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European Commission

MEMO

Brussels, 18 January 2012

EU-Community of Latin American and Caribbean States (CELAC) Summit
Santiago de Chile, 26-27 January 2013
EU RELATIONS WITH LATIN AMERICA AND THE CARIBBEAN

In recent years, the countries of Latin America and the Caribbean (LAC) have collectively enjoyed strong economic growth (over the past 3 years, average GDP growth of 4.5% at regional level). This has translated into growing confidence and a willingness to seek a more active role in international affairs, for instance on global economic issues (e.g. G20) and multilateral negotiations on climate change or sustainable development.

The Strategic Partnership between the EU and the countries of Latin America and the Caribbean (LAC), founded in Rio de Janeiro in 1999, has always been a partnership of equals. It is built on a shared conviction that both sides benefit from working together and have common interests in today's inter-dependent world. This is expressed in active and dynamic ongoing cooperation in many fields – economic, trade and investment, political and security issues, environment, people-to-people links, etc. – both at the bi-regional level and between the EU and the individual LAC countries.

This EU-LAC Strategic Partnership encompasses not only political dialogue, cooperation and economic relations but also allows both regions to affirm more effectively their positions on global issues and to better assert them in the multilateral context. At each of the six EU-LAC Summits held until now (approximately every 2 years), political contacts and dialogue have intensified and closer cooperation has been developed on a wide range of issues including trade and investment, climate change, migration, the fight against illegal drugs, the promotion of human rights, education, cultural issues and in the fields of science and technology. This culminated in the adoption of a comprehensive Action Plan at the last summit, held in Madrid in May 2010.

A series of agreements with individual countries and groups of countries in the region exist or are in the process of being concluded including an Association Agreement with Central America, a Trade Agreement with Peru and Colombia, trade agreements with Mexico and Chile – which have been up and running since 2000 and 2002 respectively and have proven very successful – and an Economic Partnership Agreement with the Caribbean. Bilaterally, the EU also has strategic partnerships with Mexico and Brazil.

Economic relations1

Investment is a crucial pillar of the EU-CELAC relationship. Investment links are impressive. The EU remains the leading foreign investor in the CELAC countries, with total stocks FDI amounting to €385 billion in 2010. This represents 43% of the region's total FDI. EU FDI in CELAC countries is higher than EU FDI in Russia, China and India combined. FDI from the EU is also highly diversified ranging from sectors with a traditional European presence such as commerce and tourism to new sectors including construction and finance, thus contributing to diversifying the basis for continued economic growth. EU investment in CELAC countries contributes to increase competitiveness and to social and economic development. The EU-LAC investment relationship is mutually beneficial as Latin America and Caribbean companies have also stepped up their investments in the EU over the past few years.

With the Lisbon Treaty the EU has acquired new competences in terms of protection of EU investments. The EU encourages high-quality, socially and environmentally responsible investment in the CELAC region. It is clear that high-quality investment can only be ensured in a regulatory framework of equally high quality, with rule of law and legal security for all investors, domestic and international.

An open, transparent, non-discriminatory and stable business-friendly environment is key in order to provide legal certainty for investors, something which is essential to foster high-quality, socially responsible investment. The EU is ready to work together with CELAC partners on Corporate Social Responsibility, which is also an integral part of our investment strategy.

There are further opportunities ahead in the field of trade. Trade between the EU and the CELAC region has been growing rapidly for a number of years (for example: trade in goods between the EU and Latin America more than doubled over the last decade – up to €214 billion – (6.5% of total EU trade). However, even if the partnership has proved extremely fruitful, there is still considerable potential for expansion. This entails further developing the EU's relationship with Mexico and Chile, ensuring the implementation of agreements with the Caribbean, Central America, Colombia and Peru, and concluding negotiations with the MERCOSUR region, which includes EU’s ninth export/import partner worldwide, Brazil. It is also important to refrain from protectionist measures. At the summit the EU will underline the importance of promoting open trade, as a key tool for supporting economic growth and development.

Priorities in the EU-LAC relationship

To respond to the challenges posed by the global economic and financial crisis, climate change and migration, in 2009 the EU set out a number of priorities for its relations with the LAC region:

  1. More dialogue on macro-economic and financial issues, environment and energy or science and research, intensifying our cooperation in these fields.

  2. More regional integration and interconnectivity (through, for example, a new instrument, the Latin America Investment Facility whose main objective is to mobilise additional financing to support investment in Latin America).

  3. Deepening bilateral relations with LAC partner countries while complementing EU support for regional associations through specific agreements.

  4. Adapting cooperation programmes to the needs of the countries beyond the areas covered by traditional development cooperation.

  5. Involving civil society in the Strategic Partnership, including through the creation of an EU-LAC Foundation.

The EU and LAC work together in other areas of interest including:

  1. The Joint Initiative on Research and Innovation fosters sustainability and social inclusion through a targeted focus on science, research, technology and innovation.

  2. The EU-CELAC Structured Dialogue on Migration provides a framework to exchange best practices and build capacities to address bi-regional migration challenges.

  3. The EU-CELAC Coordination and Cooperation Mechanism on Drugs provides a platform for policy dialogue aimed at tackling the world drug problem covering both supply- and demand-reduction issues.

Over the past decade, the EU has also helped to reduce poverty and social inequality by providing over €3 billion in development assistance to the region under both the Development Cooperation Instrument for Latin America (€2.7 billion from 2007-13) and the European Development Fund (€900 million from 2007-13). More than 40% of our present cooperation with Latin America is concentrated on the promotion of social cohesion (that is, the fight against poverty, inequality and exclusion), and there is also an important support for regional integration, trade and investment, as well as environment.

Growth in trade and investment will contribute to a lasting improvement in living standards across society, if accompanied by appropriate domestic economic and social policies.

EU-LAC Summits

The EU’s Strategic Partnership with Latin America and the Caribbean culminates in regular bi-regional Summits. The 1999 founding Summit of Rio de Janeiro, Brazil, has been followed by several bi-annual Summits held in Madrid, Spain (2002); Guadalajara, Mexico (2004); Vienna, Austria (2006); Lima, Peru (2008); and Madrid, Spain (2010). Each of these events has facilitated further deepening of the EU-LAC relations

The Community of Latin American and Caribbean States (CELAC) is a new framework for political coordination among the 33 LAC countries. It was formally established at a regional summit in December 2011. Chile currently holds CELAC's rotating Presidency. The LAC side has indicated that from now on CELAC will be the EU's counterpart for the bi-regional partnership process, including at summit level.  

The Summit taking place in Santiago, Chile, on 26 and 27 January 2013 will therefore be the 7th EU-LAC summit and the 1st EU-CELAC summit.

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Source: EUROSTAT, January 2013


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