Reading time: 4 mins approx.
Eight years later, Europe and the Latin American and Caribbean countries have found some valuable common ground—and the willpower to reengage.
This week, the European Union (EU) and Community of Latin American and Caribbean States (CELAC) convened in Brussels for the first EU–CELAC summit since 2015. The agenda included comprehensive investments, deepening trade ties, political dialogue, and above all reengagement at the multilateral level.
Investment dominated discussions at the summit, most notably the EU’s Global Gateway Investment Agenda (GGIA). This program, which will commit to €45 billion in investments in Latin America and the Caribbean by 2027, is the centerpiece of contemporary EU engagement with the region. Early sectors to receive investments and financing include photovoltaic solar panels in Brazil (€300 million) and Chile’s growing green hydrogen industry (€100 million). Chile’s state-run bank will also receive €200 million to finance newer, more energy-efficient houses in the first extra-EU green mortgage loan carried out by the European Investment Bank (EIB).
Looking to the future, renewable energy (particularly green hydrogen), digital infrastructure, and critical raw materials will no doubt be the sectors most targeted by Global Gateway funds. The EU took the summit as an opportunity to sign partnership agreements – or memoranda of understanding – with Argentina, Chile, Ecuador, El Salvador, Honduras, and Uruguay.
Each of these countries are both in need of capital and competitively suited to meet EU needs on strategic interests such as energy, with Argentina and Chile emerging as particularly significant given their massive reserves of lithium and copper. Securing steady supply chains of these critical minerals is an EU priority as it faces increased industrial competition from the United States and People’s Republic of China, and these Southern Cone countries form a vital part of the path ahead for Brussels.
Outside of investment, trade presented more mixed results commensurate with the low expectations of both organizations approaching the summit. Both the EU–Mercosur free trade agreement and the modernized EU–Mexico association agreement were on the backburner as negotiations have faltered in recent months, though in her closing remarks President of the European Commission Ursula von der Leyen outlined her vision for the negotiating and ratifying timelines of both agreements.
Notably, the EU and Chile signed – in addition to their supply chain partnership – a set of agreements designed to modernize the EU–Chile association agreement. New provisions in these accords include trade liberalization, as well as more favorable terms for EU importers which rely on lithium processed by local firms; this is particularly significant as it represents an effort to limit the extractive nature of EU trade and investment in Chile.
Certain announcements were small but tangible, such as the European Union releasing €10 million in humanitarian funds to Haiti as the country continues its slide into chaos and catastrophe. Others, such as the EU–LAC Digital Alliance, served to demonstrate a willingness to collaborate and partner on widespread issues such as technology, innovation, and digital infrastructure and governance.
In fact, initiatives like the Digital Alliance, which brought together the EU and 20 countries from Latin America and the Caribbean, serve to reflect the clearest outcome to emerge from this week’s summit: insistence on greater engagement. Leaders from both organizations reiterated time and time again their unwillingness to let transatlantic relations falter once more for another eight years, even setting up a date and venue for the next summit (Bogotá, Colombia, in 2025).
Despite stagnation on major trade agreements and divergences in policy reactions to the war in Ukraine, the 2023 EU–CELAC summit is perhaps most significant for its reenergizing of relations between the European Union and the Latin America and Caribbean region following years of disinterest and neglect.
Or as Ms. Von der Leyen put it, “This…felt like a new beginning between old friends.”
Gabriel is a doctoral fellow at the Institut Barcelona d’Estudis Internacionals and senior editor at Latinometrics. He is a monthly columnist at The Brazilian Report and has also had his writing published by Americas Quarterly and Global Americans.
Reading time: 4 mins approx.
After an eight-year impasse, the third European Union (EU) and the Community of Latin American and Caribbean States (CELAC) Summit was held in Brussels on 17–18 July under the banner “Renewing the bi-regional partnership to strengthen peace and sustainable development.” The two-day summit brought together heads of state and top government representatives from the member states of the EU and CELAC. Spain has taken a leading role in the EU’s renewal of its relationship with Latin America in its presidency of the Council of the European Union, which runs from July to December 2023. However, the summit’s arrival just days prior to Spain’s general election on 23 July leaves the European nation’s future approach to the region uncertain.
The EU and LAC countries together represent one billion citizens, 21% of global GDP, and more than a third of the United Nations. The EU has political cooperation, association or free trade agreements with 27 of the 33 countries in the LAC region and is the largest source of foreign direct investment. There are agreements with Mexico (2000), Chile (2002), Peru (2012), Colombia (2012), Ecuador (2017) – within the framework of a “multiparty” agreement with Andean countries – Central America (2012), and Mercosur (2019). The EU is Latin America’s largest investor and the third largest trade partner, behind China and the United States, while LAC countries are the EU’s fifth largest trading partner after China, US, UK and Switzerland. Over the past decade, two-way trade has risen by 40% to at least €369 billion.
The new geopolitical scenario – with the emergence and growth of China, the war in Ukraine and the role of Russia – has all contributed to a renewed interest for the EU to regain influence in the LAC region. According to a report by the OECD, the war in Ukraine was a “massive and historic energy shock” to the markets and had the greatest impact on Europe’s economy, where growth in 2023 is projected at a sluggish average of one percent. This situation has highlighted EU’s need to expand its network of alliances and strengthen its relations with the LAC region as potential suppliers of raw materials and energy, as well as partners in the fight against climate change.
By 2030, the EU is estimated to require up to 28-times more lithium, and will therefore need to secure its supply of critical raw materials. While Brazil is the largest exporter of raw materials by volume, more than half of the world’s lithium reserves are located in the “lithium triangle”, a geographical area encompassed by northern Chile, northern Argentina and southern Bolivia. According to the US Geological Survey, the three countries, along with Peru contain 67% of proven lithium reserves and produce about half of the global supply. By the end of 2023, the global lithium market value is expected to be worth more than eight billion US dollars.
After two days of discussions dominated by the war in Ukraine and the need to address past colonial injustices in the LAC region, an agreement was reached to reinvigorate multilateralism and ensure universality in the consideration of human rights, as well as an effective implementation of the Sustainable Development Goals. The EU presented a new Global Gateway Investment Agenda (GGIA) and committed to investing over €45 billion to support the partnership with the Latin American & Caribbean region until 2027. The GGIA includes more than 135 projects around four pillars: a fair green transition, human development, an inclusive digital transformation, and health resilience and vaccines.
As part of the Summit’s negotiations, the EU signed an agreement on critical raw materials with Chile and two pacts to cooperate on energy with Uruguay and Argentina. The EU will participate in the electrification of public transport in Costa Rica and in the construction of a metro line in Colombia. It will also contribute to the deployment of 5G services in Jamaica and help upgrade the electricity network in Paraguay. More importantly, the EU also plans to wrap up negotiations on Mercosur – which comprises Brazil, Argentina, Uruguay and Paraguay – by the end of 2023, as well as seal a trade agreement with Chile and an updated version with Mexico.
As EU foreign policy chief Josep Borell declared last year “2023 should be the year of Latin America in Europe and of Europe in Latin America.” Hopes are high for the prospect to turn good proposals into tangible results and closer cooperation between both regions. The next summit is set for 2025 in Colombia.
Susana joined Canning House in 2023 as its Head of Policy and Public Affairs. She has over 25 years of international affairs experience, including at the Mexican Senate and in a number of financial institutions. Susana received her PhD from the London School of Economics in 2010.
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