Central America: Trade and Investment

Lord Purvis of Tweed Excerpts

Monday 19th December 2022 Lords Chamber

[Lord Purvis of Tweed (LD)]

Well, there is no harm in embellishing the point. The noble Baroness, Lady Hooper, has been rightly congratulated on bringing this debate to us on a neglected issue, but one that she does not neglect. She leads for us on this.

I am a member of the Selkirk Merchant Company, established in 1694 and one of the two remaining elements of the Company of Scotland—I am sure that the noble Earl, Lord Dundee, is aware of this. If the Darien scheme on the Isthmus of Panama had gone differently for Scotland, the story of our nation would have gone differently. Our history as a country is entwined with that region, but we continue to punch below our potential weight for our trading relationship.

The noble Baroness, Lady Hooper, introduced the debate so well and set the scene. I have been very fortunate to visit Latin America with her, and with the noble Baroness, Lady Coussins. The closest that I get to accompanying a royal party is whenever I accompany the noble Baroness, Lady Hooper, on a visit in Latin America, or to a Latin American embassy. She does us credit.

The focus of this debate, however, should be on what the Government are doing to promote businesses to take advantage of the potential that is so obviously there. It was referenced earlier that Canning House’s LatAm Outlook process has been illustrative in highlighting the real potential for central America and the Spanish-speaking Caribbean. As it puts it, this is a market of 45.5 million people with a GDP of over $800 billion. It outlines key areas where there is a market and where we should take advantage of that market. This is a region that is demonstrating leadership in green economies, for example, and an eagerness to collaborate with international partners such as the UK. In particular, it highlighted an area that I thought was really interesting: it is seeking companies with expertise in project management and delivery of infrastructure projects to take advantage of that green investment. This is where UK businesses should have an opportunity. Costa Rica is receiving a $700 million loan from the IMF, so there are funds available.

The next area it highlighted was the Inter-American Development Bank, the Central American Bank for Economic Integration—or CABEI, as the noble Baroness referenced—and the Corporación Andina de Fomento. In my view, if the UK took the opportunity to become an early shareholder in the Asian Infrastructure Investment Bank and be part of it from the outset, controversial as it is now, the case to be part of those as willing partners is equally strong. With Costa Rica, the Dominican Republic, El Salvador and Guatemala investing in rail infrastructure, there are enormous opportunities for the UK here, as well as in water and sanitation projects such as the Dominican upgrades to their infrastructure. The list goes on. The opportunities are there.

The challenge we have now is how to meet that opportunity given that in some respects—regrettably from these Benches—we are now a competitor with the EU and cannot take advantage of wider EU opportunities. Of course we have the rollover association agreement which the noble Baroness referenced, but it is now a decade old. I would be very interested to hear from the Minister whether there is consideration of moving the association agreement into an FTA with central America.

One area where we lost in the move from the EU association agreement to the UK stand-alone one was the removal of the number of committees and sub-committees that were part of the EU agreement that we were party to. There were the Board on Trade and Sustainable Development, which is so critical in that region, the committee on SPS and the very important committees on technical barriers to trade, customs and rules of origin, public procurement, market access and intellectual property rights. Interestingly, there was also a civil society forum. All these have met the EU through CIRCABC, as it calls it, within this year. I would be grateful if the Minister could say whether there is any equivalent to those committees in our trade dialogue with central America, especially on civil society and technical barriers to trade. All these are fundamental if we are to see the potential grow.

Reference has been made to Mexico. I have a question about that but, first, I want to say that I am grateful as the Lib Dem spokesperson to receive correspondence from the Secretary of State’s office with very welcome updates on negotiations. The new Secretary of State has been very consistent in providing this, for which I am grateful. She also offered the International Agreements Committee of this House private briefings with the chief negotiator after each round, which is fairly innovative and, I hope, signals openness. I served with great pleasure under the chairmanship of the noble Baroness, Lady Anelay, at the start of the inquiries. I could sense her frustration around trade envoys, which was shared around the table. Hopefully, the sign from the new Secretary of State is one of openness, which we can take advantage of with regard to trade envoys.

It was interesting to hear from the noble Baroness, Lady Coussins, that it is not just Mexico that fires its top people in charge of trade, as I think I am now on my seventh Minister. I am not saying that they were all fired, of course—quite the reverse. I hope that there is no disruption to the Mexico agreement, but clarity on when we can expect to see it finalised will be important. With Anne-Marie Trevelyan as Secretary of State, on the India agreement, having a deadline to work towards was vital; now with Kemi Badenoch as Secretary of State, deadlines are not helpful. Which is it? I would be grateful to know what the Minister thinks is a realistic time for us to see something taken forward with Mexico.

The final issue I wish to raise, which has been raised a number of times, is human rights. Since I have been covering trade in this House, the Government have always said that trade is not at the expense of human rights—that we have tried and tried and will continue to try to get a trade and human rights policy and real clarity as to what role human rights will play. If the noble Viscount, Lord Waverley, is correct that this has been downgraded, and if the noble Baroness, Lady Coussins, is correct that dialogues are not even taking place, that is an unwelcome sign. I very much hope that the Minister can give us a positive response, and that when it comes to critical areas of trade with this region, human rights and relationships with civil society in the region will be at the core. We will not be able to see trade grow in a sustainable way unless people are involved in that process as well.