LEAK: EU to prioritise Mercosur deal, establish closer ties with Latin America
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Euractiv | 6 June 2023
LEAK: EU to prioritise Mercosur deal, establish closer ties with Latin America
By Alexandra Brzozowski
The EU will prioritise concluding a long-delayed trade deal with South America’s Mercosur bloc and closer institutional cooperation as it seeks new allies to reduce economic dependencies on China and counter Russia, according to a leaked draft proposal, seen by EURACTIV on Tuesday (6 June).
After years of relative absence, relations with Latin America and the Caribbean returned to the EU’s agenda when the EU fears losing influence in the region as trade deals falter.
The European Commission draft proposal calls for more regular summits between the EU and CELAC, progress on outstanding trade deals and more investment through the EU’s Global Gateway strategy, which has been slated to rival China’s Belt and Road (BRI) investment scheme.
Securing access to Latin America’s raw materials and other key resources in the face of “increasing geopolitical challenges” is a priority in the proposal, due to be presented by the EU’s chief diplomat Josep Borrell on Wednesday (7 June).
“By strengthening the partnership between two regions that are among the world’s most closely aligned in terms of interests and values, EU and LAC will be better placed to confront global challenges,” the latest version reads.
Strengthening ties with Latin America would make it possible for both sides to reduce “excessive dependency” on third countries and help the EU to ‘de-risk’ from China, it adds.
Latin America is a big copper producer, home to most of the world’s known lithium deposits, as well as significant amounts of petroleum and natural gas- all critical for the EU’s green energy transition.
Brussels is looking to sign agreements with Latin American countries as envisaged under the EU’s new Critical Raw Materials strategy, the document states.
This would concern the mitigation of risks to supply chains of materials highlighted by shortages during the pandemic and the energy crisis following Russia’s invasion of Ukraine.
It also sets out a roadmap for concluding several free trade and partnership agreements with Latin American countries as soon as possible and boosting bilateral relations with Brazil and Mexico.
The potential trade deals would build on an EU programme to invest in green and digital transition projects in Latin America, which is due to be approved at a summit between the EU and the Community of Latin America and Caribbean States (CELAC) in July, the first such meeting since 2015.
The push for improving relations comes as Europe has begun to look for new suppliers of energy and food after the start of the war between Russia and Ukraine.
The European Commission’s draft proposal specifically names the EU’s stalled trade pact with the Mercosur bloc – Argentina, Brazil, Paraguay and Uruguay – a key feature of the diplomatic offensive towards Latin American countries.
“The conclusion of the EU-Mercosur agreement would mark a step change in strengthening EU-LAC relations,” the document states.
An EU-Mercosur trade pact was agreed upon in principle in 2019, but its ratification has stalled due to some of the national parliaments, including The Netherlands and Austria, which are unwilling to compromise on environmental standards.
France, which has seen domestic opposition to the deal by local farmers, has since said it wants the Mercosur side to agree to various additional commitments, notably on respecting EU rules on deforestation, before Paris will give its backing.
However, the EU and the majority of EU member states fear further delays on Mercosur and other trade deals could push Latin America towards China.
The EU wants Latin America to make further commitments on environmental protections in a side letter to the agreement.
Diplomatic approximation
The EU is set to hold a summit with CELAC in July in Brussels which is expected to show political unity between “natural partners” as previously described by Borrell.
But not only that, the Commission’s draft proposal has planned a “renewed strategic partnership” between the two regions.
“What we are proposing is a different, more modern partnership – we will be partners by choice,” one senior official said ahead of the presentation of the proposal.
However, differences regarding Russia’s invasion of Ukraine have exposed underlying tensions between the two blocs.
Politically, Latin American and Caribbean governments are important when voting on resolutions on Russia in the United Nations General Assembly, a forum the EU has used to lobby against Russia’s illegal invasion of Ukraine.
But the principle of nonintervention in foreign affairs has deep roots in Latin America.
Latin America’s uncomfortable stance toward the invasion of Ukraine came into focus as Argentina’s president Alberto Fernandez, and then-Brazilian president Jair Bolsonaro, decided to meet with Russia’s President Vladimir Putin just days before Moscow’s forces surged across the Ukrainian border.
Brazil’s new President Luiz Inacio Lula da Silva angered many in the West in April when he called for the US and European allies to stop supplying arms to Ukraine, saying they were prolonging the war.
To bring both blocs closer beyond trade, the EU aims to organise more regular summits with Latin America, including bilateral meetings with Brazil and Mexico and meetings of foreign ministers.
To enhance the EU-CELAC dialogue, the goal is to “establish an EU-CELAC permanent coordination mechanism,” a structure that could bring together high-level officials a few times this year, the document states.
“This would allow us to tackle a crisis like Ukraine, facilitate the work of the foreign ministers and fill a gap that has been there for the past years,” another EU senior official said.
Before October, a meeting between European foreign ministers and Latin America counterparts had not occurred since 2018.
