economy and politics

The European Union and Latin America, what do they offer each other?

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The President of the European Commission, Ursula von der Leyen, concluded a tour of Latin America on Thursday, June 15, 2023, in which she promised billions of dollars in investments and expressed her interest in ratifying a bilateral agreement before it end this year.

A free trade agreement with Mexico, support for the environmental sector in Brazil and investments in lithium in Chile and Argentina are, among others, the agreements that Ursula von der Leyen reached with the countries she visited this week in Latin America.

Mexico City was the last stop on the Latin American tour of the European senior executive, in which, in addition, she promised to promote the final approval of the commercial agreement of the community bloc with Mercosur (Argentina, Brazil, Paraguay and Uruguay).

Brazil is one of the main challenges for the final approval of a pact that took more than two decades to negotiate. Ratification stalled during Jair Bolsonaro’s administration due to concerns over his environmental policies, as well as a European desire to protect its local farmers from cheaper imports from Mercosur.

Mercosur - EU Agreement
Mercosur – EU Agreement © France 24

The EU-Mercosur trade agreement is intended to link two markets with a total population of around 800 million people. and that they represent about a quarter of the world’s gross domestic product.

It plans to drive more than $100 billion in annual trade in goods and services by lowering customs tariffs and facilitating access for Mercosur agricultural exporters to the EU market and for European manufacturers to Mercosur countries.

Lithium in Chile and Argentina for batteries

During his visit to Chile, Von der Leyen announced his intention to sign a memorandum of understanding to develop lithium projects in that country and strengthen supply chains, at a time when the European Union is looking for suppliers of raw materials for its energy transition.

Ursula von der Leyen's visit to Latin America ended on Thursday
Ursula von der Leyen’s visit to Latin America ended on Thursday © France 24

Chile announced in April a plan to expand lithium extraction in the country through state-controlled public-private partnerships in a bid to regain its position as the world’s top lithium producer. This mineral is a key material for electric vehicle batteries.

The old continent is also interested in the potential of Chilean green hydrogen, favored by its advantageous geographical position, weather conditions and competitive production of solar and wind energy necessary to obtain the so-called “fuel of the future”.

For the region, Ursula von der Leyen announced investments of 10,000 million dollars in sustainable projects.

With EFE, Reuters and AP

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