The other transatlantic relationship
By Josep Borrell, HR/VP of the European Union
In Brussels, as we wait for President Biden, there is a great deal of speculation regarding the new transatlantic relationship. As though the United States was the only country on the other side of the Atlantic. While the relationship between the European Union and Washington is undoubtedly crucial, we must not forget the ‘other transatlantic relationship’, the one that unites us with Latin America and the Caribbean (LAC).
In many ways, Europeans and Latin Americans are the closest peoples in the world. We share a history, languages and sociocultural values. We have a dense network of institutional ties, and association agreements are in place with 27 of the 33 LAC countries. Currently, 6 million citizens from the two regions have settled on the other side of the Atlantic. However, the EU-LAC relationship still has a great deal of untapped potential. 2021 will mark 6 years since the last summit was held between the two regions. In the European Parliament, political debates on the LAC region tend to focus only on Venezuela and Cuba.
According to Eurostat, the EU is the leading investor in LAC, with cumulative direct investment standing at almost 800 billion euro at the end of 2018. Perhaps surprisingly, and although it is not widely known, this is more than the total amount invested in China, India, Japan and Russia combined. These investments focus on strategic sectors, such as telecommunications and energy. As regards development cooperation, the EU is the leading partner in the region and the leading provider of humanitarian assistance. And we are the third-largest trading partner, behind the US and China, which has moved ahead of us.
Together, EU and LAC countries account for almost a third of the votes in the United Nations. Both regions agree on the need to defend multilateralism and we share the priorities of the 2030 Agenda for Sustainable Development.
The LAC countries are being hit particularly hard by the effects of the COVID-19 pandemic, which started as a health crisis and is now a political and developmental crisis. The region, which is home to 8% of the world’s population, accounts for one third of global deaths and is now facing the biggest recession in its history. The alarming increase in poverty and inequality could mean another lost decade for the LAC countries. All of which should lead us to drive our relationship forward and show real solidarity, strengthening the ties that foster sustainable and equitable development. We have mobilised 2.4 billion euro in emergency aid for the region to help it through the pandemic but, relative to the scale of the problem, this is a small part of the worldwide total.
Now more than ever, the EU needs to put Latin America higher up on its political agenda. The recent ministerial meeting in Berlin bringing together 50 European and Latin American ministers, held virtually as dictated by the circumstances, was a first step towards creating fresh momentum on key issues such as cooperation on the pandemic and an economic recovery built on better social and environmental foundations, reducing poverty and inequality.
The environmental issue is especially important, given that Latin America is home to 50% of the world’s biodiversity and to the Amazon rainforest, a major lung for our planet. Reversing deforestation in the Amazon is one of the greatest concerns facing the world today. Climate change is having devastating effects, such as those caused by cyclones in the Caribbean. As we look ahead to COP26 in 2021, we need to step up our ambition on climate issues, in our regions and around the world.
At the same time, we need to promote an alliance to make the most of the opportunities offered by people-focused digital technologies. The new underwater fibre-optic cable stretching across the Atlantic, called Bella, is a powerful example of the benefits of working together to achieve better connectivity between our regions; this will be a digital highway for knowledge and the exchange of information between our countries.
But words are not enough; it is time for action. In 2021, we need to ratify three ambitious, next-generation treaties, which incorporate political, cooperation, trade and sustainable development aspects. Here I am referring to modernising the association agreements with Mexico and Chile, which have been such a success, and the Mercosur agreement (with Argentina, Brazil, Paraguay and Uruguay), which we have been negotiating for more than 20 years.
In June 2019, agreement was reached on the trade part of the Mercosur agreement, and in July this year, the political and cooperation aspects were agreed on. This is the biggest association agreement ever reached by the EU. Its ratification would be a turning point in our relationship with the LAC, making a significant contribution to the economic recovery on both sides of the Atlantic.
The Mercosur agreement should not be viewed as a mere free trade agreement. The trade part is crucial, but it is not the only aspect to consider. The Mercosur agreement is highly important from a geopolitical point of view, linked as it is to global challenges such as environmental protection and defending human and labour rights. The agreement encourages us to cooperate on key issues with our Latin American partners, and through it the parties undertake to ratify, and implement, International Labour Organisation conventions and international treaties such as the Paris Agreement on climate change.
However, the current political situation makes ratifying the agreement difficult. Modernising the association agreements with Chile and Mexico should not cause any difficulties, notwithstanding technical issues that have for too long remained unresolved, and the time needed for it to be ratified by the national parliaments and the European Parliament. However, the latter already made it known in October that it would not be able to ratify the Mercosur agreement in its current form. Some people have doubts as to the benefits of an agreement with certain governments whose policies fail to live up to expectations, particularly with regard to the environment and deforestation.
These are legitimate concerns and for that reason talks must continue between all the parties to find solutions so that the ratification process does not fail. Such a failure would come at a very high price; it would damage the credibility of both regions and limit the EU’s influence in a region where China looms ever larger. In Chile, China is investing heavily in many sectors, principally renewable energy, and has taken the EU’s place as the leading destination for Brazilian meat and soya.
Nature abhors a vacuum; we cannot hope to be a geopolitical power or an actor on the global stage, as we often say, without a strong presence in Latin America and the Caribbean. Let us seize this opportunity to revitalise and modernise our relations with this region, one with which we have so many ties.