Executive Summary

This report is intended to provide an overview of Western Canada's current and potential commercial linkages with Latin America and the Caribbean (LAC). It will seek to inform Western Economic Diversification Canada (WD) of potential opportunities to increase Western Canada's engagement in the LAC region.

Current economic conditions in the LAC region are becoming more favourable for international involvement. Effective macroeconomic policies have resulted in increased economic growth and stability and improved social conditions to address low standards of living and inequality.

Trade activity is modest between Western Canada and LAC with the majority of exports consisting of agricultural commodities, specifically wheat and pulse crops. The oil and gas industry has experienced an increase in demand for equipment exports to the LAC region. Further negotiations of Free Trade Agreements with LAC markets will facilitate exporting opportunities for Western Canadian companies. Despite the strong connections in the oil and gas and mining sectors, few inroads have been made by Western Canadian innovation clusters in the LAC region. However, the innovation clusters sampled in this study generally are taking note of potential opportunities for collaboration in LAC and some relationship building is taking shape.

Export Development Canada (EDC) continues to be active in Latin America supporting Canadian companies in accessing high tariff markets through foreign direct investment and joint ventures. The LAC region is increasingly becoming more integrated into the global value chain because of competitive wage advantages and an abundance of natural resources. Potential opportunities for Western Canada in Latin America exist in traditional energy and natural resource sectors but also in the tech and advanced industry sectors.

There appears to be some awakening in Western Canada to the potential of Latin America. For example the Government of Manitoba has been increasing its focus on Latin America over the past year. As well the Government of Alberta has identified Latin America as one of its top market priorities, largely thanks to the strong ties in the energy sector.

WD is well positioned to contribute to the Government of Canada's whole-of-government initiative to re-engage in the LAC region. The recommended approach is to focus on enhancing science and technology (S&T) based partnerships with LAC. WD's extensive knowledge and involvement with numerous partnerships and programs in the S&T industry will allow the department to focus on innovation clusters and current S&T departmental priorities that are transferable into the LAC market.

Specific actions for WD consideration include:

• S&T Study Tour to Western Canada
• Relationship Building with Canada's Posts in Miami and Houston
• Facilitate Clusters/Academia Partnerships
• Support Industry Associations
• Embraer Outreach
• Leverage Existing Western Canadian Links with LAC
• Inter-American Development Bank Annual Meeting in Western Canada

It is important that WD target any resulting efforts to support partnership development by innovation clusters to a limited number of specific markets. Chile and Brazil appear to be the most promising areas for innovation relationships. Canada's Science Memorandum of Understanding (MOU) with Chile has strengthened the partnership between the two nations in the areas of sustainable development, S&T, and investment promotion while negotiation of the Science and Technology Cooperation Agreement with Brazil will further encourage technology commercialization ventures.