Latin America Showing Europe Its Teeth

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    Is the financial and economic crisis in Europe leading to a turning point in EU-Latin American relations? In a rather extraordinary development, the 33 heads of State of the Community of Latin American and Caribbean (CELAC) managed to introduce significant amendments in the Santiago Declaration signed with the 27 EU-member states, after their bilateral summit in Chile on Jan. 27. By so doing, they changed in their favor some of the key articles that establish the legal framework for foreign investment in the region.

    While accepting there needs to be a stable environment for foreign investors, Latin American and Caribbean countries made sure the declaration underlined the need to take social and environmental considerations into account, giving themselves the right to intervene if need be. It states:

    “We emphasize the importance of working together to promote investments that support sustainable and sound use of natural resources, environmental care and economic and social development … We stress the importance of a stable and transparent regulatory framework that provides certainty to investors, while recognizing the sovereign right of States to regulate.”

    For the Latin American countries, this is a huge step forward and an important achievement because progress was made on establishing sovereignty. It is probably one of the unexpected consequences of the EU’s serious economic and financial crisis that stands in sharp contrast to the relative stability and decade-long growth enjoyed by Latin-America and the Caribbean. This makes them less dependent on the European Union and allowed them more leverage to further their demands, moving away from a relationship of dependency and from the assumption that largely prevailed until now, that the country receiving the capital has to yield to the will of the other party.

    Also noteworthy is the reference they managed to introduce in the declaration on the need to protect nature: “We recognize that planet Earth and its ecosystem is our home and Mother Earth is a common expression in a number of countries and regions and we note that some countries recognize the rights of nature in the context of the promotion of sustainable development. We are convinced that in order to achieve a balance among the economic, social and environmental needs of present and future generations, it is necessary to promote harmony with nature.”

    Not only did Latin American countries recognize themselves the right to protect their natural resources and to regulate against foreign investors, they also secured a joint condemnation of the United States’ trade embargo against Cuba. It declared:

    “We firmly reject all coercive measures of unilateral force imposing extra-territorial demands that are contrary to international law and the commonly-accepted rules of free trade. We agree that this type of practice poses a serious threat to multilateralism. In this context, we reaffirm our well-known positions on the Helms-Burton Act that refers to U.S. law that imposes an embargo against Cuba and sanctions against any foreign company dealing with Havana.”

    On the political front, they also managed to introduce hitherto unseen language:

    “We reaffirm our decision to support all efforts to uphold sovereign equality of all States, to respect their territorial integrity and political independence, to refrain in our international relations from the threat or use of force in any manner inconsistent with the purposes and principles of the United Nations.”

    To see this clearly, one only needs to look at the long history of U.S. interference in a region it traditionally considered as its backyard. In the past, Washington has repeatedly been using military force to overthrow what it considered “leftist” governments in Latin America and the Caribbean, especially if those governments threaten U.S. corporate exploitation of labor, land and resources.

    Today, the United States still maintains its hawkish rhetoric on “leftist” governments like Venezuela with Caracas fearing a new invasion. The trade embargo on Cuba, although increasingly criticized, is still in place. And Latin American countries like Brazil have been critical of Washington’s tendency to unilaterally resort to armed forces to impose its policies in other parts of the world.

    As a consequence, Latin Americans are increasingly taking the initiative: First, they have been strengthening intercontinental ties as never before. Second, if the possibilities for integration “bore no fruit” with the United States, Europe now represents an opportunity. With some 385 billion euros invested in 2010, the EU remains the continent’s largest leading foreign investor.

    But Latin American and Caribbean countries deplore the fact that Europe has opted for a strategy of further liberalization. During last week’s bilateral summit, European leaders insisted on talks about trade and direct investment. They are concerned that European business are sometimes subject to legal uncertainties in Latin American countries; this concern stems in part from the Argentinian government takeover last April of oil firm YPF from its parent Spanish-owned Repsol.

    EU Trade Commissioner Karel De Gucht back then criticized “the growing tendency towards protectionism across Latin America” at a moment in which the European Union is pushing to lower trade barriers and set up free-trade pacts with a number of Latin American countries or regional organizations. Brussels managed to sign trade agreements with Mexico and Chile; those negotiated with Peru, Colombia and Central America are in the process of being ratified.

    But some countries in Latin America, including Ecuador, Bolivia and Venezuela, are increasingly critical of these free-trade agreements and the neoliberal policies they champion. They denounce the prevalence given to economic interests over human rights and the social impact on the peoples. They no longer are willing to accept a model of neoliberalism to the detriment of millions in the south.

    More and more of them voice their legitimate right to adopt their own policies and to disagree with positions originating in other parts of the world. The governments of Venezuela, Argentina, Brazil and Ecuador have all refused to bow to demands from the International Monetary Fund (IMF), an institution largely controlled by the United States. Many of these countries have also clashed in the past with multinational corporations over nationalizations.

    Bolivian President Evo Morales recently said access to basic services like water and electricity belongs to the mostly rural poor and not large foreign-owned corporations. Argentina’s president Cristina Fernández de Kirchner said she could not agree to deals that would create unfair competition for home-based businesses for the sake of EU interests. “We have to avoid hurting our industries and above all, our people,” she is reported to have tweeted.

    Civil society also mobilized; more than 400 social organizations from Europe and Latin America gathered at a Summit of the Peoples that met in parallel to the EU-CELAC Summit. Convened under the slogan “for social justice, international solidarity and sovereignty of the peoples,” the aim of the meeting was to make sure the civil societies of both regions are heard, as they voice their opposition to the model of development imposed by previous bi-continental summits.

    Rejecting neoliberal policies and rising up against injustices, they want bilateral relations to give primacy to the rights of the citizens and to the respect of sovereignty of nations. They are asking a model of development that guarantees the rights of the people, be they political, social, economic or environmental.

    It looks like in Santiago de Chile, they were at least partly heard: “We reiterate the right of citizens to participate in the formulation, implementation and monitoring of public policies,” the Santiago Declaration also says.

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