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(Domenic Macri/Domenic Macri)
(Domenic Macri/Domenic Macri)

Colombia is Canada's new best friend Add to ...

Not all of Scotia’s manoeuvres have succeeded: After the Argentinian government defaulted on $95 billion worth of debt in 2002, Scotia pulled out of the country and booked a $540-million after-tax loss. But Latin America’s resurgent economies soon began to beckon again: Lately, the bank has been buying beachheads across South America, including a $400-million acquisition in Peru in 2006 and a $1-billion bet in Chile in 2008. Since then, Scotia has added to its positions in Latin America with various smaller deals and by purchasing loan portfolios from the Royal Bank of Scotland, including its Colombian business.

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If Scotiabank’s arrival in Colombia represents the culmination of a major policy initiative for the Santos government, the same is also true for the Canadian government. Ottawa has pushed hard to open trade in Latin America since 2007, when Prime Minister Stephen Harper visited Chile and, after opening a Scotiabank branch in Santiago, announced his support for a series of free trade deals.

Whereas Latin America received about 12% of global investment in mining in the 1990s, these days its share is close to one-third. Harper has been back to Latin America three more times; in 2010 his efforts paid off with the signing of the free-trade deal with Colombia.

Even before the deal took effect last year, trade between the countries was growing: It climbed by 32% between 2005 and 2010.

But the advance is from a modest base. The entire South American continent accounted for just 1.5% of Canada’s exports in 2011, and 3.4% of its imports. A 2011 report by the federal government says Colombia ranked as Canada’s 32nd-largest export destination (agricultural products being by far most important) and 42nd-largest source of imports. Those imports—primarily coffee, crude oil, bananas, coal and flowers, totalling $717 million in 2010—are dwarfed by estimated cocaine imports from the country. As for investment, it is a one-sided picture: In 2010, Canadian companies invested $824 million in Colombia, while Colombian investment in Canada amounted to $1 million.

Harper insisted the trade deal would help promote peace in Colombia. Indeed, before consenting to Harper’s push to make Colombia Canada’s new best friend, Parliament insisted the government produce annual human rights reports that monitor violent conflict. After all, Colombian officials acknowledge that every year at least 100,000 people continue to be displaced from their homes by violence—many of them in regions where Canadian companies are pursuing resource opportunities.

Shortly after Harper reached agreement with his then-counterpart, former president Alvaro Uribe, more than 30 members of the Colombian Congress, including one of Uribe’s cousins, were imprisoned over links with paramilitary forces. The head of the armed forces resigned over cases in which people were lured away and slain, then dressed to make them appear as if they were rebels or criminals killed by the armed forces. Uribe’s foreign minister, current Gran Colombia CEO Maria Consuelo Araujo, had earlier resigned after her brother and her father were jailed for their links to paramilitaries.

Even as the Colombian government claims to be quelling ideological and narcotics-related violence, conflict-ridden situations such as the one in Marmato continue to escalate in many areas, according to Colombian critics such as Senator Robledo. In part this is thanks to newly introduced resource development laws that were crafted with extensive support from Canadian consultants paid with millions of dollars in grants from the Canadian International Development Agency (CIDA), which is increasingly involved in mining promotion. “Human rights violations are linked to efforts by those behind Colombia’s murderous paramilitaries to create conditions for investment from which they are positioned to benefit,” noted the public-interest group MiningWatch in a 2009 report that was produced in collaboration with Inter Pares, an Ottawa development body that receives funding from CIDA. “The continued presence of paramilitaries in areas of high investment raises serious concerns that Canadian investment risks contributing to or exacerbating the violence, and risks benefiting from or being complicit with the human rights abuses and massive displacement that continue to occur.”

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