What have you been doing since our readers last heard from you?
Joanna Crellin: I’ve been visiting staff across the region and upgrading our teams so that we have experts focusing on key opportunities such as infrastructure, financial services, technology and advanced manufacturing. We’ve been expanding our footprint across Latin America. Our biggest success has been the trade agreements. Of the five association agreements that the EU had in Latin America we have already replicated four of them. Chile was the first, followed by the Andean agreement that covers Ecuador, Peru and Colombia, then Cafta, which incorporates the Central American countries and finally Cariforum, which is made up of the Caribbean islands.
Maintaining those agreements helps give peace of mind to British exporters. Moreover, it shows the willingness of Latin American countries to work with the UK. Four of the 11 EU agreements globally that have been rolled over have been with Latin American partners. That shows that they value the trade relationship. As a result, come Brexit, the UK is in a better position in this part of the world than in many others.
We’ve also been working hard in the UK, trying to counter the outdated or negative perception that some British firms can have about Latin America. We’ve pulled together a UK-based, Latin America-focused ecosystem made up of investment agencies, embassies, British business representatives such as the CBI and regional specialists like LatAm INVESTOR. We know that the lack of knowledge is a big barrier to trade so we use this ecosystem to help companies gain a better understanding of the region. We hold an annual Latin America roadshow, where our in-country experts travel back to Britain to meet with UK companies. We also do plenty of prosaic but useful stuff, such as sharing information about the next Latin American conferences taking place in Britain.
Has it been a good year for Britain in Latin America?
JC: Yes it has. Our biggest focus in the region was the Pan-American Games that were recently held in Peru. Two years ago, the Peruvian government was struggling to build the infrastructure needed to host Lima2019 and signed a Government-to-Government agreement with the UK. It was a risky proposition for us, as there was an awful lot to do and it had the potential to be a high-profile failure. However, the agreement worked excellently. Peruvian passion and hard work combined with UK private-sector expertise in infrastructure procurement and project management helped to create a successful event. The stadiums and athletes’ village were built without corruption, on time and under budget. More importantly it also brought many British companies to Latin America for the first time, helping to demonstrate the business potential of exciting markets like Peru. We’ve also been able to turn it into a regional springboard. For example, we invited our teams from Panama, which is hosting the youth games, and Chile, which will hold the next Pan-American Games, to come to Lima to learn from this success story.
What advantages could Brexit bring for the UK’s trade and investment relationship with Latin America?
JC: The first thing to note is that the benefits might not just be about trade. It’s important that we remember that the Latin American country we trade the most with, Brazil, doesn’t even have any agreement with us or the EU. Likewise, the US is our biggest global export partner, taking 20% of our goods and services but we don’t have a trade agreement with it either. So clearly trade happens with or without agreements. Trade deals can facilitate things but they are not the be all and end all. The big impact of Brexit has been to change the mindset and vision of where the UK does and should trade. It has forced our government and companies to realise that there is a big world out there with lots of exciting opportunities.
“Trade deals can facilitate things but they are not the be all and end all…”
Of course, creating new bilateral trade agreements with Latin American countries will help to facilitate trade in the future. When we do make those deals, I would imagine that we would focus on agriculture, where Latin America has a lot to offer, and services, which is a strength of the UK that is not covered in traditional trade deals. But those bespoke, new trade agreements will take several years to negotiate and ratify. In the meantime, there are lots of exciting steps that we can take to boost trade and investment. For example, in the Andean countries we are looking at double taxation agreements, bilateral investment treaties and the mutual recognition of qualifications, which is very helpful for exporting services.
Why should British firms come to Latin America?
JC: Across Latin America there is a positive perception of British companies and an affection towards the UK that is extraordinary. UK firms will be well received as the region looks for expertise and investment. In particular we are seeing opportunities to invest in former state assets that are being privatised. Also new projects in mining, banking and infrastructure are available across Latin America. British firms have a reputation for transparency, which makes them sought after partners in Latin America. So, the desire is there.
From the British point of view, it’s hard to ignore such a vast, fast-growing market. If you want to be a global company then you can’t avoid Brazil, the world’s seventh-largest economy and Mexico, which will soon join it in the top ten. Meanwhile exporters of any size will be keen to target a region with a population of 650 million. In fact, what makes Latin America particularly attractive is the growing middle class, which increases demand for the types of products Britain makes. Across the region there is a strong appetite for pharmaceuticals, education, food, drink and retail, all of which fits well with the UK’s export offering.
Finally, any British company looking at Latin America has more support now than ever before. The Department for International Trade has experts dotted around the different markets in the region, working together with our embassies and local chambers of commerce. There are also a growing number of events in the UK, where you can find out more about particular countries and make useful contacts.
I think in general terms most British people form their opinion about Latin America from what they have read in the paper. And because of the nature of newspapers that often tends to be dramatic, negative information. However, once firms make the initial visit to the region and start looking in depth at the economic and market figures, they soon realise it has serious potential. Our job is to convince people to make that first step.