South America’s European aspirations

Article published on Aug. 22, 2005
community published
Article published on Aug. 22, 2005

This article has not been vetted by an editor at Paris HQ

In South America, the European Union is seen as a geopolitical force to counter American hegemony and is considered a role model. It also represents South America’s second greatest trade partner after the USA.

In December 2004, South America’s twelve national leaders founded the South American Community of Nations (CSN). They openly acknowledged their intention to imitate the EU model as an economic and political bloc, as well as their aim to establish their own parliament, a common immigration policy and a single currency. In addition, the EU, despite being geographically removed, also has a frontier with South America: Brazil and Surinam neighbour French Guyana, which is considered part of the EU and the Eurozone.

Why follow in the EU’s footsteps?

Unlike multilingual Europe, over 90% of South America’s population speaks Spanish or Portuguese. The region is also more homogenous than Europe in terms of religion, culture and history, and has never had a war involving all its members.

The EU is the second largest importer and investor in Latin America, with Spain at the forefront of commercial operations. Many European countries have benefited from South American privatisation policies and concessions on mineral and energy resources. Following the disintegration of the Soviet bloc, the EU and Madrid were looking to fill the void it had left. Every year since 1991, the leaders of Spain and Portugal have convened a meeting with the presidents of their Latin American ex-colonies. The King of Spain and Fidel Castro initially instigated these summits as part of a shrewd diplomatic game that enabled Cuba to avoid the isolation that Washington tried to impose on it, whilst allowing Spain the chance to follow the examples of France, Portugal and Great Britain in building bridges with its ex-colonies. To some degree, these summits compete with those of the Organisation of American States (OAS), a body founded by the USA that has excluded Cuba.

Following the collapse of the Soviet Union, South America feared that its American sibling would further expand its influence. It is for this reason that Venezuela formed special relations with Cuba, Iran and Spain, and why Brazil sought to create its own South-South agreements and EU links. Like Latin America, the EU also tends to attract US criticism for its reluctance to sanction Cuba and for its subscription to the Kyoto Protocol.

Divisions in a seemingly homogenous continent

South America’s economic weakness is its Achilles’ heel. Whilst Europe has advanced, industrialised economies that once ruled the world, South America has only developed to a very low level and is extremely dependent. All of its states are former colonies with raw materials constituting their principal exports and who conduct more trade with the North than with one another.

In addition to this, the region is actually under two separate and conflicting pressures to form an economic bloc. The USA is suggesting a move towards a Free Trade Area of the Americas (FTAA) that would stretch from Alaska down to Tierra del Fuego, Argentina. The Andean countries are very tempted to form bilateral agreements with Washington, having reasoned that this would enable them to establish their exports in the huge North American market. To add to the problem, the Central American republics do not want to form a South American bloc at all. Instead of creating a Latin American EU, their aim is to rise above American lobbying and form free trade agreements. Venezuela, Brazil, Uruguay and Argentina, however, are not keen on the idea of a free trade agreement with the USA. They see that their national industries would lose out against the North American multinationals and they question American protectionism.

Unpaid debts

We should not neglect to mention that EU-Latin America relations could encounter two potential conflict areas: territory and trade. It was only twenty years ago that the Argentines and the British came face-to-face over the Falkland Islands (also known as the Malvina Islands). The EU is currently reclaiming this territory as part of the European constitution project. The whole of South America, with the exception of Pinochet’s Chile, showed solidarity with Argentina at the time of the Falkland War and continues to support Argentina’s claim to the islands. Then, on the commercial front, South America is dubious of the Common Agricultural Policy (CAP), which is allocated 40% of the EU budget and maintains constant subsidisation of EU agricultural products. Brazil, Argentina, Chile and other South American agricultural exporters argue that they could just as easily adapt to lower prices.