The ‘other’ transatlantic relationship

The EU and UK's political relationship with Latin America needs reviving.

Our CEO, Elizabeth Deheza, yesterday spoke on the EU and UK’s relationship with Latin America at the “Europe Future Neighbourhood: Disruptions, recalibration and continuity” conference hosted by the Diplomatische Akademie Wien in cooperation with European Commission, UNIDO and IFIMES institute. A summary of her key points are below.

EU trade and business with Latin American and the Caribbean is strong and growing, foreign direct investment amounts to €758 billion, making the EU the principal development partner of the region, and there are trade agreements in place between the EU and 27 of the 33 countries in Latin America and the Caribbean, not to mention the Mercosur deal. The EU is also active through the International Development Bank, the Central American Bank for Economic Integration and the World Bank.

Despite the thriving environment for trade and a strong commitment to aid and development, there is a disconnect when it comes to the EU’s apparent political priorities and visible engagement, which is surprising given the many shared values between the regions and their people.

Elizabeth recommended, “The EU and UK need to increase their political engagement with Latin America and the Caribbean by providing political partnership, knowledge and best practice on tackling systemic challenges whilst also supporting sustainable growth opportunities.”

“The EU and UK need to increase their political engagement with Latin America and the Caribbean by providing political partnership, knowledge and best practice on tackling systemic challenges whilst also supporting sustainable growth opportunities.”

Elizabeth Deheza, CEO

Specifically, Elizabeth identified the systemic challenges where the EU and UK could help as inequality, insecurity, institutional weakness, corruption, poor law enforcement and climate change. This is, of course, in addition to assistance with combating and recovering from the COVID-19 pandemic.

Elizabeth commented, “Progress has been made on sustainable development but huge challenges still remain, particularly in terms of deforestation, waste and pollution. Waste management and recycling is a huge problem but an army of waste pickers across the region have created innovative systems to make things work for the Latin American reality. Deforestation is still going on at an alarming rate and simply must be stopped, it’s not enough for European banks to simply withdraw, a problem of such global importance needs political engagement and support too.”

“It’s not enough for European banks to simply withdraw [based on environmental concerns], a problem of such global importance needs political engagement and support too.”

Elizabeth Deheza, CEO

In terms of the major growth and investment opportunities, Elizabeth pointed to digitalisation, clean energy, the hydrogen economy, sustainable agriculture, electric vehicles and sanitation. In particular, it was highlighted that the EU and UK have been champions and active leaders in the fight against climate change and could offer much to Latin America and the Caribbean in terms of best practice policy and lessons learned.

The impact of Brexit on UK-EU relations with Latin America was also discussed. Elizabeth believes that the short-term holds some uncertainty while the dust settles but she is optimistic that the EU and UK’s many shared values should ultimately make their global agendas converge once more.

The UK is not an especially large trading partner for most of Latin America, so the impact of Brexit is not seen to be a huge issue for a region with bigger problems and opportunities. The primary concern around Brexit for most Latin American countries at present is to minimise disruption and those who have signed trade agreements with the UK so far have mostly extended the same terms as existed before.

Having said that, Brexit has been seen by some Latin American countries as a way to work more rapidly and flexibly with the UK than was previously possible when it was part of the EU.

Finally, Elizabeth noted with interest China’s growing influence and investment in Latin American and believes that the EU, UK and US have aligned interests when it comes to the region and a common approach should be discussed at the political level. Her closing remarks, “Latin American and the Caribbean need an actionable, relevant and pragmatic transatlantic relationship with the EU and the UK and there has never been a better time to do that than now.”

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