Canada’s Time in Latin America

˙ Voces

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The liberal values of free trade and multiculturalism might be in retreat in the United States after the election of Donald Trump, but they are alive and well in Canada. A year after taking office, Prime Minister Justin Trudeau will visit Cuba and Argentina beginning on November 15, before attending the Asia-Pacific Economic Cooperation (APEC) summit in Lima, Peru. This trip is an opportunity for Canada to increase its standing in Latin America, and for Trudeau to promote the principles and interests of his country –the world’s 10th largest economy– in the hemisphere.

Many of the central issues of Trudeau’s foreign policy –economic integration, renewable energy, and multilateral cooperation—are also important in Latin America, especially after the emergence of reformist and pragmatic governments in many countries. Until now, however, the region has had a relatively minor role in the Prime Minister’s international agenda, Mexico being the exception. That the first Latin American countries Trudeau will visit are Cuba and Argentina is not a coincidence. Both countries are reforming their economies and expanding opportunities for Canadian corporations, which already have a strong presence. 

Historically, Canadian engagement with the region has been based on two pillars: hemispheric integration and free trade. Ottawa joined the Organization of American States (OAS) in 1990, and has been one of the main contributors to its budget (10% of the total, second only to the United States and much more than what Mexico and Brazil contribute.) In addition, Canada finances numerous programs on health, education and development in Latin America and the Caribbean, and has had a strong presence in Haiti for many years.

On the economic front, over the past decade Canada has signed free trade agreements (FTAs) with Colombia, Costa Rica, Peru, Honduras and Panama, in addition to the previously existing NAFTA with Mexico and the US and an FTA with Chile, signed in 1997. Promoting free trade is a long-term policy of Canada, common to Trudeau’s administration and that of his conservative predecessor, Stephen Harper. In fact, as leader of the opposition Trudeau supported Canada’s participation in the Trans-Pacific Partnership (TPP), and once in office concluded a Comprehensive Economic and Trade Agreement (CETA) with the European Union. The deal –negotiated largely under Harper and signed by Trudeau on October 30—will remove tariffs for 98% of Canada-EU trade, a rare piece of good news for global trade in the last few years.

Trudeau’s government has, however, implemented changes in other aspects of Canada’s foreign policy after a decade of conservative government. The prime minister withdrew Canadian fighter jets from the campaign against ISIS, signed international conventions against climate change, and reinforced Canada´s identity as an ally of multiculturalism and social development in the world.

Mexico’s relations with Canada have improved significantly under Trudeau. In contrast to the rhetoric of the new US president-elect, last June Canada lifted the visa requirement for Mexican visitors, which had been imposed by the conservative government in 2009 as a reaction to a growing number of asylum requests by Mexican citizens. In exchange, the Mexican government removed restrictions to imports of Canadian beef. The double announcement was made during a state visit to Ottawa by Mexican president Enrique Peña Nieto, before the summit of the “three amigos”—Trudeau, Peña and Barack Obama.

By visiting Cuba, Trudeau will imitate his father, then-prime minister Pierre Trudeau, who in 1976 was warmly welcomed by Fidel Castro in Havana. Their relationship was so close that Castro flew to Ottawa in 2000 to attend Trudeau’s funeral. But besides remembering his father and predecessor, the current Canadian prime minister will seek to reinforce the economic presence of his country in Cuba. Canada, together with Mexico, is the only country in the hemisphere that did not break relations with the island after the revolution, and has maintained a significant economic presence. In fact, Canada is the country that has the highest number of tourists visiting Cuba –more than 35% of the total—representing an important source of foreign currency. Further, Canadian companies are involved in Cuban energy and mining sectors, and bilateral trade totaled more than $1 billion in 2015. Amid the uncertainty of what a Trump administration would do with Obama’s policy of rapprochement with Havana, Canada´s potential importance as an economic partner for Cuba has increased.

In Argentina, meanwhile, Trudeau will seek to strengthen relations with Mauricio Macri, another reform-minded leader who took office in late 2015. Canada’s example of economic diversification and development based on natural resources and agriculture has been analyzed closely by Argentina for years. It is likely Macri and Trudeau will discuss Canada’s recent deal with the EU, as the Argentine president wants Mercosur to sign a similar trade agreement with Europe in the near future. In addition, Canadian mining companies have a strong presence in Argentina, and benefited from Macri’s decision to lift retention taxes over their operations in the country. At the same time, some Canadian corporations –especially Barrick Gold—have been accused of numerous regulatory violations and of harming the environment in Argentina, generating conflicts with local communities. It is not clear if both leaders will discuss this situation during their meeting.

Immediately after visiting Macri, Trudeau will go to Peru, where new president Pedro Pablo Kuczynski –another example of the new leaders committed to free trade and pro-market policies—will host the APEC summit. This will also be Obama’s farewell from the world stage, only weeks before leaving office.  The big question for Canadian foreign policy, of course, is what type of relationship the country will have with Donald Trump. If the new US president fulfills his campaign promise of renegotiating NAFTA –which Trudeau said he is willing to discuss—and increase protectionism, Canadian economic interests could be affected. After all, a whopping 75% of all Canadian exports go to the United States.

But while the new US Republican administration gets ready to take office on January 20 — which few anticipated only a few days ago– the Canadian prime minister has a great opportunity to forge new partnerships and strengthen Canadian engagement in Latin America.     

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