CONNECTION WITH LATAM

Spain 2020 | DIPLOMACY | FOCUS

History connects the Spanish-speaking world through a story once defined by conquest. Today, it is defined by commerce.

With Spain coming to terms with its own separatist voices at home, the notion of a Spanish family of nations, better known as Hispanidad, has inevitably invited reappraisal. Gaining traction back in the 20th century, the idea presupposes a culturally distinct Spanish-speaking world. While many in Latin America disdain the notion of Spanish preeminence, Spain maintains pride in the Ibero-American community of nations; it is a community of shared language, culture, and, for many, religion. But a shared language has certainly not resulted in political homogeneity.

Colonial or Fraternal?
In recent years, some Latin American governments have made opposition to neo-colonialism a pillar of their policy platforms. France has faced this kind of backlash, too, in Africa after World War II. Happily for Spain, the independence movements of former Spanish colonies happened much earlier, in the early 19th century, or were captured by the US during the 1898 Spanish-American War, as was the case in Cuba and Puerto Rico. But that was 121 years ago. Since then, time has smoothed over sharper edges of Madrid's role in Latin America. While today's trade between Spain and Latin America is relatively small, its foreign aid to the region, while in low in volume, is proportionally high. In Colombia, Madrid has assisted victims of the conflict between the government and rebel groups. It has also sought representation in Medellín's Museum of Memory.

Trade in Kind?
Spanish multinationals loom large across Latin America in core economic sectors such as financial services and energy. In 2012, Spain became the first European observer nation of the Pacific Alliance, the Latin American trading bloc. In 2014, trailing only the US and the Netherlands, both countries active in the region's energy sector, Spanish FDI claimed 10% of total inflow to Latin America. And while investment by other European nations has gradually decreased, the reverse is true for Spain, with growing investments by Santander, BBVA, and Telefónica, the world's seventh-largest mobile telco. Spanish energy firm Repsol has oil and gas exploration operations underway in Brazil and Peru. Meanwhile, Spanish construction company Sacyr spearheaded the consortium behind the Panama Canal expansion.

Special Mercantile Arrangements…
There is another level of proximity between Spanish enterprises and their investments in Latin America. Spain's foreign policy is ultimately a combination of concerns in the EU and Latin America. In 1991, Spain cemented this arrangement by launching the annual Ibero-American Summit, a forum intended to advance political and commercial relations between Madrid and Latam capitals, as well as encourage historic, cultural, and social exchange. The summit has failed to catch on among left-leaning governments in South America, however.

…including MERCOSUR
In June, 2019, the EU signed a deal with MERCOSUR, an trans-Atlantic FTA that is now 31 nations strong. Here, too, Spain has made difficult diplomatic choices. A case in point is the group's exclusion of beleaguered member state Venezuela, suspended from all rights and obligations. Spain's own recognition of opposition leader Juan Guaido as Venezuela's legitimate head of state, a move also made by Germany, France, the UK, and other European countries, is evidence of Madrid's case-by-case approach to diplomacy. The MERCOSUR deal is set to improve the competitiveness of member nations, potentially reversing underperformance in their respective economies.

The next step…
Spain and Latin America finding each other, once again, after more than a century of alienation by distance and politics reflects a wider global orientation of economies around cultural and linguistic ties, rather than simply proximity. The economies of the future will depend on the easiest paths for information to travel. That Madrid, Mexico City, and Buenos Aires all speak versions of the same language means less valuable information will be lost in
translation.