Latin America-Europe: the ‘other’ transatlantic relationship

Latin America-Europe: the ‘other’ transatlantic relationship

Our partnership with Latin America contains a paradox: despite having much in common, our interactions remain well below their potential. With Latin America, we share indeed languages, culture, history and religion… An important part of the Latin American population are descendants of Europeans migrants from 16th to the 20th centuries who left in search of a new ‘promised land’. Buenos Aires or Santiago look like European cities. From many points of view, we are the most like-minded people in the world.

Latin America has had an immense cultural influence

However, Latin America is also very different from Europe. Its identity is a mix of its indigenous roots and the Hispanic, Portuguese, but also African, French or Italian influences. By growing its own personality, Latin America is becoming more and more South America. As a result, Latin America has had an immense cultural influence during the last century and has been a laboratory for many political experiences. Nevertheless, it suffers also chronically from endemic social and political violence.

Many people believed, when I started at HR/VP, that being Spanish meant I was going to pay a lot of attention to Latin America. However, due to the crises in our neighbourhood and the coronavirus restrictions, I haven´t been able to travel to the region in almost one year. We have to reverse the tide: it is time now to engage more actively.

The dramatic impact of COVID-19 in Latin America

In July we had already discussed the dramatic impact of COVID-19 in Latin America and the Caribbean (LAC). Since then the situation has further deteriorated and the region is the hardest hit by the pandemic. This has led to an alarming rise of poverty and inequality. With only 8% of the world’s population, the region now records one-third of global deaths. Health systems are often overstretched and the region has inherited a number of social issues, some of which are also present in Europe, that have aggravated the impact of the pandemic: large informal sectors, poverty, insecurity, overcrowded cities, isolated rural communities, inadequate sanitation and limited healthcare.

The development progress has started to unravel

Even before the pandemic, frustration was growing in the region as the development progress of recent decades has started to unravel. A scenario of long-term political instability, insecurity and challenges to democracy and human rights looks all too likely. Organised crime is increasing its grip in the world’s most violent region and support for democracy has dwindled to a historic low (from 61% in 2010 to 48% in 2018, according to Latinobarometro).

The region suffers from many political crises. Venezuela remains an open wound: some 5.1 million Venezuelans have now sought refuge in neighbouring countries. The biggest humanitarian crisis of the region and one of the less funded by the international community. Internal conflict and violence persist in Colombia, Bolivia or Nicaragua with social tensions mounting in several countries of the region. Venezuela and Colombia now rank among the top countries of origin of asylum seekers in the EU (in third and fourth place respectively). However, because they don’t arrive at ours shores by boats risking their lives, this flow is not noticed

The worst recession ever

The IMF now warns of another “lost decade”, with economies forecast to shrink by 8.1 % in 2020. As the region faces its worst recession ever, demonstrating our solidarity with its 665 million inhabitants in their hour of need is not only a moral imperative. It is also an opportunity to step up EU engagement with a region whose strategic relevance has gone unnoticed for too long.

“As Latin America faces its worst recession ever, demonstrating our solidarity with its 665 million inhabitants is not only a moral imperative. It is also an opportunity for the EU.“

The attention we give to the LAC region is indeed not proportionate to its importance. Together we represent almost one-third of the votes at the UN. The stock of EU27 foreign direct investment (FDI) in LAC amounts to €758 billion; more than the total of EU investment in China, India, Japan, and Russia combined. The EU is also the region’s principal development partner and a main provider of humanitarian assistance. And there are intense people-to-people contacts: close to 6 million nationals from EU and LAC work and live across the Atlantic. The EU has negotiated association, trade or political & cooperation agreements with 27 of the 33 countries, making LAC the region with the closest institutional ties to the EU.

A growing sense of neglect

However, we have not had a Summit since 2015 and few high-level visits. This has not gone unnoticed: our diplomatic missions are sending reports of a growing sense of neglect. During the same time, other international players are moving forward. The US has kept a steady engagement. And Chinese investment has increased tenfold between 2008 and 2018. In fact, China recently overtook us as the Latin America’s second most important trading partner.

“Other international players are moving forward: the US has kept a steady engagement, and Chinese investment has increased tenfold between 2008 and 2018.”

I am therefore grateful to Germany for offering to host a ministerial EU-LAC conference planned in Berlin in December. This initiative could set in motion a new dynamic of high-level engagement. It is also urgent to re-energise the EU’s relationship with Mexico and Brazil, our main strategic partners in the region. We should move swiftly towards Summits in 2021.

“Supporting Latin America to make a green, digital, sustainable and inclusive recovery is in our mutual interest.”

Supporting LAC countries to make a green, digital, sustainable and inclusive recovery is in our mutual interest. LAC is home to the Amazon tropical forest: 50% of the planet’s biodiversity And it accounts for around 8% of the world’s greenhouse gas emissions. Ensuring that the region moves towards a more sustainable growth path is a matter of global concern. This should include raising the ambition under the Paris Agreement ahead of COP 26 in 2021.

The EU-Mercosur agreement could be a game changer

In that respect, the EU-Mercosur agreement could be a game changer. I remember travelling to Brazil and Argentina, as President of the European Parliament, at the beginning of this century and hearing that this agreement was “almost” done. Roughly, 20 years later, it is still “almost” done. If agreed, it would be the largest Association Agreement ever achieved by the EU and could contribute significantly to economic recovery on both sides of the Atlantic.

However, I am aware that the current political climate does not facilitate its ratification. The European Parliament has adopted a resolution warning that, as it stands, this agreement could not be ratified. At the Council level there are also opposition from a significant number of member states. So, we need to engage with parliaments and citizens to better address their concerns.

“The EU-Mercosur agreement has a deep geopolitical significance: help both regions to avoid being placed in a position of subordination in the US-China confrontation.”

The EU-Mercosur Agreement should not be seen as a mere free trade agreement. Neither Mercosur nor the EU were established as mere free trade areas, and an agreement between the two cannot be viewed, in a reductionist manner, on those terms either. It has a deep geopolitical significance: it is a tool to enable both regions to cope better with the growing US-China confrontation, in which both Latin America and the EU risk being placed in a position of strategic subordination.

Legitimate concerns from European citizens

The EU that has negotiated the Mercosur agreement at the beginning of the 2000’s is not the same as in 2020, and even less by the time we get to 2030 with our European Green Deal Agenda. It is legitimate for European citizens to hesitate about signing an agreement with governments that reject the Paris Agreement and whose policies in the Amazon create important environmental concerns.

“The costs of failure of the EU-Mercosur agreement would be substantial: after 20 years of negotiation, it has become a question of credibility for Europe in the region.”

However, the political and economic costs of failure would be substantial: after 20 years of negotiation, it has become a question of credibility for Europe in the region. This agreement should be seen as a lever for a change in production and consumption models. We should use it to foster policy dialogue and regulatory convergence for the “green” transition of both regional groups. If we don’t have this agreement, we lose a lot of potential leverage to discuss those issues with the LAC countries.

“It should be possible to reinforce the EU-Mercosur agreement with additional instruments on climate and environment, without reopening what has already been negotiated.”

The agreement already provides useful tools to address this problem, and it should be possible to reinforce them with additional instruments on climate and environment, without reopening what has already been negotiated. As EU, we would be better off with a strengthened agreement than without it.

The question that arises today about environmental issues, was once asked about the protection of democratic standards. Today all EU Association Agreements include a democratic clause. This kind of clause was created in 1991, when Argentina, just emerging from a military dictatorship and fearing its return, asked for it to be included in its association agreement. In 1995, the European Council decided to extend it to all association agreements with third countries. As we have innovated with a Latin American country on the essential question of respect for the democratic political system, we could do now something similar with the equally important question of environmental and climate sustainability.

In any case, we should be more pro-active to work together at the multilateral level, identifying specific issues where such cooperation could be most fruitful. We are preparing a more detailed roadmap for engagement and actions, to be presented early next year.

A unique window of opportunity

We now have a unique window of opportunity, which we cannot afford to miss. Relations with Latin America are particularly close to my heart. However, I am convinced that it will benefit the entire EU if we succeed in raising our relations to the level they deserve.

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