Canada has fallen behind in Latin America

The collective yawn that greeted Stephen Harper’s visit to Latin America should serve as a wake-up call for Canada.

Since Ottawa last fully engaged in the Americas some 20 years ago, the region has grown and, in some ways, moved past Canada. Brazil’s economy is now larger and, with 2,000 troops in Haiti compared with Canada’s 10, it’s running United Nations peacekeeping operations there. Even Guatemala, with 45 soldiers, has a larger presence.

But Mr. Harper’s visit was about trade, and it’s there that the region will become even more important for Canada.

First, Latin American countries are responding to the global debt crisis by trading more with each other. The UN Economic Commission for Latin America and the Caribbean projects growth for the region at 5 per cent, or three to four times higher than in the United States. Though Canada can never replace the U.S. as its principal trading partner, it can replace enough of the U.S. to hedge its bets and dampen the impact of the downturn there.

Second, with oil near $90 (U.S.) a barrel, trading with distant markets in Asia is less viable than markets closer to home. At the Canadian Foundation for the Americas, we worked with the UN’s ECLAC to show how, as oil gets more expensive, goods from Central America and Mexico take a larger share of the U.S. market over identical goods from Asia. Oil and gold will continue to trade globally, but most other industries’ global supply chains will become regional supply chains if Canadian business is going to stay competitive.

Third, the Americas are largely stable and maturing democracies. Even a country such as Honduras, which Canada’s professional agitator class calls a “controversial” partner for a free-trade agreement, lacks the labour and environmental strife – not to mention political oppression – that defines China.

So, while the Americas are becoming increasingly important for Canada, the same can’t be said the other way around. The countries in the region that have signed free-trade deals with Canada have done so for political reasons or to put pressure on Washington. A projection that American farmers will lose $100-million annually in sales in Colombia to Canadian farmers is the single best argument that Colombia has to move its trade agreement through the U.S. Congress. It’s also a reminder that our principal competitor in these markets is our next-door neighbour.

While $100-million in wheat sales is good for Prairie farmers, the rest of Canada is going to need something a bit more substantial to advance its broader interests in the region. The country needs to become known in the hemisphere and to become a player once again.

The underwhelming response to Mr. Harper’s visit is an indication of how much must be done. Excuses for marginalizing foreign policy were understandable during a minority government; with a majority, there can be no more excuses. Focusing on the Americas will bring Canadian foreign policy in line with Canadian national interests. But this has to be followed up with concrete measures.

The creation of the Canada-Brazil CEO Forum is a good start. Ottawa also will need to match the private sector and increase its presence in the region. Almost every U.S. cabinet secretary visits Latin America once a year. At a minimum, Canadian ministers will have to match this. Eventually, visits to the region will be more productive and greeted with a warm embrace.

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Source: Globe&Mail