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Europe and Latin America

Europe and Latin America. To the search of new models? From dependency to interdependency. From colonization to independence. Latin America’s incorporation to the world-the beginning of subordination and plunder of resources

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Europe and Latin America

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  1. Europe and Latin America To the search of new models? From dependency to interdependency.

  2. From colonization to independence • Latin America’s incorporation to the world-the beginning of subordination and plunder of resources • Colonial relationships: race and ethnicity, the other/inferiority/imitation • Economic dependency political and cultural dependency • Independence-neocolonialism

  3. 70-80s: a new profile • 70s-multipolarism and détènte: Social democracy as a new alternative searching for new partners and influence among political parties in LA • Inter-parlamentarian contacts and regular meetings • 80s-bipolarisation in Central America searching for a mediation role France, Germany and Sweden

  4. Central America: a test for multi-polarity • 1981 Resolution Mexico-France on El Salv • 1982-Nicaragua- assistance offers from Europenegative reactions from the USEC gives in and goes back to a low profile • Contadora group’s support to peaceful solutions • Falklands-re-polarization-EC+ US vs LA • Sn Jose’s process- support to Arias Plan

  5. Rio’s dialogue since 1990 • Political dialogue between two continents • Development of differentiated relations following regional groups, development levels and political/economic interests • 3rd generation agreements: conditionality clauses on democracy, human rights and structural economic reforms • Neo-liberalization and the end of alternatives?

  6. Sub-regional differentiated treatment: 90s • Andean group –preferential agreements and cooperation projects demands of strategies to fight coca production • Central America: development assistance, framing small/middle peasant production-marked orientated networks of support • Mercosur – frame agreements and direct support to regional economic integration cooperation and open path for free trade

  7. Privileged relations • Mexico: Economic partnership, political coordination and cooperation agreement, FTA entered into force 2000. • Chile: Association Agreement 2002-entered into force 2005towards a free trade area

  8. The survival of colonial links: bi-continental summits following Spain and Portugal’s presidencies • Rio 1999-strategic association and Action plan • Madrid 2002- to increase cooperation in 3 areas: hum.r., promotion of the information society and struggle against poverty • Main goal-human developm and the strengthening of civil society • Guadalajara 2004: intensifying the struggle against drugs, agreements on reg cooperation • Lima maj 2008, • May 2010 in Madrid “Towards a new stage in the bi-regional partnership: Innovation and Technology for sustainable development and social inclusion” • Jan 2013: EU-CELAC meeting in Santiago, Chile: Alliance for Sustainable Development to Promote Investments of Social and Environmental Quality

  9. Madrid May 17-18, 2010 LAC: very divided politically/ideologically Honduras as a divider: boycott (UNASUR), but also the Cuban issue Finally Venezuela and UNASUR attended, not Honduras (only to the CA-UE summit: May 19) What happened with the strategic alliance project of 1999?

  10. Civil society • Civil society’s organizations- NGOs-following already existing trade agreements: Europe-Mexico-1st meeting Brussels-2002, Mexico 2005, Vienna 2006: discussion, reports and accountability • EU-Andean countries-NGOs forum-March 2005-Brussels • In all summits: parallel NGOs meetings

  11. Trade • EU- second regional associate of LA after the US but losing importance to China in South America • 2011: 214 bill euros: 6,5% of EU’s total trade • Effects of EC-EU’s enlargement on EU-LA’s relations • Exchange structure: typical developed-developing countries (industrialized products vs raw materials) with the exception EU-Mexico

  12. LA’s share in EUs imports (percent)

  13. LA’s share in EU’s exports (percent)

  14. 2009: EU’s trade with LAC

  15. EU-LA trade up to 2012

  16. EU’s imports and exports: origin and destination 2004 (percent)

  17. LA: exports structure

  18. EU’s imports and Mercosur • Raw materials + energy (in % of all imports): • 1965: 45 % • 1990: 24% • 1995: 55% of all Mercosur’s exports to EU raw materials and energy • 2005: 21.2%

  19. EU-Mercosur • 1995: Frame-agreement of cooperation and association starts to be negotiated • 1999: Free trade agreement negotiations startgoal 2006 • Association agreement: 2001: 3 pilars: MNC/polit/trade • Assistance/consultancy –for regional integration • EU interested in telecommunication and financial services • Obstacles for FTA: EU’s CAP but advances since Cancun

  20. EU-Trade with Mercosur

  21. EU imports from Mercosur

  22. EU exports to Mercosur

  23. EU trade with Chile

  24. EU-Chile • EU: Chiles biggest trade partner and biggest investor • Chile exports mainly minerals and agrifood sectors • Also liberalization in service sectors

  25. The EU and the Andean countries • Political dialogue and cooperation agreement: 2003 • EU: leading donor of official development aid to the Andean region, with €713 million set aside • June 2007: negotiations began on a new Association Agreement bi-regional trade and investment

  26. Political Dialogue and cooperation agreements • A very broad program of cooperation at the economic, political, social level focusing strategically on the fighting of drugs production and traffic • Also: providing aid for e deepening of the integration process within Andean countries

  27. Problems towards assoc agreements • June 2007: negotiations began on a new Association Agreement • Several round negotiations (3) but the 4th round to take place in Brussels in July 2008: suspended • Problem: agreements around intellectual property, privatization of public services and state licitations

  28. Problems-negotiations with EU • Division among Andean states: Colombia and Peru-for bilateral agreements, Ecuador y Bolivia: bloc negotiations and agreements • Official announcement-mid nov: Colombia and Peru continue the negotiations on their own, Ecuador wants to follow • Bolivia is isolated-insists on bloc negotiat • Bolivia also enters bilateral negotiations

  29. EU trade with the Andean community

  30. EU exports to Andean Community

  31. EU imports from the Andean C.

  32. EU-Central America A relation based on development cooperation in the 1980s-1990s Upgrade to a trade relation: negotiations for an Association agreement Problems in the negotiations: quotas, the entrance of European milk’s products, rules of origin for CA’s textiles, banana’s entrance to the EU plus migration issues Signed is spite of all in Madrid May 2010

  33. EU-CA 2006-2008

  34. CA-EU

  35. EU-México: FTA in 2000 • Signed in 1997- starts in 2000 • Elimin tariffs -48% for all ind product fr EU, 82% for all Mex products to EU • Goals: elimin of all tariffs for ind prod  2007 • No visible results in trade exchanges-stagnated and big deficits for Mexico • Investmentsrules rejected for MAI accepted by Mexico (already-privatized banling system-mainly European investments • EU-Mex-FTA: a door for EUs products to the US (NAFTA) • Clause of democracy and HR-difficult to accept for Mexico

  36. EU’s trade with Mexico

  37. Mexico’s trade with EU

  38. EU trade with Mexico

  39. EUs import from Mexico

  40. EUs exports to Mexico

  41. EU’s investments in LA: the crucial pillar • Investments FDI to LA: increase during the 90smostly privatized industries: energy/telecommunications, banks, trade: • tot: 385 bill in 2010: 43% of the region’s FDI and higher than EU’s investm in Russia+China+India combined • Latest summit: investment is the crucial pillar of the relationship EU-LA • FDI fr EU concentrates on Mercosur (recently also Mexico) • EU’s investments in LA by country: • Spain: 28% (55% of all Spanish investm outside EU) • GB: 22%, France: 13%; Germany: 14% (45% of German investments in developing countries), Holland: 14%, Belgium: 3%, Italy: 2%, Sweden: 1,3%

  42. EU’s investments in LA: 2 • EU: the biggest extern investor in LA (decade 2000: 40%): • 2011: US (18%), Spain (14%) y Japan (8%). China: 5,2% • Flows of European FDI to Latin America peaked in 2000 (€ 46 billion), with the total stock of European investment in Latin America growing from € 189.4 billion in 2000 to € 385 bill in 2010 2 • Investments concentrated in Mercosur and México

  43. Investments-where? • 2011: 57% FDI in South America (without Br): in agriculture, mining and energy, services: 36%, manufactures: 7%. • Brasil: 43,8% of all FDI in LA. Manufactures 46,4%; services: 44,3%, raw materials and extractive ind 9,2% • México, CA and Caribbean: services: 52,5%; manufactures: 39,7%, natural resources: 7,8% • 81% of all FDI: Brasil, México, Chile, Colombia and Peru

  44. EU: Assistance Aid to LA • LA not a priority area for EU mid 90s: only 10% of all EU development aid but it was 43% of all external aid to the region in 1995 (17% came from the USA) • Aid concentrated on Central America and Bolivia • Focusing on economic reforms, support to public infrastructure: to make the local governments more effective, in democracy, human rights issues and struggle against poverty.

  45. A case of aid: Sweden-LA • Sweden: 2002: less than 10% of all bilateral aid: to LA • Aid: mostly to Central America (Nicaragua and El Salvador-peace, reconciliation, economy rehabilitation, democratisation-this has changed lately-abandoning CA) • South America: Bolivia, Chile, Brazil-democratisation, economic reforms, human rights and technical education • The main areas: health, education, human rights

  46. Civil Society and aid in the case of Sweden • Swedish NGOs channel 20 % of all bilateral aid • Both secular and religious NGOs • Focusing more and more on long term projects • Main financing sources  the state (80%) but their own financing is also increasing • Cooperation partners: local NGOs and sometimes: state organs • Some NGOs have local offices and send their own assistance volunteers: Svalorna, Civis

  47. EU-LA: an inconsistent relationship? • Priorities for EU: Economic investment, trade, assistance • Priorities for LA- trade-specially Mercosur, investments –specially Mexico • Trade is becoming balanced but it has lately been a deficit for EU and is still insignificant for EU-therefore: interest in Association agreements and FTAs • Extreme interest in LA’s nature resources-competition with China • EU-sometimes an alternative (HR and democracy clauses) but mostly a contradictory-inconsistent partner EU’s policies subordinated to the US, to CAP and complicated by enlargement • Asymmetry problems extremely present although LA’s dependency is even bigger from the US

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