{"id":60051945,"date":"2024-09-26T11:36:28","date_gmt":"2024-09-26T10:36:28","guid":{"rendered":"https:\/\/dialogue.earth\/?p=60051945"},"modified":"2024-10-03T16:11:48","modified_gmt":"2024-10-03T15:11:48","slug":"beyond-the-belt-and-road-whats-next-for-the-eu-in-latin-america","status":"publish","type":"post","link":"https:\/\/dialogue.earth\/en\/business\/beyond-the-belt-and-road-whats-next-for-the-eu-in-latin-america\/","title":{"rendered":"Beyond the Belt and Road? What\u2019s next for the EU in Latin America"},"content":{"rendered":"\n

Last year, the European Union renewed its economic and strategic interest in Latin America<\/a> by announcing investments of EUR 45 billion (USD 48.7 billion), seen by many as a way to regain influence in the face of China\u2019s growing presence in the region.<\/p>\n\n\n\n

Under the banner of its Global Gateway<\/a> infrastructure investment programme, the bloc announced that over 130 projects would be carried out in the region over four years, focusing on sectors including lithium, renewable energy, green hydrogen, transport and health.<\/p>\n\n\n\n

However, political changes in the EU following its parliamentary elections in June may now raise questions about the scope and prospects of the initiative. While pro-European political groupings were able to maintain their majority, there has been an advance of far-right parties, which have less regionalist agendas, and lower commitments on the environment.<\/p>\n\n\n\n

\u201cThe advance of the extreme right complicates the European political scene because it increases the tendency towards fragmentation, which reduces the capacity for leadership and international presence,\u201d said Gabriel Merino, a researcher at the National Council for Scientific and Technical Research (CONICET) in Argentina.<\/p>\n\n\n\n

Experts are divided on just how much these changing political dynamics will impact the prospects of Global Gateway projects.<\/p>\n\n\n\n

The political scenario<\/h2>\n\n\n\n

It has been a turbulent five years since the last EU elections in 2019. Most notably, the bloc has had to face up to a delicate post-pandemic economic and social context<\/a>, uncertainty in food and energy supplies due to the ongoing war in Ukraine, geopolitical disputes with China<\/a>, and new initiatives<\/a> on the climate agenda within the European Green Deal.<\/p>\n\n\n\n

Although their gains were ultimately smaller than had been expected, the advance of far-right parties in Europe could nonetheless \u201ccause issues such as the environment to lose weight, and national identities and anti-immigration policies to gain prominence,\u201d said Juan Carlos P\u00e9rsico, coordinator of the Europe department of the Institute of International Relations at the University of La Plata, in Argentina.<\/p>\n\n\n\n

A clear sign of continuity did come in the re-election<\/a> of Ursula von der Leyen to the presidency of the European Commission. However, there were changes in the composition of the benches of major EU countries, such as in France, where the far right, led by Marine Le Pen, won a landslide victory<\/a>, and Germany, where their counterparts, the Alternative for Germany, came second<\/a>. In Italy, the third-largest contributor to the European parliament, the ruling Brothers of Italy party, led by Italian prime minister Giorgia Meloni, won.<\/p>\n\n\n\n

\"Ursula<\/div>
European Commission president Ursula von der Leyen at the EU-CELAC Summit in July 2023. The event brought together European leaders with representatives from Latin America and the Caribbean, and saw the launch of the Global Gateway investment agenda in the region (Image: State Chancellery of Latvia<\/a> \/ Flickr<\/a> \/ CC BY-NC-ND 2.0<\/a>)<\/div><\/div><\/div><\/div>\n\n\n\n

Far-right political formations captured almost 25% of the total votes<\/a>, a huge gain on the 10% achieved two decades ago, and the 4% reached 40 years ago. However, the far-right parties active at the EU level do diverge on a number of issues, which reduces their political strength in the parliament.<\/p>\n\n\n\n

The European Parliament sets the bloc\u2019s budget and the conditions governing the functioning of the European Commission, the EU\u2019s executive body. But even with the new political makeup, financing of the Global Gateway will be unaffected in the short-term, said Ilse Coug\u00e9, head of the EU\u2019s cooperation section in Argentina.<\/p>\n\n\n\n

\u201cThe funds we have allocated for Latin America are already agreed until 2027 and will not change. After 2027, we will continue with our long-term Global Gateway strategy, but we will have to take into account the new political context,\u201d she noted. \u201cTo the extent that there is mutual interest between the EU and Latin America, I hope that we can continue to develop the strategy, although perhaps with different emphasis.\u201d<\/p>\n\n\n\n

Latin America and the EU<\/h2>\n\n\n\n

Trade in services and goods between Latin America and the Caribbean and the EU reached USD 369 billion<\/a> in 2021\u201322, a 39% increase from 2013 figures. Investment stocks in the region from the EU totalled USD 693 billion in 2021, an increase of 45% compared to 2013.<\/p>\n\n\n\n

Trade between the EU and Mercosur \u2013 the bloc which groups Argentina, Brazil, Paraguay, Uruguay and, since July, Bolivia \u2013 reached<\/a> around USD 110 billion in 2023. Although the EU is Mercosur\u2019s second largest trading partner, there has been a relative decline in the volume of trade between the two compared to other markets.<\/p>\n\n\n\n

Meanwhile, China has emerged in the last decade as Mercosur\u2019s main trading partner and the destination of 29% of the bloc\u2019s exports, as well as the source of 25% of its imports.<\/p>\n\n\n\n