague publicly backed Brazil’s case for a permanent seat on the United Nations Security Council in November 2010, despite former President Luiz Inácio Lula da Silva’s refusal to support US-backed sanctions against Iran in March of the same year.[30] The signing in September 2010 of a Defense Cooperation Treaty by British Minister for International Security Strategy, Gerald Howarth, and Commander of the Brazilian Navy Moura Neto, indicates that some defense collaboration may be possible.[31] This particular treaty, however, most likely had an economic impetus at heart – securing Brazilian military contracts for British arms manufacturers, and is worryingly reminiscent of the aforementioned UK weapon vending in the Middle East.

The Elephant in the Atlantic

One pernicious issue stands in the way of Britain creating long-lasting, meaningful relationships with some Latin American countries: the Falkland Islands. The sovereignty dispute with Argentina over the islands is diplomatically very sensitive, with neither side willing to shift position. When the sovereignty question was raised in the House of Lords in June 2011, Prime Minister Cameron commented that “as far as the Falklands maintain their interest in remaining as British sovereign territory, they should remain that way, and there is nothing more to say about it.”[32] The Argentine government under President Cristina Fernández de Kirchner remains equally as obstinate over what it refers to as the Malvinas Islands. It maintains that the Falklands are sovereign Argentine territory, and Fernández de Kirchner consistently uses the issue to curry domestic political support at home. In a notable recent incident, Fernández de Kirchner raised the issue with the United Nations Secretary General Ban Ki-Moon on his visit to Buenos Aires in June 2011.[33] Describing Britain as a “crude colonial power in decline,” Fernández de Kirchner has wasted no opportunities in an election year to bring her populist position on the issue to the attention of the Argentine electorate.[34] As British-sanctioned exploratory oil drilling has begun in waters off the islands, diplomatic tensions have become more pronounced.[35] In the latest development that is likely to provoke further controversy in Argentina, in September 2011 the British firm Rockhopper Exploration reported it had made significant finds in the waters around the Falklands, believed to hold as much as 350 million barrels of recoverable oil, and would begin pumping by 2016.[36]

More problematic for Britain is the fact that many South American countries stand in solidarity with Argentina on this issue. Brazil’s refusal to allow the Royal Navy’s Falkland Islands protection ship, HMS Clyde, to dock at Rio de Janeiro in January 2011 demonstrated the extent of this accord. The ship was forced to re-route, but was eventually able to dock in Chile.[37] HMS Gloucester was similarly denied docking access at Montevideo in September 2010.[38] Most recently, Brazil has reiterated its intention to ban all Falklands flagged vessels from calling at Brazilian ports.[39] Hugo Chávez has also called on the UK to “return the Malvinas to Argentina.”[40] There appears to be no easy solution to the Falklands dispute, and as long as both sides maintain their intransigent positions, it seems that it will continue to present a barrier to a close British relationship with Argentina, and may hinder progress and cooperation on a diplomatic and security level with several of its neighbors in Latin America.

But as the global influence of the UK wanes in the face of the aforementioned shifts occurring in geopolitical power structures, and Latin American nations become increasingly cognizant of their abilities to forge their own paths, Whitehall may have to adopt a more conciliatory approach on the Falklands dispute. If the coalition government truly desires to build a better relationship with Latin America, it must recognize that trade partnerships alone cannot ameliorate the political conflict over the Malvinas and that as the world changes, the UK must change with it. Almost thirty years after the war, it is time for the UK to enter an exploratory dialogue with Argentina on the Falklands issue, regardless of the raucous domestic political ramifications of such a move. While the rights of Falkland islanders to determine their own nationality and sovereignty must remain at the forefront of any discussions over the issue, there should be no great supervening obstacle to a revival of the kinds of negotiations between the two nations that occurred in the 1960s and 1970s.[41] Even though such a move could prove unpopular with a section of the British electorate, a rapprochement with Argentina should be viewed as a key milestone to the development of a closer, more holistic relationship with Latin America.

Conclusion

If the UK coalition government is truly dedicated to developing the kind of enthusiastic, mutually beneficial relationship with Latin America that has been largely absent in the recent past, it must not simply subscribe to the maxim of “business as usual.” Creating such links will require policymakers to look beyond the present-day focus on economic incentives and bilateral trade deals. Economic ties are undoubtedly important; however, when pursued in isolation, they are insufficient. The world is changing and Latin America is undoubtedly on the rise. No longer can British policymakers expect Latin American nations to jump at the chance to further relations with a traditional first-world power. Whitehall must demonstrate why Latin America should embrace the UK, and this demonstration cannot be based on trade alone – Latin American nations have a glut of potential trading partners to choose from. In order to guide its policy toward strengthening ties with Latin America, Britain should examine its so-called ‘special relationship’ with the United States. The UK’s cordial connection with the U.S. is based as much upon historical ties, a common political ideology, and complementary security concerns than on levels of trade between the two. Cameron, Clegg and Hague must re-focus on these aspects of foreign policy towards Latin America. Globalization, as the cliché goes, makes the world smaller. With increasing numbers of Latin Americans coming to the UK (the number of Latin Americans living in London alone has more than tripled in the last ten years, from 31,211 residents in 2001 to 113,500 in 2011) it can only be advantageous for the British government to strengthen official links with their homelands.[42] A closer, more holistic relationship between the UK and Latin America can benefit all the involved parties, but it requires a significant shift in current British foreign policy.

References for this article can be found here.