Central America: Trade and Investment

Earl of Dundee Excerpts

Monday 19th December 2022 Lords Chamber

[The Earl of Dundee (Con)]

My Lords, I join your Lordships in thanking my noble friend Lady Hooper for introducing this timely debate.

I will briefly link together three themes: our scope for building up trade and investment relations with countries in central America, while also bearing in mind Brazil in Latin America; the challenges to protect the environment, to reduce poverty and to uphold human rights, as was already highlighted by the noble Baroness, Lady Coussins, and my noble friend Lady Anelay of St Johns; and, in spite of those challenges, the United Kingdom’s present opportunity to take a positive lead within a consensual international community.

In addition to the main trade in food and drink, and as correctly identified by World Bank analysis, there is now a significant potential for United Kingdom companies to export goods and services in other sectors, including those of infrastructure and clean growth. Not least, those future prospects have already inspired a partnership and memorandum of understanding between UK Export Finance and the Central American Bank for Economic Integration.

Following that, for the next five years, which higher percentage figures do my noble friend the Minister and his department predict? What different pattern of exported and imported goods and services does he thus anticipate? Given that, at the moment, the lion’s share is with Costa Rica, to which my noble friend Lady Hooper has referred, to what extent does he expect a reinvigorated deployment of trade and investment affecting the United Kingdom to be spread more evenly over other central American countries? Equally, over the next five years, and considering the same future trade prospects—from infrastructure to clean growth and certain other sectors—from their separate current base, what trade percentage rises does my noble friend the Minister forecast between the United Kingdom and the principal bloc of Latin American countries, in particular Brazil?

Then, to help facilitate this process at all, what assessment have the Government made of certain measures which they might pursue, ranging from encouraging investment, perhaps through regional as well as central banks, to focused, well-advertised and adapted government incentive schemes to be taken up by United Kingdom business and industry?

The EU-Mercosur deal should have begun in 2019 but instead has remained on hold due to European concerns about Amazon deforestation and Mr Bolsonaro’s authoritarian rule in Brazil. His recent defeat, officials claim, has removed those obstacles, while President-elect Lula has said that a trade deal could be established within six months between the European Union and South America’s Mercosur bloc, which covers Brazil, Argentina, Paraguay, Uruguay, Bolivia and Chile. Meanwhile, regarding our own enhanced trade partnership proposals with Brazil, Lula has requested that the United Kingdom should revise the component which would impose restrictions on importing Brazilian meat products, especially beef.

If handled in the right way, Brazil’s change of regime can cause dramatic changes for the better, benefiting not just that country itself but also most others within both central and Latin America. These include preservation of the Amazon rather than its piecemeal destruction and a much-improved level of respect for human rights, democracy and the rule of law. Both the United Kingdom and the European Union have a key role to play. This begins with establishing good relations with the new regime in Brazil.

Does my noble friend the Minister therefore agree, first, that in order to achieve these more important wider objectives, we should now renegotiate our ETP terms so that through their revised acceptability the UK starts to gain the confidence of the Brazilian Administration? Secondly, does he assent that thereafter, in co-operation with the EU and countries within both central and Latin America, including Brazil, we should emphasise the priority of this shared and wider agenda? Thirdly, does he concur that, along with other states, the more the United Kingdom is seen and known in South America to put that agenda’s ethical and mutually advantageous international aims first, the more its own, as well as the trade and investment levels of those other states, will also increase, diversify and consolidate?