Japanese Diplomacy in Latin America and the Caribbean

Japan’s relationship with our neighbors across the Pacific has been, and remains, very close. Our first encounter stretches back more than 400 years. Since then—from the signing of Japan’s first diplomatic treaty on equal terms in 1888 with Mexico to the thriving Japanese immigrant community of approximately 1.65 million across Latin America and the Caribbean—the region has played a historic and pivotal role in expanding our diplomatic horizons.

History aside, recent developments on both sides of the ocean have elevated the importance of our relationship to new heights. Stable economic growth in Latin America and the Caribbean—propelled by a rapidly-growing middle class, abundant natural resources and the region’s rise as part of a global supply chain—has shed new light on the importance of the region. Moreover, countries in Latin America and the Caribbean, with whom we share fundamental values such as democracy and the rule of law, have become important and responsible actors in upholding and strengthening the international order that sustains peace and economic prosperity.

In the same vein, many countries are demonstrating a growing interest in forging stronger ties with the Asia-Pacific region, which has also become a principal growth engine in the world economy. The establishment of regional initiatives such as the Pacific Alliance, to which Japan became the first Asian country to participate as an observer, attests to this emerging trend.

Statistics demonstrate both the rapid growth as well as the still-untapped potential of the relationship between the two regions. According to the International Monetary Fund, bilateral trade increased almost seven-fold in the past 10 years—yet Latin America and the Caribbean still occupies a mere 4.5 percent of Asia’s external trade, while Asia accounts for 20.4 percent of Latin American and Caribbean trade.[1] Japan, with its extensive economic links and a long history of cooperation with Latin America and the Caribbean, finds itself in a unique position to act as a gateway between the two regions.

Japanese Engagement

The Japanese government’s engagement with Latin America and the Caribbean revolves around two pillars: strengthening our economic relationship (including support for sustainable and inclusive growth) and enhancing our cooperation in the international community.

The active promotion of economic diplomacy constitutes one of the principal pillars of our foreign policy agenda. Nevertheless, while important, our economic engagement stretches far beyond trade and investment, spanning diverse modes of cooperation and collaboration with the region.

Japan’s trade with Latin America has doubled in the past 10 years and the number of Japanese companies with newly established offices in Latin American and the Caribbean have increased by 200 in the last five years. This is a result of strengthened collaboration on a number of fronts, and, in particular, numerous economic frameworks including economic partnership agreements (EPAs) with Chile, Mexico and Peru (a Colombia EPA is under negotiation), an investment treaty with Peru (a Colombia treaty has been signed and negotiations are underway with Uruguay), and tax treaties with Brazil and Mexico. Japan was also the largest source of foreign direct investment (FDI) last year among Asian countries in the region; globally, Japan was the fourth-largest FDI source for Latin America and the Caribbean, representing approximately 4 percent of all FDI to the region in 2012.[2]

Japan’s trade and investment in the region is characterized by its mutually beneficial nature: strengthening capacity building, increasing technological transfer, generating quality jobs, and nurturing local supporting industries, among others. This relationship should only further grow on the heels of the Japan-Latin America and the Caribbean (LAC) Business Forum to be hosted by the Inter-American Development Bank (IDB) in Tokyo in November. The forum will bring together government and business leaders from both sides of the ocean.

Furthermore, under schemes such as the EPA Business Environment Improvement Committees (with Chile, Mexico and Peru) and Public-Private Consultation Mechanisms (with Brazil, Venezuela, etc.), the Japanese government, along with local Japanese businesses, is working with various Latin American governments to discuss the improvement of business environments so that investment can be sustained and increased in the future.

Despite its economic growth, the region still faces significant challenges in terms of sustainability and income distribution. Throughout the decades, Japan has provided more than $31 billion of official development assistance (ODA) in the form of concessional loans, grants and technical assistance.[3]

The concept of “human security” lays beyond these aggregate figures: a philosophy that places individual empowerment and community building at the heart of our assistance to the region. Under this concept, our assistance goes directly to the most vulnerable sectors of society, focusing on areas such as education, health/medicine and disaster prevention. Furthermore, we are working with local donor countries such as Brazil, Mexico, Chile, and Argentina in carrying out triangular cooperation projects. These initiatives are diverse: from cooperation with Brazil on an effort titled “Sustainable Agricultural Development Project in the Tropical Savannah Region of Mozambique,” to cooperation with Mexico on an initiative titled “Anti-Seismic Measures Project in Haiti.”

Our collaboration with Latin America is also forward-looking. Japan is unique among Asian and Latin American and Caribbean countries in having spearheaded responses to newly-emerging challenges such as rapid urbanization, an aging society and the worldwide transition to green societies. Japan is also at the forefront of the research and promotion of new growth industries such as eco-business and advanced science and technology.

We strive to share these experiences with our Latin American partners. This is why we hosted the Eco-Business Promotion Conference in Tokyo last November as part of our activities under the Forum for East Asia-Latin America Cooperation (FEALAC).[4] Japan is also set to invite up to 1,300 science and technology students annually from Brazil under Brazil’s Science without Borders Program and is proposing the establishment of a FEALAC Latin America Robot Competition in cooperation with local universities to foster the scientists and engineers of tomorrow.

Our engagement with Latin America is also focused on enhancing cooperation in the international community.

Political stability, the spread of democracy and a growing economy have strengthened Latin America’s voice in the international community. This strengthened voice should also be accompanied by a greater responsibility to contribute to efforts in creating a peaceful and prosperous international community.

As responsible members of the international community, Japan and Latin America share an interest and responsibility in upholding and strengthening the rules-based international order that underpins our growth and stability—such as the freedom and safety of navigation or adherence to the multilateral trading system. Japan looks to collaborate with Latin America and Caribbean partners in creating a better international community that is maintained not by force, but by common rules.

Our Latin American and Caribbean partners are a constructive and positive force in addressing global challenges including climate change, disarmament and non-proliferation, and UN reforms.

Also, in recognition of the region’s role in worldwide efforts to address global challenges—as exemplified by the nuclear-free zone created by the Tlatelolco Treaty of 1968 or by the convening of UN sponsored meetings such as the COP 16 and Rio +20—Japan hopes to continue working closely with our partners on these issues. For example, Chile and Mexico participated in the Japanese-led Non-Proliferation and Disarmament Initiative (NPDI). The Arms Trade Treaty (ATT)—adopted by the UN General Assembly in April 2013—was initiated by Japan, Argentina, Costa Rica, and Mexico, among others. 

Through bilateral consultation schemes on multilateral issues as well as our periodic dialogues with regional organizations such as the Pacific Alliance, the Caribbean Community and Common Market (CARICOM), the Community of Latin American and Caribbean States (CELAC), the Common Market of the South (MERCOSUR), and the Central American Integration System (SICA), Japan will continue to collaborate closely with our Latin American and Caribbean partners on regional and international issues.

A New Voyage with Latin America and the Caribbean

In his recent policy speech, “Japan’s Foreign Policy towards Latin America and the Caribbean,” Foreign Minister Fumio Kishida characterized the state of our relationship as “embarking on a new voyage.”[5] Indeed, there are great complementarities and potentials in our relationship that have yet to be fully exploited.

As Latin America and the Caribbean increasingly play an important role in the global community, Japan finds itself aptly positioned to serve as a gateway for the region’s engagement with Asia due to the extensive economic links and historic bonds that unite us. The fundamental values and the visions we share call for promoting our already extensive collaboration on a global scale.

Akira Yamada is Director-General of the Latin America and the Caribbean Affairs Bureau for the Ministry of Foreign Affairs of Japan.