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Latin America

My Lords, I was in another place for 31 years and I cannot remember following two speakers and agreeing with both on almost everything they said. On this occasion, I have that pleasure. I add my congratulations to the noble Viscount on instigating this debate. It is a joy to see him back and active in this House, and once again leading the activity on Latin America. There has never been a time when British diplomacy needed to be more active in Latin America. The noble Baroness mentioned the emerging world trade round. This trade round is very different from anything we have previously seen. When China joined the WTO, everybody said that it would make an enormous difference, and they were right. Mercosur’s coming together meant that its members had the power of collective negotiation if they wished to use it. We are seeing an enormous amount of diplomatic activity by China in Latin America and nowhere near enough by either this country or by Europe as a whole, which I regret. China, due to its import policy, has transformed many Latin American economies over the past 18 months, and it is interesting to see how its diplomacy has followed. The President of China arrives in Argentina, expresses his great affection for it and his delight that he has been able to buy its products at prices which are good for its consumers. He says that he wants to go on buying its products—its food, minerals, oil and gas—and would be very happy to invest in Argentina as well. The reaction of the people of Argentina was, ““What nice people the Chinese are. They are buying our goods, they are saving our economy and they want to continue being active partners with us””. Leading Chinese figures have in the past six months been to virtually every Latin American country, saying how much they want to invest and purchase their goods, but also to discuss with them the world trade round. I hope that there is a recognition both in the United States and in Europe that China is not alone in negotiating the world trade round. It is assembling enormous allies throughout the world. It is partnered with India on a considerable scale. Many of the Asian countries are following the Chinese on these trade negotiations. Many African and Latin American countries are now linking up with China on these trade negotiations. We might find that the United States gets a great surprise. As Secretary of State for Trade and Industry, I had the privilege of leading the British delegation way back in the early 1970s to the Tokyo trade round. It was the first trade round where we had been part of the European Community. I quickly discovered the clout of the European Community and of the United States. The main negotiation was between the United States and Europe, with a few fragments then thrown to the rest of the world. That has been true of almost every trade negotiation since, but maybe not on this occasion. When President Bush came to power, he said that his main ambition as President was to bring about a Free Trade Area of the Americas in his first term office. He said that for sensible reasons. He knew Europe was expanding and would have greater clout in trade negotiations. He knew China was probably coming into the WTO and America’s negotiating power would be weakened. If he could join up all the Americas into one trading group, obviously led by the United States, it would give him much more power in world trade negotiations. I am afraid that he has failed in this. NAFTA was created, with Mexico, Canada and the United States as one group. As far as the rest of Latin America goes, if anything they are more hostile to the American viewpoint than they were years ago. They are more hostile because President Clinton, having succeeded in getting NAFTA with Mexico and Canada, then called all the presidents of Latin America to Washington. He said to them, ““We are very much in favour of NAFTA, but we are not interested in all of you joining. The only one that we are interested in joining is our friends in Chile””. Chile was rather pleased about this, but the rest of Latin America was rather dismayed when the President of the United States said that he did not want to negotiate with them. The negotiations with Chile were quite difficult. Congress had made enormous difficulties over NAFTA in the first place. I am afraid that the United States is not going to be all that strong in this trade round, and nor is Europe’s unless we can get allies and have understandings. The noble Baroness quite rightly questioned the progress that Commissioner Mandelson has made. It is terribly important that Mercosur has a good relationship with the European Community. I was in Argentina the week after Mercosur was created, with the then Argentine foreign minister, Mr Di Tella, a great friend of this country, who spent many years at Oxford when he had been kicked out by various military dictators in Argentina. I congratulated him on the creation of Mercosur. He said, ““Peter, it is a miracle. I have created the equivalent of the European Community without a Commission””. I had some desire to congratulate him. They do not have a Commission. That may mean that they do not collectively negotiate, but they will certainly discuss everything together. Our relationship with Mercosur in the next few months is crucial. If we do not establish good relationships and a good understanding of its negotiating position, the trade round will be in great difficulty. I even fear that if the trade round becomes too tough, because of the negotiating power of China and its many allies in Latin America, Africa and parts of Asia, then it might come to a point where the United States withdraws from the trade round. If that happened, the whole thing would collapse. That would be an enormous disaster for the whole world. Latin America is also moved by the fact that it has a lot of primary products. We are moving from a period when the manufacturers, such as ourselves, had enormous power and the primary producers had none to a period when the primary producers have ever increasing power, finance and strength and the manufacturers less. The United Kingdom can play an important role the development of those primary products. The development of Latin America’s manufacturing base will also be important. I still find it unbelievable that in this country we have an education system in which Spanish is neglected as a language. Here is a great part of North America, nearly the whole of Latin America and part of Europe all speaking Spanish, and there is hardly any Spanish teaching in our education system. Both the noble Viscount and myself have been active in the chambers of commerce for many years. We are bored to distraction at constantly attending many committee meetings of chambers of commerce connected with Latin America, and many dinners and other occasions. However, those chambers of commerce need to be encouraged. I agree with the remarks made by the first two speakers in the debate about the importance of getting the Foreign Office firmly back in the seat. It is important that every encouragement is given to trade and industry in this country to seek out the markets of Latin America. Let us have a lot more active diplomacy in the next few months and a lot more recognition of the swaying power in the coming world trade round of Latin America as a whole. If that can be achieved, it will be to the benefit of Latin America and, I believe, to the benefit of this country.