Mr Swire reflected on some of the economic successes between the UK and Latin America over the past five years – including contracts won by Express Engineering in Brazil, President Energy in Paraguay and £300 million of projects following a trade visit to Cuba. The minister also looked ahead to how the regions can work together to build even stronger trading ties, including new economic opportunities that can result from tackling climate change.
Excellencies, ladies and gentlemen.
It gives me great pleasure to speak to you today here at the Guildhall – the home of the City of London Corporation. I’d like to thank the Lord Mayor for hosting us, in what is a fitting venue for this fifth edition of the Latin America Investment Forum.
I was delighted to be asked to continue as Minister of State at the Foreign and Commonwealth Office, and retain responsibility for the UK’s relations with Latin America. Last week, I attended the EU-CELAC Summit in Brussels with the Prime Minister. A month on from the General Election, it was a good opportunity for us both to re-engage with Governments from across Latin America, at the highest level.
One of the Summit’s key themes was a desire within the European Union to re-invigorate its relationship with Latin America – perhaps a good example of the benefits of British leadership in Europe.
Because, of course, it is now almost five years since the British Government launched the Canning Agenda - our own strategy for re-engaging with Latin America.
I have always felt very strongly that the measure of our success won’t be in the number of Government meetings that are held. Rather, it will be the links between our institutions, our businesses and our people – which is why I’m glad to see so many of you here today.
Reaffirming our commitment
This morning, I would like to do three things. I would like to reflect on the last five years; I would like to look ahead; but most importantly, before I say anything else, I would like to make clear this Government’s continuing commitment to Latin America for the long term.
Reflecting on the last five years
And I know that when the then Foreign Secretary, the Rt Hon William Hague, first spoke about this at Canning House in 2010, he always envisioned our re-engagement with Latin America as a long term strategy.
We then proceeded to open new missions and bolster our diplomatic contingent across the region, as a way of kick starting things. I can personally attest that our Ministerial team travelled more widely within Latin America and more frequently than ever before.
While of course these are the perfect tools to build Government to Government relationships on political and security issues, like our efforts on counter-narcotics, they can only nudge and encourage the likes of you in this room to build the sort of commercial, academic and cultural ties that really benefit us all in the long run.
This year’s UK-Mexico dual year is an excellent example of that, prompted and supported by Government – and a State Visit, no less – but resulting in a wide-range of activity and lasting partnerships that will benefit both of our countries.
Even more relevant to today’s programme was the support our Consulate in Rio de Janeiro gave British firm Express Engineering who went on to win contracts to supply machinery to the oil and gas sector in Brazil. Continuing the theme of long term partnership and mutual benefit, the company has since invested in a local partner - and is planning a major investment programme to expand their in country operation.
And another example: our Embassy in Asuncion – which I re-opened in 2013 – has been able to provide support to British companies Amerisur and President Energy in a way we simply couldn’t before. President Energy have since invested over £65 million – carrying out the first 3D seismic study in Paraguay – and last year made the first major oil discovery in the Chaco basin.
And just last October, I became the first British Minister to visit Cuba in a decade. The meetings I had in Havana yielded a trade mission six month later, which agreed over £300 million worth of projects with local partners, with further relationships built for the future.
And our efforts have been rewarded. Trade between the UK and Latin America is increasing in volume and broadening in scope. From 2010 to 2013, British exports to Latin America and the Caribbean grew by 25%. And, as these examples show, relationships have been built that will lead to a further increase in bilateral trade and investment in the years ahead.
So, there is no question that our companies and our governments have made great progress together – but I’m also here today to say that there is plenty still to do.
Believe me, I have enjoyed being able to make speeches telling people that the UK has the fastest-growing economy in the G7 – and talking about having one of the most business-friendly environments in the world. Indeed, our record levels of inward investment are proof that foreign investors have confidence in the UK. But we shouldn’t get complacent. We still have work to do, to consolidate our economic recovery and meet the Chancellor’s £1 trillion export target.
I’m sure that Ministers from Latin America have also been very happy to talk about the impressive growth across the region. In the decade that straddled the global financial crisis, from 2004 to 2013, Latin American countries averaged 4% annual growth and kept inflation under control. But recent economic headwinds have highlighted the need to develop infrastructure and drive up productivity.
And we all need to make fundamental changes to our infrastructure and economies in the years ahead to limit and manage the effects of climate change: Rising sea levels; threats to food and water supplies; and increased migration.
So what next? Over the next five years, we will continue to create the right conditions for cultural, academic and commercial ties to prosper.
At EU-CELAC last week, the Prime Minister and I made clear our desire to turbo-charge free trade between our regions. We want to see the EU free trade agreements with Mexico and Chile refreshed, and sixteen years after the first attempt, we want to finally see an EU-Mercosur deal. Such a deal could boost our regions’ Gross Domestic Products by more than £17 billion annually.
We will continue to work with countries to promote competitiveness, transparency and good governance. We believe that a rules-based international economic system provides a foundation for not just economic stability, but also political stability.
That is why the British Government hosted a summit here in 2013 to champion the Pacific Alliance – of which we are an observer country – and why we are supporting Colombia and Peru as they seek membership of the OECD.
Governments across Latin America have announced infrastructure investment programmes worth in excess of one trillion US dollars. We want to broaden our existing efforts to share our experience – positive and negative – of public-private partnerships to support the financing of these projects.
And if we are to see increased productivity, infrastructure is only half of the story. Through programmes such as the Newton Fund, we are investing in closer cooperation in science and innovation, and forging academic links between the UK and Latin America to address global issues like antimicrobial resistance and dementia.
The UK is also helping to train hundreds of new English-language teachers from Peru and Panama, as those nations pursue their ambitious goal of becoming bilingual.
And from September, we will increase by more than fourfold to £7.4 million the funding in Latin America for Chevening scholarships – to enable the brightest students to study at the UK’s world-class universities.
As we invest in the next generation, it is also vital that we act soon – and act together – to agree binding clean energy targets if we are to achieve the goal of limiting global warming to two degrees centigrade. Ultimately, an ambitious and fair climate deal in Paris this December will unlock further investment in low-carbon technologies, generating jobs and growth.
I hope you’ll agree that there’s a lot to be excited about, looked ahead. However, I want to conclude my remarks on a historical note.
I hope today’s event is a success for each of you and that enduring and productive partnerships are formed. There are certainly strong precedents for it, dating back to the independence of Latin America.
Simon Bolívar came here in 1810. He left with new partners, new ideas and funding for his liberation movement.
Following independence, the City of London became an important source of finance for these new nations’ development.
Today’s programme is focussed on infrastructure: I know that it is a cliché to say “the British built the railways” in Latin America. I’ve said it often enough, on my travels across the region. But in spite of how familiar it sounds, the facts still demonstrate the potential there is for the UK and Latin America to work together.
The first steam railway arrived in Latin America – in Cuba – just 12 years after Stephenson’s Rocket. It actually pre-dates railways in Italy or Spain. By the end of the 19th Century, every country in the region had a railway and British capital investment accounted for the majority of the 40,000 miles of track across the continent.
In 1913, on the eve of the Great War, 50% of all foreign investment in Latin America came from the UK.
A century on, the world is a very different place. We are all part of a global race for sustainable growth. But it is a race we cannot win alone. The UK and Latin America are indispensable partners in this. I hope I can assume – given your attendance today – that you agree.
Five years ago, William Hague told an audience at Canning House that the UK’s retreat from Latin America was over. Today, at the fifth Latin America Investment Forum in London, I’m pleased to be able to say that our reengagement has only just begun.