“Latin America is absent from the European agenda, except when a summit between the two regions comes around and Europe cannot show up empty-handed.”1 This statement from the Spanish Elcano Royal Institute can be underlined by trade figures. 2008 only one Latin American country (Brazil) was among the 20 most important EU trading partners.2 The EU’s economic relations with countries like Vietnam, Kazakhstan or Angola are more substantial than with Venezuela, Colombia or Peru.3
While economic importance of Latin America and the Caribbean (LAC)4 for the EU is small and even declining5, relations are far more vital for the other side. In 2007, the EU was the second largest trading partner for the region and provided most foreign direct investments and official development assistance.6 Nonetheless, with only 4% of EU development aid, the region receives least in global comparison.7 From a LAC viewpoint, the relations have fallen short of expectations considering the strong historic and cultural ties and the hope created by the launch of a new strategy in the mid-90s promising greater access to the European market.8 Since 1999 five EU-LAC summits have been held declaring an interregional approach and the vision of a Bi-regional Strategic Partnership but no significant progress has been achieved. In May 2010 another summit will take place, this time under Spanish Presidency, and skepticism exists whether great advancement can be reached.
The paper will outline today’s EU-LAC relations and give an outlook for the future. A changed global scenario requires a new approach towards LAC which needs to consider the shortcomings in internal integration as well as the differences in development within the region. A pure focus on bilateral agreements will not be a sustainable solution. Moreover, trade centered negotiations with LAC countries do not acknowledge the growing political influence of the region. Thus, political dialogue and social issues should play a stronger role in interregional relations.
2. EU-LAC Relations Today
When looking at EU-LAC relations today, one is confronted with a patchwork approach essentially grounded in an assessment of LAC development in the mid-90s. Traditionally, the EU has followed an interregional approach supporting integration through simultaneous cooperation with the existing subregional organizations. Thereby, it took its own development model as a basis, supporting regionalism as a mechanism for political stability, economic development and social cohesion. This, nonetheless, has proven difficult in Latin America where the valuation of national souvereinty is strong.
Negotiations with different sub-regions progressed at different speeds, so that today various types of agreements exist with the four most important organizations MERCOSUR9, the Andean Community of Nations (CAN)10, Central America and the Caribbean Community (CARICOM).11 With CARICOM for example, an Economic Partnership Agreement including a free-trade area was signed in 2008 while with MERCOSUR only a third generation accord exists. Negotiations on an Association Agreement (AA) with MERCOSUR have been in stalemate for nearly 10 years on agriculture, services and intellectual property rights.12 With Central America and CAN, AAs are negotiated at present but especially with the latter organization it seems questionable if agreement can be reached. The EU negotiates in two panels with CAN due to its internal division (Colombia, Peru, and Ecuador vs. Bolivia, which does not agree to EU trade terms). In one panel trade issues are discussed without Bolivia while in another political dialogue is negotiated with CAN in total.
Only in bilateral relations there was some progress with the signing of AAs with Mexico (2000) and Chile (2002)13, and the Strategic Partnerships with Brazil (2007) and Mexico (2008). Possibly, if negotiations with CAN and MERCOSUR continue in stalemate, the EU will opt for bilateral agreements with individual members of the organizations.14 A stronger orientation towards bilateral negotiations has also been supported by political developments in the region. The establishment of populist left-wing governments in some LAC states made consensus finding more difficult and the relations between individual countries even became deadlocked (e.g. Venezuela and Colombia).
Newly formed ideology-based mechanisms of integration like the Bolivarian Alternative for the Peoples of Our America (ALBA) produced cooperation models not acceptable for many EU countries and recent nationalizations were seen critically as they affected EU companies and created legal insecurity.
3. A changed world scenario
The basis for cooperation between LAC and the EU is not the same as it was 15 years ago. Many LAC states have evolved middle-income-countries and are reluctant to negotiate with the EU on terms set for them when asymmetries were larger. Various new EU member states (MS) today have lower per capita GDP than countries in Latin America.15 Some LAC countries became global players and corporations like Petrobras, Cemex and Bimbo established themselves on the European market.16
Despite its improved economic position, EU interest in Latin America has declined primarily because the region has stabilized. The current economic crisis has slowed growth in Latin America and the EU and forced the latter to concentrate on its home market. To this adds a power-binding internal reform process and the accession of 12 new MS. None of the new members has substantial interest in Latin America and some even have economic structure in agriculture and personal-intensive industries in compettion with LAC countries.17 This further lowered LAC portfolio in the Union and the influence of countries interested in the region, such as Spain and to a lesser extent Portugal, Germany and France.18 Moreover, under President Bush, US foreign policy has also put little emphasis on Latin America and has taken EU interest with it to regions with constant security threats and to the new economic powerhouses in the Asian-Pacific region.
Considering the strong cultural and historic ties with the LAC region, such a development is short- sighted. In comparison to other transition regions, Latin America is closest to Europe in commitment to democracy and could be a natural partner in the multilateral setting.19 Together both regions sum up to one third of UN members.20
1 Celestino Del Areal, Relations between the EU and Latin America: Abandoning Regionalism in Favour of a New Bilateral Strategy?, Working Paper (Madrid: Elcano Royal Institute, 2009), 13.
2 DG Trade, “The European Union and its main trading partners: Bolivia,” 9, 2009, http://ec.europa.eu/trade/creating- opportunities/bilateral-relations/statistics/.
3 Chris Patten, “EU-Latin America Relations ” (Speech gehalten auf der Canning House Lectures, London, 2004).
4 The term „Latin America“ as used in this paper also includes mainly English- and Dutch-speaking countries in the region and is utilized for language convenience synonymously with Latin America and Caribbean (LAC) as defined by the EU.
5 Raúl Bernal-Meza, Die Zukunft der Beziehungen zwischen der Europ äischen Union und Lateinamerika, 1. Aufl., Ibero-Analysen : Dokumente, Berichte und Analysen aus dem Ibero-Amerikanischen Institut - Stiftung Preußischer Kulturbesitz (Berlin: Ibero- Amerikanisches Inst. Preußischer Kulturbesitz, 2006), 8.
6 European Commission, EC-LA Development Cooperation Guide 2008-2010, 7, http://ec.europa.eu/europeaid/where/latin- america/documents/ec-la_development_cooperation_guide_2008-2010_en.pdf.
7 J. A Sanahuja, “De Rio a Madrid: límites y posibilidades de las relaciones Unión Europea-América Latina,” Jean Monnet-Robert Schuman Paper Series 2, no. 6 (2003): 17.
8 Ibid., 7.
9 MERCOSUR (short for Joint Market of the South) was founded in 1991 with the Treaty of Asuncion. Members are Argentina, Brazil, Paraguay, Uruguay and Venezuela; associated countries are Chile, Bolivia, Peru, Columbia and Ecuador.
10 The Andean Community (CAN) is made up of Bolivia, Peru, Ecuador and Colombia; associated members are Argentina, Brazil, Chile and Paraguay. Goals are the political, social and economic integration of the region.
11 The Caribbean Community consists of thirteen Caribbean states along with Belize, Guyana, and Suriname. The main purpose is economic integration and cooperation striving for a single market.
12 Ibid., 9.
13 Both FTA were primarily a reaction to the signing of FTA of these countries with the USA.
14 Such a development would make a change of internal policy of MERCOSUR necessary because agreement exists that FTAs with foreign partners are only negotiated with all MERCOSUR not with individual members. Especially the smallest partner Uruguay has lobbied for a change of this policy.
15 Del Areal, Relations between the EU and Latin America: Abandoning Regionalism in Favour of a New Bilateral Strategy?
16 Susanne Gratius, “Europa und Lateinamerikas internationale Neupositionierung: Chancen für eine gleichberechtigte Partnerschaft,” Internationale Politik und Gesellschaft, no. 2 (2009): 81.
17 Bernal-Meza, Die Zukunft der Beziehungen zwischen der Europ ä ischen Union und Lateinamerika, 15
18 Del Areal, Relations between the EU and Latin America: Abandoning Regionalism in Favour of a New Bilateral Strategy?, 9.
19 Bernal-Meza, Die Zukunft der Beziehungen zwischen der Europ ä ischen Union und Lateinamerika, 8-9.
20 Gratius, “Europa und Lateinamerikas internationale Neupositionierung: Chancen für eine gleichberechtigte Partnerschaft,” 87.
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- Zukunft EU-Lateinamerika Beziehungen Future EU-Latin American Relations