Photo Jonathan Blair

Wednesday, March 10, 2010

Yo-yoing in the South

Canada and the Americas at the turn of the Century: A Mostly Light Footprint, and Inconsistent Policy

Latin America and the Caribbean do not matter much for Canada and, conversely, Canada does not matter much for the Americas. With a weak economic, political and strategic foundation, Canadian foreign policy towards the region has oscillated over the last twenty years between bouts of enthusiasm and periods of neglect. Behind policy inconsistency, however, a small number of issues have become and will remain significant dimensions of Canada's presence in the region: economic relations with Mexico, Canadian mining and financial interests in a few liberal Andean countries (Chile, Peru, and Colombia), and continued foreign assistance to Haiti.

Weak, very weak interdependence

The Department of Foreign Affairs and advocates of a deepening commitment to the region make a big fuss about the scale of Canadian investments in the region, insisting on the total value of the stock of investments in Latin America and the Caribbean: at $130 bn, it is indeed very significant, representing about 20% of total Canadian FDI in the world. A close look at the numbers, however, reveals that almost 80% of that money (2008) is in fact parked in a few Caribbean tax heavens. The rest of the continent's share has been hovering around 5% of total Canadian FDI since 1995, never exceeding 6% and in fact representing less than 4% in 2008.

Trade relations tell a similar story: the region has been and remains a marginal trade partner for Canada. While increasing by about 30% between 2000 and 2007, to reach $4.03bn, exports were down to 2.92 bn in 2008. In relative terms, the region has never received more than 2.5% of Canadian exports, with about half that total represented by Mexico. On the imports side, the picture is brighter, with the region representing more than 7% of Canadian imports. In absolute terms, however, imports have only grown by 3.5 between 2000 and 2007, and they are now significantly lower than ten years ago. Moreover, more than half that amount and almost all the growth are attributable to Mexico.

About 20,000 individuals from Latin America and the Caribbean have become landed immigrants in Canada in 2008, a quarter of which from Colombia. This, however, only represent 11% of the total for that year, which means that the weight of the regions in Canada's immigrant population is in fact declining.

Canada has no significant strategic interests in the region and the much-discussed links between gangs in Canada (especially in British Columbia) and in the region appear to have little bearing on the evolution of crime and homicide rates, which, contrary to what is happening in much of the Americas, has been declining regularly in Canada over the last ten years.

Peculiar Politics

Four constituencies dominate the policy discussion. The first one is quite vocal and focuses on human rights and trade issues. It is centred in large unions' permanent secretariats, in NGOs and academia and is particularly noisy about Cuba --and now Hugo Chavez and friends- Canadian mining in the region, and free trade (which it opposes). The second, very quiet, is made up of a small clutch of financial services and mining companies and of a few large investment funds. It focuses on those Andean countries that are open for business (Chile, Peru and Colombia) but also looks towards Brazil, though with little hope for easy access to that market. A small sector of what I would call the foreign policy establishment is the third group involved. It includes a small number of mostly government players in the Privy Council Office, Foreign Affairs, Finance, CIDA, and a spate of other departments, and also a small number of outside experts that are not part of the "rights" constituency. Though sometimes emotionally or professionally attached to the region, they are mostly preoccupied with Canada's standing in the world and see the region as the last place where Canada can find a home away from North-America and the relative powerlessness that comes with it Part of that constituency also sees Latin America as a card to play in the bilateral relationship with the United States. Finally, the Haitian community is also a significant player. As the only organized diaspora community from the region, it wages a disproportionate influence because it is vocal, has well-connected advocates in academia, among civil society organizations and these days even in the Governor General's mansion, and because it is heavily concentrated in a francophone federalist riding in Quebec.

In practice

None of these constituencies is particularly strong and as should be clear, they do not all push in the same direction. In particular, government support for the liberal policy favoured by the private sector constituency meets with strong resistance from the "rights" coalition. In addition, the broadly inconsequential character of government policy towards the region implies that re-orientations are largely costless politically. As a result, public moods (currently a strong popular interest in Haiti), the personal bends of the Prime Minister (for instance Stephen Harper's personal sympathy for Alvaro Uribe), or the sudden need for resources and involvement on another issue or in another part of the world (say Afghanistan), can make the region or a sub-part thereof a priority one day and a forgotten file the next.

A few country relations have nonetheless been gaining heft over the last twenty years: The relationship with Mexico, which is deeply embedded in Canada's north-americanity, is here to stay. Canada's energy and mining sector is one of the most dynamic in the world and its involvement in Andean countries will continue and deepen, whatever the government does. Finally, the fact that Haiti matters in Quebec, and that it matters for Canada's relations with the United States, probably means that the country's involvement in what must be called a development quagmire, will continue for years to come.