The Growing Trade Alliance between Latin America and the European Union: CAF’s Support and Initiatives

CAF supports the trade alliance between Latin America and the European Union – Andean credit. EFE/Jeon Heon-Kyun/Archive

The European Union is the main source of foreign direct investment for the countries of Latin America and the Caribbean. It is estimated that the financing of the business sector of this economic and political association on our region reached, at the end of 2021, a volume similar to its combined investment in China, India, Japan and Peru (693 billion euros and 670 billion euros, respectively). And trade between both blocs has grown considerably over the last ten years.

This economic and commercial understanding, but also cultural (founded on the common roots and linguistic origins shared between regions), will reach a new milestone in its history on September 15, when the first CELAC – EU Finance Ministers Summit will be held. The event, which we at CAF organize and carry out together with the Government of Spain, in Santiago de Compostela, will bring together the 27 holders of the economic portfolios of the European Union and their 33 peers from the Community of Latin American and Caribbean States, to generate new synergies, deepen existing agreements, and promote a global agenda of cooperation and integration.

Under the mandate of the Spanish presidency of the Council of the EU, the meeting will seek to align interests and development agendas, as well as continue strengthening economic and commercial ties between blocs. In this sense, the most recent precedent has been the EU – Latin America and the Caribbean Business Roundtable, which we held last August together with the European Commission and the IDB. During that meeting, the European Union announced an investment of 45 billion euros to promote projects in our region that contribute to the reduction of poverty and inequality, and that promote the green and fair transition and digital transformation, among others.

In this context, our multilateral organization identified 70 national and regional initiatives that contemplate improvements in water and sanitation services, electrical transmission, sustainable mobility and renewable energies in countries such as Argentina, Barbados, Bolivia, Brazil, Colombia, Costa Rica, Ecuador, El Salvador and Mexico. But what we consider to be the true milestone of the agreement is, without a doubt, the privileged geostrategic position that Latin America and the Caribbean acquires in the international arena. That is to say, as a result of the synergies achieved between both blocks, our region acquires a stronger voice that will allow it to position itself as a powerful political actor within the framework of the global decision-making forums of which it is a part.

The natural and ecosystem advantages, and the values, benefits and solutions that Latin America and the Caribbean offer to the world are countless. We are a true solution region for global problems. We have biodiversity that is home to 60 percent of the planet’s terrestrial and marine life, great agricultural potential, and vast natural resources that include, for example, 49 percent of global silver reserves. At the same time, we have enormous potential to continue exporting food and agricultural goods that help stabilize international prices, for the benefit of all countries.

At CAF, we know that the growing interest in European Union investments in Latin America and the Caribbean must necessarily be supported by clear, fair and balanced roadmaps for both regions. To achieve this, we want to become the bridge that allows negotiations and agreements to be established in different areas and spaces of common interest. We also hope to continue contributing to overcoming the socioeconomic gaps that still persist in our region in indices such as poverty, infrastructure, gender, among others, as well as in the climate transformations and transitions that Europe must face.

Both regions are called to continue giving life to their historical strategic alliance and, as a development organization, CAF will always support their development and integration.

2023-09-09 07:22:00


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