111 510 510 libonline@riphah.edu.pk Contact

Latin America offers EU shelter: ‘Welcome to summer’

Chancellor Angela Merkel of Germany, Brazilian President Dilma Rousseff and Spanish Primer Minister Mariano Rajoy are among the leaders coming together Saturday and Sunday in Santiago for a summit of European and Latin American nations. The host, Chilean President Sebastian Pinera, has in recent days projected the image of his fast-growing region, and that of Chile in particular, as a safe haven from the economic troubles that have been plaguing Europe for several years.

“Welcome to the summer,” Pinera told Rajoy Friday, as the latter visited him in the presidential palace La Moneda. The audience knew full well that Pinera was not just referring to the southern hemisphere summer, with 31 degrees Celsius expected in Santiago on Saturday compared to Brussels’ chilly 1 degree.

Latin American nations have long been billing themselves as part of the solution to Europe’s woes. And European countries are acknowledging them as such. Brazil, the engine that drives South America, is the world’s sixth-largest economy as well as a country committed to huge works of infrastructure for the 2014 World Cup and the Rio de Janeiro 2016 Olympics.

Mexico, the world’s 14th largest economy, is keen to diversify markets away from its neighbour and largest trade partner, the United States. Moreover, it is the home to the world’s wealthiest man according to Forbes magazine, telecommunications tycoon Carlos Slim.

Latin American countries have long had close economic ties with Europe, which invests in this region more than in China, Russia and India put together. Latin America is the destination for a third of the foreign investments of its former colonial ruler, Spain, and the EU is Brazil’s main trading partner and largest foreign investor. However, in a changed world where they are thriving and many traditional economic powers are struggling with recession, debt troubles or even both, Latin America now wants to step up to the challenge.

“We hope to launch a new era in relations with Europe, one that is less based on aid or assistance and that is more based on co-operation,” Pinera said earlier in the week. Latin America wants to become a foreign investor, rather than just a recipient of others’ investment. And it wants to be granted increased access to European markets for its produce. In Santiago, issues like legal certainty in business and tariffs, subsidies and other forms of protectionism are likely to be hotly debated.

Leaders or their deputies from 60 countries, representing a combined population of 1.1 billion and more than 30 per cent of the global GDP, are to meet Saturday and Sunday in Santiago’s Espacio Riesco convention centre. The seventh summit between the European Union and Latin American and Caribbean nations since 1999 is also the first in which the Latin American countries will meet with European partners under their newly-formed grouping, the Community of Caribbean and Latin American States (CELAC), created in late 2011.

Forty-five leaders are expected to attend the summit, with the theme “Alliance for Sustainable Development: Promoting Investments of Social and Environmental Quality.” There will be a few conspicuous absences. Outspoken Venezuelan President Hugo Chavez is recovering from cancer surgery and is to be represented by Vice President Nicolas Maduro. Ecuadorian President Rafael Correa, whose country’s London Embassy has been harbouring WikiLeaks founder Julian Assange since June, is currently on leave to campaign for re-election next month.

It will be a rare chance to see Cuban President Raul Castro, who is generally not fond of such events but actively supports CELAC as a forum for the Americas that excludes the United States and Canada. Castro arrived in Santiago late Friday. Over the past couple of decades, relations between communist Cuba and the EU have been troubled over Brussels’ insistence on the so-called common position, which links any talks to the issue of human rights in Cuba. Havana rejects that measure.

Veronica Sardon, "Latin America offers EU shelter: ‘Welcome to summer’," Business recorder. 2013-01-27.