Towards the EU-CELAC Summit – more of the same?

By Víctor Báez Mosqueira

 

European Union leaders and their counterparts in Latin America and the Caribbean are getting ready to meet again, this time in Chile, at the end of January 2013.

It will, for the first time, be called the EU-CELAC (Community of Latin American and Caribbean States) Summit, following the recent creation of this organisation owing to the dissatisfaction among various governments of the Americas with the performance of the OAS (Organisation of American States).

In Chile, students made headlines around the world with their protests against social inequality. The graffiti on this wall reads in Spanish “We are educated to continue serving the rich” (AP Photo/Victor Ruiz Caballero)

In 2010, the Madrid Declaration of the same EU-LAC Summit spoke of addressing “the global consequences of the economic and financial crisis,” applying “macroeconomic and financial policies designed to prevent future financial crises” and emphasising “the need to reinforce support for vulnerable and poor people”.

Other commitments included the promotion of “integrated strategies as well as public policies—including social protection and fiscal policies—aimed at eradicating poverty and reducing inequality and social exclusion”.

Over the last three years, however, most governments did precisely the opposite.

The cuts in Spain, for example, took open unemployment up to 25 per cent, youth unemployment to over 50 per cent and, only days ago, the European Union called on the country to apply even greater austerity.

Not to mention Greece, Portugal or Italy. The cuts have led Europe into a recession.

On this side of the Atlantic, there is growth with social exclusion and it would seem that this policy is set to continue.

Panama, the country with the highest growth in the region (with an annual rate of nine per cent over recent years), has a government that continues to crush social protest with fire and sword.

There have been three slaughters in recent years, that of Changuinola, San Félix and Colón, in which demonstrators were killed, injured and maimed.

The real exercise of the right to education in Panama is debatable, to say the least.

Likewise in Peru, rapid growth, driven by mining operations, has done nothing to free it from being one of the countries with the lowest level of investment in education.

Moreover, as a result of its free trade agreements, quinoa, a staple known for its high nutritional value, is being exported on a massive scale, pushing up its price on the national market and subsequently reducing its consumption among the peoples of this Andean country.

In Chile, social inequality is being denounced by the country’s secondary school and university students, who are calling for free and quality education, while many parliamentarians view making a profit out of education as a normal business.

Paraguay is no exception, especially with the new de facto government, which will not be invited to the Summit. The Chilean hosts would clearly rather have Brazil, Argentina and various other Union of South American Nation members attend than to see Paraguay’s disgraceful Franco.

Despite the spectacular growth in GDP over recent years, Paraguay still has nothing that even resembles a system of wealth redistribution and not even the International Monetary Fund (IMF), which recently discovered that inequality is bad for growth, is able to convince it otherwise.

Its parliament, with its law on micro, small and medium enterprises, has shot the national economy in the foot, cutting the wages of these companies’ employees and robbing them of the human right to social security.

The fiscal reform has been a farce. The banks, which used to pay 30 per cent tax on income, now pay just 10 per cent.

The region’s exceptions to the rule are Argentina, which invests 6.5 per cent of its GDP in education, Brazil, where the government has taken 35 million people out of poverty, and Uruguay, where the Broad Front (Frente Amplio) has taken poverty down from 39 per cent to 13 per cent.

 

Free trade

So the question is: what has happened to the commitments on social issues undertaken by the EU and Latin America and the Caribbean?

The answer is easy.

The association agreements promoted by Europe have been created in response to North American logic and the fight for market share.

The United States signed a free trade agreement with Mexico and Chile years ago.

Europe did not want to be left behind and followed suit, only it did not refer to them as free trade agreements but “association agreements”, to feign giving them a more social and democratic dimension.

At the end of the day, however, it is all about securing trade and investment markets.

Europe is also promoting “association agreements” with Central America, Mercosur and the Andean Community.

Among the agreements signed, there are, of course, those on trade and investment and those on social cohesion. The difference between the two is that the former are well-crafted, debated and signed, whilst the latter are filed away in official draws until the next summit.

At the Chile Summit, the idea is to discuss “investments of social and environmental quality to promote employment and sustainable development”.

In a European market that has collapsed, where there is currently no room for investments, Europeans must want to expand them in a region that is growing.

In return, by way of compensation, they will talk about the possibility of Mexican, Brazilian and Chilean businesses investing in the old continent. And, faithful to the tradition outlined above, the topic that will really be discussed is investment.

Its long-winded surname, “of social and environmental quality to promote employment and sustainable development”, will be granted some consideration but, in line with the long-held tradition, will most probably be filed away for better times.

Meanwhile, Europe’s citizens are hoping to return to the welfare state from which they are being evicted by right-wing governments.

They are looking on with curiosity, surprise and even hope at what is happening in some countries in the Southern Cone. Not to mention the Latin Americans, who have never lived in a welfare state.

 

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