European Affairs

Summer 2005

 

European Perspectives

The EU and Latin America Should Forge a Strategic Partnership

by Heinrich Kraft

 

In a multilateral world, Europe needs partners to help shape globalization. As part of the West, Latin America is better suited than any other region, with the exception of the United States, to work closely with the European Union. In recent years, most Latin American countries have made big steps toward free-market democracy and have become more involved in tackling global challenges.

Europe, however, today pays less attention to Latin America than in the past. We look to the Islamic world because of the terrorist threat, to Africa as a result of humanitarian disasters and to growing Asian markets because of our economic interests. Latin America, by comparison, is not seen as a source either of crisis or of sufficiently promising economic growth. Although a strategic partnership was established between Europe and Latin America at a summit meeting in Rio de Janeiro in 1999, the relationship has not developed much momentum.

There have been some worthwhile results from the partnership agreement. It has led to a dense network of forums for dialogue. The European Union and its member states are Latin America's most important donors of official aid, far ahead of the United States and Japan. There has been cooperation on science and technology, and Europe has become Latin America's main source of direct
investment.

Trade relations are somewhat ambivalent. Although bilateral trade has risen sharply in absolute terms, in relative terms its importance has diminished. And while the European Union is Latin America's second most important trading partner after the United States, the Union conducts less than five percent of its external trade with Latin America. In order to increase trade flows, the European Union has opened negotiations on bilateral free trade agreements with various Latin American partners, signed pacts with Mexico and Chile, and is also negotiating an agreement with Mercosur, the Southern Latin American common market. A special feature of these agreements is that they also provide for political dialogue and development cooperation and thus offer a potential framework for coordinating common policies.

So where does this leave the strategic partnership, which presupposes the existence of important, common international goals that the parties want to achieve together? The formulation of such goals is only just beginning, and the three EU-Latin American summit meetings held so far have issued relatively vague declarations. The most recent summit meeting, in Guadalajara, Mexico, in 2004, at least chose multilateralism as a focus and discussed closer international cooperation between the two regions. Whether or not this really constitutes a "strategic partnership" - especially in light of the host of "strategic partnerships" between the European Union and other regions and countries - the fact remains that the diverse political, economic and social ties
between the two regions, and the increasing international commitment of Latin American governments, represent a significant opportunity for closer cooperation between the European Union and Latin America.

In cultural terms, Latin America is part of the West. The subcontinent's history is inextricably linked to that of Europe. A large proportion of the populations on both sides of the Atlantic share common linguistic, religious and philosophical roots. With the recent spread of democracy and open markets, Latin America may now also be regarded as part of the West in political and economic terms. If only in general terms, the declarations of the three summit meetings emphasize that Europe and Latin America have close ties, as well as common values and interests. Globalization is shrinking the distance between the two regions, and common ideas and interests are becoming more apparent. The international civil-society movement is mainly active in Europe and in North and South America.

Latin Americans are also following European developments more closely. There is more coverage of Europe in the media, and Latin American academics and intellectuals are showing increased interest in the history of European ideas. The European economic and social model is also attracting greater attention in Latin America as reforms undertaken in line with the so-called Washington Consensus have helped stabilize economies but have not led to hoped-for successes in the social sphere, where inequalities remain significant.

Finally, despite wide variations in forms of government, Europe and Latin America share an interest in regional integration. Although the level of institutionalization achieved in Latin America is far short of that in Europe, Latin America is the most integrated region in the world after Europe. Latin Americans often cite EU integration as a model for their own integration efforts, and both areas regard subregional integration as a step toward a multilateral world order.

As Latin Americans demand a more active EU policy toward their region, we should look at the subcontinent from a new angle. If European foreign policy is geared only toward the European Union's short-term economic and security interests, Latin America will continue to receive little attention. The European Union, however, also needs help in tackling other urgent global challenges, and in that light, Latin America is beginning to look like an increasingly
indispensable ally, even if it still wields less international influence than some other players.

As it is plainly impossible to devote equal vigor to solving all the world's problems, it would make sense to select a few initial issues for cooperation. First of all, perhaps, we could concentrate on the reform of the United Nations. Both regions have an interest in a democratic and efficient UN system that grants all states a say in decisions on global political issues and lends those decisions more force. Europe and Latin America prefer multilateral cooperation to unilateral action, as demonstrated, for example, by the ambitious integration projects in both regions.

It would also, therefore, be in our mutual interest to cooperate more closely in negotiations within the World Trade Organization. The two regions would benefit more from a liberalized world trade order than from agreements limited to Europe and Latin America, but they believe that world trade should be liberalized cautiously. Europe should also take seriously the efforts of Brazil and the Group of 20 - which includes ten Latin American members - to create a more just world trade order. To ensure that Latin American and other developing and newly industrialized countries really benefit from more open trade, Europe, as the stronger trading partner, should make more concessions. The
development progress that could be achieved in this way would also benefit Europe in the long run by contributing to global stability.

Finally, we should cooperate on global environmental and climate policy. Thanks to the Amazon rain forest and the region's rich biodiversity, Latin America is of special importance to the global ecological balance, while many EU countries are particularly active in environmental causes. Latin America is itself now becoming more involved in environmental issues.

Nevertheless, we should have no illusions; great efforts and many compromises will be necessary on both sides. As the opening of European markets, especially for agricultural products, is often seen by Latin Americans as the acid test of their relations with the European Union, the successful conclusion of an Association Agreement would be a decisive step towards intensifying the partnership between the two blocs.

The Latin American countries must overcome their remaining internal problems if they are to play a long-term role in mastering global challenges. Instability within individual states can have a destabilizing effect on the entire region. The European-Latin American partnership should, therefore, continue to focus on supporting the economic and social development and the further democratization of the region. To date, EU resources devoted to Latin America have been inadequate, and European farm subsidies, for instance, have distorted trade.

The European Union should not ignore the fact that Latin Americans continue to have reservations about giving up national sovereignty, which will at least slow down multilateral cooperation. Latin American governments, however, have proved increasingly ready to compromise on this, and the EU countries should use the political dialogue between the two regions to promote further cooperation on global governance.

Ultimately, every country must participate in the resolution of global challenges, and the EU-Latin American partnership should in no way exclude third parties. Europe and Latin America have a prime interest in including the United States in a cooperative system of multilateralism. Equally, the complex project of global governance will be possible only if networks of civil-society representatives participate alongside governments. Nevertheless, Europe and Latin America could provide a positive example of the joint shaping of globalization by strengthening their partnership and engaging in more targeted cooperation. The next EU-Latin American summit meeting, due to be held in Vienna in 2006, should agree to further steps in this direction.

Heinrich Kreft is Deputy Director of the Policy Planning Staff of the German Foreign Ministry, and can be reached at Heinrich.Kreft@diplo.de. He writes here in a personal capacity.