June 28, 1999
Rio de Janeiro, Brazil - European and Latin American leaders will try to forge a new strategic partnership at their summit opening Monday, hoping to counterbalance the political and economic dominance of the United States. Key among the issues for the leaders of 48 European, Caribbean and South American nations during the two-day summit will be a Europe-Latin America free-trade zone.
''It's a big chance for Europe and Latin America,'' said German Foreign Minister Joschka Fischer at a pre-summit gathering of ministers Sunday. ''We should use this historic chance.''
That is an idea, however, whose time may not quite have come. There is talk about linking the 15-nation European Union and Mercosur, the South American trade bloc that includes Brazil, Argentina, Uruguay, Paraguay and associated members Chile and Bolivia. In recent days, the EU has backed away from laying out a timetable to negotiate the linkup. Earlier, proposals were being floated for starting negotiations in 2001 and finishing them by 2005. Officials from Europe and Latin America plan to meet in November to set a calendar and format for free-trade talks, with a view to beginning in 2001. It was not known where that meeting would be held.
Spanish Foreign Minister Abel Matutes said the EU-Mercosur negotiations will have to proceed at the same pace as the multilateral efforts within the World Trade Organization. ''Europe is the No. 1 trading partner and the No. 1 investor in Latin America. The agreements that will be reached here will strengthen our relations and presence in Latin America,'' Matutes said.
A new trade agreement with Latin America would introduce a new balance to U.S. influence, Matutes said. ''The good relations of the United States with Latin America do not have to exclude the existence of good relations between the EU and Latin America,'' he said.
Argentine Foreign Minister Guido Di Tella said he was optimistic about talks with the EU. ''The skepticism that prevailed a few months ago has disappeared,'' he said. ''It will be a long and complicated process and will include all products, including agricultural products.''
Foreign ministers were working Sunday on the summit declaration to be finalized by the leaders, which is expected to deal with a variety of issues, including human rights, terrorism, drugs and trade. The ministers agreed on language for the declaration mentioning the need to control the movement of capital, Brazilian Foreign Ministry spokesman Jose Alfredo Graca Lima said.
A group led by Brazil and Chile contended that making it harder for capital to jump from country to country would reduce the world economy's volatility and curb the spread of crises. Brazil was hit hard when the Asian financial crisis shook South America. Direct European investment in Latin America doubled from 1996 to 1997, reaching $17 billion. Spain accounted for a third of that amount, followed by Britain and France. EU exports to Latin America reached $52.4 billion in 1997, double the 1987 amount. EU imports from Latin America totaled $38.1 billion.
More Information on the World Trade organization
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