Mr Major’s Speech to the Link Into Latin America Conference – 10 February 1997

Below is the text of Mr Major’s speech to the Link Into Latin America Conference, held at the Banqueting Hall in London on 10th February 1997.

---

PRIME MINISTER:

Chairmen, Presidents, Ladies and Gentlemen,

Let me first welcome you to the Conference.

It’s a particular pleasure to share this platform with President Cardoso, President Fujimori and President Perez Balladares.

President Cardoso was here a couple of years ago for the VE Day celebrations. It is good to see him back in London again. I look forward to his State Visit this autumn.

I am delighted also the President Fujimori felt able to come today. I know how much time he has devoted personally to the siege in Lima. He has the support of us all in his efforts to bring that crisis to a successful and peaceful conclusion.

And last, but not least, President Perez Balladares is here to represent Central America; and to remind us that Panama is the gateway of the Americas. He too is most welcome.

The history of Britain’s relationship with Latin America is long and deep. But I don’t intend to dwell on it today. Instead, I would like to talk about today’s Britain. About today’s Latin America. And about how we can work together.

So what is modern Britain like?

– Britain today has a growing economy. We are now into our fifth year of sustained growth, at historically high levels;

– we have falling unemployment: just 6.7%; one of the lowest rates in Europe. In the last four years we have created 900,000 extra jobs – more than France, Germany, Spain and Italy combined;

– and we have near stable prices: inflation has been below 4% for over four years. The high inflation seen during the 1970s is a thing of the past.

Behind these figures lies a fundamental transformation in the British economy.

We have reduced the state’s role, through a controversial but highly successful privatisation programme.

We believe private capital should predominantly drive the economy.

We have reduced the state’s burden on business by a policy of deregulation.

We are freeing companies from unnecessary red tape.

And we have revolutionised industrial relations. The result: a modern, dynamic economy with a highly-skilled workforce.

This isn’t just my view. Britain is increasingly seen around the world as the place to do business.

– we receive more inward direct investment then anyone bar the US;

– there are more foreign banks in London than in any other city in the world;

– and we have the world’s largest foreign exchange market, with over 30% of global turnover.

It is well known that Britain receives 40% of all American and Japanese investment coming to the EU. But I think it just as significant that we also get over one third of the investment from the rest of the world, including Latin America. For example:

– Petrobas of Brazil has invested 130 million pounds in North Sea oil exploration;

– Tenenge, another Brazilian company, has invested a further 100 million pounds;

– and over 20 Latin American banks are represented in London.

We don’t attract so much foreign investment by chance. It is the direct result of our policies:

– Britain has a flexible labour market;

– we have not weighed ourselves down the burdens of the EU Social Model – non-wage costs for employers in the UK are about half or less the costs in Germany, France or Italy;

– we have a highly skilled and motivated workforce;

– and we are part of the European Union’s single market – a market of over 300 million consumers.

I know that a number of Trade and Economic Ministers from Latin America are here at the Conference today.

I hope they will tell their businessmen back home about Britain today. Tell them that it is a place to do business. A place to invest in. And a natural gateway to the European market. And tell them they are welcome here.

Enough about Britain.

I am sure the three Presidents, and others, will speak more eloquently and originally than I can about today’s Latin America. But let me give you my perspective nonetheless.

Latin America has made remarkable advances in the last decade:

– democracy has been consolidated throughout the continent;

– there is peace in Central America;

– free market economic policies are the rule rather than the exception;

– hyper-inflation has all but disappeared;

– and there has been large-scale privatisation.

I am glad to see so many British businessmen here today. I know that some of you have been doing business with Latin America for many years. To take just a few examples:

– ICI are now the leading paints and coatings company in Latin America after their purchase of Bunge Paints of Brazil last year;

– Shell are developing the Camisea gas field in Peru, which could lead to contracts worth nearly one billion US dollars;

– British Gas have a major holding in Metrogas, distributing gas to Buenos Aires; and are also developing a 1.8 billion US dollar pipeline between Brazil and Bolivia;

– and RTZ have significant mining interests throughout Latin America including 600 million US dollars invested in a copper mine in Chile, over 200 million US dollars at a nickel mining complex in Brazil and mines in Argentina, Bolivia and Colombia.

Other British businessmen here may be looking at the region for the first time. You are right to do so. The House of Commons Foreign Affairs Committee recently produced an excellent report on the UK’s links with Latin America. The Committee noted:

– that Brazil’s GDP is of the same order of magnitude as China’s and 50% larger than India’s;

– that the Argentine province of Cordoba alone has a GDP equal to that of Bulgaria;

– and that Mexico is one of the most important trading economies in the world, with imports and exports worth over 100 billion pounds in 1995.

I am pleased to see that members of the Committee are here today.

Perhaps even more strikingly:

– the World Bank expects annual growth in Latin America in the next ten years to be the highest in the world after south-east Asia;

– over 2,000 Latin American enterprises have been privatised since 1985. Between 1993 and 1995 alone privatisations in Latin American brought in over 10 billion US dollars;

– the average inflation rate in Latin America has fallen from 340% in 1994 to around 25%;

– and trade between the four countries of Mercosur has more than doubled in the last five years. It is now worth over 12 billion US dollars a year.

Today, Latin American is one of the fastest growing, most dynamic regions in the world. This is the message the British businessmen here should take back to their boardrooms.

I have told you about “Modern Britain”. I have described today’s Latin America. How can we come together?

Clearly, we can trade with each other; and we can invest in each other. To our mutual advantage.

But there is much more to it than that. Britain and Latin America need a modern relationship. A relationship that goes beyond bilateral trade and investment.

We must deepen our political ties. As a trading nation, Britain has always had a global outlook. Our membership of the Security Council, the European Union, the Commonwealth and the G7 ensure that we continue to do so.

Latin America’s voice in the world, often muted in the past, or drowned out by the shouts of others, is increasingly being heard. We share a common view of the world. Latin American’s horizon is increasingly ours: a global horizon.

Peacekeeping is just one example. British and Argentine troops work side by side in Cyprus. They now have an Argentine commander – appointed by the UN with British support. There are Brazilians in Angola; Uruguayans in Tajikistan. I welcome Latin America’s willingness to play its part in tackling such international problems.

We must continue to develop the habit of working closely together on world issues: the habit of consulting, discussing and debating the issues of the day until this becomes second nature.

We will not agree on every issue. But the more we understand each others’ points of view, the more we will be able to find common solutions to common problems. I am certainly looking forward to my talks with Presidents Fujimori, Cardoso and Perez Balladares later today.

We must also strengthen our joint efforts to combat drug trafficking, international crime and terrorism.

We must work together to solve the world’s environmental problems.

I attended the Rio Earth Summit five years ago. It marked a turning point in global collaboration on the environment. Old arguments that the developed world used environmental concerns to hold back the developing world are no longer heard. All have accepted the need for sustainable development.

Since then, we have collaborated very closely with Latin America on environmental issues – through our aid programme, and our educational and scientific links. I very much look forward to the UN Special Session in June, to review progress and set a new environmental agenda for the years ahead.

Finally, we must work together to achieve freer world trade. Latin America and the European Union have a big role to play to pushing forward global liberalisation. We must co-operate in the WTO to ensure that we build on the success of the Uruguay Round. My aim to completely free trade by the year 2020. I hope this will also be Latin American’s aim.

In the European Union, Britain has pushed for the best possible deal to boost trade in both directions. We have argued for Chile and MERCOSUR to be given greater access to European markets, just as we expect greater access to Latin American markets.

And we are pressing for the Union to take a forward position in negotiations with Mexico. Both sides must lower constraints and barriers so that we all get a better deal.

My good friend Tristan would like us to be brief. I will be so. But let me leave you with one final thought. We should not look back at Britain’s relations with Latin America one hundred years ago, or fifty years ago, or even ten years ago. Let us instead look to the future. Look at how we can increase our co-operation, our trade, our investment, our joint endeavours – and build a modern partnership.

The advantages of doing so are there to be had. And they are very real. I hope we will have the good sense – and the self interest – to take them.