The Spanish government, coinciding with the Spanish presidency of the EU in the second half of 2023, has among its main objectives that of strengthening relations between the Union and Latin America and the Caribbean (LAC), of which Spain is the backbone. This new dimension will be analyzed at the summit to be held between the European Union and the Community of States of Latin America and the Caribbean (CELAC). The EU and CELAC constitute a market of 800 million consumers on both sides of the Atlantic.
To this end, EU and CELAC foreign ministers met for the third time on 27 October 2022 in Buenos Aires, discussing the theme Renewing the bi-regional alliance to strengthen peace and sustainable development.
Under the general theme Renewal of the bi-regional association for strengthen peace and sustainable development, ministers discussed three thematic areas: 1. Inclusive, equitable and sustainable economic recovery after the pandemic. 2. Innovation, the fight against climate change, disaster risk management and the digital agenda. 3. Multilateralism, cooperation on security and governance, promotion and protection of human rights.
The Spanish strategy is aligned with the EU strategy towards LAC, which will be launched in 2023, to halt the advance of Russia and more particularly China. It is known that the EU is progressively losing ground in the region, including the most important countries for accessing the supply of raw materials.
Indeed, Latin America can, in the medium term, become an alternative for the EU to stop depending on Russia for energy, which would strengthen Europe’s strategic autonomy. The countries of Latin America, due to their richness in lithium, green hydrogen and ability to increase their food production, are vital for developing the new production matrix promoted by the EU.
Madrid and Brussels share the belief that promoting two-way exchanges requires changes and transformations, because neither the EU nor the ALC are the same as 30 years ago. It is essential for the EU to be able to offer the region innovative benefits and incentives, something that China has been very insightful at.
China has inaugurated a new stage, through the political-economic project that made it official in its second Polycy Paper on Latin America, published at the end of the president’s third diplomatic tour; Xi Jinping in November 2016. This strategic document presents the country as a more comprehensive power than the previous 2008 policy document. It defines nearly forty cooperation projects divided into eight areas: politics; economy; Social; cultural; International cooperation; peace, security and judicial affairs; collective cooperation and institutional cooperation.
Spain, despite the slowdown in investments, continues to be the first European investor, and the second in the world only behind the USA. To strengthen leadership, it must “reformulate” its economic and trade relations with Latin America.
How to do it, by designing a “New International Economic Policy”, understood as: “A set of measures used or adopted by States with the aim of influencing the economic environment, including the flows of goods, services, foreign direct investments and capital to the abroad, respecting their best economic and commercial interests “.
Due to the space and place I cannot expand, if I want to highlight some vectors:
Provide a vision of the future in line and in accordance with the new realities and interests that define the economic scenarios of the region.
Stimulating the presence of companies that, since the financial crisis of 2008-2009, have decreased on average and according to the countries with greater intensity.
Consolidate Spain as a hub or gateway for investments and Latin American companies to Europe and Europeans to Latin America.
Promote the export of regulations, taking into account that the EU already does so by differentiating itself from China, with its model of integration and governance through regionalism and interregionalism.
Strengthen the presence, influence and weight in regional international organizations and institutions.
Develop intelligent public-private cooperation, understood as “the construction of an effective collaborative intelligence network in order to be able to add synergies in an international context of turbulence, instability and complexity”.
In the early 90s, Spanish companies began their internationalization towards Latin America and the Caribbean, and after the experiences and learning in FDI management, they diversified their investments towards more developed markets such as the European Union, the United States or Canada, thus becoming global multinationals, which allowed them to overcome competitive obstacles and to establish new business models with significant synergies.
Faced with the current low growth rate in LAC and the aggravating circumstance of a global economic context that transmits a slowdown and affects Spanish companies, which however must maintain the level of activity and income, a situation that requires an intelligent public-private sector .
An intelligent cooperation that presupposes on the private side, perfecting management and above all what is linked to talent, reputation, innovation and governance; and on the public side, reformulating economic and commercial relations through the New International Economic Policy.
Hoping that these reflections will be useful, it remains only to say that it would be desirable to strengthen intelligent public-private cooperation, as a commitment so that the internationalization of companies at different levels constitutes one of the most dynamic and powerful forces in the Spanish economy. And it would be desirable to do so from a strategic point of view, not without imagination and audacity, which will make it possible to successfully affirm Spain’s New International Economic Policy towards Latin America.
