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Mr. Deputy Speaker: Order. We must now move on to Her Majesty's Government's policy on Latin America.
Latin America
11 am
Mr. Jacques Arnold (Gravesham): I am most grateful to Madam Speaker for granting this Adjournment debate, the latest in the current Session, on Britain's relations with Latin America. This is the ninth successive yearly debate that we have had on Latin America, a tradition started in the House in 1988. It is interesting to contrast the debate those nine years ago with the debate today, based on the situation in Latin America in those years.
Nine years ago, we were viewing the early stages of a return to democracy and the demise of the dictatorships that so stained the reputation of Latin America. The House itself was involved in heated ideological warfare with Chile on the one hand and Nicaragua and Cuba on the other, and Latin America was then a byword for high inflation. Today, we debate Latin America against a background of stable economies and stable Governments. It is interesting that the recent great political pressures in Venezuela and in Paraguay did not lead to the traditional overthrow of the Government and imposition of a dictator.
In recent years, we have also witnessed the impeachment processes of the Presidents of Brazil and of Colombia and how that painful process resulted in democracy holding sway, albeit with very different outcomes in the two countries. Today in Latin America there are stable economies, stable Governments, historically low inflation, growth, open markets and privatisation, all of which provide great opportunities for Britain.
We should not forget the power of the Latin American region. It ranks alongside the Pacific rim and southern Asia in opportunities for our country. Latin America's economy is equal to or greater than those of Africa, the Indian sub-continent and south-east Asia put together. We should reflect on the fact that Brazil alone has an economy as powerful as that of Spain and that its state of Sao Paulo alone has an economy equal to that of Belgium.
The economy of Mexico is greater than those of Sweden, Hong Kong and Nigeria put together. The economies of Venezuela and Colombia, taken together, are more powerful than that of South Africa, an area in which this country takes a considerable interest. Last, but not least, Chile's economy is greater than that of either Malaysia or Singapore.
British interests in Latin America are nothing new. George Canning, then Foreign Secretary, said in a Commons debate in 1826 that Britain had
The historic links with this country are perhaps best exemplified by an event that is taking place just a few hundred yards from the House, as President Eduardo Frei of Chile lays a wreath at the tomb of Admiral Lord Cochrane in Westminster abbey. The House will perhaps recall the colourful career of that naval officer, who took a leading role in the independence struggles not only of Chile but also of Brazil and of Greece. Lord Cochrane's
contribution to Latin American independence ranks alongside the midwife roles of Canning, of Ponsonby in Uruguay and of the British soldiers and sailors of the Legion Britanica who served under Simon Bolivar in the independence struggle in northern and western south America.
So much for history; what of today? Our Foreign Affairs Select Committee has just returned from its journeyings in Latin America duly impressed, and we look forward to its report. The Inter-Parliamentary Union has dispatched delegations to Argentina, Uruguay and Brazil in the past three months, all of which have been successful. Members of the House have played a key role in the six successive Argentine-British conferences, which have done so much to reconstruct relations between our two countries following the tragedy of the south Atlantic only 14 years ago.
In all those ventures, our embassies and consulates in the region have played a valuable facilitating role. I pay tribute to the valued work of our diplomats in all the countries of Latin America--we can proudly use the word "all", with the recent opening of our new embassy in Santo Domingo in the Dominican Republic.
There was a time, particularly under previous Governments, when we closed and reopened missions with the regularity of yo-yos. I hope that the tight spending round in progress will not lead to a recurrence of that dismal process and that my hon. Friend the Minister will be a doughty fighter on our behalf in that respect. That is particularly important, as Latin America represents a massive opportunity for Britain, which we would do well indeed to get up and grasp.
I commend the proposed conference of key British business men due to be held in January next year, co-ordinated by the Foreign and Commonwealth Office and the Department of Trade and Industry, with key Latin American speakers from the highest level in the continent. It will be a magnificent opportunity for British business to learn more, building on the "Links into Latin America" programme of the DTI. I also commend the initiatives of Canning house, the Latin American centre in London, and its series of conferences and seminars, not least in the educational sphere.
Perhaps the biggest challenge in Latin America is the development of trading blocs. Mercosur, which is in effect the southern common market, was established as recently as 1991 by Brazil, Argentina, Uruguay and Paraguay, and has flourished. Although much work needs to be done to free up sectors and to apply a common external tariff, the volume of intra-group trade between the countries has grown impressively. In 1990, the year before Mercosur's inception, trade among the four countries amounted to $4 billion; by 1995 it had more than tripled to $14.5 billion. The impact of Mercosur is clear.
Above all, the venture of Mercosur is seen as a union of nation states with a minimum of supranational institutions, and with decisions taken by consensus. It is significant that it is avoiding the pitfalls of excessive bureaucracy, over-regulation and money-churning that have become the hallmark of the European Union. To date, Mercosur has maintained only a small secretariat in Montevideo and work is conducted through joint working parties, particularly to deal with the non-tariff issues.
Both President Fernando Henrique Cardoso of Brazil and President Carlos Menem of Argentina have given an impressive lead in those developments, and the four countries are pushing a five-year programme to develop the free trade area and the customs union.
Close ties are being developed with Chile. Tariffs are falling and Chile, the region's fastest growing economy, is coming closer to Mercosur. Bolivia is next into the frame to be associated with it. Mercosur has concluded an inter-regional co-operation agreement with the European Union that was signed in Madrid a year ago.
Sir Kenneth Carlisle (Lincoln):
I was interested to hear what my hon. Friend had to say about Mercosur. Does he agree that one of the most interesting developments to arise from that freer, larger market is the substantial investment by European and other countries in the Mercosur countries, especially in the automobile industry? There has been great investment by, for example, Volkswagen and Fiat simply because the market in that area is so much bigger now.
Mr. Arnold:
Stability and free trade have already had the remarkable effects for Mercosur that I have outlined. The opportunities for British investment are certainly there. I hope that the Rover Group will read the debate and bring its proposals for that area to a more rapid conclusion.
Mr. Robert Banks (Harrogate):
Does my hon. Friend recall that the Trade and Industry Select Committee visited Argentina and Brazil last year and submitted a report to the House pointing out the advantages for British companies in trading with both those countries and in looking more widely to the Mercosur region? There are considerable opportunities. Mercosur is a very good and expanding organisation.
Mr. Arnold:
I thank my hon. Friend for raising the important Select Committee on Trade and Industry report and the hard work done by the Committee, which I hope will further highlight the opportunities for Britain.
Elsewhere in the continent, progress is being made by Colombia, Ecuador and Venezuela in the rejuvenation of the Grupo Andino, which is working on a free trade agreement with Mercosur, perhaps including Peru, and with which Panama is associated.
The process undertaken by Mercosur and the Grupo Andino contrasts with the north American free trade agreement, which was severely jolted by the Mexican financial crisis last year--a crisis that brought about a paralysis of any extension of NAFTA which has been exacerbated by United States internal politics.
All this points to opportunities for Britain and Europe. There is a growing tide of opinion in favour of a coherent relationship between a Latin American trading bloc bringing together its component parts, and a partnership with Europe and other regions around the world. The NAFTA experience and the Uncle Sam tendency, best exemplified by the haughty treatment of Colombia when it was struggling with the drugs menace can only emphasise Latin America's will to have close ties with the wider world.
All these matters underline the key role and opportunity for Britain. We are the natural point for Latin American countries' relationship with Europe--the logical first port
of call in Europe. President Frei is here today. President Zedillo of Mexico was here earlier this year, when he addressed a meeting of both Houses of Parliament in an exceptional way. President Cardoso of Brazil is expected next year. Dozens of other high-powered Ministers, business men and so on have come to London in recent months.
Not only is London the world's leading financial and business centre, but our patterns of international trade are unique in Europe. That best ties in with the interest and preference of the Latin American republics. We are the obvious champions for Latin America within the counsels of Europe. Whereas France, Spain and Portugal have interests, particularly agricultural ones, which are competitive with those of Latin America, our interests are almost entirely complementary to those of Latin America. I look forward to my hon. Friend the Minister of State, Foreign and Commonwealth Office highlighting our work in that context.
To highlight the economic progress of the past year, I point to the stable currencies and low inflation in Brazil and Argentina, although I wonder what pressures are building up behind their highly valued currencies. We should note the continued excellent performance of Chile and the renaissance of Peru and Bolivia. Mexico is making a steady recovery after its financial crisis last year. We are also witnessing a coherent fight in Venezuela. Many of us were fascinated to hear the presentation at the House yesterday by the Venezuelan Finance Minister and the president of its central bank.
It is interesting to note in passing that the economy of the Falkland islands is also doing well, particularly in the fishing sector and the oil industry, in which more harmony is developing with its neighbour, Argentina.
Over the years, Britain has been a leading partner in infrastructure projects. One thinks of the Rio-Niteroi bridge in Brazil, and we are looking at the Bolivia-Brazil pipeline. A massive series of projects is linked with the Hidrovia project--a project to develop the navigational capacity of the Parana and Paraguay rivers and their tributaries, from their upper waters in Bolivia and Brazil through Paraguay, Uruguay and Argentina to the River Plate and the Atlantic ocean. The scale of the engineering projects--to the tune of US$2 billion--presents massive opportunities for British companies. From the upstream terminus at Puerto Suarez in Bolivia, through the navigation channel up the Itaipu dam, opening up the Brazilian waterways as far as Sao Paulo, down to Nueva Palmira in Uruguay--the major open sea port at the mouth--there is much work to be done. Furthermore, there is the massive proposal for a River Plate bridge between Buenos Aires and Colonia del Sacramento in Uruguay. I hope that our embassies in all five countries are on the ball, and that our excellent trade promoters will alert potential British participants to the opportunities.
Privatisation is one of the greatest recent British success stories, and it is being emulated throughout the region. There are massive opportunities for British expertise and experience, not only in the process itself and the development of local stock markets but in popular shareholding. There is also a massive opportunity for British investment in the privatised companies. Our record, notwithstanding local successes such as British
Gas in Buenos Aires, is not as good as it might be. There is much to be done. We must be in there, playing a leading part as the privatisation programme continues to roll out.
Education and training is another area of opportunity for us. My right hon. Friend the Secretary of State for Education and Employment recently visited Chile and Colombia and my noble Friend Lord Henley has visited Brazil, Argentina and Mexico. It is fascinating to note the enthusiasm of many Latin American countries for our national vocational qualification system. A major project is under way in Mexico in conjunction with our National Council for Vocational Qualifications. That project is funded by the World bank. There are also interesting developments in Colombia, Argentina and Brazil in that respect.
Throughout the region, there is dynamic activity in English language teaching, British cultural events and projects involving British higher education. This is being fostered and led by the British Council and its sister Cultura Inglesa institutes. Local British schools, notably in Sao Paulo and Buenos Aires, are flourishing. I am sure that the work of all of them will be encouraged by the Government.
"called the New World into existence, to redress the balance of the Old."--[Official Report, 12 December 1826; Vol. 16, (2nd Series) c. 397.]
From independence onwards, Britain has taken a major partnership role in the region's development, involving railways, public utilities, banking and shipping, to mention but a few aspects.
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