Better late than never? The message the EU is sending Latin America and the Caribbean by hosting a summit at the start of next week of leaders from the Old and New Worlds is a decidedly mixed one. Optimists say the mere holding of the meeting counts as a win; critics point out that an eight-year gap since the last such gathering indicates serious neglect.
For Europe, Latin America ought to matter. Almost as large as the US and China combined, the region contains nearly a quarter of the world’s forests, close to a third of its fresh water and a quarter of its cultivable land. Most of its 650mn people live under freely elected governments and they are among the better educated in the developing world, with a growing middle class.
China has taken notice. While Europe has been distracted by domestic squabbles and crises elsewhere, Beijing has been steadily building trade, investment and influence in Latin America. Long before Brussels, it realised the region’s strategic importance for clean energy (Latin America has more than half the world’s lithium reserves and more than 40 per cent of its copper) and started snapping up mines.
China has also developed a voracious appetite for Latin America’s exports of meat, soya and oil. As a result, China is now South America’s main trading partner and buys more from that continent than the EU and the US do combined. (Further north, free trade agreements tie Mexico and Central America’s trade much more closely to the US.)
Latin America is not an easy partner. The region’s politics are turbulent and some nations, such as Cuba and Venezuela, are closely aligned with Moscow. It lacks a formal body equivalent to the African Union or Asean. The Community of Latin American and Caribbean States (Celac), the EU’s partner for next week’s summit, has no permanent staff — so preparations have been channelled through the pro tempore presidency of Saint Vincent and the Grenadines, an island state of 110,000.
Those difficulties have not put off the Chinese, who are locked in an increasingly fierce competition with the US for trade, investment and influence in Latin America. Next to them, Europe risks becoming sidelined.
Hence the coming summit offers an important opportunity to relaunch Brussels’ relationship with the region. This year’s Spanish presidency of the EU provides additional impetus. The challenge is to institutionalise closer co-operation and turn good intentions into tangible results.
Brussels is hoping to woo the Latin Americans with promises of investment in green energy, infrastructure and social projects, though it is unclear how much new money is available. Closer co-operation on digital technology is also on offer. Officials stress the two regions’ shared democratic values and common cultural heritage. They tout the prospect of twice-yearly leaders’ summits.
But for the relationship to flourish, it needs a strong commercial basis. The EU remains the region’s biggest foreign investor and a major trade partner. The litmus test now is simple: Europe must ratify its trade deal with the South American Mercosur bloc. Twenty years in the making, the Mercosur pact still awaits final approval with some EU member states demanding additional environmental safeguards — which to Latin American eyes look like thinly disguised agricultural protectionism.
If the EU wants to show it is serious about its relationship with Latin America, it should find a way to resolve any remaining environmental concerns, in a way that does not require renegotiating the Mercosur pact — and ratify it quickly. That would send a stronger signal than any number of summits.
Source: Economy - ft.com
