With a sea change in the political and economic climate, Director General of Canning House Dr Charles Goodson-Wickes says now is the time to reassess Latin America’s potential

British Foreign Secretary George Canning’s grandiose claim of 1826: ‘I called the New World into existence to redress the balance of the Old’ – has been a long time coming to fruition. A region long neglected, it’s only since the turn of the century that Latin America has started to be seen in a new light. Europe, of course, has historically tended to look south east to Asia for economic opportunities rather than to the south west, to a region which has only recently entered a period of comparative political and economic stability.

Some have ruminated that Mercator might be to blame for the historic neglect of Latin America’s Pacific face. Today, in the age of Google Maps, Mercator’s depiction of the globe has not discouraged China from increasing its trade with Latin America tenfold during the last decade. Interestingly, this dramatic shift in China’s trade with the region has taken place without the political interference which many predicted would accompany it. It may be that China pays only lip service to the anti-US stance displayed by Ecuador, Venezuela and Bolivia for its own long term ends. Certainly, China shows no enthusiasm for antagonising the Western powers and Russia by selling significant military hardware or providing ‘military advisers’.

The region’s attraction for resource-hungry China has been principally its raw materials (oil, coal, metals and minerals), together with plentiful agricultural products and fertile fishing grounds to feed China’s burgeoning population. Indeed, Latin America’s exceptional natural resources offering has been fundamental in stimulating the high levels of foreign direct investment which have underpinned impressive growth in recent years. With improving economic fortunes have come greater political ambitions, evidenced currently through Brazil garnering increasing support for it to be afforded a permanent seat on the UN Security Council (to add to its place – together with Mexico and Argentina – in the G20).

It has been interesting to note that, while the established economic powers of the ‘Old World’ (and, of course, the US) have been hit hard by the global economic downturn, the economies of today’s Latin America have been less dramatically affected by market turbulence. The region’s economic wellbeing today is, of course, in marked contrast to the situation at the close of the 1980s –often referred to in terms of a ‘lost decade’, though one which seems all the more distant now when we look at key economic indicators for major players like Brazil. Indeed, in the twilight years of the ‘lost decade’, who would have thought that Brazil’s GDP would come to eclipse that of the UK in 2012, or that Latin America might come to account for some 10 per cent of the global economy? A growth rate of 6 per cent for the region in 2010 serves to further reinforce Latin America’s appeal to foreign investors.

A reputation for revolving dictatorships and hyperinflation served to deter potential investors from Latin America for much of the last century. With a sea change in the political and economic climate having taken place, however, the time is now right to reassess Latin America’s potential. Some of the region’s major companies, among them Vale and América Móvil, are recognised as global leaders in their respective fields, and are working to expand their operations further afield. Forthcoming free trade agreements will serve to further expand the volume of trade Latin America exchanges with the rest of the world, particularly Asia. To take one example, Colombia and South Korea are currently poised to sign a new agreement, to complement existing treaties with the US and the EU.

British Foreign Secretary William Hague, in his oft-quoted Canning Lecture of 2010, could not have been more adamant in signalling the importance of reengaging with Latin America for the UK: ‘Britain’s retreat from the region is over.’ The cynics may have thought that this was mere posturing from the new Government, but the enthusiasm with which the coalition – through Foreign Secretary William Hague and Minister of State Jeremy Browne – has backed up its words with concrete action has served to convince the majority of doubters that this time around the UK, in its strategy for reengagement with Latin America, means business.

Business, of course, is at the very heart of the process by which Britain aims to develop closer ties with the region. ‘Commercial diplomacy’ has at last become a reality in UK foreign policy with the deployment of dedicated Prosperity Officers to Latin American embassies, and through a clear strategy for business and targeted support from the UK Foreign Office and UK Trade & Investment.

With its fast-growing middle classes and consequently expanding consumer spending power, Latin America in 2012 is a market which simply cannot be ignored by UK companies. While consumers in Europe and the US remain cautious in the face of cuts to public expenditure and shrinking prospects for growth, Latin America’s consumers have continued to spend.

Besides impressive growth rates and a wealth of raw materials, Latin America is noted for its vibrant cultures, cuisines, phenomenal creative output, and for a love of football. The region’s fanatical obsession with the sport was highlighted in a new 2010 study by the European Central Bank which examined the impact of the World Cup on stock market trading. The study found that, while trading activity in all countries fell during World Cup games, this tendency was by far most clearly marked in the nations of Latin America. The 2014 World Cup in Rio de Janeiro will certainly serve to reinforce the association between Latin America and the beautiful game. With the 2016 Olympics also taking place in the cidade maravilhosa (the ‘marvellous city’), the handover from London 2012 will provide further opportunity to reinforce ties – sporting and otherwise – with Brazil.

Thus Latin America captures the attention of the world. Complementing the work of UK Government, Canning House will continue to play a central role in UK-Latin America relations. Whether showcasing Latin American culture and the arts, facilitating new business partnerships at our networking receptions, promoting Portuguese and Spanish language learning in the UK’s schools, or disseminating the latest business and political intelligence, Canning House exists to promote closer and more productive relationships between the UK and Latin America. For those interested in learning more about what we do at a time of increased interest in Latin America, our door will always be open.

Ambassador of Colombia Mauricio Rodríguez Múnera, Director General of Canning House Dr Charles Goodson-Wickes,  former Lord Mayor of the City of London Nick Anstee, President of the Republic of Colombia Dr Juan Manuel Santos, President of Canning House Lord Brennan of Bibury, FCO Minister of State Jeremy Browne MP and Head of International Government Relations at Anglo American plc and Chairman of Canning House Hugh Elliott, at the 2011 Canning Lecture

Who would have thought that Brazil’s GDP would come to eclipse that of the UK in 2012, or that Latin America might come to account for some 10 per cent of the global economy?

‘Commercial diplomacy’ has at last become a reality in UK foreign policy with the deployment of dedicated Prosperity Officers to Latin American embassies

Canning House is the centre of choice for UK-Latin America relations. Based in London’s Belgrave Square, it works with numerous strategic partners to promote closer commercial, diplomatic, political, cultural and educational ties between the UK and Latin America. As a membership organisation, it supports UK companies doing business in Latin America and their Latin American counterparts seeking to establish or consolidate their presence in the UK. www.canninghouse.org