a strategic partnership america and the caribbean: the...
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The European Union, Latin America and the Caribbean:a strategic partnership
ESEN
European Commission
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Guadalajara summit: http://europa.eu.int/comm/world/lac-guadal/00_index.htm
European CommissionDirectorate-General for External RelationsLatin America DirectorateB-1049 Brussels
Tel. (+32) 2 299 11 11Fax (+32) 2 299 39 41E-mail : [email protected] : http://europa.eu.int/comm/external_relations/index.htm
The European Union,Latin America
and the Caribbean:a strategic partnership
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Introduction 5
1. Background to EU–LAC relations 6
•Two histories making up a strategic partnership 6
•American and EU/Caribbean relations 7
•Regional and institutional groups in the Latin American and Caribbean area 8
•Lexicon 9
2. Current figures 12
2.1. The European Union, Latin America and the Caribbean today 12
2.2. EU–LAC trade and investment figures 14
2.3. EU–LAC cooperation in figures 19
3. The strategic partnership 21
3.1. The Madrid May 2002 summit 21
3.2. From Madrid to Guadalajara: the achievements 22
3.2.1. Strengthening ties 22
3.2.2. Developing regional cooperation 23
3.2.3. Implementing bi-regional cooperation 24
3.3. The challenges and objectives of the Guadalajara summit 26
3.3.1. Discussion topics 26
3.3.2. Participation of all actors in the bi-regional partnership: events in the margins of the
Guadalajara summit 27
4. Thematic challenges 28
4.1. Social cohesion 28
4.2. Respect for human rights, democracy and the rule of law: shared values 30
4.3. Promoting multilateralism 31
4.4. Regional integration 32
4.5. Enlargement of the European Union: an opportunity for its Latin
America and Caribbean partners 34
3
Contents
4
5. Bi-regional relations 36
5.1. The EU and Mercosur 36
5.2. The EU and the Andean Community 41
5.3. The EU and Central America 45
5.4. The EU and the Caribbean 49
6. Bilateral relations 53
6.1. The EU and Mexico 53
6.2. The EU and Chile 56
7. EU humanitarian aid to Latin America and the Caribbean: the work of ECHO 59
7.1. Displaced peoples: Colombia and Mexico 59
7.2. Natural disasters: Central America, Peru, Ecuador and Bolivia 60
7.3. Dipecho: ECHO’s disaster prevention and preparedness programme 60
Conclusion 62
5
Introduction
The European Union, Latin America and theCaribbean share many values relating to humanrights and democratic principles, the market econo-my, the fair distribution of the fruits of globalisationand the benefits of the advent of new technologies.These common values have enabled the Heads ofState or Government of both regions, who met forthe first time in Rio in 1999, to set up a bi-regionalstrategic partnership, laying down certain prioritiesto ensure coordinated action in the political, socialand economic spheres.
The European Union (EU), and Latin Americaand the Caribbean (LAC) must now continue toconsolidate their partnership.
The third EU–LAC summit in Guadalajara(Mexico) in May 2004 is a unique opportunity toreview the various initiatives, the dialogue and thenegotiations between the two regions since 1999.
This brochure gives a brief, factual presentation ofthe richness of the partnership between the Euro-pean Union, Latin America and the Caribbean, itsbackground and recent developments. It consists ofthematic fact sheets focusing on the main aspects ofthe strategic partnership and how it has developed,and describes the political, trade and cooperationrelations between the EU and each sub-region, aswell as humanitarian aid.
6
Two histories making up a strategic partnership
The EU has developed and maintained strong linkswith Latin America and the Caribbean since the1960s.
The institutional structure and implementation ofcooperation with these two areas have, however,been managed under different agreements. Relationsbetween the EU and Latin American countriescome under the ALA-DC regulation (Asia, LatinAmerica and developing countries), while theCaribbean countries form part of the ACP group(Africa, Caribbean and Pacific countries) and aretherefore bound, with the exception of Cuba, by theCotonou Agreement signed in 2000 (see chronologyand lexicon).
The strategic partnership between the EU on theone hand and Latin America and the Caribbean onthe other, which started with the first summit ofHeads of State or Government of both regions inRio in 1999, was pursued and strengthened at theMadrid summit in 2002. The key aspects of theEU–LAC strategic partnership include political dia-logue and economic, scientific and cultural coopera-tion. The strengthening of trade links and the har-monious integration of the partners into the worldeconomy are also key objectives of this partnership.Continuing with the action plans adopted at the twoprevious summits, the Guadalajara summit inMay 2004 will consolidate the strategic partnershipbetween the two regions. It provides an opportunityto take up a major challenge: to continue increasingthe wealth generated by the economy and to sharethe fruits of growth on a fairer basis, in the contextof increasing economic liberalisation and marketintegration.
1. Background to EU–LAC relations
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1952 Establishment of the European Coal and Steel Community resulting in the integration pro-cess which was to lead to the European Union in 1992.
1969 Establishment of the Andean Pact, to become the Andean Community in 1996 (Treaty ofTrujillo).
1973 Establishment of Caricom: Caribbean Community and Common Market (Treaty ofChaguaramas).
1974 Start of the biennial European Parliament and Parlatino Conferences.1975 Establishment of the ACP Group (Africa, Caribbean and Pacific) and signing of the first
Lomé Convention (EU–ACP)1976 Initial cooperation activities between the EU and Latin America, including certain Caribbean
countries which were not members of the ACP at this date.1983 Signing of the first cooperation agreement between the EU and the Andean Pact.1984 Launching of the San José Dialogue between the EU and the Central American countries.1985 Signing of the EU–Central American cooperation agreement.1986 Establishment of the Rio Group.1990 Rome Declaration establishing political dialogue between the EU and the Rio Group.1990 Lomé IV (EU–ACP), accession by Haiti and the Dominican Republic.1991 Signing of the Treaty of Asunción establishing Mercosur (Common Market of the South).1992 Establishment of Cariforum.1994 Signing of the Ouro Preto Protocol consolidating and institutionalising the Mercosur process.1994 Fourth ministerial meeting between the EU and the Rio Group in Sao Paulo: adoption of a
declaration on ‘partnership’.1995 Communication from the European Commission: ‘European Union–Latin America: the pre-
sent situation and prospects for closer partnership, 1996–2000’, COM(95) 495.1996 First meeting of the high-level dialogue between the EU and the Andean Community on
combating drugs following the signing in 1995 of the agreements on ‘precursors’.1997 Signing of the agreement on an economic and political partnership and cooperation with
Mexico.1999 Communication from the European Commission on ‘A new European Union–Latin Ameri-
can partnership on the eve of the 21st century’, COM(1999) 105.1999 Rio summit: EU–Latin America/Caribbean.1999 Launching of negotiations for an association agreement between the EU and Mercosur.2000 Communication from the Commission on the follow-up to the Rio summit: ‘Follow-up to
the first summit held between Latin America, the Caribbean and the European Union’,COM(2000) 670.
2000 Signing of Cotonou Agreements between the EU (15 countries) and the ACP countries (77countries).
Chronology of EU/Latin Americanand EU/Caribbean relations
8
2000 Cuba enters the ACP group.
2000-2001 Gradual entry into force of the free trade agreement with Mexico.
2002 Madrid summit: EU–Latin America/Caribbean.
2002 Signing of the EU–Chile association agreement.
2002 Signing of the memorandum of understanding by the European Commission and the Inter-American Development Bank (IDB).
2003 Entry into force of the Cotonou Agreement.
2003 Entry into force of the provisional trade measures in the EU–Chile association agreement.
2003 Signing of the agreement on political dialogue and cooperation between the EU and theAndean Community.
2003 Signing of the agreement on political dialogue and cooperation between the EU and CentralAmerica.
2004 Launching of the negotiations on economic partnership agreements (EPA) with theCaribbean.
Latin America (geographic)
GuatemalaEl SalvadorHondurasNicaraguaCosta Rica
Panamá
México
Chile
Belize
Guyana
Suriname
Cuba
Dominican Republic
Haiti - BahamasJamaica - BarbadosTrinidad and Tobago
Antigua andBarbuda
DominicaGrenada
Monserrat (1)St Kits and
NevisSt Lucia
St Vincent and theGrenadines
VenezuelaColombiaEcuador
PeruBolivia
BrasilParaguayUruguay
Argentina
Caribbean (geographic)
Countries takingpart in the Madridsummit
Member of the RioGroup(at 1/3/2002)
Central Americancountry
Andean Community member country
Mercosurmember country
Cariforum membercountry
Caricom membercountry(1) 2003: with theexception of Montserrat, which is anoverseas territory, the Community is anassociation of sovereign States
Jamaica
OECSmembercountry
Regional and institutional groups in the Latin American and Caribbean area
9
ACP: Africa, Caribbean, Pacific. The ACP groupwas established following the signing of the firstLomé Convention with the European Union in1975.There were 79 members in 2003.
ALA developing countries regulation: regula-tion of the European Parliament and Council gov-erning Community cooperation with the countriesof Asia and Latin America.
ALFA: Latin American academic training. A bi-regional cooperation programme on higher educa-tion.
AL-Invest: bi-regional cooperation programme forcooperation between European SMEs and LatinAmerican undertakings.
@LIS: ALliance for the Information Society. Bi-regional cooperation programme aimed at promot-ing the information society and combating the digi-tal divide.
CAN: Andean Community of Nations.
Caricom: Caribbean Community and CommonMarket, the main objective of which is to promoteregional economic integration.
Cariforum: Discussion forum to promote theregional integration of the Caribbean countries thatare members of the ACP.
Cotonou Agreement: new ACP–EU partnershipagreement concluded in February 2000 for a 20-year period (2000–20).This agreement and its finan-cial protocol will be reviewed every five years.
Dipecho: ECHO programme for preparing for nat-ural disasters.
EC: European Community (see EU).
ECHO: Humanitarian Aid Office of the EuropeanCommission.
EDF: European Development Fund. The EDFfinances projects and programmes in the ACP coun-tries and in overseas countries and territories.The ninth EDF covering the first five years of theCotonou Agreement, represents an amount ofEUR 13.5 million.
EIB: European Investment Bank.
EPA: European partnership agreements. Tradeagreements between the EU and the ACP regions.These agreements, which are compatible with WTOrules, are intended to gradually remove barriers totrade and to strengthen cooperation in every domainrelating to trade.
EU: European Union. From May 2004, 25 mem-bers: Austria, Belgium, Cyprus, the Czech Republic,Denmark, Estonia, Finland, France, Germany,Greece, Hungary, Ireland, Italy, Latvia, Lithuania,Luxembourg, Malta, the Netherlands, Poland,Portugal, Slovakia, Slovenia, Spain, Sweden and theUnited Kingdom. The EU was established on thefoundations of the EEC (former EC), the ECSC(European Coal and Steel Community) andEuratom (European Atomic Energy Community).
FDI: foreign direct investment
Flex: this system is used to compensate for financialimbalances in ACP countries caused by significantlosses of export revenue.
GSP: generalised system of preferences. A systemconsisting of granting, unilaterally and according to aprinciple of non-reciprocity, preferential tariffswhich are unlimited in terms of quantity, to 180developing countries, economies undergoing transi-tion and dependent territories.Tariff preferences aremodulated according to the classification of imports(sensitive/non-sensitive).
Interreg III: The Interreg III Community pro-gramme (2000–06) has an operational framework
Lexicon
10
aimed at promoting harmonious and balanced devel-opment as well as regional integration in the areasconcerned.
LAC: Latin America, Caribbean.
Lomé Convention: The first Lomé Convention,signed in 1975, involved the nine EU Member Statesof the time and 46 ACP countries.This Conventionwas renewed four times between 1975 and 2000,before being replaced by the Cotonou Agreement in2000.
Memoranda of understanding (MoU): Bilateralagreements between the European Community andits partners, which lay down the priorities andindicative budgets for development cooperation for acertain period (in this brochure: from 2000 to 2006).
Mercosur: Common Market of the South. Region-al integration organisation.
OECS: Organisation of Eastern Caribbean States.
PRRAC: regional programme for the reconstruc-tion of Central America.
Rio Group: political consultation mechanism deal-ing with subjects of common interest to Latin Amer-ica and the Caribbean.
SFA: special framework of assistance for traditionalACP banana suppliers. The aim is to improve com-petitiveness in the banana sector and/or to underpindiversification.
Stabex: used up until the ninth EDF, Stabex com-pensated ACP countries for losses of export revenuedue to fluctuations in prices or in demand for agri-cultural products.
Sysmin: used up until the ninth EDF, Sysmin alle-viated the effect of the fluctuations of revenue fromthe production and sale of mining products.
URB-AL: bilateral EU-Latin American cooperationprogramme aimed at developing links betweenEuropean and Latin American local authorities bypooling best practices relating to urban policies.
WTO:World Trade Organisation.
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2.1. The European Union, Latin America and the Caribbean today
Population
Overview of the indicators for both regions
2. Current figures
Population (as a % of the world population)Population (as a % of the world population)
70
60
50
40
30
20
10
01950 1960 1970 1980 1990 2000 2010 (1) 2020 (1)
Asia
Africa
LA & Car.
EU-15
US
Japan
(1) Estimated value.
Sources: Eurostat European Commission
Latin America and the Caribbean: per capita GDP
Mexico
Chile
Mercosur
Andean Community
Central America
Latin America
Cariforum
LAC
EU-15
EU-25
1 958.20
756.63
11 910.77
4 718.32
498.64
19 842.56
621.87
20 464.43
3 781.47
4 599.01
Area(thousands km2)
Population 2001(millions)
492.054
94.067
1 074.078
272.878
63.567
1 996.643
88.980
2 085.623
8 865.400
9 283.647
GDP 2001(euro billions)
Per capita GDP2001 (euro)
99.4
15.4
218.6
115.4
36.6
485.4
34.3
519.8
378.2
45.3
4 949.261
6 107.437
4 912.876
2 364.455
1 734.781
4 112.569
2 615.029
4 014.487
23 340.000
20 420.000
N.B.: GDP expressed at 1995 constant prices, 1995 average exchange rate used = EUR/USD 1.03801.
Source: ECLAC, Eurostat, World Bank.
Latin America and the Caribbean: per capita GDP
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Per capita GDP at 1995 constant prices, 1991-2001
25 000
20 000
15 000
10 000
5 000
0
N.B.: 1995 average exchange rate: EUR/USD 1.03801 (Eurostat).Source: Eurostat, ECLAC
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
LAC
EU-15
EU-25
(euro)
HDI per region in 2001
1.000
0.900
0.800
0.700
0.600
0.500
0.400
United States (0.937)
Japan (0.932)
European Union (0.893)
Central and eastern Europe and CIS (0.787) Latin America and the Caribbean
(0.777) East Asia and the Pacific (0.722) China (0.721)
Arab States (0.662)
Developing countries (0.655)
South Asia (0.582)
Sub-Saharan Africa (0.468)
Least developed countries (0.448)
N.B.: The human development indicator measures,in a country, the level reached in terms of lifeexpectancy, access to education and real adjustedincome.Source: Human Development Report 2003, UNDP.
Per capita GDP at 1995 constant prices, 1991-2001
HDI per region in 2001
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that EU imports from Latin America and theCaribbean have increased faster that EU exports tothe region.As a consequence, Latin America and theCaribbean is steadily reducing its trade deficit withthe EU.
The main merchandises exported from LatinAmerica and the Caribbean to the EU are agricul-tural products, transport material and energy. TheEU has a trade deficit with Latin America and theCaribbean in agricultural products and energy, and atrade surplus in the rest of the sectors.
The structure of Latin America and the Caribbeanexports to the EU is not very diversified yet, andremains dominated by agricultural products. EUexports to Latin America and the Caribbean aremore varied, the main sectors being machinery,transport material and chemical products.
The EU has traditionally been the first investorin the region. European foreign direct investmentinflows peaked in 2000 and have since reduced.However, the stock of European investment in LatinAmerica and the Caribbean continues to increaseand, in 2002, accounted for more than EUR 200billion.
2.2. EU–LAC trade and investment figures
The EU is Latin America’s second trading partner.The EU has gradually strengthened its economicand trade links with Latin America and theCaribbean, resulting in trade figures that more thandoubled between 1990 and 2002.
Latin America and the Caribbean’s trade with theEU has remarkably increased since 1980, althoughthe bulk of the rise took place during the lastdecade. In 2002, EU imports from Latin Americaand the Caribbean accounted for EUR 53,700billion, and exports to the region amounted toEUR 57,500 billion.
If we examine more closely the trend followed bytrade figures during the last five years, we will see
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70.0
60.0
50.0
40.0
30.0
20.0
10.0
0.0
–10.0
–20.0
EU merchandise trade with LAC
Imports
Exports
Balance
(billion ECU/EUR)
1 9 8 0 1 9 9 0 2 0 0 2
18.114.7
–3.3
26.817.1
–9.7
53.7 57.5
3.8
25.0
20.0
15.0
10.0
5.0
0.0
–5.0
–10.0
–10.0
–15.0
–20.0
EU merchandise trade with Latin America and the Caribbean by product, 2002
Imports Exports Balance(billion EUR)
Agriculturalproducts
21.8
3.6 4.8
0.7
15.3
3.8
Energy Machinery Transport material
4.9
14.3
2.2
9.5
0.6 1.30 0.67
Chemical products Texti les andclothing
–18.2
–4.04
9.4
4.57.2
400.0
350.0
300.0
250.0
200.0
150.0
100.0
50.0
0.0
–50.0
LAC merchandise trade with the world
(billion ECU/EUR)
63.4 60.8
–2.6
81.0 94.3
13.3
368.0 370.0
2.0
1 9 8 0 1 9 9 0 2 0 0 2
Imports
Exports
Balance
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EU imports from LAC, 2002
Agricultural products40.5%
Other 27.7%
Textiles andclothing 1.2%
Chemical products4.1%
Machinery 8.4%Energy 8.9%
Transport material 9.2%
EU exports to LAC, 2002
Agricultural products6.2%Other
22.2%
Textiles andclothing
2.3%
Chemical products16.4%
Machinery26.7%
Energy1.3% Transport
material24.9%
17
45.0
40.0
35.0
30.0
25,0
20.0
15.0
10.0
5.0
0.0
EU foreign direct investment with LAC (flows)
(billion EUR)
2 0 0 0 2 0 0 1 2 0 0 2
Inflows
Outflows
Balance
0.6
25.1
1.2
11.4
1.5
9.8
40.9 40.3
24.0
Source: Eurostat
250.0
200.0
150.0
100.0
50.0
0.0
EU foreign direct investment with LAC (stocks)
(billion EUR)
2 0 0 0 2 0 0 1 2 0 0 2
Outward stocks
Source: Eurostat
8.7
176.5
8.2
194.7
9.8
206.1
Inward stocks
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Loans
The level of collaboration between the Commission andthe major international institutions in the field of develop-ment cooperation is particularly high in Latin America.
These institutions are additional partners for Europeancooperation policy and, as such, they contribute to suchthings as financing projects of mutual interest, combatingpoverty and strengthening democracy.
The EIB in Latin America
Under the current mandate (ALA III) of EUR2 480 million for the period from 1 February2000 to 31 January 2007, EIB funds are utilisedto finance investment projects of mutual interestto the countries of the EU and Latin America in17 countries in the region.There are no amountsper country.
Sectors assisted:The EIB supports viable publicand private sector projects in infrastructure,industry, agro-industry, mining and services. Spe-cial emphasis is given to the improvement orprotection of the environment.
Amount: Between 2000 and 2003, the EIBfinanced projects in Latin America to the tune ofEUR 1 104 million.
The EIB in the Caribbean
Under the successive Lomé conventions, theEIB has played a significant part in financingprojects in the Caribbean.
Sectors assisted: Financial support for SMEs(through local financial intermediaries), infra-structures, electricity and energy. Under theCotonou Agreement’s investment facility, fundswill be provided for private sector support, inparticular small and medium-sized enterprises,supporting the local savings’ markets as well asfacilitating foreign direct investment.
Amount: Between 1978 and 2003, the EIBfinanced projects in the Caribbean to the tune ofEUR 1 154 million
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2.3. EU–LAC cooperation in figures
The European Union is the main donor to LatinAmerica and the Caribbean, providing aid in the formof grants and loans (European Investment Bank).
Grants
In addition to the European Union MemberStates’ contributions, over EUR 500 million have
been allocated to Latin America under the European
Community budget every year since 1996.
Furthermore, through the European Development
Fund, the Member States finance cooperation proj-
ects in the Caribbean for an average value of EUR
81 million per year (EUR 2 041 million between
1976 and 2001).
(1) Grants by each donor to the Latin American and Caribbean countries as a percentage of total grants by all donors to these countries
(1) 489/6 044=25 %; 31/6 044=1 %).
(2) Grants by each donor to Latin American and Caribbean countries as a percentage of own grants to all beneficiaries (1 489/6 044=25%;
31/6 044=1 %).
Table 1: The 10 main donors of aid to Latin America and the Caribbean in 2001
Millions USD Millions USD
1United
1 489 9 743 25 15 1 CarDB 31 31 100 1States
2 Japan 738 7 482 12 10 2IDB
277 277 100 5SpecialFund
3 Spain 694 1 164 11 60 3 Spain 694 1 164 60 11
4 EC 582 8 200 10 7 4UN
142 569 25 2Others5 Germany 334 3 098 6 11 5 GEF 24 139 17 0
6 Netherlands 315 2 321 5 14 6Nordic
5 32 16 0Dev. Fund
7IDB
277 277 5 100 7United
1 489 9 743 15 25Special StatesFund
8 ID 274 4 962 5 6 8 Austria 74 503 15 1
9United
176 2708 3 6 9 AATNU 58 422 14 1Kingdom
10UN
142 569 2 25 10 Netherlands 315 2 321 14 5OthersOthers 1 023 17 713 17 6 Others 2 936 433 037 7 49Total 6 044 58 238 100 10 Total 6 044 58 238 10 100
LatinAmericaand theCaribbean
Allbene-
ficiaries
% totalgrants
(1)
% owngrants
(2)
LatinAmericaand theCaribbean
Allbene-
ficiaries
% totalgrants
(1)
% owngrants
(2)
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Table 2: The 10 main beneficiaries in Latin America and the Caribbean in 2001
USD %
Millions
1 Nicaragua 928 152 Bolivia 729 123 Honduras 678 114 Peru 451 75 Columbia 380 66 Brazil 349 67 El Salvador 234 48 Guatemala 225 49 Ecuador 171 3
10 Haiti 166 3Latin America and the Caribbean, others 1 733 29Total 5 044 100
Table 3: Aid per sector in Latin America andthe Caribbean in 2001
Aid for Latin American and Caribbean countries isconcentrated in the following sectors in particular: social(41 %), infrastructure (18 %), education and health (17 %),multisectoral aid (14 %) and, lastly, manufacturing (10 %).
All beneficiaries
Other infrastructure and social services
Education, health and population
Infrastructure and economic services
Multi-sectoral aid
Manufacturing
N.B.: Inside circle: Latin America and the Caribbean;Outside circle: all beneficiaries of aid.
20 %
17 %
30 %
41 %
28 %
18 %
10 %
12 %
10 %14 %
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3.1. The Madrid May 2002 summit
The first summit of Heads of State or Governmentof Latin America, the Caribbean and the EuropeanUnion was held in Rio de Janeiro on 28 and 29 June1999.The objective was to strengthen the political,economic and cultural ties between the tworegions in order to develop a strategic partnership.
In Madrid in 2002, the Heads of State welcomed thepractical progress achieved by the strategic partner-ship between the two regions since the 1999 Riosummit. The summit enabled the ‘common valuesand positions’ professed by both regions to bereasserted, and gave new impetus to the partnershipthrough the ‘political statement’ adopted by the rep-resentatives of the 33 Latin American and Caribbeancountries and the 15 European Union countries.
The Madrid summit was also the occasion for con-cluding negotiations on the association agreementbetween the European Union and Chile, whichestablishes a political dialogue, cooperation and thegradual introduction of a free trade area.
The European Commission took advantage of theoccasion to launch two major new bi-regional pro-grammes in the key sectors of education and theinformation society: the ALßAN programme,which provides scholarships to Latin Americanpostgraduate students wishing to study in Europe,and the @LIS programme aimed at promoting theuse of information and communication technolo-gies. The ALßAN and @LIS programmes are alsoopen to the Caribbean countries, which can takepart in them by availing of national indicative pro-gramme resources.
3. The strategic partnership
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Lastly, the summit expressed renewed support forthe coordination and cooperation mechanism adopt-ed by the EU and LAC in 1999 to combat drugs,entitled the Panama action plan. This mechanism isbased on the principle of shared responsibility. Itaims to promote inter- and intra-regional coopera-tion on drugs issues (and related crimes). It also seeksto improve the regular pooling of ideas and experi-ences by the political and technical authorities ofboth regions.
For further information on the Madrid summit:
http://europa.eu.int/comm/world/lac/
The Madrid summit declaration
The Madrid declaration essentially focuses on thestrengthening of democratic institutions, sustainabledevelopment, the eradication of poverty, culturaldiversity, justice and social fairness, plus the continu-ation of the regional integration process.
In relation to political matters, the Heads of Stateemphasised the need to act in unison within inter-national bodies, in the fight against terrorism andorganised crime, and against all forms of discrimina-tion.
In relation to economic matters, they expressedtheir will to increase the flow of trade and invest-ment between both regions, in line with the condi-tions governing sustainable development. They alsostated that they would work together to improve theinternational financial system.
In relation to cooperation, the representatives ofboth regions reaffirmed their common commitmentto respect cultural diversity in the world. This com-mitment is reflected in an active cooperation agree-ment concerning the information society, educationand culture.
3.2. From Madrid to Guadalajara: the achievements
3.2.1. Strengthening ties
Signing of two EU–Central America andEU–Andean Community political and cooper-ation agreements in Rome on 15 December2003
The Heads of State had agreed in Madrid tolaunch negotiations between the European Unionand the countries of Central America (Guatemala, ElSalvador, Honduras, Nicaragua, Costa Rica andPanama) on the one hand, and the Andean Commu-
nity and its Member States on the other (Venezuela,Colombia, Ecuador, Peru and Bolivia). Conductedsimultaneously, these negotiations were concludedvirtually at the same time and the two political andcooperation agreements were signed in Rome on 15December 2003 (see also details in the sections of thebrochure dealing with EU relations with each one of thesetwo regions).
Implementation of the EU–Chile associationagreement concluded at the Madrid summit
The application of the association agreementbetween Chile and the European Union producedthe expected results. Chilean exports to the EU roseby 11.4 % during the first six months of entry intoforce of the commercial component of the agree-ment (February–August 2003) compared with thesame period the previous year. Imports from the EUincreased by 23.1 % compared with the same periodin 2002.
Progress in negotiations for an associationagreement between the EU and Mercosur
The EU and Mercosur announced in Madrid inMay 2002 that the negotiations on two components,the political dialogue and cooperation, were virtual-ly complete. The trade component remains to benegotiated. Strengthened by the results and hencethe success of the multilateral trade negotiationslaunched in Doha, the negotiations between the EUand Mercosur continued to progress at the samepace as the multilateral negotiations.The parties heldsix negotiation sessions between the Madrid and theGuadalajara summits.
Analysis of the migration between Europeand Latin America and the Caribbean
In Madrid, the EU–LAC Heads of State or Gov-ernment agreed: ‘To carry out an integrated analysisof the different issues of migration between ourregions, which has brought and continues to bringgreat benefits to both, to implement solutions and toguarantee the full respect of the fundamental rightsof migrant workers and their families, in accordancewith international law and national legislation’ (point31 of the political declaration).
At the initiative of Ecuador, representatives fromthe EU and LAC met for a two-day experts-levelseminar on migration in Quito (4 and 5 March2004). The seminar allowed for a fruitful exchangeon a broad range of issues, such as an assessment ofthe migration flows, causes of migration, the impact
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on receiving countries and the countries of origin aswell as policy responses in Latin America and theCaribbean and the European Union.
3.2.2. Developing regional cooperation
Definition
The Madrid summit adopted a clear definition of‘bi-regional’ cooperation between the EU and LatinAmerica and the Caribbean: Evaluation report adoptedin Madrid, point 12: ‘The bi-regional nature of theactions is by definition flexible in order to determinehow to build links between our regions. Bi-regionalactivities in the framework of the EU–LAC summitare understood to be those originating in one orvarious EU Member States or in the EuropeanCommission or in one or various LAC countries orin one of their integration organisations involvingthe participation of various countries (more thanone country) of both regions. These activities shallcontribute to the strengthening of the bi-regionalstrategic partnership. The actions that need to bepromoted are essentially those that have a multipliereffect in other regions or sub-regions.’
Website for pooling bi-regional cooperationprojects: a new tool for bi-regional cooperation
The EU–Latin America–Caribbean partnersadopted a new tool for bi-regional cooperation in2003. The cooperation directors in each one of thepartner countries met in December 2002 and agreedto establish a mechanism for pooling bi-region-al cooperation project profiles. This mechanismoperates via the Internet. A forum, with accessreserved for cooperation officials in each EU–LACcountry, permits cooperation projects to be proposedto counterparts in government structures in othercountries. Any partner countries that are interestedcan communicate online their wish to becomeinvolved in implementing a new bi-regional project.
The website for pooling bi-regional cooperationprojects has been in operation since October 2003.Aseminar on ‘bi-regional cooperation,’ organised atthe initiative of Costa Rica, was held in San José on18 and 19 March 2004, permitting online communi-cations and effective pooling of ideas for bi-regionalcooperation projects.
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3.2.3. Implementing bi-regional cooperation
The European Commission started to devise anddevelop horizontal programmes for all of LatinAmerica back in 1993 (with the AL-Invest pro-gramme). Bi-regional cooperation between the EUand Latin America, financed by the Communitybudget, complements that implemented by theEuropean Commission at national and sub-regionallevels.The EU has, over time, created a series of pro-grammes in different sectors, in which civil societyorganisations in Latin America and Europe are themain actors.
Higher education and research:
The ALßAN programme, launched in May2002, provides postgraduate scholarships toenable students and professionals in Latin Ameri-ca to study in the European Union. It makes pos-sible education projects for postgraduate students(at master’s and doctoral level) and for profession-als or future decision-makers (for specialisedhigh-level training) in high-level EU institutions.
The first financial aid under the ALßAN pro-gramme was granted for postgraduate studies(masters’ and doctoral degrees) and for high-levelspecialised training during the 2003-04 academicyear.The first group selected comprised 251 appli-cations from Latin American students, which wereaccepted. The education and training periods lastbetween six months and three years. The mostpopular destinations were Spain and England,with these two countries receiving 193 students,hence 77 % of the applications selected.
For further information: http://www.europa.eu.int/comm/euro-peaid/projects/alban/index_fr.htm http://www.programalban.org(ALßAN portal)
Under the ALFA programme (Latin Amer-ican academic training), the aim is to promotecooperation between higher education establish-ments in both regions.
The second phase of the ALFA pro-gramme (2000–05), or ALFA II, consists of twocomponents: (i) participative and academic man-agement, and (ii) scientific and technical coopera-tion (mobility).
The budget approved by the European Com-munity for the projects amounts to EUR 42 mil-lion.
For further information:http://europa.eu.int/comm/europeaid/projects/alfa/index_fr.htm
OREAL (Observatorio de las RelacionesUE–AL), approved by the European UnionMember States on 18 September 2003, seeks toidentify and develop all opportunities for partner-ship between the two regions. This programme,based on the expertise available in the networksof European and Latin American institutes, aimsto achieve better understanding of regional andsectoral issues affecting policy-making.
Objectives of the Observatory include contribut-ing to the debate on the common challenges facingboth regions and on the issues arising from theirrelationship, strengthening relations between Euro-pean and Latin American institutes willing to pooltheir research, information, prospective and strategicanalysis capacities, and promoting the spread, inEurope and Latin America, of relevant informationrelating to relations between these two worldregions, based on a strategic vision of these relations.
Economic cooperation:
The AL-Invest programme, launched in1993, underpins the globalisation of undertakingsin both regions by encouraging European SMEsto invest in technological modernisation andmanagement of any Latin American undertakingsinterested in this. The aim is also to strengtheninter-regional relations through transfers of tech-nology and of European technical know-how toLatin America, and to maintain sustainable coop-eration of mutual interest between the undertak-ings in both regions, confining public interven-tion to the role of catalyst. To this end, sectoralmeetings are organised between undertakings inthe same sector on either side of the Atlantic.
The results have been very positive. Over30 000 undertakings took part in the Al-Investprogramme, accounting for over 200 millioninvestment and trade agreements.
In December 2003, a contract was signedbetween the European Commission and a consor-tium of institutions representing the private sectorin Europe and Latin America which will hence-forth be responsible for implementing Phase III(2004–07).The amount set aside for the Commu-nity contribution is EUR 42 million.
For further information: http://europa.eu.int/comm/europeaid/projects/al-invest/index_fr.htm
The information society
The @LIS programme (Alliance for theInformation Society) aims to reduce the digitaldivide by promoting the use of information and
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communication technologies. The objective ofthe programme is to meet the needs of localcommunities, stimulate dialogue on policies andregulation, and increase the interconnectioncapacity between research circles in both regions.
Based on an evaluation in January 2003, 19 pro-jects were selected to demonstrate the benefits ofinformation and communication technologies infour key areas: local governance, education andcultural diversity, public health and social inclu-sion. Some 212 organisations from both regions(LA and EU) are taking part in these projects: 103European organisations and 109 Latin Americanones.
For further information: http://www.europa.eu.int/comm/europeaid/projects/alis/index_en.htm
Energy
The ALURE programme encourages opti-mal, rational use of energy by (public, mixed andprivate) energy supply actors in the EU and LatinAmerica.
The programme ended in 2002. Twenty-five pro-jects were implemented between 1996 and 2001involving some 100 actors in the gas and electricitysectors.
The results are positive: ALURE supported theefforts by Latin American countries to find greater
quantities of better quality energy supplies, whilepromoting access to this service for the most under-privileged section of the population and ensuring aminimum environmental impact.
The projects generated considerable added valuefor the beneficiaries, mainly through the transfer ofconcepts, procedures and instruments tested by theEuropean energy sector, and their adaptation to theLatin American context.For further information: http://www.europa.eu.int/comm/europeaid/projects/alure/index_en.htm
Urban development
The URB-AL programme seeks to establishdirect, solid links between European and LatinAmerican towns by disseminating, acquiring andapplying ‘best practices’ in the area of urban poli-cies.
After seven years in operation, the URB-ALprogramme comprises over 12 000 local authori-ties in Latin America and the EU representingsome 2 000 cases of participation.
Following an initial phase (1996–2000) with abudget of EUR 14 million, the UR-BAL pro-gramme is now in its second phase (2001–06).
With a budget of EUR 50 million, five newthemes have been introduced in this phase: localfinance and participative budgets, the fight against
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urban poverty, promoting the role of women inlocal decision-making bodies, towns and theinformation society, and citizens’ safety in towns.
For further information:http://www.europa.eu.int/comm/europeaid/projects/urbal/index_en.htm
Social cohesion
The Social Initiative is a new programme aimedat developing the capacities of authorities in allLatin American countries to devise coherentpolicies to fight against social inequalities byidentifying the populations most concerned. Theeradication of poverty and quest to achieve socialequity were the key objectives mentioned at thesecond summit of Heads of State or Governmentof the European Union, Latin America and theCaribbean, held in Madrid in May 2002.
To be implemented in 2004, this project complieswith the 13th commitment in the Madrid summitpolitical declaration: ‘…to combat poverty through,inter alia, the strengthening of our democratic insti-tutions, macroeconomic stability, the closing of thetechnological gap, wider access to, and better qualityof, education, healthcare and social protection. Inthis respect we will cooperate in areas such asimproving the effectiveness of public institutions …’.
3.3. The challenges and objectives of theGuadalajara summit
3.3.1. Discussion topics
The preparations for the summit of Heads of Stateor Government to be held in Guadalajara started atthe end of 2002 with the following goals:
• to evaluate the progress achieved by the part-nership since the previous summit in Madrid(May 2002);
• to propose to the Heads of State or Govern-ment political strategies and an action plan to beadopted to ensure progress in the strategic part-nership in Guadalajara in May 2004.
During the preparations, a consensus has graduallyemerged on the key themes to be discussed at thesummit:
• social cohesion; and
• multilateralism.
This discussion agenda provides an opportunity topropose progress in areas where action has alreadybeen started in the context of the strategic partner-ship. It will also permit a challenge to be laid downfor both regions, that of dealing with a problem at
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the roots: the lack of social equity and equal accessto collective goods and services, despite economicgrowth.This is the challenge of social cohesion.
Website on social cohesion:http://europa.eu.int/comm/external_relations/la/index.htm
3.3.2. Participation of all actors in the bi-regional partnership: events in the margins of the Guadalajara summit
Of the events and initiatives in the margins of theGuadalajara summit, social cohesion stands out asone of the central topics in the EU–LAC partner-ship. The European Commission is co-financingmany of these events. Most of the events planned forthe margins of the summit relate to a considerableextent to certain dimensions of the problem, such as:
• access to justice;• the contribution of civil society and the search
for good governance;• the role of taxation and foreign debt;• the international community and the fight
against poverty, inequality and exclusion;• social groups;• education and employment;• immigration.
List of events in the margins of the Guadalajara summit, co-financed or co-organised by theEuropean Commission
Date Event Place Organiser
2004
2004
2004
2004
2004
2004
2004
2004
Regional integration and social
cohesion in Latin America and
the Caribbean: a contribution by
members of parliament to the
3rd EU-LAC summit
EU-LAC seminar
on immigration
Regional cooperation seminar
Conference of local partnerships
EU-LAC (URB-AL)
II Euro-Latino American and
Caribbean Civil Society
Forum (ALOP)
3rd Meeting of Organised Civil
Society UE-ALC (CESE)
EU-LAC seminar
on access to justice
Launching of the PRODDAL
report on democracy in Latin
America
Chile
Quito (Ecuador)
San José (Costa Rica)
Valparaiso (Chile)
Pátzcuaro, Michuacán
(Mexico)
Mexico (Mexico)
Costa Rica / Brussels
Lima (Peru)
Guadalajara
(Mexico)
CELARE (Centro Latinoamericano
para las Relaciones con Europa)
Government of Ecuador
Government of Costa Rica
Valparaiso municipal authorities
Barcelona
ALOP – Latin American Association
of Development Organisations
European Economic and Social
Committee (EESC)
IIDH – Inter-American Institute for
Human Rights
UNDP
15-16 January
4-5 March
18-19 March
21-23 March
24-26 March
13-15 April
19-21 April
and June
19-21 April
and End of May
Alure
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4.1. Social cohesion
‘The tremendous efforts that Latin Americannations in the past two decades have put into mod-ernising their economies and stabilising democraticrule and respect for human rights yielded consider-able dividends in terms of growth, trade and invest-ment. But this has not been translated intowidespread improvements in living conditions, filter-ing through to all levels of society. Despite the stridesmade to improve living conditions and to increaseand safeguard public social expenditure, we havewitnessed a worrying increase in the number ofpoor people during the last decade.’
Christopher Patten, EU–Rio Group ministerialmeeting,Vouliagmeni, 28 March 2003.
Growth is not enough!
The wealth generated by an economy is notenough to ensure the fair distribution of the fruits ofgrowth, even though the latter is a necessary condi-tion for the sustainable development of a country.The LAC region, which generates a relatively highlevel of income compared with other world regions,is nevertheless recognised at the moment as beingone of the least egalitarian.
A real debate must be conducted on social cohesionto find solutions that would help reduce poverty,inequalities and social exclusion in the region.
4. Thematic challenges
0
10
20
30
40
50
60
ALC Asia NorthAmerica
EasternEurope
WesternEurope
Scandinaviancountries
Coefficient Gini 2000%
N.B. The Gini coefficient measures inequality in income distribution. High coefficient = high level of inequality.Source: Inter-American Development Bank (IADB).
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The State and its responsibilities
The role of the State is essential to ensure a satis-factory level of social cohesion. Bearing in mind theneed for stability in terms of the macro-economyand public finance, the State can, for instance, takeaction in relation to the tax system to make it fairerand more progressive. The search for greater cohe-sion thus requires a continuation of democratisationefforts through participative governance.
Latin America and the Caribbean: socialcohesion as a new challenge
There is a broad consensus that recognises that theLatin American and Caribbean countries will not beable to achieve sustainable growth unless they dealwith the problem of social exclusion at the source.The socioeconomic indicators of the LAC countrieshave drawn significantly closer to those defined inthe context of the millennium development goals,for instance in relation to access for all to primaryeducation and to healthcare. However, efforts mustbe made to halt the self-perpetuating processes ofeconomic, social and political exclusion.
The European experience
The European Union is also facing growing prob-lems to maintain its social cohesion levels. The EUHeads of State or Government defined a global strat-egy to combat social exclusion and poverty at theEuropean Council in Lisbon in March.
Website: http://www.europa.eu.int/comm/employment_social/soc-prot/soc-incl/ex_prog_en.htm
The European Union’s regional policy, in existencesince the 1970s, is also intended to ensure greatereconomic and social cohesion between its Member
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State’s regions.Website:http://europa.eu.int/comm/regional_policy/index_fr.htm
Exchanges of experience between the EUand Latin America and the Caribbean: onesolution for achieving progress in social cohe-sion
The EU’s experience in promoting social cohesioncould be used as a basis for its cooperation withLatin American and Caribbean countries. It shouldalso allow LAC countries to find their own ways ofcombating inequalities, exclusion and poverty.
Initial phases of coordinated action
The biggest lender (the IADB) and the biggestdonor (the European Commission) in Latin Americawork in tandem to draw the European, Latin Amer-ican and Caribbean partners together in an associa-tion and in specific actions to improve social cohe-sion.
The memorandum of understanding signed by thetwo institutions on 16 May 2002 acknowledges thatsocial equity and the reduction of poverty are thekey themes for coordinated intervention. A jointseminar on social cohesion in Latin America and theCaribbean was organised in Brussels on 5 and 6 June2003. This provided an opportunity to pinpoint themain problems specific to this matter and to suggestactions to governments and to the internationalcommunity.
For further information, consult the website on social cohesionand the documents from the seminar:http://europa.eu.int/comm/external_relations/la/index.htm
Social initiative: an initial proposal for action
In the Community’s financial package for regionalcooperation with Latin America, the EuropeanCommission has provided for a EUR 30 million bi-regional programme in 2004 to finance actions inthis area. Under this programme, a dialogue and thepooling of experiences will be organised with a viewto defining and introducing policies with an impacton the reduction of social inequalities.
The initiative for highly indebted poorcountries (HIPC)
The main objective of the HIPC initiative is tohelp lower foreign debts to a sustainable level. Thiscan allow some room for manoeuvre in budgetaryterms in order to launch structural reforms that willhelp reduce inequalities. Moreover, this initiative willalso combat poverty by defining a strategic frame-
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work: the poverty reduction strategy papers (PRSP).In the Latin American and Caribbean region, thefollowing countries already benefit from this initia-tive: Bolivia, Honduras, Guyana and Nicaragua; andHaiti will benefit shortly.
A key theme for the EU–LAC summit inGuadalajara in May 2004
The European Union and Latin America and theCaribbean promoted social cohesion as a key themeat the EU–LAC summit in May 2004 in Guadalajara(Mexico). Both parties are clearly determined toturn this common concern into concrete commit-ments to effectively combat poverty, inequality andexclusion.
For further information on the Guadalajara summit:http://europa.eu.int/comm/world/lac-guadal/00_index.htm
4.2. Respect for human rights,democracy and the rule of law:shared values
Approached by the Contadora Group, the Euro-pean Community decided in 1984 to support apeace and development initiative in Central Americabased on the definition of a political and economicplatform negotiated by and with the countries inthis sub-region. This was the beginning of the San
José dialogue, which paved the way for a specificidentity for European cooperation in the region:‘democracy, peace and development’ combined withthe guarantee of long-term partnership.
Since then, the protection of democracy andhuman rights has remained an essential componentin cooperation between the European Union andthe countries of Latin America and the Caribbean.The Lomé conventions, devised from the outset asagreements on political, economic and social part-nership between the EC and the ACP countries,have given political aspects (respect for democracy,human rights and the rule of law) an increasinglypre-eminent role in the 1990s. Respect for democ-racy, human rights and the rule of law has nowbecome an essential condition in every new partner-ship agreement concluded between the EuropeanUnion and third countries. Thus the cooperationframework agreements between the EU and eachone of the Latin American sub-regions, followed bythe political and cooperation agreements, and finallythe association agreements with some countries, allcontain this clause enabling either one of the partiesto terminate cooperation if it considers that therehas been a serious, repeated infringement of theprinciples of democracy, the rule of law or humanrights.
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In the context of the EU–Latin American andCaribbean strategic partnership started in 1999 atthe first summit of EU–LAC Heads of State in RioJaneiro, the safeguarding of human rights, democracyand the rule of law was instantly adopted as a toppriority.The Madrid summit confirmed this, using itto head the document it adopted on ‘common val-ues and positions’.
The European Union cooperates with LatinAmerican and Caribbean countries on the safe-guarding of human rights, democracy and the rule oflaw by financing bi-regional, regional and nationalcooperation programmes or through the EuropeanInitiative for Democracy and Human Rights(EIDHR).The EU supports the efforts by the LACcountries to ensure the stabilisation of democracy byfinancing election observer missions. A number ofcooperation projects are also carried out locally,depending on the needs identified among localcommunities.The European Union has, for instance,supported the peace process in Colombia by settingup peace laboratories, the aim of which is to makeavailable a forum for Colombians to listen to andunderstand each other.
For further information:http://europa.eu.int/comm/europeaid/projects/eidhr/index_en.htm
4.3. Promoting multilateralism
The EU–LAC partnership reflects the will of bothparties to promote an international system based onthe principles of multilateralism, governed by con-sensual, universally applied rules and multilateralsurveillance mechanisms.
One of the priorities in the EU–LAC partnershipis to develop mechanisms for consultations betweenthe two regions within international institutions andmultilateral bodies. The two regions are convincedthat multilateralism is the only valid method fordealing with international relations today.
The European Union, Latin America and theCaribbean have adopted converging positions on anumber of matters of international interest, such asthe Kyoto Protocol, the International CriminalCourt, etc. This convergence was possible mainlybecause certain values are shared. These values werelisted in the document on common values and posi-tions adopted by the Heads of State or Government ofthe two regions at the Madrid summit in May 2002.
The EU is determined to strengthen multilateral-ism by working as closely as possible with the com-petent international organisations on cooperation
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with the countries of Latin America and theCaribbean:
with the United Nations:See the Commission communication to the
Council and European Parliament, COM(2003)526 final of 10 September 2003: ‘The EuropeanUnion and the United Nations: the choice ofmultilateralism’.
It must be remembered that the EU budgetallocates some EUR 300 million per year to Uni-ted Nations agencies.When Member States’ con-tributions are added to this, this makes the EUthe main donor of United Nations operations. Ofthe UN agencies, the Economic Commission forLatin America and the Caribbean (ECLAC) andthe United Nations Development Programme(UNDP) are obviously special components in theEU–LAC partnership given their expertise ineconomic, social and environmental issues;
with the Inter-American DevelopmentBank (IDB) which constitutes a solid partner inthis domain since it is the main non-refundablelending and technical assistance body in the LACregion. The memorandum of understanding,signed on 16 May 2002 between the EuropeanCommission and the IDB, has permitted thedevelopment of joint initiatives, for instance on
social cohesion, consultations with civil society,natural disasters, support for regional economicintegration, etc.;
with the World Bank, in particular as regardsthe coordination of strategies to reduce povertyin the poorest countries (in Latin America: Nica-ragua, Honduras and Bolivia);
with the International Monetary Fund, forinstance through the programme for highlyindebted poor countries (HIPC).
4.4. Regional integration
The European Union has always supported theregional integration process in Latin America andthe Caribbean. Because of its history and its ownintegration process, support for regional integrationis an area in which the EU has real added value tocontribute. The EU is ready to share this uniqueexperience with other world regional groupings. Italso hopes to help them draw on the substantialgains made in the regional integration process. Ittherefore encourages other countries in the world toforge ever stronger links with their neighbours andto organise themselves within institutionalisedregional organisations.
Latin American countries have already decisivelyembarked on the path to regional integration. Mer-
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by Member States and regional institutions tostimulate economic integration through the crea-tion of the single Caricom market and economy(CSME).
The Community also supports the regionalintegration process through the economic part-nership agreements (see lexicon).
In terms of institutional strengthening, the EUsupports the region in its strategy to integrateinto the world economy bilaterally, multilaterallyand regionally. It underpins the Caribbean regionin particular in its involvement in negotiations atthe WTO and in the establishment of the FTAA(free trade area of the Americas).
Support for the stepping up of regional integrationis the main focal sector in the Caribbean regionalindicative programme under the ninth EDF. It willthus be granted between 75 and 90 % of the region-al budget of EUR 57 million.
For further information:http://europa.eu.int/comm/development/body/region/caribbean_fr.htm
cosur (‘Mercado del sur’), the SICA (Central Amer-ica integration system) and the Andean Communityare the three main regional integration processes inLatin America.
The priority accorded to regional integration wasconfirmed by the signing on 15 December 2003 oftwo new political dialogue and cooperation agree-ments between the European Union and CentralAmerica, on the one hand, and the Andean Com-munity, on the other.
The EU supports the efforts made by the Caricomand Cariforum Member States in the Caribbeanregion by means of several regional integration ini-tiatives.
The ‘regional integration and development stra-tegy of Cariforum’ (RIDS), adopted in April2002, has the economic goal of preparing theCariforum economies to overcome the problemsarising from their integration into the world eco-nomy.
EU support is also focused on the major efforts
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4.5. Enlargement of the European Union:an opportunity for its Latin Americaand Caribbean partners
The 15 countries which formed the EuropeanUnion since 1995 (Austria, Belgium, Denmark, Fin-land, France, Germany, Greece, Ireland, Italy, Luxem-bourg, the Netherlands, Portugal, Spain, Sweden andthe United Kingdom) will be joined by 10 newcountries on 1 May 2004: Cyprus, the CzechRepublic, Estonia, Hungary, Latvia, Lithuania, Malta,Poland, Slovakia and Slovenia. This is the biggestenlargement which the Union has ever experienced,in terms of both size and diversity.
The European Union of 25 countries will havea population of almost half a billion people, and aGDP of over EUR 9 200 billion.
Already the biggest trade partner in the worldwith its 15 countries, the EU with 25 memberswill account for one fifth of world trade, and
close to 50 % of foreign direct investment, and itwill receive in its territory 30 % of the world’sforeign direct investment.
With 25 members, the EU will continue to bethe biggest donor of development and humanita-rian aid, as it was with 15 Member States.
Enlargement is a source of enrichment ofEuropean cultural diversity, and of the extent ofits historic, cultural and political experience.Thisplaces the European Union in a position to bet-ter understand other peoples and their political,economic and historical situations.
Enlargement extends the area of peace, stabilityand prosperity in Europe and strengthens thesecurity of all its peoples.
Enlargement strengthens the role and position ofthe Union in the world, in external relations, securi-ty, trade and in other domains relating to world gov-ernance.
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From a strictly commercial point of view, the EU’spartner countries benefit from its enlargementbecause of:
the extension of the common market: theapplication of a set of common trade rules,identical customs tariffs and harmonised admi-nistrative procedures on the territory of 25countries;
simplified and greater access to the markets ofthe new countries: with the application of theEU tariff by these countries, customs duties willbe significantly reduced for goods entering theirterritories: the tariffs on agricultural products willdrop from an average of 18.7 to 16.2 %, while for
industrial products they will fall from 4.8 to3.6 % with the application of the European com-mon external customs tariff.
In political terms, by adding to the power, cohe-sion and influence of the Union on the internation-al arena, enlargement strengthens the Union’s handwhen it comes to globalisation and underpins anddefends the European social model.
On the international stage, the influence of anenlarged EU benefits partners such as Latin Americaand the Caribbean when it comes to defendingtogether their common values and the importanceof multilateralism.
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Mercosur is a dynamic process of regional integra-tion between Argentina, Brazil, Paraguay andUruguay.
Mercosur is the 4th largest economic group in theworld, with a total GDP of EUR 606 billion and apopulation of 217 million. There are strong histori-cal, political, social, economic and geopolitical linksbetween the EU and Mercosur. The EU fully sup-ports Mercosur’s integration project and objectives.
The EU has supported Mercosur integration fromits beginning/inception in 1991, and continues to doso with a view to create a close and comprehensiveassociation between the two parties.The EU believesthat a strengthened Mercosur will be the key to the
development of the region. The EU welcomes theprogress achieved so far in these negotiations andreiterates its commitment to continue to make fur-ther progress in view of an early and satisfactoryconclusion of the association agreement.
The objective of the Ministerial meeting in Mexicois to take stock of results achieved so far and give fur-ther political guidance to the negotiating process. TheEU looks forward to substantially strengthening itsrelations with Mercosur during the summit and inthe years to come.
Paving the way for an association agreement
A regular EU-Mercosur political dialogue takesplace at the level of heads of state and at ministerialand senior officials’ level.
In 1995 the EU and Mercosur signed an Inter-regional Framework Cooperation Agreement inorder to ‘strengthen existing relations between theparties and to prepare the conditions enabling an
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5.1. The EU and Mercosur
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interregional association to be created’. At the EU-LAC Rio de Janeiro summit in June 1999, EU-Mer-cosur authorities decided to launch associationnegotiations, covering the liberalisation of all trade ingoods and services, an enhanced form of coopera-tion and a strengthened political dialogue.This is thefirst time that two trade blocs have ever negotiatedan association agreement.
From April 2000 to January 2004, eleven roundsof negotiations have already taken place (either inBrussels or in the capitals of the pro tempore Presi-dency Mercosur countries).
On 12 November 2003, a meeting of negotiatorsat ministerial level took place in Brussels. Duringthis meeting, Commissioners Patten and Lamytogether with their Mercosur counterparts agreedupon an ambitious roadmap for the final phase ofthe negotiations.
In 2004, as part of this programme, four negotiat-ing rounds and two Trade Negotiators Meetings atministerial level (one in May during the EU-LACsummit and another one in Brussels in October)take place, with a view to conclude the associationagreement between EU and Mercosur during 2004,if conditions are met.
The leading donor of aid to Mercosur...
At present, the EU is the leading donor of aid toMercosur. EC financing during 2000-06 forregional and bilateral cooperation with Mercosurtotals nearly EUR 250 million:
Mercosur: EUR 48 million
Argentina: EUR 65.7 million
Brazil: EUR 64 million
Paraguay: EUR 51.7 million
Uruguay: EUR 18.6 million
Mercosur also benefits from other horizontalEC programmes in Latin America (e.g. Al-Invest,URB-AL, ALFA, @LIS).
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During 2001 the EU and Mercosur signed severalbilateral and regional Memoranda of Understandingon cooperation. Priorities in the period up to 2006will be:
Mercosur:Support to enhancing the institutionalisation ofMercosur, completion of internal market and civilsociety participation
Argentina:Institutional reform, trade & economic promo-tion, information society, investment promotion,consumer policy
Brazil:Economic reform, public administration, socialdevelopment, science & technology, the environ-ment
Paraguay:Modernising the State, trade & investment pro-motion, sustainable development, fight againstpoverty
Uruguay:Economic reform, modernising the State, regionalintegration, social development, the environment,science & technology
On the way towards a free trade area …
The EU is Mercosur’s main trading partner,accounting for almost 23 % of Mercosur’s trade. TheEU is also Mercosur’s biggest investor.
EU exports to Mercosur:EUR 18.2 billion in 2002 (machinery, equipment,transportation material, chemicals).
EU imports from Mercosur:EUR 24.1 billion in 2002 (almost entirely agricul-tural products).
FDI by the EU in Mercosur:EUR 16.4 billion in 2002.
The association negotiations are aimed atcreating a free trade area between both regionsby liberalising trade in goods and services in confor-mity with WTO rules. In addition, the comprehen-sive agreement will also cover inter alia marketaccess/rules on government procurement, invest-ment, intellectual property rights, competition poli-cies, SPS (sanitary and phyto-sanitary issues), TBT(technical barrier to trade), wine and spirit, businessfacilitation, trade defence instruments, a dispute set-tlement mechanism, etc.
Significant progress has been achieved, with thetabling of improved tariff offers in May 2003. At thisstage, Mercosur offer covers 83.5 % of EU exports toMercosur and EU offer covers more than 91 % ofMercosur exports. Initial offers on services andinvestment were exchanged in May 2003 and bothsides also exchanged their respective tariff offers andrequests for improvements during the same period.
100.0
80.0
60.0
40.0
20.0
0.0
–20.0
Mercosur merchandise trade with the world
(billion ecu/euro)
1 9 8 0 1 9 9 0 2 0 0 2
Import
Export
Balance27.0
–6.0
20.9
24.7
11.4
36.2
68.4
25.4
93.8
EU-Mercosur: some trade figures
39
Progress has also been achieved in the other tradeareas of the negotiation, i.e. non-tariff measures (incl.antidumping, customs and related matters,TBT, SPSand Wines and Spirits agreements), trade in servicesand establishment, government procurement, currentpayments and capital movements, IPR, competitionand dispute settlement.
30.0
25.0
20.0
15.0
10.0
5.0
0.0
–5.0
–10.0
–15.0
EU Merchandise trade with Mercosur
(billion ecu/euro)
1 9 8 0 1 9 9 0 2 0 0 2
Import
Export
Balance
7.7
–1.8
6.0
14.2
–8.6
5.7
24.1
–5.9
18.2
EU imports from Mercosur, 2002
Other28.4 %
Agricultural products54.9 %
Energy1.4 %Machinery
3.8 %Transport
material6.8 %
Chemical
products3.8 %
Textiles andclothing0.9 %
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Other20.7 %
Agricultural products3.5 %
Energy1.3 %
Machinery29.6 %
Transportmaterial23.2 %
Chemical
products20.5 %
Textiles andclothing1.3 %
EU exports to Mercosur, 2002 EU foreign direct investment with Mercosur(stocks)
(billion euro)
2 0 0 0 2 0 0 1 2 0 0 2
140.0
120.0
100.0
80.0
60.0
40.0
20.0
0.0
118.0
3.6
127.3
3.0
132.9
3.7
Inwardstocks
Outwardstocks
Source: Eurostat.
EU foreign direct investment with Mercosur (flows)
(billion euro)
30.0
25.0
20.0
15.0
10.0
5.0
0.0
2 0 0 0 2 0 0 1 2 0 0 2
Inflows
Outflows
Balance
0.5
16.016.5
0.7
4.95.6
0.6
25.926.5
More information: http: //europa.eu.int/comm/external_relations/mercosur/intro/index.htm
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Relations between the European Union (EU) and theAndean Community (Comunidad Andina de Naciones orCAN) stretch back over more than 30 years. The tworegions have consistently sought to strengthen these rela-tions.This process is based today on a range of instrumentsreflecting their mutual interests in the spheres of politics,cooperation and trade.
Growing confidence in the political dialogue
The EU has supported the Andean process ofregional integration since its very beginning withthe Cartagena Agreement of 1969. This agreementestablished the ‘Andean Pact’. Later, through the Tru-jillo Protocol of 1996, this pact was transformed intothe ‘Andean Community’, comprising Colombia,Peru,Venezuela, Ecuador and Bolivia.
The EU and the Andean Community share thesame democratic values and principles. In 1996, theRome Declaration initiated a political dialoguebetween the two regions and, since then, ad hocpresidential and ministerial meetings have takenplace at regular intervals.
The fight against drugs is a priority issue inthe political dialogue between the two regions
The Andean region is the only one in the worldwith which the EU is engaged in a specialised dia-logue on combating drug production and trafficking.This dialogue was initiated in 1995 and takes theform of yearly high-level meetings between the tworegions, meant to discuss the fight against drugsjointly. It has led to agreements on fundamentalprinciples, such as shared responsibility for addressingthe drug problem. Each year, the participants try toresolve practical issues and plan new actions. Further,as a result of the dialogue, special agreements were
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concluded with each of the Andean countries on thecontrol of precursors (chemical substances used inthe manufacturing of illicit drugs).
The first Latin American region receivingfinancial assistance from the European Union
The Andean region was the first region in LatinAmerica with which the European Union conclud-ed a regional cooperation agreement (in 1983). Itsscope was extended and follow-up mechanisms, suchas joint institutions, were defined in a second frame-work cooperation agreement concluded in 1993(and superseding the one of 1983). Innovative, inparticular, was the inclusion of the ‘human rights’clause.
The EU is the leading donor of official develop-ment aid to the Andean region. In terms of financial,technical and economic cooperation, the EuropeanCommunity assists the countries of the region withEUR 420 million through its country and regionalstrategies for the period 2002–06. For the respectivecountries, indicative allocations are EUR 126 mil-
(m i l l i ons Eu ros )
84.813 61.965 37.480 71.634 68.981
115.040 95.078 41.700 128.488 43.655
199.853 157.043 79.180 200.122 112.636
Bolivia Columbia Ecuador Peru Venezuela1996-2002
Financial and technicalcooperation (EURmillion)
Horizontal budget lines(EUR million
Total (EUR million)
5.2. The EU and the Andean Community
42
lion for Bolivia, EUR 86 million for Peru, EUR38.5 million for Venezuela, EUR 92 million forEcuador and EUR 105 million for Colombia. Forregional programmes, the indicative allocation overthis period amounts to EUR 29 million.
However, these figures do not present the full pic-ture because further very substantial assistance is pro-vided through so-called ‘horizontal budget lines’.These budget lines cover specific themes such asdemocracy and human rights, humanitarian aid,drugs, refugees, etc. Projects under these budget linesmay address either cross-national/regional issuessuch as the fight against drugs (a regional project ondrug precursors has started in 2003) or bilateral mat-ters, such as support to enhancing political dialoguein Venezuela (also started in 2003). Colombia is agood example in order to illustrate how such budgetlines may have an impact on the final amount of ECassistance. In fact, due to the specific circumstances
in Colombia it was granted an extra allocation ofapproximately EUR 95 million, compared to EUR62 million for financial, technical and economiccooperation, in the period 1996–2002. These extrafunds were covering, to a large extent, humanitarianaid.
Examples of bilateral projects under the countrystrategies are the peace laboratories in Colombia, thealternative development projects in Bolivia, a voca-tional training project in Peru, an environmentalproject in Ecuador and a very substantial flood pre-vention and rehabilitation project in Venezuela (forwhich the horizontal budget line ‘rehabilitation’ pro-vided an extra EUR 25 million).
As regards ‘regional programmes’, the EuropeanCommunity is the only donor consistently dedicat-ing a substantial aid effort to the consolidation of theAndean Community as such. Such ‘bi-regional’ pro-
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jects aim in particular at strengthening regional sta-bility (for example, through a project in the field ofconflict prevention) and at stimulating furtherregional integration (for example, through trade-related technical assistance).
A very favourable trade regime
The EU is a major trading partner for the AndeanCommunity.Trade between the EU and the Andeancountries has almost doubled over the last 10 yearsand increased by 12 % over the last five years,amounting to approximately EUR 15.5 billion in2002. The increase was mutual with more exportsfrom the EU to the Andean Community and moreexports from the Andean Community to the EU,illustrating a significant improvement in the exportcompetitiveness of the Andean countries.
The Andean Community’s overall exports to theEU are predominantly raw materials (agriculture,agro-industry and mining), while manufacturedproducts (mainly machinery and chemical products)represent the majority of EU imports into theAndean Community.
The EU is the Andean Community’s second largesttrading partner. The EU represents 12.3 % of theAndean Community’s total trade.The Andean Com-munity, on the other hand, ranks 29th among theEU’s main trade partners (0.8 % of the EU’s worldtrade).
Trade relations between the two regions are cur-rently based on the generalised system of prefer-ences, which includes a special ‘drugs’ scheme. This,combined with the most favoured nations clause(WTO), allows 90 % of Andean exports to enter theEU without being subject to customs duties. Theobjective of this system is promoting sustainabledevelopment in the beneficiary countries and sup-porting their efforts to combat drug production andtrafficking.The current regime has been extended to2005 and has incorporated regional cumulationbetween the Andean and Central American region.
The EU is traditionally the leading investor in theAndean Community counting for more than a quar-ter of total foreign direct investment in the region.The EU’s investments in the Andean region mostlytake the form of participation in the privatisation
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EU and the Andean Community: some figures process of certain services and public undertakings,in the financial system and manufacturing, miningand oil activities.
Ever stronger relations
In December 2003, a political dialogue and cooper-ation agreement was signed in Rome, strengtheningand deepening both political and cooperation rela-tions. Once ratified, this agreement will institutionalisethe political dialogue and expand its scope to includematters such as conflict prevention, good governance,migration, money-laundering, the fight against organ-ised crime and counter-terrorism. The cooperationpart of the agreement will also see these and othernew areas added to its scope so as to encompass anever-larger spectrum of cooperation fields.
The negotiations for this political dialogue andcooperation agreement were launched following thedeclarations made by Heads of State or Governmentin the 2002 Madrid EU–LAC summit. The agree-ment represents an important step in the strengthen-ing of the EU–Andean Community’s bi-regionalrelations and it demonstrates the shared will of bothsides to move the relationship between both regionsonto a different level. It emphasises the importanceof regional integration as instrumental for regionalstability and social and economic development and itaims at creating the conditions allowing for a possi-ble more comprehensive agreement in the future.
Andean Community’s merchandisetrade with world
(billion ECU/EUR)
60.0
50.0
40.0
30.0
20.0
10.0
0.01 9 8 0 1 9 9 0 2 0 0 2
Import Export
14.7
21.2
6.5
14.0
24.8
10.7
45.8
56.8
11.0
Balance
EU imports from the AndeanCommunity, 2002
Other31.8 %
Agricultural products33.9 %
Energy29.0 %
Machinery1.0 %
Transportmaterial0.5 %
Chemicalproducts
2.0 %
Textiles andclothing1.8 %
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For more information:http://www.europa.eu.int/comm/external_relations/andean/intro/index.htm
Ever stronger relations through a new agreement
There are few regions in the world where theEuropean Union’s strong commitment has been asclear and decisive as in Central America. This isborne out by the highly successful political dialoguethat has contributed to the promotion of democracyand respect for human rights, the very high levels ofcooperation including significant amounts of emer-gency and reconstruction relief in response to natu-ral disasters, and a favourable trade regime grantedby the EU.
The cornerstone of the European Union’s relationswith Central America is the San José Dialogue, essen-tially a forum for political discussion, which was initiat-ed in 1984 and was originally aimed at supporting con-flict resolution, democratisation and development inCentral America.The notable success of this dialogue haspermitted its renewal in Florence in 1996 and inMadrid in 2002, broadening its scope to include ques-tions of regional integration, regional security, environ-ment and natural disasters, bi-regional relations andpolitical concertation on international issues of commoninterest. The EU–Central American political dialoguechapter under the new political dialogue and cooperationagreement (signed in December 2003) will retain the‘San José Dialogue’ title.
The first cooperation agreement between the EUand Central America was signed in Luxembourg in1985 and was superseded in 1993 by the currentframework cooperation agreement signed in San
EU exports to the Andean Community, 2002
Other25.6 %
Agricultural products8.8 %
Energy1.0%
Machinery31.4 %
Transportmaterial9.9 %
Chemical
products20.9 %
Textiles andclothing2.5 %
Source: Eurostat.
EU merchandise tradewith the Andean Community
(billion ECU/EUR)
Import Export Balance
Source: Eurostat.
10.0
8.0
6.0
4.0
2.0
0.0
–2.0
–4.01 9 8 0 1 9 9 0 2 0 0 2
5.0
3.7
–1.3
3.6
–1.2
8.5
6.9
–1.6
4.8
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Salvador. In line with the Madrid Declaration madeby the EU and Latin American and CaribbeanHeads of State or Government in May 2002, a newpolitical dialogue and cooperation agreement wasnegotiated in 2003, and signed by both parties on 15December 2003 in Rome. Once ratified by all par-ties, this new agreement will institutionalise the SanJosé Dialogue and broaden existing cooperation toinclude new areas such as human rights, migrationand counter-terrorism.
‘The new political dialogue and cooperationagreement marks a significant transition in our rela-tions, underlining the importance of regional inte-gration and opening the way for a more compre-hensive future agreement. Regional integration cancontribute to the stability of the region and fosterdemocracy and respect for human rights and is thebest route to increased economic and social develop-ment. The Commission considers the realisation ofthe Central American Customs Union as an impor-tant step in the process of regional integration.’
Eneko Landaburu, Director-General for Exter-nal Relations, Brussels, 2 October 2003, Conclu-sion of the negotiations.
A broad range of cooperation focused onthe region’s needs
Since the initiation of EU cooperation with Cen-tral America, significant support programmes havebeen directed towards the promotion of humanrights and democracy, the development of small andmedium-sized enterprises and poverty reductionmeasures, environmental conservation and foodsecurity, rural development, decentralisation, debtrelief and humanitarian aid. Following HurricaneMitch in October 1998, the Commission deployedemergency relief for the affected population andsubsequently developed a wide-ranging regionalprogramme for the reconstruction of Central Amer-ica with a financial commitment of EUR 250 mil-lion. This programme aims to rebuild the necessaryinfrastructure for social development and focusesmainly on education, public health, water supply,sanitation and housing.
The indicative programmes and allocations percountry and for the regional programme for theperiod 2002–06 are as follows:
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Costa Rica 31 million
El Salvador 60 million
Guatemala 77 million
Honduras 138 million
Nicaragua 176 million
Panama 24 million
Regional programme 75 million
The main areas of cooperation for these pro-grammes include:
support for the regional integration processincluding the participation of civil society prima-rily under the regional programme (EUR 40million);
support for the prevention of natural disastersand environmental management (EUR 20million);
more than EUR 150 million will go to supportfor good governance including aspects of decen-tralisation and municipal development;
EUR 110 million to poverty and social sectorprogrammes, including a specific attention to thesituation of indigenous peoples;
local and rural development (primarily inNicaragua) will absorb some EUR 110 million;
sustainable management of natural resources(primarily in Honduras) will be allocated someEUR 60 million;
in 2003, the Commission approved its first sec-tor-wide financing programme in the region, aEUR 52.5 million education sector programmein Nicaragua in the form of budget support.
47
Additional cooperation is provided under ‘thema-tic budget lines’ covering areas such as humanita-rian aid through the European CommissionHumanitarian Office (ECHO), food security aswell as the promotion of human rights anddemocracy. The EU has continued to supportdemocratic processes in the region through thefielding of electoral observation missions, namelyin Nicaragua in 2002 and Guatemala in 2003.
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Central America’s merchandisetrade with the world
(billion ECU/EUR)
1 9 8 0 1 9 9 0 2 0 0 2
Import Export Balance
35.0
30.0
25.0
20.0
15.0
10.0
5.0
0.0
–5.0
–10.0
4.2 3.4
–0.8
6.23.7
–2.6
32.5
24.8
–7.7
EU and Central America: some figures
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For further information:http://www.europa.eu.int/comm/external_relations/ca/index.htm
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4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
–0.5
EU merchandise trade with Central America
(billion ECU/EUR)
1 9 8 0 1 9 9 0 2 0 0 2
Import Export Balance
1.3 1.4
0.1
3.0 3.0
0.1
–0.04
3.7 3.7
EU foreign direct investment in Central America(flows)
Source: Eurostat.
20.0
15.0
10.0
5.0
0.0
–5.0
(billion EUR)
1 9 9 9 2 0 0 0 2 0 0 1
Inflows Outflows Balance
7.38.1
–0.9
18.1
8.9 9.2
14.4
6.1
8.2
EU imports from Central America, 2002
Other2.4 %
Agricultural products49.1 %
Energy0.3 %
Machinery40.2 %
Transportmaterial6.3 %
Chemical
products0.7 %
Textiles andclothing1.1 %
EU exports to Central America, 2002
Other19.8 %
Agricultural products6.6 %
Energy3.4 % Machinery
22.6 %
Transport
material26.9 %
Chemical
products18.6 %
Textiles andclothing2.1 %
The Commission’s cooperation with CentralAmerica represents the highest level of coopera-tion in the Latin American region, both in abso-lute and per capita terms. For the period 2002–06,the EU will disburse more than EUR 600 millionin support of the countries of the Central Ameri-can sub-region.
Trade relations
The EU is the second most important trade partner(10 % of total trade) for the Central Americanregion after the United States (43 % of total trade).Trade (exports and imports) between Central Amer-ica and the EU represent some 0.4 % of total EUexternal trade, with exports from Central Americabeing mainly agricultural goods and imports fromthe EU predominantly industrialised goods.
Commercial relations between the EU and CentralAmerica are dominated by the special drugs regimeof the generalised system of preferences (GSP) aimedat combating drug production and trafficking, underwhich the bulk of Central American exports enterthe EU either duty free or with preferential tariffs.The current regime, which has been extended to2005, has incorporated regional cumulation betweenthe Central American and Andean regions.
5.4. The EU and the Caribbean
The EU and the Caribbean have a long-lastingrelationship based on the legacy of history, commonvalues, economic and trade cooperation and a con-tinued increase in the volume of trade exchange.
Since 1975, the EC has been the largest grantdonor to the Caribbean region. Overall, EC–Carifo-rum cooperation aims towards the development ofan enabling environment to facilitate integrationinto the world economy, sustainable socioeconomicdevelopment, and the observance of the principles ofdemocracy, human rights, good governance and therule of law.
49
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Ongoing regional cooperation divided by sector
Humandevelopmentand capacity
bui lding18 %
Disasterpreparedness
and prevention4 %
Trade and privatesector development
50 %
Tourism3 %
Environment5 %
Agriculture andrural
development7 %
Transport11 %
Communications,telecommunications
and media2 %
S o u r c e : D i r e c t o r a t e - G e n e r a l f o rD e v e l o p m e n t .
EU foreign direct investment in Central America(stocks)
Source: Eurostat
90.0
80.0
70.0
60.0
50.0
40.0
30.0
20.0
10.0
0.0
(billion EUR)
1 9 9 9 2 0 0 0 2 0 0 1
Inwards stocks Outward stocks
45.1
35.8
76.3
58.861.9
52.6
50
Successive EU–ACP conventions have given theCaribbean an enhanced framework of reference forpolitical dialogue, trade and development coopera-tion. Political dialogue with the Caribbean takesplace mainly in the context of the joint ACP–EUinstitutions, in particular the Council of Ministersand the Joint ACP–EU Assembly. At the regionallevel, the annual regional dialogue at ministerial levelbetween Cariforum and the European Commissionprovides an opportunity for discussing a wide rangeof issues of mutual interest.
A broad spectrum of cooperation
EC aid to the Caribbean continues to cover abroad range of sectors and is financed through avariety of instruments. The EC’s principal instru-ments employed in cooperation with the Caribbeaninclude national indicative programmes, regionalindicative programmes and successive EDFs. Fur-thermore, a variety of other instruments, such as Sys-min, Stabex, Flex, SFA and Interreg III focus on spe-cific areas of cooperation (see lexicon). As illustratedbelow, current programmes at the regional levelcover a spectrum of sectors, focussing on essentialdevelopment needs in the Caribbean.
For the period 2002–07, in the framework of theninth EDF, EUR 690 million has been allocated forcountry programmes, while an initial amount ofEUR 57 million has been set aside for regional pro-grammes.
For more information see:http://europa.eu.int/comm/development/body/region/rb_fr.htm
A strong trading relationship
In 2002, the EU imported merchandise of a valueof EUR 3.5 billion from the Caribbean countriesand exported goods worth EUR 4.4 billion to theregion. The main EU imports were agriculturalproducts, whereas the structure of exports is domi-nated by industrial products. The EU shows a tradedeficit with Caribbean countries, mainly in the agri-cultural and energy sectors.
Caribbean ACPs benefit from the preferential tradeagreements set out in the Cotonou Agreement,which provides for tariff- and quota-free imports ofa wide range of products (including all industrialgoods).
The EU’s banana trade regime has long been a sig-nificant issue in trade relations. The tariff and quotasystem is due to be replaced by a tariff-only system,at the latest on 1 January 2006. In order to help theACP traditional banana suppliers to adapt to the newmarket conditions, in 1999 the Commission estab-lished a special framework of assistance, providingthem with technical and financial support aimed atenhancing their competitiveness and/or promotingdiversification.
Many Caribbean countries benefit from the SugarProtocol, which provides for specific quantities ofsugar to be imported into the EU at a guaranteedprice. Following on from commitments made in theACP–EU agreement, a rice-specific programme ofEUR 24 million has been set up to help Caribbean
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rice exporters, designed to enhance the efficiencyand competitiveness of the sector. Unrestricted,duty-free access for ACP rum, whose productionand export is important for a number of Caribbeancountries, is also foreseen under the ACP–EU agree-ment. Given the wider liberalisation in the sector,the EC has launched a rum-specific programme ofEUR 70 million for the Caribbean, designed toencourage the industry to modernise, develop itsmarketing and diminish its environmental impact.
For the future, as foreseen in the Cotonou Agree-ment, the EU and the Caribbean ACP countries willnegotiate an economic partnership agreement(EPA), progressively removing barriers to tradebetween them and enhancing cooperation in allareas relevant to trade. The EPA is, above all, aninstrument for Caribbean development aimed at fos-tering their smooth and gradual integration into theworld economy. It will be a stable and predictableWTO-compatible trade regime that builds on andstrengthens Caribbean regional integration.
By combining trade relations with very substantialeconomic and development cooperation support, theEU is seeking to help the Caribbean ACP partnersto seize the opportunities of the new global chal-lenges, with all the requisite back-up measures, andaddressing transitional costs as appropriate.
For more information see:http://europa.eu.int/comm/trade/miti/devel/index_en.htm
The European Investment Bank (EIB) andthe Centre for the Development of Enterprise(CDE), two key partners for development
Under the Cotonou Agreement, and financed bythe European Development Fund (EDF), the EIBhas EUR 2.2 billion for investment in projects inACP countries under the investment facility, andEUR 1.7 billion from its own resources. Theseamounts are to be deployed between 2001 and 2005.The investment facility is a revolving fund, intendedto support primarily private sector development inACP countries through loans, capital risk and guar-antee operations.Whilst it is difficult to predict howmuch lending will occur in the Caribbean regionunder the investment facility, the figure is likely to bein the realm of EUR 50 to 70 million per year.
In 2003, EUR 48 million was lent by the EIB inthe Caribbean, whilst in 2002, the DominicanRepublic, Jamaica and Trinidad and Tobago receivedfinancing for a total of EUR 81 million. The mainfocus of EIB operations has been financial support
for small and medium-sized enterprises (SMEs),through local financial intermediaries.
The CDE, which was established to provide assis-tance to the private sector in ACP countries, has alsobeen very active in the Caribbean. In the five yearperiod 1998–2002, the CDE assisted a total of 301enterprises with 458 interventions for a sumamounting to EUR 5.8 million. Over the same
Caribbean merchandise trade with the world
(million ECU/EUR)
1 9 8 0 1 9 9 0 2 0 0 0
Balance
50 000.0
40 000.0
30 000.0
20 000.0
10 000.0
0.0
–10 000.0
–20 000.0
–30 000.0
Import Export
5 377.48 332.9
2 955.512 298.9
7 522.3
–4 776.6
39 574.0
18 374.0
–21 199.9
EU merchandise trade with the Caribbean
(million ECU/EUR)
1 9 8 0 1 9 9 0 2 0 0 1
Import Export Balance
9 000.0
8 000.0
7 000.0
6 000.0
5 000.0
4 000.0
3 000.0
2 000.0
1 000.0
0.0
–1 000.0
–2 000.0
2 233.0
1 632.0
–601.0
1 962.0
2 474.0
512.0
4 979.0
7 670.0
2 310.0
A breakdown of Caribbean trade
period, a total of 136 actions in support of SMEdevelopment were undertaken at a cost of EUR 3million. Such actions include sector surveys, partner-ship meetings and assistance to private sector supportorganisations.
For more information see:www.eib.orgwww.cde.int
A constructive agreement and dialogue withCuba
Cuba is the only Caribbean country which has notconcluded a cooperation agreement with the EU.
Cuba was admitted into the ACP group in 2000,although did not sign the Cotonou agreement. SinceOctober 2001, Cuba has been a member of Carifo-rum and has signed a ‘partial scope’ free trade zoneagreement with Caricom.
The EU Council adopted a common position onCuba in 1996 which continues to define EU–Cubarelations, and is reviewed periodically. On the basisof this common position, the EU favours construc-
tive engagement and dialogue with Cuba. The EU’spolicy works towards encouraging a peaceful transi-tion to democratic pluralism, the promotion ofhuman rights and other fundamental freedoms, com-bined with economic recovery and improved livingstandards for the Cuban people.
In 2000, the Commission decided to refocus itsfinancing in cooperation with Cuba towards projectspromoting economic reform and encouraging thedevelopment of civil society. From 1997 to 2002, thetotal amount of financial support to Cuba throughthe all-budget lines reached EUR 88.2 million.Cuba also participates in the bilateral cooperationprogrammes ALFA, URB-AL, AL-Invest and @LIS.
Finally, in terms of trade, the EU is Cuba’s largesttrading partner, receiving 37 % of Cuban exportsworldwide (EUR 567 million) and providing 42.3 %of Cuban imports worldwide in 2002 (EUR 1 278million).
For more information see:http://europa.eu.int/comm/development/body/country/country_home_en.cfm?cid=cu&lng=en&status=old
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EU imports from the Caribbean, 2001
Other19.6 %
Agricultural products27.8 %
Energy7.0 %
Machinery1.9 %
Transportmaterial36.8 %
Chemicalproducts
4.8 %
Textiles andclothing2.0 %
EU exports to the Caribbean, 2001
Other22.0 %
Agricultural products12.4 %
Energy1.7 %
Machinery16.8 %
Transportmaterial38.4 %
Chemicalproducts
6.8 %
Textiles andclothing2.0 %
53
6.1. The EU and Mexico
The first Latin American country to havesigned a privileged partnership
Mexico was the first country in Latin Americawith which the EU negotiated a privileged partner-ship based on common interests and values ofdemocracy and human rights, enshrined in the eco-nomic partnership, political coordination and coop-eration agreement, which was signed in 1997.
The agreement provides for regular high-level polit-ical dialogue on bilateral and international issues.The Joint Council, at ministerial level, meets once ayear, and its work is prepared by a joint committeecomprising European and Mexican civil servants. Adialogue with Mexican and European civil society isalso being developed: a first forum took place in2002 and a second event is scheduled to take placein Mexico in 2004.
6. Bilateral relations
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Meeting between Vicente Fox, President of Mexico and Romano Prodi, President of the European Commission
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A many-faceted cooperation strategy
The rule of law, social development and economiccooperation are the main priorities in the EU coop-eration strategy with Mexico for 2002–06, with afinancial package of EUR 56 million. Additionally,Mexican organisations are active participants in vari-ous EU–Latin America regional programmes. Forexample, some 3 700 Mexican companies have par-ticipated in events organised by the AL-Invest pro-gramme, which promotes alliances between compa-nies in the EU and Latin America.
The EU welcomed the emphasis given to humanrights issues by the Government of President Fox,and this commitment on the part of the MexicanGovernment inspired the EU to include Mexico asone of three priority countries in Latin America forthe 2002–04 European initiative on democracy andhuman rights. Various projects are supported underthis initiative, including a project to strengthenhuman rights ombudsmen in Mexico, and an inno-vative project using radio to promote the humanrights of women.
In February 2004, Mexico and the EU signed anagreement on scientific and technological coopera-tion, promoting the establishment of long-terminstitutional alliances between research centres andfacilitating the participation of Mexican researchinstitutes in the EC’s framework programme forresearch and technological development.
Growing economic relations
In the three years following the entry into force ofthe free trade agreement (FTA) between the EU andMexico in 2000, trade between the two parties grew
by 25.5 %. Investment flows have also increased, withover 5 600 companies with EU capital now doingbusiness in Mexico and a growing number of Mex-ican companies investing in the European Union.The FTA provides for asymmetrical trade liberalisa-tion, whereby the EU reduces tariffs on importsfrom Mexico exports faster than Mexico reducestariffs on imports from the EU. Ever since 1 January2003, Mexican exports of industrial goods (whichrepresent 92 % of all Mexican exports to the EU)can enter the EU duty-free, while Mexico has until2007 to complete a similar liberalisation for EUproducts.The enlargement of the EU is expected toprovide further trade and investment opportunitiesto both parties. Industrial products represent about95 % of Mexican exports to the EU.
EU and Mexico, some figures
The EU is the second most important trade part-ner (7 % of total trade) for Mexico, after the UnitedStates which account for as much as 77 % of Mexi-can external trade. Trade relations (exports andimports) between Mexico and the EU represent 1 %of total EU external trade, with exports fromMexico being mainly machinery, energy and trans-port material, and imports from the EU consistingbasically of machinery, transport material and chem-ical products.
EU foreign direct investment flows to Mexicohave sharply increased during the last five years,accounting in 2001 for almost EUR 6 billion. As aconsequence, EU foreign direct investment stocks inthe country have risen from EUR 11 billion in 1999to EUR 24 billion in 2001, more than two-fold inonly two years.
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For more information:http://www.europa.eu.int/comm/external_relations/mexico/intro/index.htm
180.0160.0140.0120.0100.0
80.060.040.020.0
0.0–20.0
Mexico’s merchandise trade with the world
(billion ECU/EUR)
1 9 8 0 1 9 9 0 2 0 0 2
Imports Exports Balance
11.8 11.0
–0.9
25.9 21.3
–4.6
158.6 158.0
–0.6
EU merchandise trade with Mexico
(billion ECU/EUR)
1 9 8 0 1 9 9 0 2 0 0 2
Imports Exports Balance
16.014.012.010.0
8.06.04.02.00.0
2.1
2.7
0.6
3.0 4.3
1.2
6.2
15.0
8.8
EU foreign direct investment in Mexico (flows)
(billion EUR)
1 9 9 9 2 0 0 0 2 0 0 1
Inflows Outflows Balance
7.06.05.04.03.02.01.00.0
0.2
1.9 1.8
0.1
5.8 5.7
0.3
5.8 5.5
EU foreign direct investment in Mexico (stocks)
(billion EUR)
1 9 9 9 2 0 0 0 2 0 0 1
Inward stocks Outward stocks
30.025.020.015.010.0
5.00.0
1.0
11.6
1.5
18.3
1.8
24.1
EU imports from Mexico, 2001
Other13.6 %
Agricultural products7.6 %
Energy24.2 %
Machinery28.8 %Transport
material14.7 %
Chemical
products9.3 %
Textiles andclothing1.7 %
EU exports to Mexico, 2001
Other24.1 %
Agricultural products4.8 %
Energy0.6 %
Machinery28.0 %Transport
material23.2 %
Chemical
products15.9 %
Textiles andclothing3.4 %
56
6.2. The EU and Chile
The EU and Chile signed an association agree-ment on 18 November 2002.The bulk of its provi-sions have been applied provisionally since 1 Febru-ary 2003. At its plenary session of 12 February, theEuropean Parliament unanimously gave its assent tothe agreement.
The association agreement has three main compo-nents: political dialogue, cooperation and trade.
Political dialogue
The provisions of the political part foresee thestrengthening of the political dialogue between theEU and Chile through increased coordination ofpositions and joint initiatives in international fora.They will also cooperate in the fight against terror-ism.Their dialogue will be enhanced by an increasedconsultation and involvement of the EU andChilean civil societies and by the regular contribu-tion of an association parliamentary committee.
Cooperation for a sustainable development
In the field of cooperation, the European Unionand Chile seek to promote a sustainable develop-ment including its social, economic and environ-
mental aspects. Importance is given to dialogue withcivil society; the representatives of the EU–Chilecivil societies will meet at regular intervals so as toexchange views on the cooperation strategy and tosupervise the implementation of cooperation proj-ects. Finally, the cooperation chapter foresees that theparticipation of the EU and Chile as associated part-ners in each other’s cooperation programmes shall bepromoted.
The European Commission adopted, in 2002, thecountry strategy paper on the EU and Chile, whichprovides a five-year cooperation strategy (2002–06)with an indicative amount of EUR 34.4 million.
This cooperation strategy concentrates on the fol-lowing three priority sectors:
economic cooperation and technological inno-vation (59 % of the indicative budget);
capacity building to promote, among others,social equity (32.5 % of the indicative budget);
protection of the environment and naturalresources (8.5 % of the indicative budget).
During 2003, the Commission made a great effortin the implementation of this cooperation strategy.
Moneda Palace, Presidency headquarters, Santiago de Chile
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Two important projects have been approved, count-ing for nearly 65 % of the total indicative budget:
the project Empresas Innovadoras (EUR 17.2million), aiming to improve the commercial capa-city of Chilean small and medium-sized underta-kings;
the project Fondo de Aplicación del Acuerdode Asociación (EUR 5 million), aiming, to sup-port the implementation of the EU–Chile asso-ciation agreement.
A science and technology agreement between theEU and Chile was also signed on 23 September2002. It aims at opening a bilateral policy dialogueon research and technological development issues,improving scientific and technological cooperationbetween the two parties and increasing the invest-ments in human and institutional capital, using theresources available in various European Commissionprogrammes.
Implementing the free trade area …
The trade part of the association agreement coversa wide range of areas. Chile and the EU havereached a very ambitious and innovative agreementthat goes well beyond their respective WTO com-mitments. It establishes, for example, a free trade areain goods covering the progressive and reciprocal lib-eralisation of trade in goods over a maximum transi-tional period of 10 years reaching a full liberalisationfor 97.1 % of bilateral trade. It also establishes a freetrade area in services, provides for the liberalisationof investment and includes rules to facilitate trade in
wines and spirits. It provides for the reciprocal open-ing of government procurement markets and for theadequate and effective protection of intellectualproperty rights. Implementation of the trade provi-sions of the agreement has been smooth.The exten-sion of the trade provisions of the agreement to the10 new Member States should provide further tradeand investment opportunities.
La Silla, situated at 2 450 m altitude in the Andes near La Serena (Chile) is the place chosen by ESO (European Southern Obser-vatory) for building its first observatory
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Port of Valparaiso
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Valle del Elqui (Pisco Elqui), place of wine production
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More information:http://europa.eu.int/comm/external_relations/chile/intro/index.htm
EU–Chile, some trade figures …
The EU is Chile’s main trading partner, as well asthe main foreign investor in Chile. These links will
be further strengthened by the free trade agreementalready in place.The parties are beginning to witnessthe first signs of an increasing dynamism in bilateraltrade.
Chile’s merchandise trade with the world
(billion ECU/EUR)
1 9 8 0 1 9 9 0 2 0 0 2
Imports Exports Balance
20.0
15.0
10.0
5.0
0.0
–5.0
3.5 3.2
-0.2
5.7 6.6
0.9
17.8 18.8
1.0
5.0
4.0
3.0
2.0
1.0
0.0
–1.0
EU foreign direct investment with Chile (flows)
(billion EUR)
1 9 9 9 2 0 0 0 2 0 0 1
Inflows Outflows Balance
–0.1
4.5 4.6
–0.0
1.3 1.3
–0.02
0.3 0.4
16.014.012.010.08.06.04.02.00.0
–2.0
EU foreign direct investment with Chile (stocks)
(billion EUR)
1 9 9 9 2 0 0 0 2 0 0 1
Inward stocks Outward stocks
13.8
–0.1
14.8
–0.04
14.4
–0.02
EU merchandise trade with Chile
(billion ECU/EUR)
1 9 8 0 1 9 9 0 2 0 0 2
Imports Exports Balance
6.05.04.03.02.01.00.0
–1.0–2.0–3.0
1.50.7
–0.7
2.71.4
–1.4
4.8
3.1
–1.7
EU imports from Chile
Other63.4 %
Agricultural products29.1 %
Energy0.0 % Machinery
1.5 %
Transportmaterial0.2 %
Chemical
products5.8 %
Textiles andclothing0.1 %
EU exports to Chile
Other23.9 %
Agricultural products3.5 %
Energy0.3 % Machinery
34.9 %
Transport material19.1 %
Chemical products15.2 %
Textilesand
clothing3.2 %
59
ECHO is the Humanitarian Aid Office ofthe European Union. It was created in 1992and its mandate is to provide emergency assis-tance and relief to the victims of natural dis-asters or armed conflict outside the EuropeanUnion. The aid is intended to go directly tothose in distress, irrespective of race, religionor political convictions.
7.1. Displaced peoples: Colombiaand Mexico
Colombia has one of the world’s largest displacedpopulations, with around three million peopleforcibly displaced since 1985 and around 180 000newly displaced in 2003. Since 1997, the Commis-
sion has provided a total of EUR 51.2 million inhumanitarian aid to internally displaced people(IDPs) and other vulnerable groups affected by thecivil conflict. It is estimated that approximately150 000 people per year benefit from this assistance.ECHO’s main partner in Colombia is the Interna-tional Committee of the Red Cross (ICRC), whichprovides emergency assistance to newly displacedpeople all over the country. ECHO also works withUN agencies and European NGOs.
ECHO’s strategy is:
to ensure basic relief assistance to IDPs in allthe regions of the country immediately followingdisplacement (through ICRC);
7. EU humanitarian aidto Latin Americaand the Caribbean:the work of ECHO
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to improve the living conditions, to restore aminimum level of self-reliance and promote thesocial integration of IDPs in rural areas in theregions most affected by displacement (throughEuropean NGOs and European national RedCross societies);
to increase the exchange of information amonghumanitarian organisations in order to improvethe coordination and quality of humanitarianassistance (through OCHA).
ECHO actively coordinates with other services ofthe Commission and with the EC delegation inBogotá, in order to enhance the links between relief,rehabilitation and development.
In Mexico, ECHO has been present supportingthe displaced population of the Chiapas conflict witha programme worth EUR 6 400 000 since 1998.The operations have been aimed at improving med-ical coverage, nutritional levels of the population inthe short term, productive capacity and housingconditions. In 2003, the situation stabilised and needsshould be addressed by other accompanying mea-sures and local policies. ECHO therefore decided towithdraw from the region at the end of 2003.
7.2. Natural disasters: Central America,Peru, Ecuador and Bolivia
Central America has been a major area of activitysince ECHO was created in 1992. ECHO has beeninvolved in assisting the victims of armed conflictsand epidemics, and most importantly, in bringingrelief to those hit by the earthquakes, tropical storms,volcanoes, droughts and floods which pose a con-stant threat in the region.
Between 1998 — when Hurricane Mitch struckwith incredible devastating force — and 2003,ECHO has provided more than EUR 64 million inhumanitarian aid to the region.
In early 2001, El Salvador was hit by two powerfulearthquakes in quick succession. In response to theearthquakes, ECHO financed relief operations for atotal of EUR 10 million.
In November 2001, ECHO intervened again tosupport the victims of Hurricane Michelle as well asto provide nutritional support to the populationaffected by the exceptional drought. Between 2001and 2003, ECHO has been monitoring andresponding to the acute malnutrition that affectsmany children by providing targeted therapeutic andsupplementary feeding, and supporting health andwater and sanitation structures in the four mostaffected countries which comprise: Guatemala, Hon-duras, Nicaragua and El Salvador.
60
ECHO is also present in other South Americancountries such as Ecuador, Bolivia, Peru andParaguay, where natural catastrophes are recurrent.ECHO provides assistance on a punctual basis to themost vulnerable people when local capacities are notsufficient to cope with major disasters and financesdisaster preparedness activities. Between 1999 and2003, humanitarian aid to South America (excludingsupport for Colombian displaced people andDipecho actions) has amounted to more than EUR23 million.
ECHO’s initial response to natural disastersincludes the provision of essential relief such asfood aid, emergency non-food packages (basicitems such as cooking utensils or hygiene prod-ucts), medical care, temporary shelters, the reha-bilitation of water and sanitation systems andepidemiological surveillance.
Caribbean
Between 2001 and 2003, ECHO has providedsupport to the Caribbean for more than EUR 16million, mainly to prepare for and respond to naturaldisasters. ECHO has withdrawn from global assis-tance to the population of Cuba to give way tomore comprehensive cooperation instruments,which were negotiated as from 2003 following theopening of an EU office in La Havana.
7.3. Dipecho: ECHO’s disaster preventionand preparedness programme
The Andean Community, Central America and theCaribbean are three of the six priority regions forDipecho. This programme addresses disaster pre-
© Elizabeth A
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Beneficiary receiving an emergency kit after eruption of ElReventador volcano, Ecuador
61
paredness in the regions that are most vulnerable andmost frequently affected by natural disasters. Itintends to boost local capacities to respond to natu-ral disasters promptly and in an appropriate mannerin order to save lives and avoid economic losses.Funds support activities such as training, local capac-ity-building, awareness-raising, and early-warningsystems, as well as the organisation of relief services.
The programme has shown that even simple andinexpensive precautions can help save lives and prop-erty when disaster strikes. Between 2000 and 2003,Dipecho projects have been financed in Latin Amer-ica and the Caribbean for more than EUR 21 mil-lion.
More information:http://europa.eu.int/comm/echo/index_en.html
An emergency pedestrian bridge built in the framework of a Dipecho project (Ecuador)©
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The European Union, Latin America and the Caribbean have gradually developed a dialogue marked byfrank and fruitful cooperation and by considerable progress, for instance as regards promoting democracy andregional integration.
The third summit of Heads of State or Government of the two regions, to be held in Guadalajara in May2004, will ensure the continued strengthening of the strategic partnership between the two regions. Itdemonstrates that Latin America, the Caribbean and the European Union are not simply important tradepartners, but also key interlocutors because of their strong historic ties and the values they share.
Conclusion
La Silla, Chile
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The European Union, Latin America and the Caribbean: a strategic partnership
Luxembourg: Office for Official Publications of the European Communities
2004 — 62 pp. — 21 x 29.7 cm
ISBN 92-894-7106-9
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11 NF-58-04-788-E
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11 NF-58-04-788-E
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