Latin America & the Caribbean

Introduction

Europe has age-old links to Latin America. Many of our countrymen have travelled to this part of the world ever since the 16th century, resulting in an extensive network of cultural, political and economic relations. This led to an affinity that helped us overcome geographical distances. We are above all bound by our common socio-cultural and humanistic values, which should create a fruitful foundation for cooperation and partnership. Political reality was, however, often different, with the result that the continent struggled to get out of the grip of ‘caudillismo’, populism and nationalism. During the last wave of dictatorships, a strong commitment to human rights and democracy was expressed by Belgium and, more generally, by the West.

To this day, the EU remains the second-largest trading partner (the first for trade in services), the biggest investor (approximately 40%) and the largest donor in Latin America and the Caribbean – although, in relative terms, this presence can still be improved. We are therefore increasingly focusing on "partnerships", thereby moving away from our still somewhat “paternalistic” image of development aid donors and trade facilities providers. However, we still notice a rather defensive attitude among a number of Latin American politicians and company directors towards the European commercial and economic potential. Fortunately, these defensive attitudes are compensated for by more open market attitudes.  

Latin American and the Caribbean is far from being a homogeneous region. Thanks to CELAC (Community of Latin American and Caribbean States), which was established in Caracas at the end of 2011, there is now for the first time an alliance of states that includes all Latin American and Caribbean countries. There are several regional blocs as well (UNASUR, Mercosur, SICA, ALBA, Caricom, …). Only the Pacific Alliance has a substantial integrational character and aims to maximise economic integration by removing technical barriers to free trade, to free movement of persons, capital and services and to investments and academic mobility. Latin America has made great political and economic strides in recent decades: the debt crisis was overcome, healthy growth has made a comeback, and the middle class has visibly grown. Yet major challenges remain: social inequality, the inadequate educational system and gaps in infrastructure.

For Europe and Belgium, there is room for more diverse investments, which focus on services on the one hand and primarily on energy, telecoms and partly infrastructure on the other. The same can be said of our cooperation in science, technology and innovation. At the same time, both Europe and Belgium expect more investments from Latin America and trade flows that are less concentrated in the raw materials sector.

Our diplomatic network in Latin America and the Caribbean currently includes nine embassies, two consulates-general and one diplomatic office. Some embassies’ jurisdiction encompasses more than one country: Mexico City for Mexico and Belize; Panama City for all six Central American countries; Havana for Cuba, the Dominican Republic and Haiti; Kingston for the vast majority of the Caribbean; Bogota for Colombia, Caracas and the Dutch Antilles; Lima for Peru, Ecuador and Bolivia; and Buenos Aires for Argentina, Paraguay and Uruguay. In addition, there are the posts in Santiago for Chili and in Brasilia for Brazil. The two consulates-general are located in Brazil: in Rio de Janeiro and Sao Paulo. The diplomatic office is located in Caracas.

The regions (FIT, AWEX and BIE) are also present, although not everywhere in a balanced way. The French Community has an office in Chili and a representative for scientific cooperation in Sao Paulo.

The most significant bilateral contacts over the course of the past decade were without doubt established through the economic missions led by Prince Philippe to Brazil, Chile, Argentina, Uruguay, Mexico and Panama. The Belgian Minister for Foreign Affairs has also visited several countries in the region in recent years. The last visit, to Brazil, Argentina and Uruguay, dates from August 2016.

 
Central America and the Caribbean

The area comprising the Central American countries, with more than 46 million inhabitants, makes for a small and rather lopsided trading partner (export of Belgian machinery versus import of agricultural products). We traditionally have a balance of trade deficit with these countries, except for Panama, which is our largest trading partner in the region. Belgian companies are primarily active in the infrastructure sector (including the expansion of the Panama Canal in 2016).

These countries are among the poorest on the continent and suffer greatly from violent drug-related crime. The Belgian Development Cooperation still remains present through several Belgian NGOs. The Association Agreement between Central America and the EU, which has entered into force provisionally (the trade component), is expected to provide an additional economic stimulus for this region. Overall, the agreement appears to be working well and implementation is progressing steadily. Despite the lack of dynamism in the global economy, EU trade flows with Central America have shown a fairly strong positive development.

With respect to the Caribbean, Haiti has become the focus country in the region when it comes to relief aid following the devastating earthquake in January 2010 (Belgium provided more than 10 million euros in emergency aid and around 20 million euros in short-term reconstruction aid), Hurricane Matthew in October 2016 and Hurricane Irma in September 2017. Belgium also contributes to the UN MINUSTAH mission.

Cuba is a traditional partner country of our NGOs and of federated entities. As the last communist bastion in the Western hemisphere, it plays a significant political role. The changed geopolitical realities call for gradual policy changes, with Belgium taking a constructive lead within the EU. In May 2016, Minister Didier Reynders made a visit to Cuba.

Jamaica (where our Caribbean embassy is located) provides a particular economic interest (transport, Jonckheere buses) and a potential for infrastructure works, while Trinidad and Tobago offers prospects for renewable energy.

Belgium's support in the region following Hurricane Irma - September 2017: Belgium has decided to release 1 million euros in humanitarian aid for the reconstruction of the most severely affected islands. In addition, Belgium is contributing more than 53 million euros to flexible UN funds and the International Red Cross. These funds can be mobilised during humanitarian emergencies such as Hurricane Irma.

 
South America

This part of the continent consists of 12 states, including the most important ones.

Since the presidential elections of 14 April 2013, organised after the death of President Hugo Chavez, Venezuela has been struggling with a deep political, economic and humanitarian crisis. President Maduro's attempts to neutralise the opposition's victory in the parliamentary elections of December 2015 have led to serious political instability. On 30 July 2017, the draft Constitutional Assembly proposal was officially put to the public vote. The opposition decided to boycott the vote and organize its own referendum on 15 July, in which more than 7 million people (approximately 40% of all Venezuelans entitled to vote) voted against President Maduro's proposal. Popular protests are being violently suppressed, with the death toll since April 2017 now above 120.

The Andean Countries

Until May 2015, Peru, Bolivia and Ecuador were focus countries of the Belgian governmental cooperation. Since then, the importance of development cooperation in our bilateral relations has been decreasing. Belgium nevertheless continues to attach importance to indirect development cooperation through non-governmental actors such as NGOs and universities. Absolute poverty is decreasing and these three countries, especially Peru, show good growth rates. Ecuador and Bolivia have regimes with a high degree of state interference, while Peru and Colombia are more liberal. The latter two concluded a multi-party Free Trade Agreement with the EU, which was ratified by the European Parliament in December 2012. The agreement was subsequently also ratified by the Peruvian and Colombian authorities and has therefore entered into force provisionally. Ecuador later joined this agreement.

Colombia has a very attractive business climate, with the peace agreement signed with the FARC in 2016 contributing to a positive trend.

Chile also presents an open business environment and is our third-largest trading partner in the region. Belgium is Chile's first European investment destination. Since 2005, the country has had an association agreement with the EU, which is now in need of revision. Since the summer of 2012, Mexico, Colombia, Peru and Chile have formed the Pacific Alliance. This is a loose federation of states that have bilateral trade agreements among themselves and are pursuing a larger market with as much free trade as possible. The Alliance is open to other like-minded countries.

We have good relations with the two smaller Mercosur countries, Paraguay and Uruguay. The latter country in particular is an example of economic cooperation: logistics and infrastructure. Relations with the much larger Argentina have long been hampered by the highly-protected Argentinean market, but the election of Mauricio Macri as President at the end of 2015 has brought about a radical change. President Macri wants to realign his country’s economy with the world economy and has rapidly taken measures to stimulate free trade, attract foreign investment and improve the country's competitiveness. Argentina is a member of the G20, represents a market of 43 million people and is the third-largest economy in Latin America and the 21st largest in the world. In 2016, Argentina was Belgium’s 52nd biggest client (496.7 million euros export) and its 56th supplier (351.1 million euros import from Argentina).

The region's largest country, Brazil, is trying to attract investors and make its economy thrive because of its infrastructure objectives. This Latin giant, with its nearly 200 million inhabitants, hosts around 100 Belgian firms and is our most important trading partner in the region (accounting for over €5.5 billion euros in bilateral trade in 2015). Belgium has a solid presence in Brazil, especially since we are its second-largest investor in the world (through AB Inbev). Our potential lies with major infrastructure projects in port terminals and transport matters. There are also opportunities in the fields of space and aviation, energy (nuclear and green energy) and mining. Our scientific and technological cooperation has led to agreements between the Brazilian and the French-speaking and Flemish higher education systems.

Finally, long-lasting negotiations for an association agreement have been going on with MERCOSUR within the framework of the EU. Paraguay (with its President Cartes, elected in August 2013) became a full member again and the MERCOSUR, which is currently composed of five members, can operate normally again, although economic and commercial flexibility to conclude an association agreement is still mostly lacking, especially in the larger countries.