LATAM-EU: AT THE SERVICE OF CORPORATIONS?
by Julio Godoy
Thursday, 11 May 2006
http://www.ipsterraviva.net/Europe/article.aspx?id=3326

VIENNA (IPS) - As the final preparations are underway for the fourth
EU-Latin America/Caribbean summit, to take place Friday in the
capital of Austria, the European Union is using its trade and
investment policies in Latin America as aggressive instruments of
economic domination, at the service of Europe's multinational
corporations, according to independent analysts.  

"The EU is working hard to send out the image of a global power that
professes world peace and promotes development for the countries of
the South, and that is an alternative to the United States," said
Stephen Schmalz, a political scientist at the University of Marburg
in Germany.  

But "the EU has actually put into practice a Latin America strategy
that consists of pressing hard for free trade and investment
agreements with the different subregional groupings, that are
favourable to Europe's multinational corporations," Schmalz, who
specialises in the relations between the EU and Latin America, told
IPS.  

These free trade treaties will be a key focus at the summit, he
added.  

The heads of state and government of nearly 60 EU, Latin American and
Caribbean nations will meet in Vienna on Friday. The earlier EU-LAC
summits were held in Rio de Janeiro, Brazil in 1999, Madrid, Spain in
2002, and Guadalajara, Mexico in 2004.  

The EU, which has signed free trade deals with Mexico and Chile, is
seeking similar agreements with Central America, the Andean Community
(Bolivia, Colombia, Ecuador, Peru and Venezuela) and Mercosur
(Southern Common Market - Argentina, Brazil, Paraguay and Uruguay).  

These agreements are modeled after the North American Free Trade
Agreement (NAFTA), which has linked Canada, Mexico and the United
States since January 1994, especially with respect to the limitations
imposed on member states in terms of adopting legislation aimed at
protecting the environment and workers' rights, according to Schmalz.
 
Such curbs on national sovereignty in Latin America benefit European
transnational corporations, said the analyst. In addition, the free
trade agreements foresee the gradual phasing out of Latin American
import tariffs on farm and industrial products, to the detriment of
small and medium farmers and manufacturers in Latin America.  

European Commissioner for Foreign Affairs and European Neighbourhood
Policy Benita Ferrero-Waldner said the EU hopes to make progress in
Vienna in the negotiations with Mercosur and to reach agreements with
the Andean Community and Central America. She also referred to
strengthening the free trade accords with Mexico and Chile.  

In a strategy document produced ahead of the Vienna Summit, the EU
also underlined the importance granted to bilateral free trade
agreements with Latin American countries.  

The document, published in December 2005, says that over the next few
years, the European Commission will work towards establishing a
"strategic partnership" with Latin America and the Caribbean,
reinforced by a network of free trade accords eventually encompassing
all of the countries in the region, while deepening the agreements
signed with Mexico and Chile.  

According to official European statistics, trade between the EU and
Latin America rose 13 percent between 2004 and 2005, to a new record
of nearly 150 billion dollars.  

At first glance, Latin America would appear to be the winner in these
trade flows, with an annual trade surplus of nearly 10 billion
dollars, even though the EU continues resisting international
pressure to open up its markets not only to farm products but also to
industrial goods from developing countries.  

However, from 2004 to 2005, European exports to Latin America
increased 13.7 percent, while imports of products from Latin America
only grew 12.4 percent.  

Other aspects to be discussed in Vienna are cooperation in the fight
against drugs, organised crime and terrorism, and in areas like
migration, science and technology, and energy.  

Besides the meeting of heads of state and government, a gathering of
foreign ministers will take place Thursday, and summit meetings of
subregional leaders will be held on Saturday, while a business forum
will bring together executives from Latin America and the EU on
Friday.  

For Olivier Hoedeman, with the Amsterdam-based Corporate Europe
Observatory (CEO), a possible debate between representatives of Latin
American governments like that of Bolivia and European authorities
and business executives on the nationalisation of public services
could be one of the high points of the business forum.  

CEO describes itself as "a research and campaign group targeting the
threats to democracy, equity, social justice and the environment
posed by the economic and political power of corporations and their
lobby groups."  

"The nationalisation of Bolivia's natural gas (announced on May 1)
dealt a major blow to several of Europe's most powerful and
influential multinationals," Hoedeman told IPS. The firms affected by
the move include the French oil company Total, the Spanish-Argentine
oil company Repsol YPF, British Gas and British Petroleum.  

Hoedeman also pointed out that Bolivia has been at the forefront of
the debate on keeping public services like water in state hands in
Latin America.  

The activist said the EU continues to use trade and investment
policies designed in the 1990s, without taking into account the
radical political changes that have occurred in Latin America over
the past 10 years, spurred by popular discontent with governments
that defend privatisation and free-market, neoliberal economic
policies in general, which are focused on downsizing the state.  

The EU is the main pillar of support for the privatisation of public
services in developing countries, as outlined in the General
Agreement on Trade in Services, which the World Trade Organisation
(WTO) has been discussing for six years.  

"This EU-backed model is based on the logic of European corporations,
conceived of more than 15 years ago, which has failed in developing
countries, as in the case of water in Argentina and Bolivia," said
Hoedeman.  

Last year, the Bolivian government cancelled the concession that had
been granted to the French water company Suez Lyonnaise des Eaux,
after Bolivians took to the streets en masse to protest the rate
hikes and poor service that followed on the heels of privatisation.  

And Aguas Argentinas, which was also controlled by the French firm,
was caught up since 2002 in a lawsuit against the Argentine state for
rate increases and breach of contract in water and sanitation
services, until the government rescinded the company's concession
this year.  

"But it would seem that the EU has failed to notice this failure and
the political changes that have occurred in Latin America, as it
continues to defend privatisation and neoliberal policies," said   
Hoedeman. (END)