What’s The New Agenda To Strengthen The EU’s Partnership With Latin America And The Caribbean?

News Americas, NEW YORK, NY, Weds. Aug. 23, 2023: In July this year, leaders from the European Union (EU) and the Community of Latin American and Caribbean States (CELAC) assembled in Brussels for a summit exploring the challenges and opportunities for strategic partnerships. Charles Michel, President of the European Council and Ralph Everard Gonsalves, President pro tempore of the CELAC and Prime Minister of Saint Vincent and the Grenadines, chaired the meeting jointly. In fighting exogenous unforeseen events (external shocks), the economies put their faith in diversification to solve their problems. The European Union and Latin America and the Caribbean seem like the perfect fit, as they have complementary economies, not to mention shared languages and values.

An EIB Delegation Attended the EU-LAC Business Round Table Preceding the Summit

At the time of the EU-CELAC Business Round Table, the European Investment Bank (EIB) made public the signature of several loans to finance climate action projects in Argentina, Brazil, and Chile, all of which are part of the European Union’s Global Gateway initiative. The Global Gateway represents a new strategy for sustainable and trusted connections in digital, energy, and transport sectors to reinforce global health, education, and research systems. EIB Global has been providing financial support for regional and urban development projects in Latin America since 2022, ensuring the necessary technical support to ensure these projects will deliver positive social, economic, and environmental results.

EIB And Banco Santander to Free Capital to Support Solar Energy Investments in Brazil

The EIB, the most prominent multilateral financial institution in the world and one of the most significant providers of climate finance, and Banco Santander, which maintains a presence in all global financial centers, have concurred to foster the usage of renewable energy in Brazil. The money will be used to install solar photovoltaic panels in homes, small and medium-sized enterprises, and rural properties, mainly on rooftops. Ricardo Mourinho Félix, Vice-President of the EIB, and Carlos Rey de Vicente, Vice-President Executive Officer of Banco Santander for South America, signed a loan agreement worth €300 million that will help Brazil reach its targets for increasing the share of renewable energy sources in its annual electricity generation.

Europe Aspires to Be the Partner of Choice for Latin America and The Caribbean

In today’s fast-evolving and challenged world, partnerships are of geostrategic relevance. Relations between China and Latin America and the Caribbean have grown considerably over the past 20 years; the engagement remains, first and foremost, economic and diplomatic. The European Union is struggling to regain diplomatic ground in a region it has ignored for the past eight years due to political differences concerned about China’s growing economic power. As we all know, the Americas is the globe’s biggest commodity-exporting region, and Europe is eager to secure supplies of critical minerals. Josep Borell, who serves as High Representative of the Union of Foreign Affairs and Security Policy, stated that the EU Bloc hadn’t given too much thought to Latin America, attributing part of the blame to the COVID-19 pandemic.

A country’s economic growth is influenced by its trading partner economies, meaning that industrial countries benefit from trading with developing countries, which tend to grow rapidly. Many countries in Latin America and the Caribbean are doing their best to increase their Human Development Index and catch up with the rest of the world. International trade entails the exchange of goods and services between businesses from different countries; it may be imports or exports. B2B research services for firms help avoid costly expansion mistakes, allowing a business to minimize risk before entering a foreign market. Different nations are endowed with different assets and natural resources, so trade contributes to global efficiency.

Despite the fact that Europe is South America’s biggest investor, China remains the region’s most significant trading partner. Trade relations between China and the Americas are of the essence because Latin America and the Caribbean are brimming with natural resources like soybeans or copper, which are important for Chinese industries. China needs these raw materials to thrive in industrial development. Additionally, South America is a consumer market for Chinese products, consisting mostly of manufactured goods. Beginning in May 2022, numerous countries in the Americas take part in China’s massive Belt and Road Initiative, namely Venezuela, Ecuador, Bolivia, Peru, Chile, Argentina, and Uruguay.

To This End, The EU-LAC Relationship Must Be Redefined

The European Union, its Member States, development finance institutions, and export credit agencies will combine their supply and collaborate for increased impact. If we were to draw a conclusion, we’d have to say that the EU-LAC relationship must be redefined, and the current context isn’t particularly favorable, even if ties are solid and cordial. According to Sergio Diaz-Granados, who currently serves as the Executive Director for Colombia in the IDB Group, both sides would derive benefit from an expansive agenda connecting the two regions as a whole. Sergio Diaz-Granados rejects agreements between small blocs of countries finding common ground on environmental, commercial, and investment matters.

An important part of the trade relations between the European Union and South America, and the Caribbean is Ukraine. To be more precise, the European Union is unhappy with the Americas refusal to condemn Russia’s invasion of Ukraine, which has devastating consequences for food security, energy prices, and the global economy. The leaders of the Latin American and Caribbean nations have convinced European officials to cancel Volodymyr Zelensky’s invitation to the EU-LAC summit. While Brazil and Mexico have a more neutral position on the war in Ukraine, Cuba and Venezuela are close supporters of Moscow.

Years after their last gathering, leaders from the European Union and Latin America and the Caribbean met in Brussels for the third EU-LAC summit, reaffirming their long-standing partnership based on shared values and interests. Regrettably, officials failed to agree on a final statement on the Russo-Ukrainian war, with only one country, Nicaragua, strongly disagreeing to include a reference. Latin American and Caribbean nations welcome Europe’s increased attention, but there are still concerns that the agenda is tailored to Old World interests rather than addressing the big issues.