The CELAC summit and the European Union: tensions and disagreements

On July 17 and 18, the CELAC Summit with the European Union will be held in Brussels. This meeting, which has not been held for 8 years, will take place at a particularly conflictive moment in the relations between the blocs of both regions due to the world crisis. Furthermore, it coincides with the fact that Spain will assume the presidency of the European Union.

The relationship between the two blocs in recent decades has focused on the signing of free trade agreements, which have to do with both tariff elimination and investments.

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Free trade agreements: key agreements at the CELAC – European Union Summit

In the case of the Americas, the European Union has signed several free trade agreements, called Association Agreements, such as the one signed between Colombia and Peru (2012), Mexico (1998), and Chile (2003). Some of these agreements are already under renegotiation.

It is important to point out that the term used to signify renegotiation in several of these agreements is “modernization”, as in the case of Mexico and Chile.

Other treaties have been negotiated for many years without ratification, as in the case of the Southern Common Market (Mercosur) countries, Argentina, Brazil, Paraguay and Uruguay.

For cultural and historical reasons, Spain is Europe’s gateway to Latin America, so it will use its role in the presidency to try to strengthen bi-regional ties.

These free trade agreements have been accompanied by bilateral investment treaties, which seek to ensure the protection of European foreign investors in Latin America and facilitate the resolution of investor-state disputes through the intervention of international tribunals.

However, the results of these treaties leave much to be desired because Latin America has maintained its export structure based on raw materials and commodities, and the share of manufactured goods in exports has decreased in recent decades.

Among the raw materials and commodities exported by Latin America to the world are hydrocarbons and minerals.

A summit with difficulties

The relationship between the European Union and Latin America has been fraught with tensions. At first, the old continent sought minerals and hydrocarbons from the region. Now, in the name of climate change, European countries are looking for lithium, green hydrogen and iron, but maintaining the export structure of manufactured products without favoring technology transfers.

An example of the tension between the two regions is the agreement between the European Union and Mercosur, reached in 2019 and whose negotiation lasted 20 years. Currently, this agreement has not been ratified due to the opposition of European farmers who are concerned about competition from Brazil and Argentina.

In addition, Brazilian governments have rejected new European Union demands related to Amazon deforestation and new proposals on climate change.

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Although all parties claim to be willing to ratify the treaty, in reality, it will be difficult to ratify it as world tensions increase, geopolitical confrontations – as a result of the war in Ukraine – and the eventual strengthening of the BRICS (Brazil, Russia, India, China and South Africa), which threaten to become a new geoeconomic pole.

The dissatisfaction of many Latin American and Caribbean countries with the European Union is notorious when they question the kind of relations they have with each other, in which the Europeans are largely benefited.

This relationship, rather than creating new sources of wealth, has concentrated on acquiring already established public goods, such as public services, from European countries and guaranteeing the supply of raw materials needed by Latin American countries for their industries.

Intense diplomacy to seduce the Community of Latin American and Caribbean States – CELAC

In search of a rapprochement with Latin America, the European Union has deployed intense diplomacy in recent months, as evidenced by the recent tour of Ursula Von der Leyen, current President of the European Commission, to Brazil, Argentina, Chile and Mexico.

During her visit to the Latin American countries, she announced new investments of close to 10,000 million euros, from 2023 to 2027, as part of the European Union’s Global Gateway investment plan.

European Commission Vice President Joseph Borrell also made five trips to the region in the last year, during which he announced an emphasis on strategic partnership with Latin America to reinforce the “rules-based international order and defend democracy and human rights”.

In statements made during a visit to Santo Domingo, Borrell had pointed out that, in a world in which hydrocarbons are going to disappear, Latin America could be the new Persian Gulf, referring to the region’s lithium reserves.

Regarding the geopolitical conflicts in Ukraine, Borrell stated that this war that “we are facing now is not a problem between Europeans, it is not something that Ibero-Americans can wash their hands of, saying ‘it is not our problem’, [this war] affects the balance of law, freedoms and progress in the world”.

Within the process of rapprochement that the European Union is seeking with Latin America and the Caribbean, President Gustavo Petro’s trips to Spain, France and Germany have played an important role, which seem to be more on the European agenda than on the CELAC’s vindictive agenda.

The Global Gateway plan explicitly seeks to counteract the plans of China, which had announced investment programs for 300 billion dollars for developing countries.

On the eve of the summit, tensions have escalated. The website Euractiv has leaked that the European Union’s proposal for the declaration of the CELAC and European Union Summit included the need to condemn the Russian war of aggression against Ukraine, mentions that were not accepted by the Latin Americans.

As is well known within CELAC there are diverse and even conflicting positions on this conflict, but in addition the Latinos in their own draft have included the demand for reparations for the damage caused by slavery and, instead of enthusiastically supporting the financial initiative of the European Union, they just “take note” of it and add that they disagree with imposing unilateral trade barriers under environmental pretexts.

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