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What cards, if any, can the UK play in Latin America after Brexit?

Many Brexit voters were driven by nostalgia of the good old days when Britannia ruled the world. But the world has changed so much that it will be unrecognisable for our imperial great-grandparents, who look to make strides to once again become a global power. Español

Anna Grugel Smith
21 January 2020
Boris Johnson meeting the President of Chile Sebastian Pinera in Santiago, Chile.
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Stefan Rousseau/PA Archive/PA Images. All rights reserved

The scale of the consequences of Brexit still remain unknown. But it is clear that the UK will need to reshape its relationship with Latin America as much as with the rest of the world, and this will not resemble to anything like the long gone British Empire, a time when the current ruling actors, USA, China, Russia and the EU, did not wield the same amount of power.

Latin American economies were shaped after Independence in the nineteenth century by British dominance of global trade and the impact of UK imperialism. Regional economies have changed dramatically since then, of course, and the USA, China and the Pacific have replaced the UK as favoured partners. But the European Union remains important, politically, economically and culturally in Latin America. So what does the UK decision to leave the EU, or Brexit, which was definitively ratified in the UK elections in December 2019, mean for the region? Will it create opportunities for closer trade? Will it strengthen or undermine EU-Latin American relations? Three years after the Brexit referendum, the answers are still unclear.

Brexit is forcing the UK to reshape its foreign policy with both countries within and outside of the EU. It will also inevitably change Britain’s relationship with Latin America. The EU and Latin America have established a strategic partnership and the EU has consistently looked to trade with Mercosur, Latin America’s largest trading bloc. Although the region has been growing trade with China and the Pacific region, the EU remains Mercosur’s largest trading partner, highlighting the important role that the EU plays within Latin America. The EU also plays a role in education, aid and has traditionally supported democracy within the Latin American region.

Despite a fairly strong relationship between the EU and Latin America. Britain’s independent relationship with the region has arguably been almost non-existent and has certainly been dwindling since the early 20th century. Not only is there very little trade between the UK and the region but other than the dispute over the Falkland Islands Britain plays a very limited role in regard to political and strategic policy within Latin America. However, in a post-Brexit world Britain is looking to trade more globally and Boris Johnson, as foreign secretary, claimed he wanted to strengthen the “the UK’s relationship with countries in this region”. So can the relationship become more important once again?

Latin America’s shift away from pink tide governments towards more neoliberal governments gives Britain hope that it will be able to create a new free trade agreement with Latin America. It seems that Latin American officials are also speaking positively about possible free trade agreements with the UK. The Brazilian ambassador to the UK spoke about improving trade relations and cooperation with UK post-Brexit as have Mexico. Despite close relations and continued trade, an EU and Mercosur trade agreement, finally reached in June 2019, proved very difficult to achieve with discussions ongoing from 1999. One problem was simply the number of countries with interests on at stake. Some experts argue, therefore, that a trade agreement might be easier when the EU is no longer involved given that the consensus of all EU member states will no longer be required. Alongside Mercosur there may be opportunities for enhanced trade with the Pacific Alliance, which includes Chile, Colombia, Peru and Mexico. This bloc is considered to be more neoliberal and so may be more likely to come to a deal with the UK and be more supportive of foreign investment and international trade.

Despite a fairly strong relationship between the EU and Latin America. Britain’s independent relationship with the region has arguably been almost non-existent

Despite this positive outlook for greater trade between the UK and Latin American countries, there are a number of issues that might affect trade deals between Britain and Latin America. The manner in which the UK leaves the EU and the deal it strikes are likely to play a big role in Britain’s ability to make trade deals with Latin American countries. In order for trade to take place Britain needs to secure a deal that allows it to look for new trading partners across the world. However, even if the final agreement allows this, will Britain focus on Latin America or instead look more towards China and India when trying to strike fair trade deals and will Latin America be interested in trading with Britain, when they have the option of more powerful trading partners such as the USA, the EU and a host of increasingly powerful Asian nations?

Beyond trade, Brexit may also affect other aspects of Latin American relations the EU. The EU currently works with Latin America in a strategic partnership through the EU-CELAC partnership. This encourages the two regions to work together within higher education institutions through supporting joint innovation and research and the launch of Erasmus+ in Latin American countries. Even before the deal becomes clear it is possible that Britain will withdraw from Erasmus +. The House of Commons rejected an amendment to remain within Erasmus after Brexit, signifying not only a further step away from EU but also a step away from an improved cultural relationship with the Latin American region based on mobility. Furthermore, very few British people speak Spanish, and the Latino diaspora in the UK is tiny compared with number of migrants from former British colonies in Asia or Africa, and only migrants from the Caribbean amount to any significant figure but those are not usually considered Latinos.

Brexit also looks likely to affect the UK’s aid policy. In 2017 British NGOs received €214 million from the EU’s civil protection and humanitarian aid fund and funding in 2019 from the EU has already started to drop off. Since Britain is legally obliged to continue giving 0.7% of its GNI to international aid, it should continue spending similar amounts of money on international aid. However, Britain’s international aid reach looks likely to shrink as withdraws from the EU as the UK only operated in 44 of the 91 countries the European aid fund gave money. Consequently, as most of UK aid to Latin America came through EU funding, with a lack of UK presence in the region, this is likely to mean reduced commitment to Latin American development aid. It’s also a loss for the EU international aid fund which will lose Britain’s contribution to the fund.

Brexit has been and will continue to be a catalyst for changing the relationship that Britain has with countries throughout the world. But despite Britain’s desire to be a global power, Brexit looks likely to detract from Britain strategic partnership with Latin America, which is unlikely to be a priority area. Although some political elites, including William Hague, ex-Foreign Secretary and leader of the Conservative Party, have spoken about the potentially important role that Latin America could play for Britain, it seems that the focus will in fact further shift away from Latin America, as strategically the UK looks to English speaking countries like the USA and former Commonwealth countries like Australia, Canada, India and the Caribbean.

In spite of this there are discussions about increasing trade, nothing can be set in stone until the Brexit deal is complete and even so Britain looks likely to push trade with Asian nations more than with countries within the Latin American region. What is clear is that Britain’s talks and relationships with countries, once the Brexit deal has passed will be complex, if not difficult, and there is still no significant policy substance about what a future “global Britain” will look like. Today, it is China, Russia, the US and the EU who are playing their cards right in Latin America, and the UK will come to the table diminished and with many fewer cards to play, if any.

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