The Future is Now: European Union and Latin American (EU-LAC)

by The Global School for New Leadership | Jul 19, 2023 | July 2023

Despite the already known tension across the globe, the EU-LAC summit is a success because it brings two important blocs back to the table to reconcile and seek a brighter future.

We hereby take the opportunity to acknowledge the remarkable work of Claudia Gintersdorfer, Head of the Americas Regional Division at the European External Action Service, whose leadership has been crucial in supporting more meaningful collaboration between the European Union and the Latin American region.

You can watch here her closing remarks at the Latin American Leaders Awards held in Vienna, Austria, where public and private sector leaders gather to strengthen partnerships and collaborations.

The European Union. (EU) and Latin American & Caribbean (LAC) states summit took place this week with a renovating partnership, The EU committed to investing over 45 billion euros to support the bloc’s reinforced partnership until 2027.

This is the first of its kind high-level summit in eight years, the opening session didn’t turn into a joyful reunion of long-lost friends, some LAC leaders brought century-old recriminations over colonialism and slavery across the Atlantic to the EU’s headquarters in Brussels, and added current-day complaints that Europe still doesn’t get how to treat former colonies as equal partners in the 21st century.

“Most of Europe was, and still is, overwhelmingly the lopsided beneficiary in a relationship in which our Latin America, and our Caribbean, have been and are unequally yoked,” said St. Vincent and the Grenadines Prime Minister Ralph Gonsalves, who holds the presidency of the 33-nation Community of Latin American and Caribbean States.

European leaders acknowledged time and again that the exploitation of old had been fundamentally wrong, and insisted that the challenges of today can only be tackled effectively when EU and Latin American countries do so together.

“You have to realize that in the past, we didn’t pick up the phone when they had issues. So there is very serious irritation among many countries,“ Dutch Prime Minister Mark Rutte said. “That we get this back in our face now is also proof that we, as Europe, sometimes acted a bit arrogantly.”

European Commission President Ursula von der Leyen presented the EU’s new Global Gateway Investment Agenda at the EU-Community of Latin American and Caribbean States (CELAC) summit. 

The summit, co-chaired by European Council President Charles Michel and Ralph Gonsalves, focuses on renewing the bi-regional partnership for peace and sustainable development. 

The investment agenda prioritizes sectors such as clean energy, critical raw materials, health, and education, and includes collaborations on critical raw materials in Argentina and Chile, telecoms networks in the Amazon region, public transport electrification in Costa Rica, and other projects across the region.

The leaders will also discuss multilateral cooperation, trade, economic recovery, climate change, research and innovation, and justice and security.

Central and South America revinvigorate confidence is boosted by a huge injection of funds from China and the knowledge that their critical raw materials will become ever more vital as the EU seeks to end an excessive reliance on Beijing’s rare mineral resources.

Annual trade between the two blocs has increased 39% over the past decade to 369 billion euros. EU investment in the region stood at 693 billion euros, a 45% increase over the past decade. The EU already has trade deals with 27 of the 33 LAC nations.

Several EU nations have powerful farm lobbies that seek to keep competition from beef producing nations like Brazil and Argentina away, specially with EU nations insisting on tougher environmental standards.

“The conclusion of the Mercosur-European Union Agreement is a priority and must be based on mutual trust, not threats,” said Brazil’s current president, Luiz Inácio Lula da Silva. “The defence of environmental values, which we all share, cannot be an excuse for protectionism.”

Acknowledging the differences, European Commission President Ursula von der Leyen stated “Our ambition is to settle any remaining differences as soon as possible.”

There is no doubt that EU-LAC future is brighter when both leaderships come and sit at the table. We kindly extend you an invitation to attend the Latin American Leaders Awards, the most promising celebration for public & private sector leaders of both regions.

New Agenda to strengthen EU’s partnership with Latin America and the Caribbean:

The New Agenda aims to recalibrate and renew bi-regional relations. It makes a series of proposals in key areas:

• A renewed political partnership;
• Strengthening common trade agenda;
• Rolling out Global Gateway investment strategy to accelerate a fair green and digital transition and tackle inequalities;
• Joining forces for justice, citizen security and the fight against transnational organised crime;
• Working together to promote peace and security, democracy, rule of law, human rights and humanitarian aid;
• Building a vibrant people-to-people partnership.

Key proposals

Political partnership: The Communication calls for renewed political engagement in a flexible and multi-layered approach: between the two regions, with individual Latin American and Caribbean countries, with sub-regions and in multilateral fora.

At bi-regional level, it proposes to enhance dialogue between the EU and the Community of Latin American and Caribbean States (CELAC), with more regular Summits and a permanent coordination mechanism.

At sub-regional level, the Caribbean merits increased political attention notably through the finalisation of the post-Cotonou Agreement, in addition to engagement with other sub-regional groups such as Mercosur, the Central American Integration System (SICA), the Andean Community or the Pacific Alliance.

At the level of bilateral relations, relaunching Summits with strategic partners Brazil and Mexico, as well as establishing political dialogue mechanisms with a number of countries that do not currently have them are other priorities.

The Communication also proposes increased cooperation at multilateral level to address jointly regional and global challenges in line with our shared values, interests and objectives. Both regions have an interest in working together for a reform of the global financial architecture, in particular Multilateral Development Banks, and forging a New Global Financing Pact.

Trade: Bilateral and regional trade agreements are a key driver for growth and diversification strategies in both regions, and catalysts for sustainable and inclusive development. Thanks to these agreements, two-way trade in goods has increased by 40% from 2018 to 2022, with a total bilateral trade in goods and services of €369 billion in 2022.

Efforts are underway to sign and ratify the modernised agreement with Chile and to finalise the one with Mexico, as well as to conclude the agreement with Mercosur. Once trade agreements with Central America and Colombia-Peru-Ecuador are ratified by all EU Member States, strengthening the sustainability provisions of the agreements should also be considered.

Further enhancement of EU-LAC cooperation in the WTO, as well as strengthening our global efforts to diversify sources of raw materials and make global supply chains more resilient will benefit both regions. The EU will continue to work with LAC partners to help create the conditions for sustainable investment, including by jointly addressing the impact of European Green Deal legislation, and the support of open, stable, and predictable legal frameworks.

Global Gateway: Through the Global Gateway investment strategy, the EU can leverage quality investments to help address the regions infrastructure needs, while creating local added value and promoting growth, jobs and social cohesion. In addition to investments in hard infrastructure, Global Gateway supports human development, including youth and women’s empowerment, enhancing innovation, education and skills, as well as an enabling business and regulatory environment.

The EU-LAC Global Gateway Investment Agenda (GGIA) is a political commitment to work together, identifying fair green and digital investment opportunities in Latin America and the Caribbean, which will benefit from the open environment generated by trade and investment agreements and will help achieve the Sustainable Development Goals.

Under the Investment Agenda, which will be a key deliverable of the EU-CELAC Summit. investments will be mobilised for, amongst others, renewable energy and green hydrogen, critical raw materials, decarbonisation, and transport infrastructure projects, 5G and last-kilometre connectivity, digitalisation for public services, sustainable forest management, health manufacturing, education and skills and sustainable finance. 

Green Transition: There is significant potential for cooperation between the EU and Latin America and the Caribbean towards climate neutral, clean and nature-positive economies. The region has unique potential in terms of biodiversity, natural resources, sustainable renewable energies, agricultural production and strategic critical raw materials. We both are committed to protecting biodiversity, halting deforestation, promoting more circular economies, improving waste and water management, increasing resource productivity and tackling pollution, as well as working towards climate neutral, clean and nature-positive economies. To meet these objectives, the Communication calls for a strengthened partnership on the green transition, including through increased dialogue, strengthening of regulatory frameworks and investments under Global Gateway.

Digital: The EU and Latin America and the Caribbean have a joint interest in pursuing digital policies that empower people and businesses to build a human-centric, sustainable and more prosperous digital future. 

The EU-LAC Digital Alliance was launched in March 2023 with the ambition to join forces for an inclusive and human-centric digital transformation in both regions and to develop bi-regional dialogue and cooperation across the full spectrum of digital issues. Both regions can benefit from further cooperating on a wide range of areas such as connectivity, regulatory dialogue, free and safe data flows and space.

Sustainable economic growth for human development: The Communication puts forward proposals to step up joint efforts towards a robust and sustainable socio-economic recovery that promotes equality and social inclusion, notably through education and skills-building, with a particular focus on women and youth.

It calls for increased cooperation in research and innovation, making full use of opportunities under Horizon Europe Programme, and expanding joint work on health security as well as sustainable food systems.

Citizen security, justice, human rights and rule of law: The Communication proposes to consolidate and strengthen the partnership on justice and security to address common challenges posed by transnational organised crime, including the drugs trade and human trafficking.

It stresses the importance of reinforcing cooperation on human rights, including non-discrimination and gender equality, and makes the case for a more prominent protection for human rights defenders and journalists. The Communication also proposes joint efforts to promote democracy, rule of law and good governance, as well as global peace and security.

A vibrant people-to-people partnership: People are at the centre of this bi-regional partnership. Engagement with youth in Latin America and the Caribbean will increase through initiatives such as country-level Youth Sounding Boards.

The Communication proposes to intensify collaboration on education and research for example with key exchange programmes such as Erasmus+, promote circular mobility by drawing on the Skills and Talents package, encouraging intercultural networks and joint initiatives such as the first ever EU’s participation as guest of honour in the 2023 International Book Fair in Guadalajara, Mexico.

Background

The EU and Latin America and the Caribbean are key allies to defend and strengthen a rules-based international system. Together, we represent almost one third of the membership of the United Nations (UN). We are strong supporters of international law and the UN Charter.

The region is vital to the ecological balance of the planet, with over 50% of the planet’s biodiversity. The region is also a major food producer, accounting for 14% of global food production and 45% of net international agri-food trade, and a renewable energy powerhouse (its generation mix has the largest share of renewables in the world, amounting to 61% in 2021).

The EU and Latin America and the Caribbean are close and reliable trade and investment partners, with one of the world’s densest networks of political, cooperation and trade agreements, covering 27 of the 33 LAC countries.