I began writing this commentary the day Russia invaded Ukraine. Besides the deep concern for the war and its victims, I wondered if this episode represented a turning point in acceptable practices internationally and possibly in the world order. The answer is not clear to me yet, but a conviction that I have been mulling over for a while returned to my mind. Structure is as decisive for international relations as agency. Agents’ preferences do matter but they find major constraints – or opportunities - in the context, which shapes options and choices. The relations between the European Union (EU) and Latin America and the Caribbean (LAC) do not escape this logic.
Too often, emphasis on agency has led to a palpable dissatisfaction with the depth and the results of the EU-LAC relationship. Politicians, diplomats and analysts of different standing and background have stated that the bi-regional relationship is underperforming and that it ought to be returned, or taken to a different level. This implies that the agents involved in the bi-regional process could have done more and actually shall do more. While this is possibly true, such an approach tends to underestimate both the context in which EU-LAC relations take place and the results obtained thus far. The current context is not particularly favourable to EU-LAC relations. Yet, these are solid and cordial. They have produced satisfactory results. Hence, they deserve a positive assessment. A careful analysis of the international context and subsequently of the state of the art of EU-LAC relations underpin this appraisal.
Six features characterise the international scenario today. They seem to be enduring rather than temporary phenomena. They pose significant challenges as well as possible opportunities to EU-LAC relations.
First is the rise of China and the ensuing competition with the United States. China is no longer an emerging power but a great power, according to established canons of judgement, including material resources, immaterial resources, universal interests and reach, and recognition by others. The world is fast moving towards a global and comprehensive competition between Beijing and Washington. This may potentially compress the space for autonomous EU-LAC initiatives. For instance, the US and China already dominate Latin American international trade. The broader international system might again experience dynamics and rules largely determined by two major players, in a similar vein to that of the Cold War period (1947-1989). However, this international structure for the decades to come may be quite different from the Cold War bipolarism. In fact, the space for manoeuvring open to other international players may remain significant in a number of sectors. The EU and LAC should consider this new scenario very carefully and ponder their role, space and allegiances within it.
Second is the post-COVID-19 pandemic transition. This phase may last for a time that is currently unpredictable, as are the consequences in the medium and long term of the recovery strategies adopted so far. Inflationary shocks, shortcomings in international supply chains, fluctuations in prices, unemployment and other economic and social repercussions may affect international interactions. Most countries and regions are revisiting their production structures and scrutinising their alliances. The goal is to diminish external dependencies, especially for key supplies. In times of economic contraction, resources for external reach may suffer. What will be the consequences for EU-LAC relations? How will the EU, the first provider of aid cooperation and stock investments to Latin America react? To what extent will the EU be able to overcome the credibility gap that the pandemic and China’s health diplomacy seem to have created?
Third is the transition that globalization, as we have experienced it in the last thirty years, is going through. A 2019 McKinsey report informed that the world produced and exported more and more but export distances were diminishing. Regional value chains may replace global ones, especially in Europe, Asia and North America. This may leave LAC in a difficult situation. De-globalization may not yet be happening, but a shift in the nature and logic of globalization is. Hence, labour costs would play a lesser role and technological advances a major one. The internet of things and 3D printing, but also changes in mentality and values such as the green transition, may prompt a recast of EU-LAC relations. The consequences are not clear yet but challenges may outmatch returns under the current formats of EU-LAC political and economic interaction.
Fourth is the supposed crisis of multilateralism, of which region-to-region relations are an expression. Actually, the liberal, Western-type of multilateralism is in crisis. The United Nations is bordering on irrelevance in its primary task: the maintenance of international peace and security. The cases of Ukraine and Syria provide painful evidence. The paralysis of the World Trade Organization, Brexit, the questioning of the International Monetary Fund and the World Bank, the decline of the G7 and G20, and the failure of the TTIP and TPP all attest to the decline of the West-led and inspired multilateralism. On the contrary, the multilateralism led by Beijing is flourishing. At the political level, the BRICS, the China+16 Forum in Central and Eastern Europe, the China-CELAC Forum in Latin America and the Caribbean seem to be taking root. In the financial sector, the New Development Bank and the Asian Bank of Development and Infrastructure, both sponsored and financed by China, provide fresh funds to countries in need. At the trade level, the Regional Comprehensive Partnership (RCEP) and the Comprehensive and Progressive Agreement for a Trans-Pacific Partnership (CPTPP) show a dynamism that the West has lost. As long as LAC is attracted to the new multilateralism and Europe remains anchored to the old one, the spaces for bi-regional entente will tend to shrink.
Fifth is the redefinition of the global role and position of the three major components of the West. The United States, still the world’s most powerful country in terms of combined power assets, is experiencing a phase of transition, including in self-perception. On the one hand, the need to address domestic issues, the perceived overstretch of its power, and protectionist tendencies prompt a desire for retrenchment. On the other, the US perceived decline in global influence, the assertiveness of China, and the preservation of US interests suggest a resurgence of Washington’s international presence. Europe has been a declining power since World War II. Yet, the European Union is the most prosperous market in the world and keeps its presence and international share stable. Latin America has been steadily declining for the last century. A recent study shows how Latin America has lost terrain in comparison to other regions in terms of all indicators of international relevance: proportion of world population, strategic weight, trade volumes and diplomatic capacity. In this framework, EU-LAC relations face additional structural limitations.
The current state of EU-LAC relations deserves a benign assessment, especially within this difficult context. The EU and Latin America and the Caribbean have maintained an institutionalised political dialogue since 1999, which remains alive in spite of the lack of a top-level political summit since 2015. The EU is the third trade partner for Latin America. In fact, bilateral trade has grown in absolute terms in the last twenty years and remained stable in relative terms between 2000 and the year before the pandemic. The EU remains the first stock investor in LAC and the first provider of aid cooperation to the region. The interactions between civil societies are dense and fruitful. To hope and aim for even stronger relations is legitimate. Yet, this cannot overshadow the achievements. Furthermore, improvements would imply considerable political and economic investments. Are the two regional leaderships ready to make them? Would the benefits significantly outweigh the costs of an even closer relationship?
As I am finalising this piece, the war in Ukraine has flared up. There may be a sixth systemic factor affecting EU-LAC relations in the near future: the disappearance of the international order, as we know it. I hope I am wrong. The post-World War II liberal order is based on sovereignty and equality of states and international law. Russia’s invasion of Ukraine casts serious doubts on the continuation of such a setting and is a blatant violation of this order and international law. China’s extremely parsimonious comments on the war might lay the ground for similar future scenarios in Taiwan and for the formation of an autocratic front. International law is not being violated for the first time. Yet, on this occasion, there is a complete disregard of legal commitments and the reasons for this seem quite preposterous. As things stand, future EU-LAC relations may take place in a quite different global context from the one we know, a truly brave new world. Force and greed may rival reason and rules. If that were the case, rather than a choice in terms of strategic autonomy for the EU or active non-alignment for Latin America, the moment may come for a choice of camp and values. This may take the form of a revamp of the West as a civilisation and community of values to which both Europe and LAC fully belong.