This is my first visit to El Salvador. It is a pleasure to be here, and a privilege to address the IEESFORD diplomatic academy.
I would first like to repeat my message of last week and express my deepest condolences to the families and friends of those who lost their lives, or were injured, as a result of the earthquake in Guatemala. I know the tremors were felt here too.
The earthquake has been a tragic reminder of the very real threat this region faces day-to-day. The brave response of those on the ground, and the offer of support from countries across the region, has been an example to us all.
Two years ago, the British Foreign Secretary, William Hague, gave a speech at Canning House in London, on the United Kingdom’s relations with Latin America. His speech marked the opening of a new chapter in Britain’s approach to this region; that, and I quote, “the UK’s retreat from Latin America is over”.
I come here today to reaffirm this message, and to set out what this new chapter means for the United Kingdom and the countries of Central America.
The UK has enjoyed a long and very special bond with Latin America.
George Canning, the nineteenth-century Foreign Secretary and Prime Minister after whom Canning House was named, remains perhaps the most striking example. Under his leadership, Britain was among the very first countries to recognise newly independent Argentina, Colombia, Mexico, and, of course, Brazil, whose independence Canning himself helped to negotiate.
But Canning was certainly not the only Englishman to see the huge potential of Latin America. Weetman Pearson, one of the great Victorian entrepreneurs and an early proponent of globalisation, built railroads and harbours in Colombia, Mexico and Chile. He also had ventures in oil and energy, illuminating Mexico and Chile with energy generated by the countries’ first hydroelectric plants. Visitors to Veracruz can see a statue of Pearson, which was unveiled ten years ago to mark the centenary of its port.
Pearson’s endeavours reflected our strong trade links: by the time of the First World War, 50 percent of foreign investment in Latin America came from Britain, and 20 percent of its trade was with Britain.
European and Central American economies had been closely linked since the Industrial Revolution. When we started importing jute from India, for example, the blue indigo dye used to colour textiles - particularly shirts - came from Central America, principally El Salvador. The term “blue collar workers”, which originated at that time, is still used in English to this day.
By the late twentieth century, however, Britain had lost sight of the importance of Latin America. We had shut Embassies, withdrawn diplomats, found other trading partners.
The UK’s return to Latin America
So when this Government came into office, we inherited a relationship with Latin America that was well short of its potential. That was bad for Britain and, I think, bad for Latin America.
It meant that we in Britain were not making the most of our relations with one of the world’s leading engines of economic growth. Latin America has a combined GDP greater than that of India and Russia together, with growth rates forecast at around four to five percent for the next five years. The region’s middle class is already bigger than China’s and India’s combined.
Its countries are also playing an increasing role in international affairs. Guatemala currently has a seat on the UN Security Council, and will be joined from January by Argentina - who will take over from Colombia. Eight Latin American states are currently members of the UN Human Rights Council. Countries like Brazil are increasing their development co-operation in Africa.
And from a Latin American perspective, it meant losing out on all that Britain has to offer - whether making the most of British expertise in energy, education or financial services, or taking full advantage of the UK’s position as a springboard to the EU’s Single Market of over five hundred million customers.
So over the past two years, the Foreign Secretary has led Britain’s most ambitious effort to strengthen our ties with Latin America since the days of Canning.
Despite the difficult economic situation we face, we have opened a new Consulate General in Recife in Brazil, and we are on track to re-open our Embassy in Paraguay next year. We have sent more diplomats to Brazil, Mexico, Columbia, Chile and Peru - by creating, for instance, a new network of Prosperity Officers.
At the same time, we recognise that there is no substitute for high-level engagement. So we are visiting more.
There have been over forty Ministerial visits to Latin America since this Government came into office - including those by the Prime Minister and Deputy Prime Minister to Mexico, and the Prime Minister’s visit to Brazil in September, with the largest ever trade and education delegation. I joined him on that trip - my first as a Foreign and Commonwealth Office Minister.
In all, Ministers from no fewer than ten Whitehall Departments have touched down in Latin American countries so far this year. We have also hosted several major inward visits, President Santos of Colombia and the incoming President of Mexico among them.
And we have increased co-operation at the highest levels with Brazil, for example through our Host-to-Host programme on the Olympics, and with Mexico during their very successful Presidency of the G20.
Central America has been crucial to our refocus too. We have, for example, strengthened our Embassy in Panama, and we are increasing our resources for engaging with Honduras. The Foreign Secretary visited Panama last year, as did my predecessor, Jeremy Browne, who also went to Costa Rica. Panamanian President Martinelli has visited the UK twice in the past year, and Ministerial contact with Guatemala has also increased.
This shift in focus is perhaps most evident right here: I am in El Salvador first and foremost to re-open the British Embassy, which I will do this afternoon. Since it was closed nine years ago, El Salvador has been the largest economy in the world without a British Embassy. That is something we had to put right.
I know that in the short time we have been back, much has already been achieved. We have worked more closely on climate change and prison reform, and on preventing violence against women, which I know is a priority for the government here, including the First Lady.
In May, our Ambassador launched the GREAT campaign to spread the message that Britain is open for business. Shortly afterwards, the Embassy marked Her Majesty The Queen’s Diamond Jubilee. And we held a series of events around the London 2012 Olympic and Paralympic Games, with more to follow to help build a lasting legacy here. Incidentally, I should offer my congratulations to El Salvador on the design of your Olympic uniform, which quite rightly won plaudits around the world.
These activities are only a sign of what is to come. I say this because I believe that it is strongly in the interests of the UK to work more closely with Central America across the bilateral agenda. That means engaging more on security, as well as prosperity.
Tackling the security challenge
Whilst we should not exaggerate the security challenge that Central America continues to face, nor should we downplay it.
Belize, Guatemala, El Salvador and Honduras have some of the highest homicide rates in the world, linked mainly to the activities of criminal gangs. Central America, situated as it is between drug producers to the south and major consumers to the north, clearly faces significant challenges. We recognise this, which is why co-operation between security authorities and Britain’s Serious Organised Crime Agency remains a crucial part of our work in the region.
Central American governments are taking positive steps to tackle organised crime and the drugs trade, and we want to support your efforts - not just because it is in the interests of Central America, but because your security problems affect Britain too.
This is one of the reasons we have stepped up our involvement with SICA, the Central American Integration System - which is, I know, based just down the road from here. Last November we committed an extra £250,000 in funding for SICA projects, ranging from training police in Belize to supplying equipment for counter-narcotics work in Costa Rica and Honduras.
I will be meeting SICA representatives tomorrow and am delighted to announce today that Britain, currently a “Friend of SICA”, has applied to become an Extra-Regional Observer. This demonstrates how seriously we take your efforts to tackle violence, organised crime and insecurity. If our application is agreed, I hope our strengthened commitment will enable us to work more closely with SICA, its Friends and Observers.
At the same time that Central America is underpinning its own security, it is playing an increasingly important role outside its neighbourhood.
Costa Rica and Guatemala are providing a strong voice on human rights internationally in their roles as members of the UN Human Rights Council. Central American countries have been strong supporters of the growing international consensus on Syria. It is important that your voices are heard, not least because you have a wealth of experience you can share with the world.
I was interested to hear that El Salvador is considering increasing its international peacekeeping contribution, partly as a way of thanking the United Nations for the role it played in helping to draw up the Peace Accords to end the civil war in 1992. This is an important and welcome step. I know that El Salvador already participates in nine peacekeeping missions, from MINUSTAH in Haiti to UNIMIT in East Timor.
Central American governments are taking a constructive approach on a range of international issues. Many of you have shown a real willingness to listen to others’ views, including on issues like the Falkland Islands. We are grateful to those countries that allowed the Islanders’ representatives to visit recently and set out their case for determining their own political status and being allowed to live in peace. We very much hope that Argentina too will one day listen to their views.
Supporting our mutual prosperity
As the security situation in the region continues to improve, it will reinforce the conditions for trade and investment to flourish. British exports to Latin America as a whole increased by fourteen percent last year.
Central America is already an important market for trade, and the figures bear this out. It has a combined GDP of over $167 billion, and its countries represent a market of close to forty-two million people.
Consider Panama, which is growing at an impressive rate. Its GDP is projected to grow by 9.5 percent this year, and according to the Latin Business Index it ranks second in Latin America for ease of doing business. Consider Nicaragua, whose investment agency, ProNicaragua, was named by a World Bank study earlier this year as the top investment facilitator globally.
Positive stories like these are helping to attract foreign investment to the region. And the opportunities, I know, are significant - particularly in infrastructure, energy, green technology, education and retail.
It is therefore unsurprising that British companies are already operating successfully - including familiar British names such as Lloyds Insurance, BT, BUPA, Unilever, GlaxoSmithKline and JCB. The UK is already the world’s biggest investor in Panama.
Even so, UK exports of goods to SICA countries totalled just £355 million last year. I think there is scope to increase this significantly.
That is why within the last year we arranged a trade mission to Guatemala and El Salvador, and brought a Costa Rican business delegation to the UK. It is why we are negotiating a new Double Taxation Agreement with Panama, which we hope to conclude by the end of the year; and why we have signed a bilateral Memorandum of Understanding with the Dominican Republic, which covers trade and investment.
It is why we are supporting Central American countries as they address the underlying barriers to prosperity such as corruption - by, for example, funding training in Belize to tackle money laundering. And it is why we will continue a busy programme of high-level visits, including a landmark visit by the Lord Mayor of London to Panama next year.
And countries across the region can take steps to drive growth in our trade too. Ratifying the EU-Central America Association Agreement, signed in June, would have a particularly significant impact.
Once implemented, its trade pillar will reduce or eliminate tariffs that Central American countries pay when exporting goods to the European Union. This will be hugely beneficial, with gains on exports such as coffee, sugar and spices, as well as textiles and vehicle parts.
In all, Central American signatories are expected to experience gains in national income of around $3 billion as a result of the Agreement’s trade pillar coming into force. It will also diversify your trade markets, create jobs and, ultimately, help to reduce poverty.
At the same time, it will liberalise sixty-nine percent of Central America’s existing trade with the EU, saving EU exporters an estimated £68 million annually in customs duties. And by introducing new safeguards such as better protection of Intellectual Property and Geographical Indications, the Agreement will make Central America a more attractive destination for investment.
Given the very real benefits it will bring, I was pleased to hear that on 18 October Nicaragua became the first Central American country to ratify the Association Agreement. I would strongly encourage others to follow.
The Canning Agenda launched by the Foreign Secretary is just two years old. It will take time for us to rebuild the sort of relationship between the United Kingdom and Latin America that Canning would be proud of.
That said, I think the actions we have taken have put us on the right track. And we are starting to see the benefits.
Central America will remain a crucial part of our re-engagement. I hope that when Foreign Minister Martinez and I cut the ribbon at the new British Embassy this afternoon, it will underline Britain’s commitment to this exciting and dynamic region.
I am confident that as we tackle today’s global challenges; as we work closer together on trade, counter-narcotics, international crime, on climate change, human rights and the most pressing of international issues, we will go some way to supporting our mutual prosperity in the years to come.
I believe that there is a bright future ahead for Britain and Latin America.