OPPORTUNITIES AND CHALLENGES FOR GREATER
INTER-REGIONALISM
For
two decades, EUROPEAN governments largely ignored LATIN AMERICA. Disinterest
for the region grew in the 1990s when attention became focused on rebuilding
and integrating EASTERN EUROPE. General disregard continued at the turn of the
century, despite LATIN AMERICA’S booming economic growth.
However,
since the beginning of 2013, things appear to be changing in the international
arena. At the end of January, the First EUROPEAN UNION – LATIN AMERICAN and CARIBBEAN
(EU – CELAC) Summit took place in CHILE. It gathered the EU’s 27 and LATIN
AMERICA’S 33 countries with the objective of creating a “strategic alliance for
sustainable development”.
Important
political figures were present during the meeting, including José Manuel
Barroso, President of the EUROPEAN COMMISSION, Hermann Van Rompuy, President of
the EUROPEAN COUNCIL and GERMAN Chancellor, Angela Merkel. The quality of the
attendants alone seems to highlight the importance the region is taking for EUROPE.
In addition, Merkel herself stated that LATIN AMERICA had the potential to help
redress EUROPEAN countries in distress, in particular SPAIN and PORTUGAL.
Later,
in mid-February, the LATIN AMERICAN Development Bank (CAF) and the prestigious
school of government in Paris, Sciences Po, organized a Conference on EU-LATIN
AMERICAN inter-regional relations. Renowned political, economic and academic
figures from both regions were present to discuss the opportunities and challenges
of greater interdependence. These offered important insights on the issues at
stake and the viability of a strategic alliance.
INTER-REGIONAL
COOPERATION IS HIGHLY DESIRABLE
First,
all participants agreed that EUROPE and LATIN AMERICA’S common history, culture
and values were a strong basis on which to develop positive inter-regional
relations.
Second,
according to Enrique Iglesias, IBERO-AMERICAN Secretary General (SEGIB), EUROPE’S
past role as a socio-political, economic and integration model also facilitated
collaboration between the two regions.
Admittedly,
this model has proven to be ridden with imperfections as a result of the crisis
affecting the EUROZONE and put the EU’s prime position in doubt.
However,
according to Enrique Garcia, CAF Executive President, the current situation in EUROPE
provides the opportunity to diversify LATIN AMERICA’S economic relations.
If EUROPEAN countries and the EU reach out to foreign markets to
stimulate growth, LATIN AMERICAN countries should see this as an incentive to
increase bilateral and inter-regional relations.
CONSIDERABLE NEED FOR INVESTMENT IN INFRASTRUCTURE, HUMAN
CAPITAL AND TECHNOLOGY
In
fact, while the LATIN AMERICAN region as a whole has experienced an average 4%
to 5% growth since 2007, for Iglesias, governments should be cautious about
“Latinoptimism”. Macroeconomic fundamentals and debt have been controlled,
poverty has been reduced, but considerable challenges remain.
Most
countries still have a considerable need for investment in infrastructure,
human capital and technology. With an economy three times the size of LATIN
AMERICA and an advanced degree of development, EUROPE’S funds and skills remain
highly attractive. EUROPEAN and LATIN AMERICAN development funds, government
representatives and businessmen all agreed on this.
As
Juan Carlos Echeverry, former Minister for the Economy of COLOMBIA put it, LATIN
AMERICA also suffers from political tensions, but these can be tamed by
continued growth. While countries such as BRAZIL have done an impressive job
expanding the domestic market to absorb the shock of the US and EU crises,
external markets will have to be reinvigorated to sustain and strengthen these
rates of growth.
Hence,
during the conference, many stressed that private sector initiative is crucial
to foster business agreements and associations in the two regions. For Donato
di Santo, an ITALIAN diplomat, in the past two years, small and medium ITALIAN
enterprises in BRAZIL have increased from 200 to 800, benefitting parties on
both sides of the Atlantic. However, for Iglesias and Di Santo, government
intervention and political decisions to bolster inter-regional cooperation is
also urgently needed.
INTRA-
AND INTER-REGIONAL TENSIONS HINDER SUSTAINABLE COOPERATION
However,
interregional cooperation suffers from a certain number of tensions. For Yves
Saint –Geours, former FRENCH Ambassador to BRAZIL, Juan Gabriel Valdés, former
Minister of Foreign Relations in CHILE and Ernesto Talvi, academic director of
the Center for the Study of Economic and Social Affairs (CERES) in URUGUAY,
inter-regionalism is difficult because there is not a united region for the EU
to negotiate with.
Not
surprising when we see the myriads of regional organizations in the AMERICAS.
Since the 1990s, there have been the NAFTA, MERCOSUR, CAN and SICA, to name
just a few. In recent years, we’ve seen the emergence of ALBA, UNASUR and most
recently, the Pacific Alliance.
These
have effectively resulted in fragmenting rather than deepening regional
integration. Differences in countries’ visions about regional integration and
international relations, as well as competition between these visions have
proved to be a further obstacle in creating a coherent regional stance for
effective inter-regional cooperation.
Linked
to this phenomenon, for Mario Pezzini, Director of the OECD Development Centre,
differences in needs and demands on either side of the Atlantic limit greater
inter-regionalism.
BRAZIL AND ARGENTINA HAVE INCREASED PROTECTIONIST MEASURES,
WHICH GO AGAINST THE EU’S POLICY GOALS
For
instance, the EU is seeking to stimulate global demand and re-establish
confidence in the Eurozone. Hence, it is aiming to increase access to secure
and profitable external markets through free trade agreements, while
maintaining EU agricultural subsidies. However, LATIN AMERICAN countries
want to stimulate the domestic demand and achieve sustainable growth. To do so,
countries such as BRAZIL and ARGENTINA have increased protectionist measures,
which go against the EU’s policy goals.
Moreover,
there is the fear that EUROPEAN interests will continue to be driven by energy
needs. Consequently, the exploitation of natural resources risks deepening the
primarization of the LATIN AMERICAN economy, leading to growth, but not
development.
To
conclude, the beginning of 2013 has been subject to a number of important moves
aimed at extending and deepening EURO-LATIN AMERICAN relations. As former AUSTRIAN
Foreign Minister and European Commissioner Benita Ferrero-Waldner put it, the
EU-ECLAC was a “very, very important summit”, which marked the change towards a
more equal and symmetrical relationship between the two regions. The Second
Sciences Po-CAF conference equally marked the growing importance given to
EU-ECLAC relations.
Notwithstanding
the advantages that could be reaped on both sides from greater
inter-regionalism, a number of important hurdles need to be overcome. Achieving
greater intra-regional cohesion and inter-regional cooperation are some of them
and clearly not the easiest ones. It seems that beyond political will,
effective negotiations to reach common, viable and sustainable policies will be
needed in the next few months. It is highly doubtful that we will see integral
and effective inter-regionalism any time soon, but hopefully, concrete measures
in that direction will be put into action.
By
Charlotte Serres
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