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12.12.2016 10:15
Why Latin America should be the EU’s top priority in 2017
by Luis De Grandes and Antonio Tajani, Members of the European Parliament
Walking the streets of Buenos Aires, you feel like you could be in any European capital. After the First World War, over a million Italians started their lives in Argentina. No wonder some say that pasta here is as good as in Italy!
We share similar democratic values, concerns and interests
A similar number emigrated to the US during the same period. Micaela is one of the most popular names in Argentina, as is Lucas, representative of the 4 million German speakers in the country. There is also a strong Polish community, the fourth largest after the Italians, Spanish and the Germans. It is not globalisation that brought Belgian restaurants to Buenos Aires, or the best English scones with tea nor is it globalisation that gives you the opportunity to join an animated Swiss fondue cheese party. Strong European communities started over here at the end of the 19th century.
Why did the EU fall short in giving Latin America the attention that it deserves? Why is now the best moment to do it?
People in Latin America want accountable democratic governance and sustainable economic growth
The continent is experiencing a key moment in its political history. Populist left-wing governments that ruled in the last decade by very questionable democratic standards and followed by unsustainable economic policies are now being challenged. The results in the parliamentary elections in Venezuela and the victories of Mauricio Macri in Argentina and Pedro Pablo Kuczinsky in Peru show that populism can be defeated. They showed that people in Latin America want accountable democratic governance and sustainable economic growth.
The EU is now the first foreign investor in Latin America and the Caribbean, accounting for one third of their overall investment. This is more than the investments that the EU has in Russia, India and China combined.
These changes pave the way for the EU to strengthen its relations with Latin America into a partnership of equals. This would imply not only closer political cooperation but also harnessing the huge economic potential of regional integration to our mutual benefit. The EU is now the first foreign investor in Latin America and the Caribbean, accounting for one third of their overall investment. This is more than the investments that the EU has in Russia, India and China combined.
We already have several success stories that not only contributed positively to the growth of both sides of the Atlantic but also enhanced regional cooperation in the area. The EU has bilateral free trade agreements with all the countries that are members of the most successful economic alliance in the region - the Pacific Alliance - made up by Chile, Colombia, Mexico and Peru. Last month, Ecuador was the latest country to sign such an agreement with the EU.
This has proven to enhance economic growth, job creation, social development and cooperation resulting in the creation of a stable legal framework ensuring the highest level of consumer and environmental standards protection
Most of the EU’s trade and investment partnerships come with an Association Agreement. This has proven to enhance economic growth, job creation, social development and cooperation resulting in the creation of a stable legal framework ensuring the highest level of consumer and environmental standards protection.
Despite these successes, there is still some room for improvement. One piece of unfinished business is the conclusion of a comprehensive Association Agreement with the Southern Common Market, the so-called Mercosur countries. We share similar democratic values, concerns and interests. So naturally, such an agreement will go beyond a free trade agreement, including political dialogue and cooperation.
The creation of a market of some 750 million consumers with a combined GDP close to a quarter of the world's total GDP will create enormous benefits and even greater opportunities
The economic potential of the agreement is obvious. The creation of a market of some 750 million consumers with a combined GDP close to a quarter of the world's total GDP will create enormous benefits and even greater opportunities. Our cooperation can be strengthened with regard to small and medium-sized enterprises (SMEs), services, security, the fight against poverty and social inequality, climate change and innovation.
It is better to work with those with whom we share culture, language, religions, common values and aspirations. Our common history and culture and our strong commitment to regional integration contributes to making the EU and Mercosur natural partners.
We are aware of the sensitivities which exist on both sides, but we believe the time has come to move on towards the conclusion of the Agreement. Mechanisms to compensate for the effects of free trade are likely to be required in some areas. This will still involve important mutual concessions and above all political will to overcome protectionism on both sides.
Europe cannot afford to close itself in the face of globalisation but instead it should shape it. Moreover, given the weakening of our economies, we must also come up with a vision for opening up to new opportunities.
Europe cannot afford to close itself in the face of globalisation but instead it should shape it
In 2030, 60% of world GDP will be generated in emerging and developing countries. Despite this, only 13% of our SMEs are doing business beyond EU borders. Speaking with one voice therefore becomes essential to safeguarding the interests of our industry. This is why, together with strong foreign affairs diplomacy, the EU needs economic diplomacy. The recent extension of the Panama Canal carried out by a consortium of European companies (Italian, Spanish and Belgian) is a good example.
In 2030, 60% of world GDP will be generated in emerging and developing countries
Last month, Chinese President Xi Jinping made his third visit to Latin America since he came to power three years ago. He visited Ecuador, Peru and Chile to sign agreements for cultural and economic cooperation in sectors such as energy, mining or infrastructure. He also inaugurated the hydroelectric power station Coca Codo Sinclair in Ecuador, financed with Chinese money, at the side of President Correa.
It should have been a European President there and not the Chinese President!
Speaking with one voice becomes essential to safeguarding the interests of our industry
We cannot abandon Latin America and the Caribbean to the Chinese and the North Americans. We must be present in the region. We must take the opportunities that the changes on the North side of the continent offer! The countries of the EU, Latin America and the Caribbean are natural allies linked by strong historical, cultural and economic ties and cooperate closely on an international level. The time has come to strengthen this relationship and step up our political, trade and cooperation relations.
As a Uruguayan proverb says: better to marry a neighbour than a stranger! We would say it is better to work with those with whom we share culture, language, religions, common values and aspirations. Our common history and culture and our strong commitment to regional integration contributes to making the EU and Mercosur natural partners. 2017 offers new opportunities to think big about what we really want in the long-run.
former EPP Group MEP
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