The UK’s Relationship with the Pacific Alliance (International Relations Committee Report)

Motion to Take Note

Moved by

That the Grand Committee takes note of the Report from the International Relations Committee The UK’s relationship with the Pacific Alliance (8th Report, Session 2017–19, HL Paper 386).

My Lords, I begin by thanking all the then members of the International Relations Committee when this report was first published; the excellent clerk and support staff for their work; and, especially, the noble Baroness, Lady Coussins, who urged us to look at this area and whose expertise greatly benefited the committee, and from whom we will hear shortly.

This is, of course, a delayed debate, in the sense that publication was actually more than 18 months ago. Things inevitably move on, as they certainly have done in relation to the subject matter of this inquiry and report. It is a pity in a way, not least because it means that the initiative in discussion and new insights into important issues tend to slide away from your Lordships’ House into other fora. I know that some colleagues will want to say something about these long delays, which may be inevitable, between the publication and debate of Lords reports. In the meantime, at least this delay gives us the chance to update ourselves on fast-moving events in the region we are looking at today. There is sort of a silver lining to the delay situation.

The Pacific Alliance currently brings together Chile, Colombia, Mexico and Peru. It was founded in 2011 and covers trade and a whole range of wider issues as well. It is one of a number of trade associations and organisations in the Latin America region. In global terms it is relatively small, with a total population of 210 million people, compared with the giant new networks that have sprung up in Asia and are now reshaping the whole of world trade and commerce, such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership—CPTPP—which I will talk a bit more about in a moment, or the Regional Comprehensive Economic Partnership, or RCEP, which, with a market of 2.2 billion people, dwarfs even the European Union.

The Pacific Alliance is certainly thriving, although it has had to survive quite a few political bumps and changes along the way, including several since we wrote this report. As the Financial Times rightly warns, all these will certainly continue. Also, British trade relations with the region have been pretty modest in recent decades, involving in fact only about 0.7% of our total exports and 0.6% of our imports for the four countries in the alliance, and indeed with only 1.5% of our total exports going to the whole of Latin America. Of course, in the distant past things were quite different, and Britain had a far larger and deeper connection with South America. So it may be thought a little strange that your Lordships’ International Relations Committee chose back then to undertake even a short inquiry—as this one is—on these four specific countries, when most of our inquiries tend to be on major and overarching foreign policy issues rather than bilateral single-country relationships.

But there were at least two reasons why we did this. First, the Pacific Alliance is a classic example of the way that world trade is changing. We are not looking at a static picture at all, but at a very fast-evolving one. Saplings grow, sometimes very rapidly, into big trees with wide-spreading branches. The PA is not a customs union; it is something much more modern. I would say it is more of a product of the digital age, when data and services start to form the bulk of international exchange.

I thank the noble Lord, Lord Howell of Guildford, for his characteristically well-informed and expert introduction. I welcome that way that this report has highlighted the potential to the UK of the Pacific Alliance, established in 2011. That importance is underlined, as the noble Lord, Lord Howell of Guildford, said, by the fact that the leaders of China and another 14 countries in the Asia-Pacific region signed in November 2020—just two months ago—one of the biggest free trade deals in history, covering 2.2 billion people and 30% of the world’s economic output. Australia, Japan, New Zealand and South Korea signed the deal, alongside members of the 10-nation Association of Southeast Asian Nations, including Indonesia, Malaysia, the Philippines and Thailand.

Can the Minister comment on the weekend news that the UK is applying to join a free trade area made up of 11 Asia-Pacific nations, under its post-Brexit plans? The Comprehensive and Progressive Agreement for Trans-Pacific Partnership—CPTPP—includes Australia, Canada, Japan and New Zealand, covering a market of around half a billion people and generating more than 13% of the world’s income. As the Minister will be aware, there are 11 countries in the CPTPP, some overlapping with the Pacific Alliance. Formed in 2018, it comprises Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. Can the Minister say when negotiations will begin and what human rights, employment protection and sustainable growth clauses Britain will seek to place within it?

The committee reports:

“The Government appears to lack a coherent, well thought-through approach to Latin America as a whole, and to its regional and subregional organisations.”

Yet many of the countries in the region, including members of the Pacific Alliance, are ones with which the UK shares considerable common ground on policy issues, such as on the global economy, trade, sustaining the rules-based international order, upholding human rights and addressing climate change. I agree with the committee that the Government should raise and promote the UN Guiding Principles on Business and Human Rights, particularly in the context of UK companies’ activities in the region, and that they should promote only sustainable, inclusive growth in a continent where nature has been devastated by human commercialism—Brazil’s Amazon rainforest is still being plundered—and which engages with the concerns of indigenous peoples.

My Lords, I welcome this report, with reservations. The UK has neglected relations with Latin American countries since the last war. There have been periodic attempts to increase our commitment, and to reverse the decline in trading and investment links, but we have continued to lag far behind Germany and others in the intensity of our relations with most countries in the region.

I have often acted as a guide in singing tours of Westminster Abbey, where I walk over the tomb of Admiral Lord Cochrane, who at one point commanded the Chilean navy and helped found the Peruvian fleet. Britain has strong historical ties with Latin America that we have let decline. As a policy analyst working on transatlantic relations, I have attended conferences in Chile and Mexico, and have also visited Peru. The members of the Pacific Alliance are significant states. On any definition of global Britain, we should be paying more attention to relations with Latin American states and markets, but we should not fall into the trap of assuming that trade with Latin America can somehow replace trade with the European continent; nor fall into the illusion that economic integration among South American countries is an easier process to commit the UK to than any European one. I recall when I was a young academic, 50 years ago, the optimism of Mexican economists about the prospects for the Latin American Free Trade Association and other regional schemes. These failed or stagnated as regimes changed in different South American states.

The noble Lord, Lord Howell, is correct to argue that the UK needs to pay more attention to the Pacific as a region—with the rapidly growing economies of east and south-east Asia now acting as the dynamo of global growth, and with the rise of China creating new economic and security challenges—but we need to beware of overemphasising the prospect of Britain becoming a major commercial or military player in the Pacific; nor should we see commitment to Pacific co-operation as an alternative to continued engagement with European states and markets and across the wider European neighbourhood to the Mediterranean and Africa. The enthusiasm with which the Secretary of State for International Trade has just announced the UK’s application to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership contrasts sharply with her antagonism towards the European Union. The CPTPP, if it develops into a serious economic grouping, which is not yet clear, will compromise UK sovereignty on issues such as animal welfare, regulation of chemicals, and investor protection. It is not clear to me why such limits on sovereignty should be more acceptable to our Government in the Pacific than across the North Sea.

My Lords, I served on the International Relations Committee under the chairmanship of the noble Lord, Lord Howell. I was the president of the Peru Support Group at the time. Our clerk and her team enabled us to deal with a great deal of evidence, including a valuable session with the ambassadors of the four Pacific Alliance countries.

Since the report’s publication, the UK has withdrawn from the EU, promoted its global Britain strategy and signed continuity agreements with all four Pacific Alliance member states, so it is time now to implement the report’s core recommendation:

“The UK should deepen its engagement with the Pacific Alliance as an active observer state”.

In their response, the Government said that they agreed with that, so I will give a few examples of what being an active observer state should look like and what is in it for the UK.

One of our witnesses, Professor Gardini, pointed out that one of the alliance’s strategic objectives is to build relationships within the Asia-Pacific region, also offering an opportunity for

“UK insertion into regional and global value chains aiming at the Asian market.”

Professor Gardini also said that the alliance could be

“a significant political partner in global forums and issues.”

This could be helpful in reconfiguring our international influence outside the EU and building alliances on global issues such as climate change, on which the UK aspires to be a global leader and which the alliance identifies as a key concern.

The UK has also shown leadership in respect of the UN’s principles on business and human rights. Greater engagement with the Pacific Alliance provides a unique opportunity to put this commitment into practice by influencing sustainable growth within the region without trampling on the rights of indigenous communities.

My Lords, I congratulate my noble friend Lord Howell on his perseverance, which has finally secured time for a debate on our International Relations and Defence Committee’s report, The UK’s Relationship with the Pacific Alliance. It was a pleasure to serve as a member of the committee under my noble friend’s chairmanship and, indeed, as a colleague on the Front Bench for many years before that. It was therefore an honour to follow him as chair of the committee 18 months ago.

Post Brexit, the UK now has the opportunity to reconsider its strategy in delivering on its global Britain agenda. We await the publication of the long-delayed integrated review of foreign policy, defence, security and development. On 18 January, my noble friend Lord Ahmad confirmed in the House that it will now include a soft power strategy—also long delayed.

Today, the noble Lord, Lord Frost, begins his work in a new post in Downing Street as the Prime Minister’s representative on Brexit and international policy. It is reported that he will liaise with the Foreign Secretary. One has to wonder, however, what impact that will have on the decision-making process in the FCDO. I welcome the noble Lord’s appointment. He is to be congratulated on his work in negotiating our trade agreement with the EU. I also hope that I will have the opportunity this year to welcome him to our committee to give evidence.

It is a pleasure to see my noble friend Lord Godson take his seat today. He is the director of Policy Exchange. I agree with the position expounded in its recent report, A Very British Tilt:

“As it contemplates its global interests post-Brexit, the UK could and should play a significantly larger role in the Indo-Pacific Region. Specifically, it should aim to foster a community of free and independent nations committed to upholding peace, stability, prosperity, and access in the region. By offering a vision of a common strategic future built around shared principles and focused on shared challenges … Britain can add to existing defence, trade, and political relationships and inspire new approaches.”

My Lords, it is a great pleasure to join and engage in this debate, and to have the opportunity to learn from the considerable experience and expertise that your Lordships bring to it.

I have relatively little experience of the region. I have, however, had the opportunity to visit Mexico on a number of occasions, most recently when I was part of an election observation delegation that saw Andrés Manuel López Obrador elected. I was therefore interested in the phrase in the report that said that countries in the region remain

“vulnerable to political swings at future elections”.

I merely observe that either the maintenance in power of a party or a change to a different party in power, as has just happened in the US, is what we tend to think of as democracy, so “vulnerable” seems a slightly odd word to me.

I will make a couple of observations about Colombia, which I have had visited a number of times with British and other parliamentarians and trade unionists. The reason for those visits was to engage with human rights defenders who have come under considerable attack and to meet trade unionists, many of whom have been imprisoned under the catch-all legislation of rebellion. When the report talks of the UK having

“a set of shared values, whether on democracy, or the way we want to see the international system working, based on rules”,

I am pleased that the recommendations and conclusions contain the following:

“The UK should also continue in its bilateral engagement to support and help to strengthen the rule of law in these countries.”

Specifically, I was recently pleased that the Minister was able to engage with some of these issues in response to a Question. I will add to the large number of questions already put to him today. As the penholder for Colombia at the UN, the UK has a particular responsibility to play an active role in ensuring that the Colombian Government uphold their commitment to end violence against human rights defenders and trade unionists. When the Minister spoke of these matters in response to the Question, the answers were very fulsome, but I want to take the opportunity provided by this debate to ask the Minister for an update on the UK’s recent work as the penholder for Colombia and to say what assessment Her Majesty’s Government have made of recent levels of violence there.

My Lords, I am grateful to the noble Lord, Lord Howell of Guildford, both for the important report that he and his committee have written and for obtaining this substantial debate. It gives us an opportunity to discuss the relationship with the four countries of the Pacific Alliance and advise Her Majesty’s Government on how they should prioritise and promote this set of relationships.

I have a long-standing interest in this area, particularly in Colombia and Peru. I declare my registered interest as the president of the Peru Support Group. I pay particular tribute to my predecessor, the noble Baroness, Lady Coussins, who, as the noble Lord, Lord Howell, pointed out, played an important role in the origins of the report and spoke with such passion and insight this afternoon.

My relationship with those countries and my visits to them began many years ago when Northern Ireland, my own part of the United Kingdom, was emerging from a long and painful experience of terrorism. Both Peru and Colombia were seeking to do the same. Of course, the underlying issues that find tragic expression in terrorist campaigns do not easily or quickly go away—even when, as in Colombia in particular, there has been a substantial effort at peacebuilding. My connection with both countries still includes regular contact with colleagues there who continue to work to build peace, stability and reconciliation, as is also the case in Northern Ireland.

However, like the Select Committee report does, I will focus on some other important elements of our relationships and how they can be developed to our mutual benefit, especially in this post-Brexit period. One of my frustrations over the years has been the way in which our Governments have consciously turned away from long-standing relationships with Latin America. I well recall protesting in your Lordships’ House against the decision of the Blair Administration to withdraw resources from Latin America in favour of a focus on China. The closure of the British Council office in Lima in 2006 is just one example of this serious strategic error of judgment, which was clear to me at the time—and I said so. Abandoning long-standing relationships of that kind in favour of hoped-for economic benefits from countries that do not share our values is almost always foolish and misguided, as those decisions have proved to be.

My Lords, I thank my noble friend Lord Howell of Guildford for introducing this debate. I must admit that when I signed up to speak, I had mistakenly thought that we would be debating our imminent accession to the CPTPP, which should form an important pillar of the profile of global Britain as we renew and deepen our relationships around the world after leaving the EU. I must also admit that I was not aware of the existence of the Pacific Alliance and briefly contemplated withdrawing from the debate because, although I have spent many years living and working on the eastern shore of the Pacific and have visited California, British Columbia and Hawaii several times, I do not know the Latin American countries of that alliance at all. It is probably true that we hear much more about the Mercosur alliance than the Pacific Alliance, as the former’s total GDP is about 30% greater and, at $2.5 trillion annually, is approaching that of the UK.

However, having read the interesting report of the Select Committee I decided not to withdraw, not least because three of the four member countries of the Pacific Alliance are also members of the CPTPP. It is worth noting that of the other eight members of that organisation, only Japan and Vietnam are not members of the Commonwealth. Furthermore, the fourth country of the Pacific Alliance, Colombia, has given notification of its interest in joining the CPTPP. Of the six Commonwealth members that are already members of the CPTPP, Australia, Canada, New Zealand and Singapore are already associate members of the Pacific Alliance and therefore committed to enter into free trade agreements with it. Therefore, to maximise our influence in and the benefits we can gain from membership of the CPTPP, it seems logical that we should also seek associate membership of the Pacific Alliance and closer relationships with its members on a bilateral basis.

Two of the early continuity trade agreements to be negotiated were those with Chile, in January 2019, and with the Andean countries, which include Colombia and Peru, in August 2019. As your Lordships are well aware, we concluded a continuity trade agreement with Mexico just in time. However, in general, the Pacific Alliance members are not among those countries with which we have as many historical and trade links as others. Guyana is the only South American country which is a member of the Commonwealth.