Trade And Diplomacy Top Abe's Agenda In Latin America

With his mind set on diversifying investments, Japanese Premier Shinzo Abe has embarked on a five-nation tour of Latin America. But while economic ties are high on the agenda, the PM will also launch a diplomatic push.

Two days after Xi Jinping's Latin America trip ended in Cuba on July 23, Shinzo Abe is visiting Mexico. The Japanese premier will tour the continent to "strengthen and improve ties throughout the region," according the Foreign Ministry.



Kristin Surak, expert in Japanese Politics at the School of Oriental and African Studies (SOAS) in London, explains that while "the timing comes at the end of Xi Jinping's visit, the trip itself has been on the books since May," adding that it also falls in between parliamentary sessions in Japan.



"My sense is that the trip is not immediately about making a statement to Beijing, but rather about securing trade interests and Security Council votes, since Abe went on a similar tour of Australia and New Zealand last month."



"In both of these issues, China cannot be ignored: Japanese railways are competing with Chinese ones for the Brazilian market and China will put up a fight over a seat at the United Nations Security Council (UNSC)."



Laura Tedesco, a research associate at the think tank FRIDE, points out that Latin America is hosting a lot of visits and that Japan, just like China and Russia, wants to expand economic deals in the region and reach some political agreements.



Politically speaking though the relationships are more complicated, Tedesco adds, since "Abe could have more differences with Latin American politicians and he cannot be as generous as China has been with Argentina, Venezuela and Cuba."



However, she considers that "a democratic Japan should be a more natural ally to Latin American democracies than China or Russia."



For Latin America, it's not a "zero-sum game", says João Castro, analyst at the Washington-based Eurasia Group. The economies in the region won't shun China, he says. But as the majority of Latin American countries are entering a cycle of economic slowdown, it is important to maintain a close relationship with the global players, not only because they are huge consumer markets for their products but also potential sources of investment in their countries, Castro adds.



Trade, always



A great deal of the trip is about, of course, trade. In fact, Mexico is one of Japan's oldest economic partners in the region and the two countries have had an Economic Partnership deal since 2005. Tokyo has since invested some 16.5 billion USD in the Mexican economy, mainly in manufacturing. Last year alone, bilateral trade amounted to 22 billion USD.



A big part of the Mexico and Chile leg of the tour consists of discussions on the stalled Trans-Pacific Partnership (TPP) - an agreement to create a free trade area with 12 countries on both sides of the Pacific Ocean, including the US, Vietnam and Malaysia but excluding China. Castro believes the TPP is "one of those deals that can change the global trade landscape."



It is also a way for Latin American countries in the Pacific Rim to counter their economic dependency on China. "Chile's economy is particularly tied to China, so the TPP is a way to diversify trade," he adds. It can also be a way for Japan to assert its regional importance.



The TPP says Surak, "has been high on Abe's agenda." Given the secrecy around the negotiations, it is hard to know what exactly will be discussed, but Surak says that "public opinion in Japan has come out strong against concessions on issues like agricultural integration, and it is likely that he will seek support in this area."



But the TPP is not the only trade issue in Abe's basket. According to Tedesco, in Colombia, Abe will probably want to deepen negotiations on a Free Trade Agreement which started in 2012. The business ties between the two countries have increased nearly threefold in less than 10 years. A deal is expected soon.



A seat at the table



Abe is also set to become the first Japanese premier to visit Trinidad and Tobago. There, the PM will take part in the first summit meeting between Japan and Caribbean Community (CARICOM), which has some 15 member states. There is a focus on investments and assistance, with Tokyo announcing spending in energy, fisheries and disaster management.



However, the summit will not just focus on economic issues, says Surak: "The voting power of the countries in CARICOM in the United Nations Assembly is significant as they constitute 7 percent of the votes." One of Abe's declared goals on this trip is to gather support for his country to become a non-permanent member of the UNSC next year.



The UNSC is expected to be the top political issue on this tour – and one of the main topics to be covered in Brazil, the PM's last stop before returning to Japan on August 4. Abe is set to join Brazilian President Dilma Rousseff in lobbying for a reform of the UNSC.



Castro says that for Brazil this visit is yet "another opportunity to make an argument for its right to be in the UNSC and for the need of reform in the council." However, this is unlikely to happen at this time as the reform needs to be approved by its five permanent members. "China has no opposition to Brazil becoming a permanent member, but they definitely do not think the same of Japan," the analyst explained.



A long-standing friendship



The visit to Brazil is not limited to shared interests - on the contrary, it is probably the most relevant relationship Japan has in the whole continent. The Latin American giant is home to the biggest Japanese diaspora in the world and cooperation between the two countries goes back decades.



Abe's goal to boost bilateral ties is probably why loans totaling about 500 million USD from Mizuho bank to Brazil's state-run oil firm Petrobras are expected to be signed during the visit, marking an investment in oil exploration.



And although commodities make up the majority of Japanese imports from Latin America Tokyo wants to diversify its interests. For instance, Tedesco says that Japanese proposals to improve roads and infrastructure to facilitate grains exports are also in the works.



All of this is part of Abe's broader agenda. Tedesco says "since Prime Minister Shinzo Abe came to power in 2012, he has tried to expand Japan's political and economic relations." João Castro agrees, saying this "fits into Abe's broader agenda of becoming a more international leader in comparison to previous Japanese prime ministers."



"He's been travelling more than his predecessors and Latin America is an important region in terms of natural resources," he says. "It fits well into this agenda of Abe trying to be seen as a global leader."