At the beginning of the third decade of the 21st century, the European Union (EU) appears to be in a transitional stage of inter-regional cooperation and in search of a new leadership model in the Latin American region in the context of its competition with the US and China. For the nations of Latin America and the Caribbean (LAC), the EU is the main deliverer of state programmes along the North-South line, aimed at providing solutions to global problems, including the preservation of the environment. It is worth mentioning that more initiatives are being undertaken in the EU on the issue of achieve the Sustainable Development Goals (SDGs) than in other parts of the world. In this way, the EU is moving towards an innovative reproduction of the global economic system, based on the SDGs, both within the European bloc and in interregional cooperation in the North-South format, in particular with LAC. Throughout the political and economic dialogue held with LAC, the EU abides by the chosen model of interaction with the region, which is oriented towards long-term partnership and has a differential approach applied simultaneously at several levels of action: bilateral, sub-regional, and inter-regional.

Notwithstanding, a major factor in transatlantic relations is the health, economic and social crisis caused by the COVID-19 pandemic, which will lead to corrections in international relations and globalisation. It must be recognised that the post-pandemic world will make certain adjustments in global economic relations, which in the short term would manifest itself first and foremost in a sharp drop in macroeconomic indicators on both sides of the Atlantic. Under the new circumstances, in the foreseeable future there may be tendencies among the main actors to renounce globalisation; the fragmentation of regional integration in LAC may increase, and the role of the state in the national economy may increase as well.

The pandemic has triggered a worldwide recession and festered existing global trends, including: the critical nature of the ecological crisis, growing geostrategic rivalry between China and the US, the approach of the Fourth industrial revolution, the crisis of globalisation and the deepening of the deficit of multilateralism. Nevertheless, the EU has set out for 2020 with a clear vision of its development until 2050; it is primarily a question of European "green deal". As a result, the agreements between the EU and Latin America are not merely free trade agreements but contain a sustainable development and environmental component (the agreement with MERCOSUR). It is precisely the chapter of the signed agreements dedicated to SDGs that can be further developed to effectively promote the green, inclusive, and sustainable transition to new trade policies and the new reproduction of the global economic system.

The structural problems of the LAC economies and the new international scenarios make it necessary that foreign direct investment (FDI) and policies promoting it also be part of a broader project that drives progressive structural change, i.e., a change that allows for increased productivity and social inclusion, equality, and growing environmental sustainability.

It is now a matter of consolidating financial resources to ensure a way out of the pandemic crisis. Financial cooperation mechanisms are needed to provide joint and more effective solutions to the problems facing Latin America and the EU.

Particularly, financial institutions such as the Inter-American Development Bank, the Development Bank of Latin America and the Central American Bank for Economic Integration have a key role to play in financing the investments necessary for the recovery of LAC economies in the post-pandemic period. All indications are that the financing of economic recovery and the role of international organisations will be at the heart of the European-Latin American dialogue. The process of renewing interregional relations between the EU and LAC, as well as making use of the opportunities emerging in the new regional geopolitics must be recognised as an imperative.

The EU needs to make a qualitative leap in its relations with LAC and introduce the goals of the EU's “green agenda”, formulated in line with the SDGs, into the interregional dialogue. It is argued that such a qualitative leap in inter-regional cooperation entails numerous tasks for the EU. It is necessary to facilitate the provision of technologies to overcome Latin America's extractive model. In the Latin American energy sector, European companies can contribute to changing the energy mix and invest in renewable energies. Funds need to be mobilised to invest in the necessary infrastructure to ensure access to sustainable energy security for the nations of LAC. Official development assistance (ODA) programmes are of particular significance, which, among other areas, cover the field of sustainable development. Thus, in line with the SDGs, the special European programme EUROCLIMA+ is a major tool for supporting policies to protect the environment and reduce the consequences of climate change in LAC. Digitalisation is yet another opportunity to achieve technological progress based on innovation and thus open new possibilities for inter-regional cooperation. Such cooperation should provide for specific funding of joint projects. An important field of activity is to include sustainable development aspects in cooperation agreements with Mexico, Chile, and MERCOSUR.

In a short-term perspective, a scenario of renewed dialogue at the inter-regional level is possible in terms of the functioning of summits and pragmatism in relations on the part of LAC. In the medium-term perspective, an adjustment of strategic lines in inter-regional relations to post-pandemic development trends and priorities in the way towards the achievement of the SDGs and the 2030 Agenda is to be expected. One can well imagine that, in the medium- and long-term perspective, both regions could count on the basis of closed trade agreements between the EU and particular Latin American countries or LAC integration blocs. A move towards a more grounded and pragmatic approach to trade regulation and the drafting of the new generation of trade agreements is possible. Such interaction can help to strengthen convergence between economic integration mechanisms in the Latin American region itself. In turn, trade agreements in the medium-term perspective should be aligned with global value chains, environmental requirements, and digitisation objectives. This would serve to shift the emphasis from traditional cooperation issues to areas like climate, services, e-commerce, and the protection of intellectual property. In this line, ECLAC sees regional integration as a key to post-crisis recovery.

There is a growing understanding in the EU that fields of activity in the Latin American region where EU influence weakens will be taken over by China and other partners. Particularly, LAC enables Europe's “green course” to develop its influence and external dimension. The EU's stability, its ability to adapt to changing development conditions, cannot be underestimated. The new world order that is currently taking shape is prompting the EU leadership to look for new tools and mechanisms to solve the problems that the partnership faces. In the meantime, humanitarian cooperation between European and Latin American countries, especially in the health sector, is likely to be amplified.

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