The new year for Japan began with another push in its strategy for greater engagement in Latin America, with recently appointed Japanese Foreign Minister Motegi Toshimitsu undertaking his first visits of the year to Mexico, Uruguay, Argentina, Paraguay, and Brazil. With one of the longest visits to Latin America by a Japanese foreign minister in recent times, Motegi’s visit is symbolic of Japan’s commitment to maintaining bilateral ties in the region as well as cooperating through multilateral initiatives such as the G-20 and Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
Japan’s outreach to the region comes amid the COVID-19 pandemic, which seemed to affect China’s global image to a certain extent as Wuhan, China was the original epicenter of the outbreak. However, Beijing strategized its international image rehabilitation through medical diplomacy, infrastructure investments, technological advancement, and vaccine trials in several nations. China’s outreach to the region has been done on a much larger scale and more coherently than Japan’s. Tokyo provided 20 Latin American nations with $73 million worth of medical equipment, $8 million for medical capacity building through institutions like Fondo Fiduciario de Japón, a special fund of the Inter-American Development Bank, and a $2.7 million contribution to the Pan American Health Organization.
China has emerged as an alternate source of financial and infrastructural support in the region, with Beijing providing over $140 billion loans in the past 15 years to Latin American states and China-Latin America trade estimated to be $500 billion in the next five years. Support for the Chinese Belt and Road Initiative in Latin America — with 19 nations in the region signing on — is viewed with concern by the United States, which sees the region as its own strategic backyard. Despite that, the Trump administration never put together a comprehensive and coherent Latin America policy, even as the region drew increasing Chinese investments in key infrastructure projects.
Japan, however, is taking action. Tokyo has initiated an extension of the Free and Open Indo-Pacific policy through its outreach to Latin America and a boost to its 2014 “Juntos” policy for Latin America and the Caribbean, launched by former Japanese Prime Minister Abe Shinzo in Brazil and continued by new Prime Minister Suga Yoshihide. Juntos, meaning “together,” was the Japanese policy of promoting development, connectivity and people-to-people connection between Japan and Latin America and the Caribbean, based on three concepts: progress together, lead together, and inspire together
The United States maintains strong influence in Mexico, a strategic partner for Japan, and it has not been a recipient of major Chinese BRI-led initiatives for the same reason. During his visit, Motegi called for “strengthening rule-based, free and open global order” though cooperation on several issues such as free trade, climate change, environmental sustainability, and North Korea. Motegi also emphasized the need to support Japanese companies that have expanded capacity in Mexico as they pulled out from China but have struggled to maintain operations and employment during the pandemic.
Japan and Uruguay mark a century of diplomatic relations in 2021. Motegi’s visit also marked the first by Japanese foreign minister in over three decades to Uruguay, which is crucial for Japan’s investment relationships and free trade goals in South America. The two nations signed a Customs Mutual Assistance Agreement promising to boost bilateral trade, simplify customs formalities, and take strict action against intellectual property rights violations and the illicit drugs and arms trades.
Speaking to Paraguay’s President Mario Abdo Benitez, Motegi stressed Japan’s anxiety regarding the transforming balance of power in the new international order which has underscored the need to “further strengthen coordination for enhancing a free and open international order based on the rule of law.” Motegi pledged Japanese financial assistance of 9.29 billion yen ($89 million) to Paraguay for providing stable electricity in the nation and boosting Paraguay’s investment opportunities, infrastructure development, and technological progress.
Earlier in the day, Motegi was in Argentina, where he confirmed with Argentine President Alberto Fernandez and counterpart Felipe Carlos Sola plans to strengthen bilateral ties in the fields of trade and investment, the Japanese Foreign Ministry said. Motegi requested Argentina to improve its business environment, noting that Japanese companies continue to invest in the country even amid the novel coronavirus pandemic, according to the ministry. Motegi pushed for stronger economic ties between the two countries, such as through a tax treaty to avoid double taxation, while noting that the presence of Japanese firms in Argentina has doubled since 2017. For his part, Sola said Japanese companies are playing an important role in the economy of his country.
Japan faces tough competition from China, which has a comprehensive strategic partnership with Argentina. Just a week before Motegi’s visit to Argentina, in fact, Fernandez had exchanged letters with Chinese President Xi Jinping, highlighting China’s increasing presence in Argentina. The two declared their intention to further deepen their relationship in 2021 through Belt and Road collaboration. The end of 2020 saw several Chinese companies kick-start key infrastructure projects in the country, such as a rail project worth $ 4.7 billion, electricity projects, and the replacement and renewal of diesel locomotives and freight networks connecting Argentina’s northwest farmlands with its eastern port. China also has a scientific base in Argentina, where a Chinese military presence has been reported.
On the final leg of his Latin American visit, Motegi met Brazilian President Jair Bolsonaro, where the Japanese foreign minister once again stressed Tokyo’s vision for a free and open international rule-based order in Latin America. Motegi spoke of the need to improve the business environment for Japanese firms in Brazil and strengthen business relations. Motegi offered Japanese support for Brazil’s digital economy and the two sides signed a memorandum of understanding on protecting the biodiverse Amazon rainforests.
Japan currently has around 3,000 corporations in Latin America and over 2 million people of Japanese origin live in the region. Besides ensuring support and protection for its diaspora and businesses, Japan aims to play a larger role in the region though political consultations, infrastructure development, and promotion of a rule-based order in the post-pandemic world. Japan’s emphasis on improving the business environment is significant for preparing Latin America for increased connectivity and integration with the larger Asia-Pacific. Japan’s commitment is indicative of the difference in policies from China, which primarily sees the region as a hotspot for Chinese investments and source of natural resources. However, there needs to be a more comprehensive Japan policy for the region, such as through trilateral partnerships along with the United States under President Biden, to ensure a significant presence and relevance in the post-pandemic era. As the economic crisis threatens Latin America, increased Japanese engagement can offer alternative development avenues as well as reduce the dependence of the region on China.
Astha Chadha is a Ph.D. student at Ritsumeikan Asia Pacific University, Japan.