EU plans investments in Latin America, Caribbean

EU leaders met in Brussels to announce investments totalling €45 billion (£39 billion) to be made in Latin America and the Caribbean. While part of these investments would accelerate the transition to sustainable energy, EU leaders made little headway in thawing a frozen trade deal that critics believe will further destroy the Amazon rainforest.

The purpose of the EU-Celac summit, which was the first of its type to take place since 2015, was to draw the European Union (EU) closer to the countries of Latin America and the Caribbean. Negotiations were difficult because of disagreements about how to allude to the conflict in Ukraine in the final language.

The investment package, which includes finance from the private sector, encompasses projects to extract essential minerals, electrify bus fleets, and assist in the protection of the Amazon rainforest in Brazil. Additionally included are projects in fields such as healthcare and communications technology.

President of European Commission-Ursula von der Leyen, was quoted as saying that “It’s not just about how much, but also how we are investing,” and she went on to say that she wanted the money to come with strong environmental and social standards.

Beyond a phrase in the proclamation that takes note of “ongoing work,” the diplomats who attended the conference made very little progress on the contentious free trade treaty with Mercosur, the trade group that comprises South America. Von der Leyen had stated that she planned to finalize the accord this year.

The European Union is concerned that if it ratifies the free trade deal it reached in 2019 with four nations in Latin America — Brazil, Argentina, Paraguay, and Uruguay — it will hasten the deforestation of the Amazon rainforest. For this reason, the EU has not yet signed the pact. During the rule of former President Jair Bolsonaro, Brazil scaled back regulations meant to safeguard the environment and denied financing to the agency responsible for enforcing environmental laws. Farmers, loggers, and miners in the Amazon jungle cut down and burned trees at a quicker rate in 2021 than they had in the 15 years prior to that year.

Luiz Inácio Lula da Silva, who won the presidential election campaign in Brazil on a platform of defending the Amazon and the rights of Indigenous peoples, has criticized the European Union as “protectionist” for putting strings to the goods it imports. He won the election on a program of protecting the Amazon and Indigenous peoples’ rights.

Emmanuel Macron, the President of France, told reporters present at the conference that it was “not a threat but respect” to apply the same standards both domestically and internationally. Environmentalists, who are concerned that the pact will lead to the destruction of even more of the Amazon rainforest, and farmers, who are concerned about the threat of competition from imports from other countries, have forged an odd alliance in France.

The European Union (EU) is hoping that by encouraging commerce with Latin America, it will be easier for it to meet its own climate targets. In a speech that he gave on Monday, Von der Leyen highlighted the region’s potential for hydrogen – a gas that can be produced with renewable energy to clean up industries such as steel-making and shipping – as well as crucial raw materials that are required for the transition to a new energy source, such as lithium.

“Unlike other foreign investors, we are not only interested in investing in the pure extraction of raw materials,” she said. “We are also interested in investing in the processing of raw materials.” “We want to work with you to establish a partnership to build local capacity for processing, for manufacturing batteries, and for the final products, such as electric vehicles.”

A trade analyst at the environmental think tank E3G named Ignacio Arróniz Velasco referred to it as a “subtle but significant shift” in the discourse of the EU. Von der Leyen had discussed commerce in hydrogen and minerals without adding support for the region’s own sectors while he was in Latin America a month ago as part of a trip that he took there.

The President of Argentina, Alberto Fernández, lauded the deal for its departure from “extractivism” in its terms. We have never been able to develop our manufacturing sector because of the widespread misconception that Latin America exists solely as a supplier of raw resources.

He went on to say that the summit was the first time this had ever altered. “It took us half a millennium, but we finally accomplished our goal.”

The United States of America is Latin America’s most important trading partner, followed by China. China is primarily interested in purchasing raw resources and agricultural goods while selling manufactured goods.

As a result of the conflict in Ukraine, which brought to light the continent’s excessive reliance on imports of Russian gas, European politicians and businesses have made efforts to diversify their supply chains so that they are less dependent on China. As a result of the move, commercial ties with Latin America and the Caribbean have taken on a more prominent role.

“We don’t want to repeat some of the errors of the past,” said Luisa Santos, the deputy president of the lobby organization BusinessEurope. “We don’t want to repeat some of the errors of the past.” “We don’t want to put all of our eggs in one basket” is what we want to avoid saying.

The declaration that was signed at the end of the summit emphasized the significance of money in terms of the need to clean up economies, protect people on a warmer globe, and pay for losses caused by extreme weather. In paragraph 23 of the declaration, the leaders agreed that rich countries would recommit to getting $100 billion in one year in climate fund to poor countries. This was a pledge that should have been honoured in 2020, but it was not. They also promised to quadruple the financing to adapt to climate change by the year 2025.

The Prime Minister of Saint Vincent as well as the Grenadines, Ralph Gonsalves, stated that it was essential to “hold their feet to the fire” in reference to the failure of wealthy countries to fulfil their financial commitments.

“It would be a terrible turn of events if you wrote this in paragraph 23, and then in the year 2025, we had no money,” she said.

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