Revista Forum ::: Fundación Euroamérica

Now that globalization is opening up new methods for relations between countries, there is, on both sides of the Atlantic, an awareness of the necessity to go further in uniting peoples with a shared culture and a common vision of the world. Important Latin American and European figures express their ideas for the development of new and more solid bridges between the European Union and Latin America.

From the time of the first conference between the European Union and Mercosur, which took place in Montevideo, (Uruguay), in 1996, a great number of Latin American and European politicians, businessmen and intellectuals have taken steps to explore new channels of understanding between Latin America and Europe. It was at this point that the ideal of the Fundación Euroamérica was born, which went on to take shape during the course of subsequent meetings in Madrid (May 1999) and Sáo Paolo (December 1999). In this first issue, the magazine Forum collects the speeches of some of these distinguished participants in this series of conferences. The following texts are extracts taken from their speeches which, together, offer a very full and expert view of the current status of relations between the European Union and Latin America, as weIl as providing new ideas with which to broaden and improve these relations in the future.

Rodrigo Rato
Second Vice-president, Spain
The compromise with Latin America

Macro-economic stability is hardly enough on its own to take the most intense advantage of the enormous benefits that a company can derive from the process of market globalization. In addition, it is essential that companies and countries equip themselves with flexible end efficient markets, goods and services, with the clear dismantling of private and state-controlled monopolies. It is this new role of the State that also contributes to making the ownership of companies irrelevant and even advises strongly in favour of a greater distance between political and business decisions. From a theoretical standpoint, many people may think that the State, when it owns a large corporation, particularly those linked with public services, is able to implement through that ownership economic intervention policiesthat improve the lives of the citizenry. But experience teaches otherwise. Large corporations dictate the policy of governments, not the other way round. We can find examples in many countries of large state-owned corporations where, when a governing body has to determine not only certain policies of general interest but also watch out for the specific interests of a company because it is the owner, the government fails to adopt the decisions that it should so as to protect the company in its possession.

It is an experience that I feel that all governments can determine. Therefore, governments are the first party interested in being able to take global decisions in benefit of all concerned in the process of privatization.

This economic process, this economic policy, has to be accompanied by society's ability to move flexibly and this flexibility is only possible in contexts with the maximum level of dialogue, in contexts of agreement and harmony, consensus and compromise, contexts in which many decisions are brought closer and closer to the level of the citizenry. This is the model on which we the Spaniards have built up our transformation over the last twenty years, and it is the context where Europe has built up their transformation too. I feel that this is also the path along, which Mexico and other countries of Latin America are advancing.

Enormous transformation potential is opening up for the future and in this sense Spain's clear vocation is not merely as a Euro-pean and Mediterranean country but particularly as a Latin American country. From the standpoint of politics, culture and also economics, we are committed to the transformation of all of the societies in Latin America. And let me once more cite the example of Mexico: nowadays, Spanish institutions have a significant presence and I should like to cal] special attention to the fact that Spanish financial institutions believed in and supported the Mexican economy and the government of President Zedillo through the worst moments of the Mexican economic crisis in 1994.

I believe this shows that the vision that Spain has of its partners, friends and brethren in Latin Ame-rica is a medium- and long-term vision, far from a mere snapshot of current circumstance. And I feel that this is the only standpoint that can be maintained by Spain. Of course the State and government of Spain can only strengthen this position and fully support it. In this sense, I feel that, the negotiations between the European Union and the countries of South America, must be one of the priorities of the European agenda over the coming years. Europe, not only Spain, cannot renounce the important role falling to us as a political and economic partner of a continent that that is destined to achieve the importance of Latin America in the 21 st century.

( Taken from the lecture given in Madrid at the meeting on "Mexico and Europe: Economic and political scenarios" , May, 1999.)

Rosario Green
Secretary of State for Mexico
A bridge country

The economic importance of the European Union for Mexico has been stated. As the principal trade block, it is also of enormous attraction. You will all also be aware that, as we continue this process of strengthening our economic ties with the United States, we are becoming a little estranged from the European Union, to a greater extent in trade figures and to a lesser extent in tercos of investments. The idea now is that with the Agreement, and particularly in terms of the trade issues of the same, we will be able to return to closer trade relations. However, although we have been speaking of the importance of economic relations with the European Union for my country, I believe that you are all already aware of the importance which Mexico represents for the European Union.

I think that perhaps Mexico's greatest asset is its geographical location. Since geography cannot be changed, we have to seek out the important advantages which this brings. We are a bridge country, we are a country located in a highly strategic geo-political position, sin-ce we constitute a link between North America and South Ame-rica. Not only are we a bridge because of our physical presence; we are a bridge because we are working on integration programs with both North and South America, which will enable globalization at this end of the century which will also doubtlessly be a characteristic of the coming century, to continue meeting the challenges which Mexico sets in terms of freedom in the flow of trade and, in particular, freedom in the flow of capital. In this world, globalization is not an obstacle, but rather the crest of a wave, which must be ridden in order to really participate in world progress. Mexico has this Free Trade Agreement with the United States and Canada, which has been in place now for five years, which has doubled trade with the United Sta-tes and which, measured in imports, has increased trade with Canada by ninety percent. It has also been fundamental in terms of investments, and, of course, it has created a climate of prosperity and association, the effects of which have been felt in political dialogue and in the dialogue on co-operation. With South America we have made and are continuing to make a considerable effort to create the mechanisms which will bring about a trade and financial rapprochement, which will eventually enable us to become part of a network of convergence in this respect. Additionally, with Chile, we signed the first Free Trade Agreement in ninety two, while the North American Free Trade Agreement came about in ninety four, which says something about how we operate in Latin America: the Latin American vocation of Mexico.

(From the conference held in Madrid, during the meeting "Mexico and Europe: Economic and Political Scenarios in May 1999)

Mario Soares
Ex President of the Republic of Portugal
New regulatory systems

People are now starting to recognize the fact that the world is largely unregulated, and that there is a need to find some systems of regulation. It seems interesting to me that at the meeting of the G7 in Floren-ce, which was a meeting of the representatives of rich countries, and which was also attended by Fernando Henrique Cardoso, on the basis of his lnternational prestige, the main element which emerged was the need for the basic vehicle, in areas where the establishment of a certain degree of regulation was required.

This means that there was a necessity to continue along the road to the regulation of flows of capital so that the economies with a certain degree of stability are not totally destabilized by speculations coming in from overseas, and also that, to achieve this, a restructuring of the financial institutions inherited from Bretton Woods, was required, since these were rather obsolete in their methodology and reforms were required also in the economic policies of the G7 itself.

President Clinton, for example, almost at the end of his term of office, quoted Prime Minister Jospin, "Without a market economy, there is no market society". In my opinion, the fact that Clinton felt obliged to say this is not without significance. What does this mean? Obviously it means that the market is fundamental since it is through the market that development arrives and competition is maintained; but that the market itself is not al!, since the market also generates inequalities, some of which are very serious, such as in the access of primary goods, housing, health, education, employment, social security, and inequality when it comes to having access to knowledge and information, which are perhaps more important today than access to money and capital. There is therefore a need to establish and there is now some consensus on this issue some rules: reintroduce some human values and certain social values. On an international level, the path we should be following is that of financial regulation, and it is also important that democracy is maintained not only in the nation states, but also on the level of internal relations, where this is not currently sufficiently the case. The world, in my opinion, is highly complex, and too vast to be run by a board of rich countries, however powerful they are. I do not believe that the world can be run by either the G7 or the G-8, as it is known. The problems of the world must once more be discussed at an appropriate location for debate, which is the place where international resolutions may be made, perhaps creating a more just international order for the next century. This place is logically the UN, once the UN can be restructured and better adapted to the complex conditions of our times.

(From the conference held in Sao Paolo, at the meeting "The European Union and Brazil: Realities and expectations of a transatlantic relationship" in December 1999.)

Fernando Becerra
National Integration Minister for Brazil
A growing relationship

If there is anything which differentiates current economic international relations it is, without doubt, the increase in the regional or bilateral liberalization programs, in comparison to those termed, perhaps somewhat simplistically, as regionalization. As an example, the creation of Mercosur certainly stands out, although we did suffer temporary problems: the sub-regional block was consolidated as an economic integration program, closely linked to the process for the assertion of democracy through which these member countries pass. The national and external legitimacy of Mercosur is an undeniable fact, as is its active role in overcoming the problems of the current situation. As an economic block open to the world, Mercosur embarked on a negotiation process which is now moving into a new phase, establishing with the European Union an ample period for the framework for co-operation in the areas of trade, economics and integration. Both Brazil and Mercosur have an interest in seeking from negotiations with the major players in international trade, particularly the European Union and the United States, the establishment of a less discriminatory liberalization program for third countries. This aside, these negotiations will be fundamental to make viable a substantial improvement in the conditions for trade partners to access these markets, particularly in so far as concerns those sectors currently prejudiced by non-tariff related lows or by excessively high tariffs. An increase in trade relations between Mercosur and the European Union is logical given the strength of the economic ties between the two blocks. The European Union is the main trade partner of Brazil and of Mercosur, representing around 25 percent of the foreign trade of the sub-region. It should be emphasized that European sales exceeded 6 billion dollars, during the period 90 to 97. Additionally, almost 40 percent of the flow of direct foreign investments made in the South American block originate from the European Union, and reinforce the presence of European business, deeply rooted in the industrial history of the member nations of Mercosur.

(From the conference held in Sao Paolo, in the meeting "The European Union and Brazil: Realities and expectations of a transatlantic relationship" in December 1999)

Felipe González
Ex President of Spain
Lasting investments

I have followed, since 1991, this magnificent process of the creation of Mercosur, which has exceeded all expectations. I believe that the result has been spectacular and I have also had a great honor of signing, as acting President of the European Union, the first agreement between one region, the European Union, and another, Mercosur, in December '95, the first time that Europe did so. Ten years ago, at Harvard, they said I was mad when I proposed a triangular relationship with Latin America. The relationship already exists, the relationship is such that we are the leaders in trade, leaders in investment and the primary partner for cooperation in development.

Despite these three things, however, for Europe what happens in this continent is not sufficiently relevant. We complain that we have lost presence in Mexico, there is now an agreement with Mexico; as Europeans we can recuperate not only presence in Mexico, but in the entire territory of the North America Free Trade Agreement. What surprises me, however, is that we are not even sufficiently egoistic (I refer to intelligent egoism) in Europe to pay much attention to what is happening here. We have considerable vested interest, not only in Spain, which has made a spectacular investment effort, in what happens during the course of the decade. Not investments made over the period of one week and then withdrawn, but long terco investments. So let's pay a little more attention, and I speak from the point of view of Europe.

Mercosur is not in any way to blame for some of the elements of crisis which have arisen over recent months, in the wake of the financial crisis. There are, in my judgement, two problems: one, there are no fuses to blow before the entire system is affected. This is very dangerous. In the Mercosur venture there should be some fuses to blow before the main fuse blows, these being the national presidents, who cannot fix conflicts one by one. Two, attempts should be made to harmonize responses to the economic shocks which occur as a result of a financial, or any other, crisis. I am not proposing a single currency. Decide the course to follow, but try to anticipate and harmonize responses to these economic and trade shocks produced as a result of financial crises when there are differing or diverse monetary policies among the countries concerned. This can and should be planned.

(From the conference held in Madrid, at the meeting "Mexico and Europe: Economic and political scenarios" in May, 1999.)

Luis Felipe de Seixas Corrêa
Deputy Foreign Minister of Brazil
Globalización simétrica

Last June, as you know, Brazil hosted the first summit between Heads of State and Governments of Latin America, the Caribbean and the European Union. The occasion was a symbolic one, to put forward proposals for rapprochement between the two regions. One of the principal results of this conference was the initiation of trade negotiations between Mercosur and the European Union, with a view to embarking on the process which will lead to a free trade area between the two markets. For this to take place, the protectionism which still governs the European Union, in respect of the agricultural sector, which will cause so much damage in the Mercosur countries in terms of access to the European market, and competition between markets, must be overcome. It is important for the European Union to take into account the political and strategic importance of these negotiations. The rapprochement between Mercosur and the European Union must be seen aboye all as a political initiative which transcends the level of mere trade. It should be confronted as a means of maintaining the strong European presence in Latin America, thereby strengthening both the multi-polarity and the strategic balance on an international level.

We are aware of the obstacles which lie ahead, but we trust in the convergence factors which bring us closer together: the open nature of the two processes of integration, the commitment of both to the multi-lateral norms of trade, and the already fairly extensive commercial trade, the presence of sizeable European investments in the Mercosur countries, as weIl as the historical and cultural affinities which link them.

It is therefore necessary to take into account the asymmetries existing in trade terms. In fact, the exchange between Brazil and the European Union has developed in an extremely unbalanced manner during the decade 88-97. During these ten years, our imports from the European Union grew by 355 percent and our exports by only 28 percent. Brazil has suffered clear negative effects as a result of protectionist practices and needs to work in conjunction with the countries of the European Union to overcome them. This is, in general terms, the strategy which Brazil is attempting to follow to confront the risks and maximize the opportunities presented by globalization. In order to promote what President Fernando Henrique Cardoso calls a "more symmetrical globalization". Bearing in mind the need to ensure the appropriate relations between the logic of the international market and the domestic social requirements of each nation.

(From the Con ference held in Sáo Paolo, at the meeting "The European Union and Brazil: Realities and expectations of a transatlantic relationship", in December, 1999.)

Hans-Dietrich Genscher
Ex Foreign Minister of Germany
Visionary movements

The decision taken by Mexico, the United States and Canada, to create a free trade area (North American Free Trade Agreement, NAFTA), represents a visionary, almost revolutionary, movement. In fact, it was the correct response to globalization. We could almost say the same of the project for the creation of the free trade area in Latin America, from Alaska to Tierra del Fuego. Latin America has become one of the most dynamic areas of the world. With the exception of Cuba, the remainder of the Latin American countries have embarked on the road towards democracy and the market economy. The positive development of this region is also visible in the ever increasing trend toward regional integration, and this can be seen, for example in the framework of MERCOSUR. Regional integration in Latin America corresponds to the period of growth, since stability in Latin America is an important factor in the attainment of a situation of general stability. Never before in history have there been such high hopes as there are now that Mexico and the European Union (EU) will become partners. Both parts share historical, cultural and social affinities. This, however, is not the sole reason why the EU decided to write a new chapter in the history of the relations, the negotiation of agreements and co-operation with Mexico during the German Presidency in 1994. In fact, the EU has recognized the importance and influence, both political an economic, of Mexico in Lati America and throughout th world. Currently, the EU Mexico's second most impo tant partner, after the Unite States. If, on one hand, we loo to both the Atlantic Ocean an to the Pacific as gateway be' ween the United States an Central America, and, on th other hand, to Latin Americ and Central America, we hav, a unique panorama from the geopolitical and geoeconomil point of view. Mexico does no belong solely to NAFTA, since as a result of its status as member of the Economic Co. operation Forum of Asia anc the Pacific, it is inextricably linked to the dynamic region of Pacific Asia. Currently, the gross national product of Mexico exceeds that of some member States of the European Union. Mexico represents for the European Union a gateway to the vast Pan-american market and it comes as no surprise that some six hundred German companies are already represented in the country.

(From the conference held in Mexico D.F. during the meeting on "Europe and Mexico: the present and the future of a balanced relationship; March 1998)

Douglas Hurd
Ex Foreign Minister, UK
More open doors

The crucial factor this year is economic cooperation between Europe and the rest of the world. There is much interna! debate in Europe. These debates, although difficult, are necessary: We are fifteen democracies, and debate is an essential part of the engine which drives our destinies. There are discussions between those who want a free market and those who, legitimately, prefer the protection of the existing interests. I have attended many of the meetings of the Council of Ministers in Brussels, where this topic is a recurrent one, and I believe that all Europeans should be concerned by the great number of disputes which are arising on the other side of the Atlantic between the US and Europe one some trade matters.
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This discussion is going on and will continue to go on. Why? Because the great majority of us recognize that free trade has a liberalizing effect which will increase prosperity for all of us. lf the trade barriers are reduced, the lesson is clear: the citizens of each nation, Europe, or the North American Free Trade Agreement, (NAFTA) will benefit and become more prosperous. However, this is not as valid for some private interests. Free trade will have a negative effect on private interests and these have a voice, sometimes a powerful one! Sometimes these voices effect a counter-influence on those who make policies; we are familiar with this phenomenon both in Mexico and in Europe. I refer to the long and arduous delays employed by Europe until it reached an agreement with Mandela's new South Africa, with post-apartheid South Africa. As a political decision, we should have aided, and hastened to open doors for South Africa rather than delaying for years and years what has recently been achieved. This will probably not happen in the same way in Mexico, which does not have the agricultural products which Europe defended so fiercely. Negotiations with Mexico will be — I hope — more rapid and straightforward. This tests the ongoing debate within Europe between protectionists and the supporters of free trade.
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I believe that we should maintain the doors open, to allow fresh air to blow in through ancestral Europe. If we begin to close doors, and we do not open other new ones, in the millennium which begins next year, the atmosphere will become stale, we will be inefficient and we will lose our role in the world economy. I hope that we continue thinking in Europe as a whole, with some reservations of course, taking a step back from time to time, to keep the doors and windows open, and open them more frequently.

(From the conference held in Madrid, during the meeting "Mexico and Europe. Economic and political scenarios" in May 1999)