Why are the 27 EU countries and 33 countries from Latin America and the Caribbean coming together?
Following the geopolitical changes caused by the war in Ukraine, the European Union (EU) wants to Intensification of relations with Caribbean and Latin American countries (CELAC). The European Union’s foreign affairs commissioner, Joseph Borrell, explained that regions of the world that share the same values in principle should form strategic alliances. Additionally, the EU is trying to free itself somewhat from its economic dependence on China.
For this reason, Latin America is a potential supplier of raw materials and energy, an interesting market and a partner in climate protection. In early June, the European Commission published a global strategy for Latin America. “We are partners in strengthening the rules-based international order in defense of democracy, human rights and peace. We are keen to strengthen our political partnership,” said EU Commission President Ursula von der Leyen.
CELAC says that means all US states except the US and Canada want to reactivate their economies after the pandemic. This is why the EU is so welcome as an investor and trading partner: companies from EU countries invest more in the region than Russia, China, India and Japan.
Will there be new free trade agreements?
A deal with Mercosur members (Brazil, Argentina, Uruguay and Paraguay) has been on the table since 2019. However, it is not recognized by EU countries due to concerns about deforestation in the Amazon. The EU wants to reactivate the agreement with Mercosur, but Brazil must be reassured Sustainable environment and climate protection in an additional protocol. The new left-wing Brazilian president, Luiz Inacio Lula da Silva, who is also the Mercosur president, rejects the Europeans’ demand.
The European Commission is also negotiating trade agreements with Chile and Mexico. The Brussels summit could give fresh impetus to the negotiations, as well as to the reluctant process of ratifying the deal with Mercosur.
What political problems does the European Union face?
Brazil’s president is clear Very friendly with China For trading partners in Europe. During his visit to Beijing in April, Lula da Silva agreed to foster cooperation with Chinese President Xi Jinping.
Brazil’s stance on the war in Ukraine has also caused controversy in the European Union. Many disagreed that Lula da Silva did not demand Russia withdraw its forces from Ukraine, but instead offered to mediate and blame the US for the war.
What does the European business world think?
19 European business associations from all sectors are pushing for the swift approval of a trade deal with Mercosur that respects demands on climate change. “The EU-Mercosur agreement opens up unique opportunities for Europe to gain first-mover advantage in a broader Latin American market,” the business associations wrote in a statement.
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