The European Union (EU) wants to advance in its strategic association with Latin America, particularly in the context of the war in Ukraine and in view of China’s rapprochement with the region, and is preparing a memorandum of understanding on energy issues that could be signed in July at the summit together with Celac, while waiting for a response from Mercosur to finish closing a free trade agreement that began to be negotiated more than 20 years ago.
During her visit to Buenos Aires two weeks ago, the President of the European Commission, Ursula von der Leyen, signed a memorandum of understanding on raw materials with Alberto Fernandez, which contemplates an association with the country linked to these key inputs to the transition towards cleaner energies, such as lithium or green hydrogen.
“We believe it is time to take this partnership to the next level. We put on the table a new agenda to strengthen relations between Europe and Latin America and the Caribbean”said Von der Leyen in Argentina, in the framework of a tour of the region that took her first to Brazil and then to Chile and Mexico, and where she announced that the European Commission will invest 10,000 million euros in Latin America within the Global Gateway plan to the development of global infrastructure, financing the climate and digital transition.
The visit came shortly after the EU presented a new agenda to strengthen its relationship with the region, to make it more “modernized and more solid, through reinforced political dialogue, the stimulation of trade and investment” and almost a month before the summit that will be held on July 17 and 18 in Brussels with the Community of Latin American and Caribbean States (Celac).
In this meeting, the first EU-Celac since 2015, the Europeans will seek the signing of another memorandum of understanding on energy issues, bloc sources told Telam today.
The war in Ukraine, which caused the Europeans to reduce the import of Russian oil and gas Given Moscow’s decision to invade the neighboring country, as well as the new environmental guidelines, which point to the energy transition, led the EU to seek a partner in Latin America, where the so-called Lithium Triangle is also located, made up of Argentina , Bolivia and Chile, and which has almost 65% of world reserves.
Lithium is key in the objective of several countries to move away from fossil fuels in the face of the climate crisis, with the use of electric cars, whose batteries are made from this metal.
But Brussels not only wants to have access to the raw material, but also to support the development of value chains and promote the participation of European companies in this regard. The objective is, at the same time, to depend less on China as a supplier of lithium batteries, which could be produced in Argentina, for example,
And, on the other hand, the EU views Beijing’s rapprochement with Latin America “with concern”, both in terms of trade, which allowed the Asian giant to become the second largest partner in the region, and in relation to the production model adopted by Chinese companies, according to bloc sources.
In this context, it also wants to finalize before the end of the year the free trade agreement reached in principle in 2019 with Mercosur after two decades of negotiations.
In March, the EU presented an additional instrument to the regional bloc made up of Argentina, Brazil, Paraguay and Uruguay, in which it incorporated a series of additional environmental requirements that could harm the export of certain products from the region, for which it was met with the resistance of some countries.
Specifically, Fernandez called for a “balanced” agreement, to take into account the asymmetries, although he expressed that there is “political will” to sign, while for the Brazilian president, Luiz Inacio Lula da Silva, the new conditions are “unacceptable” and represent a “threat.”
“We are going to make a response and we are going to send it, but we have to start discussing. It is not possible that we have a strategic partnership and there is an additional letter that poses a threat to a strategic partner.”Lula Da Silva
In recent weeks, Lula harshly criticized this “side letter” presented by the EU, both during his trip to Italy and France, and during von der Leyen’s visit to Brazil.
“We are going to make an answer and we are going to send it, but we have to start discussing. It is not possible that we have a strategic association and there is an additional letter that poses a threat to a strategic partner,” Lula said in Paris.
You wait for Brazil’s position
The EU now considers that “we have to wait for Brazil”, pointed out the European sources, who nevertheless admitted that Lula’s arrival in power allowed bilateral relations to be relaunched after the cooling off during the government of Jair Bolsonaro, especially questioned justly for his environmental policy.
For this reason, they stressed that “it was clear” that there was a shift with Lula and pointed in this sense to the decision of the leader of the Workers’ Party (PT) to appoint Marina Silva as head of the Ministry of the Environment and to create a Ministry of Indigenous villages.
Mercosur will hold a summit in Puerto Iguazu on July 3 and 4, in which Argentina will transfer the pro tempore presidency to Brazil and in which the bloc is expected to discuss a joint response. According to Fernandez, the country will present its partners with three points “not to block, but to advance” in the agreement.
In addition to this negotiation, an additional element is added, which is the European Green Dealagreed by the EU in 2019 and which will enter into force at the end of next year, and which establishes a series of measures that aim to reduce net greenhouse gas emissions by at least 55% by 2030 compared to 1990 levels.
It is expected that these new regulations will in turn affect the exports of the countries of the region, since they establish, among other things, that the EU will stop buying products that come from areas of deforestation, in addition to proposing a 50% reduction in the use of pesticides, fertilizers and veterinary products by the year 2030, a requirement that presumably will be transferred to external suppliers, including Latin American ones.
