What future for the EU – Latin American development relations? Two clichés and one proposal

The bi-regional relations between the European Union (EU) and Latin America and the Caribbean (LAC) have moved to the forefront of the EU political agenda as a result of this year’s EU-CELAC Summit -the previous one was held in 2015-, this semester’s Spanish presidency of the EU Council -a Member State who has traditionally championed for closer EU–LAC relations- and the war in Ukraine -and its geopolitical derivatives-.

This critical juncture could actually offer an opportunity for a more fruitful relation, since the narrative of this Trans-Atlantic link is grounded in two assumptions -almost clichés-, which are, on the one hand, that Latin America is not a priority for the EU and, on the other, that there is a certain renewed interest in this region on the part of the EU, as a result of the Union’s geopolitical aspirations and the derivatives of the war in Ukraine in terms of international alliances.

Is this so?

Statement 1: LAC is not a priority for the EU

In general terms, results from the Elcano Global Presence Index for the EU back this statement (Figure 1). The EU is (or has been until recently) a regional player, focused on its own region -with over 20% of its global presence projected in other European countries- and on its extended East and South neighbourhood – where 25% of its external projection can be found. While North America appears as a relevant global partner, the EU’s presence in Latin America and the Caribbean is limited to 6% of its foreign projection.

Figure 1. Geographical distribution of EU global presence (in % and percentage points, 2005-2018)

Nevertheless, a closer look at these bi-regional ties shows that, in some areas, the LAC region is a key partner for the EU, even when compared to other regional stakeholders. The economic links, particularly those related to foreign direct investment (FDI), outstand as the most important dimension of the bi-regional relation (Figure 2). Also, this link is stronger than with other partner regions such as Asia or Africa (Table 1); a feature that has been highlighted in a recent report on the region.

Figure 2. EU global presence in selected Latin American countries (in % of global presence, 2018)

Table 1. Main sources of external development finance. LAC vs. other developing regions

	FDI flows*	Remittances *	Exports **	ODA *	OOF * ***
LAC	51,256	12,377	104,828	3,173	857
Africa	9,590	31,442	148,863	13,426	880
Asia	4,981	37,863	919,608	10,406	866

Sources: Eurostat, OECD & World Bank

* millions of current US dollars

** millions of current euros

*** disbursements of long-term funding

Statement 2: In the context of Russia’s invasion of Ukraine, LAC has proven to share EU values

This assumption follows the geographical distribution of votes of the UN resolutions on the aggression against Ukraine. For instance, in March 2022, most Latin American countries voted in favour of the ES-11/1 Resolution -with the exceptions of Bolivia, Cuba, El Salvador, Nicaragua and Venezuela-, whereas the African support to this resolution was scarce, with slightly over twenty votes in favour in this vast region.

This somehow surprising result for the EU has sometimes been interpreted in Brussels as a manifestation of the shared values and world visions of Europe and Latin America; values that might differ from those of other partners in Africa or Asia.

However, there might be additional or alternatives explanations. The alignment with the EU might be related to weaker economic, military and historical links with Russia, when compared to a good number of African countries. In fact, several political moves previous to the Summit that is being held today and tomorrow might back this more pragmatic interpretation: the capacity of several LAC countries to ban the presence of President Zelensky at the Summit, President Lula’s declarations on the state of democracy in Venezuela, or the reluctance to express a clear rejection of Russia’s behaviour in relation to Ukraine in the final communiqué.

A complex landscape requires sophisticated tools

A higher political profile on the part of the EU as well as a diversification of its international alliances will strengthen its role as a global player. However, the EU might need a more nuanced reading of the current global situation. Although some political decisions reflect a cosmovision of closed blocs -in a similar fashion to that of the XX Century-, the probability of re-articulating world relations within isolated blocs seems rather infeasible after four decades of globalization and a strong interdependence of all types of countries in the economic, political and social domains.

This complex situation also requires a sophisticated toolkit of partnership instruments. In this sense, an important stock of political capital has been invested in moving the EU-Mercosur trade agreement forward, despite the fact that the possibilities of having the agreement signed in the short term seem scarce as of today. Also, the recently published Joint Communication to the European Parliament and the European Council on a New Agenda for Relations between the EU and Latin America and the Caribbean shows the objective, on the part of the EU, of articulating the bi-regional relations around Global Gateway, in the framework of a strategy that tries to counter-weight the increasing presence of China in the region. This is so despite the fact that this tool is particularly oriented towards investment and that EU-LAC ties are already strong in this precise dimension. What would be needed is rather, or additionally, a diversification of relations in other economic, political and social domains. Meanwhile, other tools that have proven to be particularly effective in advancing political dialogue, such as triangular cooperation or EUROsociAL, are not being articulated as part of a wider strategy towards the region.

Author: Iliana Olivié (Elcano Royal Institute).

Photo by Flashvector, available on iStock.