Future and current ties between Latin America and Asia

Attempting to describe the current state of the ties between Latin America and Asia is an extraordinarily complex task, considering that we are referring to two very different worlds within and without the region. Not only from the cultural viewpoint, but also geography, political processes, economics and social-demographic realities.

This column will focus on the current state of relations between South America and Mexico (the latter is part of NAFTA, although it is also a full member of the Pacific Basin Economic Council) and those countries that have traditionally and are now achieving a greater presence in our region, namely Japan, China and Korea. We will to try to outline some ideas about the possibility of further linkages that will be vital in the twenty-first century. This is relevant because of the international relations trend away from unipolarity to multipolarity. Also, because the Asian region is already taking on an increasingly important influence in economic and geopolitical (China, Korea, ASEAN and in the medium-term India). Our scope is not only descriptive in nature but analytical from an integrated perspective, encompassing aspects beyond the economic-commercial relations. The aim of this article is to also present some ideas on how these disparate two regions may converge, considering the gravity that Asia has, not only from an economic standpoint, but also in political and cultural life in an increasingly interrelated international scene and in the midst of globalization. This is perhaps the biggest challenge facing our region at present.

First encounters
 
History tells us that there were always physical contact and trade between Latin America and Asia ever since the Spanish empire expanded into the Philippines and the Pacific Rim. The historian Sergio Villalobos tells us that it was the Spaniards who charted the trade routes between the Americas and the East, with the discovery of the Strait of Magellan in 1520, and their arrival later to the Philippines. European colonization in the East was difficult because of the nature of commercial activities and "the absence of real roots that did aid in the dynamic development of the Pacific. Spain sought to maintain its American colonies isolated from the Pacific, to preserve them from attack by other powers and ensure the flow of silver from Peru and Mexico"(1).

Thus, the link between these distant regions arose primarily from the private sphere, with traders exchanging goods between the two regions: gold and silver from Mexico in exchange for silk and spices from Manila via The Manila Galleon, a Spanish Navy vessel. When the Latin American countries achieved their independence, there was already a steady, private traffic between Latin America and Asia, China, the Philippines and Dutch Indonesia. They also traded with Australia, New Zealand and the French colonies in the Pacific. They were traders and privateers whose naval stations protected the shipping lanes. It was the private sector which began and boosted this trade. The public sector of the countries that became independent in the region, showed no great interest in having diplomatic relations during the nineteenth century with Asian countries(2).

In the mid-nineteenth century, the rise of plantations and a concomitant shortage of manpower led to the development of a traffic in "coolies" or Chinese workers. With a forced contract for eight years, they came to Cuba, the Caribbean islands, Peru, and later moved to Chile once they were free of their contracts. They did not mingle much in their new home countries, because they remained marginalized. When they received better treatment they even fought for their new homelands, as in the Pacific War (3).

Later, in the nineteenth and twentieth centuries a second Japanese immigration to Peru and Brazil occurred. In the beginning, they too did not mingle with the locals. They were devoted to small industrial and commercial concerns. The Japanese also helped develop agriculture in Brazil. It is interesting to note that the links continue to exist predominantly within the private and without much understanding between the distinct two worlds, because there was not much interest on either side. Interests were limited to trade. Latin American countries concentrated mainly on relations between themselves, Europe and the US. The Asian world was not perceived as significant because, from the sixteenth century onwards, the economies of the Atlantic dictated the course of history until well into the twentieth century. Remoteness, the high price of sea freight, cultural differences that in one way or another breed mistrust and lack of knowledge (because there was no interest in it), are factors that contributed to the lack of a transpacific relationship in the twentieth century, since there were no defined policies Asia towards Latin America, nor vice versa.

The 20^th Century: The era of the Pacific
 
In the twentieth century, trade and political-diplomatic exchange were accentuated by industrial growth in Japan and later with the rest of Asia which continues to progress on the basis of an exchange of minerals, textiles from Latin America, and autos and electronic products from Asia. This situation remains the same today in terms of export commodities from Latin America. But from Asia exports are the usual industrialized products, plus more diversified products(4) including textiles and manufactured goods (China).

Latin America, and Chile in particular, resumed ties when in the last quarter of the twentieth century the hub of economic commercial, military, financial and political activities moved from the Atlantic to the Pacific. Historical processes influenced this change, such as the emergence of Japan as the world’s second strongest economic power; following its recovery from the Second World War with the support of its ally the U.S. The economic changes that began in China Deng Xiao Ping in a visionary fashion also played a part. With the start of the four modernizations that are leading China to the status of superpower: economic openness, development of science and technology, modernization of defense and development of agriculture and its coastal and inland areas. In addition, there is the phenomenon of globalization. It has resulted in trade in goods and services increasing to the point that, according to the OECD, 2007Asia imports and exports trade are double those of North America (14.0% Asia, 7.2% USA, 7.1% EU). Asia, led by China and India, will the engines of the global economy in the next millenium.

Until 1986, trade in Latin America had been mainly with Japan (two thirds of Latin American exports to Asia were shipped to Japan, but the business relationship later extended to all the countries of Asia. But Latin America was always a provider of primary goods and disconnected from the importance that Asia has been gaining as a generator and protagonist in international trade, with China emerging as a world power. Investments to this day are quite limited. Japan began to invest in the nineties in the area of natural resources (mining). They have not been significant due to geographical distances, lack of clear rules in Latin America for investment and unstable political processes (except Chile, which is a small market of only 16 million).

Accordingly, Latin America has had no deliberate policy towards Asia. Most Latin American nations Asia policy is circumstantial in nature, although we note that Chile’s is not. This country was a pioneer in the process, due to political and economic isolation during the military regime which began a process of unilateral economic opening in the mid-seventies, then moved on to multilateral and bilateral, which led to a long-term State policy on Asia, which was accompanied by opening diplomatic missions in that region.

Nevertheless there were some earlier inroads made by the Chilean Navy and academic institutes, which no doubt contributed to the future policy. Leaving aside the political circumstance, it is important to note that Chile was rewarded for its approach to Asia and the process of opening its domestic economy. The latter was particularly crucial. The pragmatism of Asian countries, many of whom were not put off by the military regime, chiefly: Japan, China and South Korea. In fact, Chile's relations with China begun in 1915 were never interrupted. The government of Salvador Allende recognized the PRC as the only China on the map. Consular relations are older, dating to 1845, mainly due to growing trade with China, Chile (5.6% of the total Port of Valparaiso traffic is tea, textiles; exports were mainly copper, as today; silver, gold also, which were imported more exported)(5).

With Japan, the relationship is longstanding. In September this year marks 110 years of bilateral diplomatic relations, a landmark of great importance if one considers that long-term friendship and values are relevant in the Asian world. By September, it is hoped that the FTA is ratified by the respective congresses, as both countries hope to not only increase trade but also investment, which requires project development beyond the investment Japan has in the fishing industry and copper mining in Chile. Japan wants Chile to make progress on its plan to be the platform for Latin America vis-à-vis Asia.