Brussels' commitment to Latin American integration questioned

Pedro Paez on EU-Latin America relations at the TNI organised event
30 September 2009
In the media

EUOBSERVER / BRUSSELS - The European Commission is hoping to boost EU-Latin American relations with the creation of a joint forum that will bring together the two sides on a permanent basis and launch of a new investment fund. But civil society organisations and some Latin American officials believe Europe is steadily abandoning its support for regional integration on the EU model on the continent.

EUOBSERVER / BRUSSELS - The European Commission is hoping to boost EU-Latin American relations with the creation of a joint forum that will bring together the two sides on a permanent basis and launch of a new investment fund. But civil society organisations and some Latin American officials believe Europe is steadily abandoning its support for regional integration on the EU model on the continent.

The proposal, for an EU-Latin America and Caribbean Foundation, was made on Tuesday (29 September) within Brussels' strategy document on relations between the two regions.

The foundation, which the commission aims to launch in spring next year following the next EU-Latin American summit, to be held in Spain, would exist as a kind of secretariat that would prepare summits and maintain the dialogue between meetings.

The commission presented its renewed policy for the region, assessing the state of play of the bi-regional relationship and outlining the targets and objectives for the coming years.

The EU, which is the leading donor of development assistance to Latin America, also hopes to set up a new financial instrument to leverage millions of euros to bank-roll energy infrastructure, environmental projects and combat poverty.

The Latin America Investment Facility, (LAIF), modelled on a similar instrument for Europe's neighbouring states to the east and south, would mobilise resources from financial institutions to support projects in energy infrastructure, energy efficiency and renewable energy, transport, the environment and social cohesion.

While no figures were announced, the Neighbourhood Investment Facility has used €71 million in grants as leverage for projects worth €2.7 billion. The commission hopes the LAIF would be able to encourage similar sums for development in Latin America.

"By working together better, we directly contribute to peace and stability in the region and to its further development by increasing social cohesion, improving democratic governance and deepening regional integration," said external relations commissioner Benita Ferrero-Waldner.

The document was published on the occasion of the ten-year anniversary of the launch of the EU's strategic partnership - the bloc's mechanism of formalising relations with foreign countries - with the region.

Biennially, the two regions hold summits to develop the relationship, and since 1999, the commission has launched negotiations on association agreements, including trade accords, with the Andean Community of Nations (CAN) and Central America.

But beneath the friendly discourse of Ms Ferrero-Walder, relations are not infrequently choppy.

After months of talks between Brussels and the CAN, negotiations were ultimately suspended, with Ecuador and Bolivia feeling that the EU was pressing for concessions that would undermine domestic industries. Talks were also frozen with Central America as a result of the coup d'etat in Honduras.

Negotiations over an association agreement with Mercosur, the continent's third regional customs union, have been on hold since 2004.

Regional integration no longer a goal?

Ecuador's former economy minister Pedro Paez Pérez, who is also a member of the UN's high-level task force on the global financial crisis, told EUobserver that he feels Brussels places too much emphasis on trade agreements that are more advantageous for European businesses than Latin American citizens.

"Europe could have a much more decisive role in building another kind of relationship, a more positive one than we have traditionally had with other powers," he said in Brussels.

Mr Perez is on a tour of Europe in an attempt to drum up investment support for the Banco del Sur - the South American alternative to the International Monetary Fund - and the Sucre, the proposed common currency for the Bolivarian Alliance for the Americas, the regional co-operation organisation of nine Latin American and Carribbean nations.

"But instead, in the case of the EU-CAN negotiations, you have increasing pressures for free trade agreements that exacerbate the already existing differences between Andean countries with very negative contributions to peace in this zone."

Last year, Brussels entered into a new round of negotiations with just two of the countries in the CAN: Peru and Colombia, who both have more conservative leadership and are much more amenable to the EU's negotiating position.

Latin America watchers worry that the decision to split the talks will reverse the Andean regional integration process, a process the EU says in its document it holds as a key goal.

Gustavo Hernandez, of the EU-CAN Alliance, a network of Andean civil society organisations, told this website that the commission document "seems to leave aside the sub-regional integration process in Latin America - Central America, Andean Community and Mercosur."

Mr Hernandez is worried that the announcement of the LAIF investment facility will be used as a way to de-emphasise regional integration.

"Is it simply a shift from the traditional support of the European Commission for the regional integration process to a more pragmatic approach through the Investment Facility?" he asked.

Camilo Tovar, of the Latin American Association of Promotion Organisations (Alop) also feared that the LAIF had the potential to undermine environmental protection.

Although the commission document underlines Europe continuing to support "developing sustainable infrastructure," Mr Tovar said that there is no suggestion of any changes to existing practices even though current European investment flows are not backing genuine sustainability.

"Of particular importance is the Initiative for Integration of Regional Infrastructure in South America (IIRSA) and a series of mega-projects such as Rio Madera: a multi-billion dollar hydroelectric complex which threatens one of the Amazon Basin's main southern tributaries," he said.

He added that the Santa Cruz-Puerto Suarez "bio-oceanic transportation corridor" in Bolivia, also threatens the global weather regulatory capacity of the Amazon basin. Construction was launched in 2002 with €57 million in funds from the European Investment Bank.

Enormous delay

Ms Ferrero-Waldner conceded that regional integration was not proceeding as she would like.

"I don't think we can talk about failure of regional integration, although certainly, I will grant you there's been an enormous delay," she told reporters in Brussels. "We are trying to help various regions to come together and to follow the model of the EU. We've done what we can, but the ball is in their court."