Strategic Choice Oriented to the New 21st Century--On the First EU-LA Summit

　　
　　Photo:  Brazilian President Francisco Cardoso (first right) chatting with Cuban President of Council of State Fidel Castro (second right) at the closing ceremony of the First EU-LA Summit on June 29.

　　 June 29 afternoon saw the First European Union-Latin America Summit closed at Rio de Janeiro. Leaders from 15 EU and 32 Latin American and Caribbean countries had through the Summit signed a joint communique and a program of action pointing to the strong desire for closer political, economic and cultural relations to be developed between Europe and Latin America. In the view of observers following close the Summit, though there were not many practical results that have been achieved, the Summit represents the strategic choice on the part of EU and Latin American countries oriented to the 21st century.

　　 It was French President Chirac who had been the initiator for a summit by leaders of EU and Latin American countries in March 1997 at Rio de Janeiro when he went on a state visit in Brazil. The initiative had then been much well received by leaders throughout Latin America.

　　 Europe has already had wide cultural economic ties developed with Latin America. In recent years, much to EU's attention there has arisen a new rising market in Latin America and as a result of advances made in privatization and opening it has come to attract an increased amount of investments from EU. As things stand now in Latin America, EU has come to become the biggest investor and trade partner with Latin American countries. But new challenges arise for a portion of the Latin American market from the US first out with a proposal for an American Free Trade Region to be established. Immediately after this, the US saw to it that two American summits were successively held to expedite free trade talks with its counterparts it projected. This has however caused much concern to EU ready for an EU-branded Latin American market to be launched. Previously for its negligence EU could not but help it to see Mexico's joining in North America Free Trade Region and a speedy rise in Mexico's 1998 import trade with the US to 79 billion dollars from 41 billion in 1994. To ward off unexpected "Mexican effect" EU turns to seek development of firm close ties oriented to the 21st century with the Latin American countries in the way its great strategic goal of setting up a trans-Atlantic free trade market is to be realized. Portugal Foreign Minister Gama pointed out during the recent Summit that EU has already had a "tight agenda" in its talks for developing free trade with Southern Common Market (Mercosur). "EU should not be a loser to the US in carrying out a fight for the Latin American market", he said.

　　 To Latin American countries, a strengthening of political and economic relations with EU also makes a central part indispensable for realizing their strategic goal of developing a multilateral economic and trade market in Latin America. The Latin American countries, especially those of Mercosur, though already having taken an active part in the talks on developing an American Free Trade Region, still do not want to tie themselves to a mono US-led regional market. They expect to establish a trans-Atlantic Free Trade Region, with triangular economic relations to be developed with EU and the US as well and see to it that their position be strengthened with enhanced balanced economic interests gained when international economic talks are held. This is as has been seen in the practice of Mexico. As a trade partner with North America Free Trade Region, it considers also an adjustment of its mono-oriented trade strategy.

　　 A theme central to the Rio de Janeiro summit is EU's free trade talks with Southern Common Market. The two sides had as early back in December 1995 an agreement frame signed with which they set the goal for a trans-regional free trade region to be established. But it ran into snags when talking about opening of EU's farm produce markets on the way for EU to develop free trade with the Mercosur countries. With an annual subsidiary of over 100 billion dollars to farm produce along with various protective barriers set up as institution of a quota system for imports, anti-dumping and quarantine, these have considerably affected a rise in the export amount of farm produce from the Mercosur countries. The Mercosur countries hold that as farm products form a major part of their exports with strong competitive force they demand the EU countries open their farm produce markets. Since free trade is to be developed it should be mutually beneficial from an opening of markets to each other's products, they said.

　　 EU also has bilateral talks held in the meantime with Chile and Mexico respectively. These include six rounds of trade talks that have already been held by it with Mexico since 1995. During the recent Summit at Rio de Janeiro, Mexico further represented itself as saying that it hopes trade talks are to be completed by the end of this year and that it could be the first to develop free trade with EU among its Latin American counterparts. As to Chile, since it has become a partner among the Mercosur countries its trade talks with EU should been channeled into free trade talks between EU and Southern Common Market. During the recent Summit at Rio de Janeiro, EU also had talks held with Andean Group through which it has decided on an extension of general trade preferential treatment enjoyed by the Group to 2004.

　　 All in all, EU and all Latin American countries represented at the Rio de Janeiro Summit have unanimously expressed the view that a strengthening of trade ties is merely a part of the project for an integral development of economies of EU and Latin America. They demand that the two sides, the two regions, should make redoubled effort to further their relations in political, cultural and social fields. The Rio de Janeiro Summit has given approval to a program of action that includes altogether 54 items designed as aspects of bilateral relations to be developed. It shows that EU-LA relations have been developed on much wider profound scale than those of American Free Trade Region. But there are many problems still found as a hard nut to crack.

Opinion 1999-07-01 Page6

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