One of the European Union's current priorities is to strengthen its voice on the world stage. Yet, writes Carlos José Cruz Infante, the EU has not sufficiently explored its opportunities with the Latin American continent. Attractive opportunities remain – if the bloc can embrace them soon
During a period of economic and political instability in Latin America, China and Russia have managed to strengthen their geopolitical positions. The US and the EU, meanwhile, have neglected theirs. However, there remain a number of opportunities for the EU to restore its bond with the region.
One of the EU's four priorities for the period 2019–2024 is to promote 'European interests and values on the global stage'. To this end, the EU needs to focus on the policy priorities of ordinary Latin Americans, kickstart a digital alliance between the two regions, deepen the EU’s role in renewable energies, and capture a decent share of the Southern Cone's lithium value chain. But let us first look at how other world powers have reacted to Latin America's recent economic and political instability.
South America represents 7% of global GDP – roughly the same as India. Thanks to a commodity price boom during the 2000s, the region more than duplicated its GDP until 2017, when its economy stagnated. The pandemic only aggravated the situation. Regional GDP fell, as did foreign direct investment. A third of Latin Americans remained or became poor, and inequality began to rise again, which had not happened since 2005. On top of that, inflationary pressure now threatens food security in the region.
Since the 2010s, Latin America's social landscape has been just as unstable as its political one. Democracy has worsened for the sixth year in a row, and social discontent has led many countries to elect leaders who promise Latin America for Latin Americans – the so-called second pink tide. These leaders tend to prioritise ideological agendas, and to cooperate mainly with like-minded states.
2021 saw a historical milestone. For the first time, China overtook the EU as the second-biggest Latin American trading partner, and the leading one in most Latin American economies. By March 2022, as a result of consistent foreign policy efforts, 20 of 24 Latin American economies had joined China's Belt and Road Initiative.
Beijing aids Latin America with infrastructure, money lending, intensive trading, and strategic resource exploitation. The Chinese government is the primary stakeholder in two of the ten biggest lithium mines in the world. It is also a 'comprehensive strategic partner' of Bolivia, Argentina, and Chile, which hold over 50% of global lithium stock.
In 2021, China overtook the EU as Latin America's second-biggest trading partner
China's future in the region looks promising. To reduce the worrying gaps in internet access, it promises to provide Latin America with affordable 5G – indeed, it has already attempted to do so in Brazil. In exchange, the People's Republic would exert its influence through military power and control of information.
Last October, Central America shifted its UN Assembly votes and voted against a UN resolution condemning the Russian invasion of Ukraine. Argentina and Brazil, who have voted against Russia in the past, have nevertheless been lukewarm in their criticism of Putin’s actions. Has the Kremlin’s strategy towards the continent constrained Latin American critique? Russia has seized several opportunities to strengthen its influence in the region.
Secondly, Putin has made bold moves to secure that position. For example, the Kremlin owns Venezuela's most influential oil controller, and operates a nuclear research centre in Bolivia. Putin also hopes to install two further nuclear research centres in Argentina.
Russia has seized several opportunities to strengthen influence in Latin America, through the energy and agriculture industries, via media outlets, and through vaccine diplomacy
The fourth element is agriculture. Russians provide Brazil and Argentina with enormous amounts of nitrate-based fertilisers; in return, Russia buys significant quantities of Latin American agricultural products.
Finally, Russia has an active communication strategy for the continent. News channel Russia Today, for example, operates a Latin American branch broadcasting content tailored to the region.
During the Cold War, amid fears the 'communist menace' would spread further, the US propped up several Latin American military regimes. When democracy returned to most of the region, its governments found themselves devastated by debt crisis. Subsequent US efforts to boost economic development – the Washington Consensus – proved insufficient. Inequality and institutional mistrust continued to grow.
Nowadays, the relationship remains strained. The Biden administration took months to appoint ambassadors to several Latin American countries, and the most recent Americas Summit in the US failed to produce any substantial outcome. The US appears to be losing its influence in the region.
The EU needs to engage proactively in policy areas that could improve the lives of Latin Americans. These include advice on education, based on the European experience; recommendations to enhance the preparedness of the region's health systems; and guidance on boosting businesses and job creation. All these are issues about which most Latin Americans care deeply. The Covid-19 pandemic took Latin Americans’ jobs and lives. Russia's invasion of Ukraine is taking their food. These problems are affecting people's wellbeing, but not their consciousness.
Another opportunity for the EU would be to invest in digital infrastructure to improve the region's economy and afford it digital sovereignty. The EU could take advantage of contingencies such as the fibreoptic connection between Portugal and Brazil, and act on recent recommendations from the European Council on Foreign Relations to end its neglect of the region. If Europe does not, China will.
The EU must focus on investment in Latin American digital infrastructure. If it does not, China will
The EU is an investor in Latin America's renewable energy sector. However, to temper some governments' tendencies towards fuel nationalism, the EU needs to do more than simply invest: it needs to step up to a leadership role. For example, an EU-led regional renewable energy integration, such as Road 2023, could ensure some policy continuity to overcome the short-termism of certain Latin American administrations.
Finally, the EU could get involved in the lithium exploitation and value chain. At present, Europe depends strongly on Chinese manufacturers of lithium-based batteries. But investment in Latin America could guarantee Europe’s electric mobility, consolidate its climate change fight and reinforce relationships with lithium holders’ governments in the longer term.
Other superpowers can count remarkable achievements in Latin America. The EU could learn valuable lessons from these approaches – and find its way to a renewed partnership with the region.