No C 330/24 Official Journal of the European Communities 20. 12. 85 
Result of the vote 
Against: a large majority. 
B. The following passages of the section's opinion were replaced by amendments approved during the 
plenary session debate 
8.4. Farmers have sometimes been forced to farm more intensively and to use more fertilizers, pesticides, 
etc., albeit with adverse side-effects. Their main purpose in doing this has been to protect their livelihoods 
and their families and farms, and to remain competitive with imports (identical and substitute products). 
The agricultural community, subject to appropriate compensation arrangements and to the provision of funds 
additional to those of the EAGGF, would therefore be prepared to: 
(a) take even more radical action to protect the environment, water and the atmosphere (optimum use of 
fertilizers, pesticides, etc.); 
(b) continue its contribution to conservation of the countryside, reafforestation, re-establishment of zones 
for protection of species, etc. 
Result of the vote 
For: 64, Against: 33, Abstentions: 12. 
12.8. If regional policy is to perform adequately all these functions, the Section believes larger resources 
will have to be devoted to it. 
Result of the vote 
For: unanimously. 
Opinion on guidelines for the strengthening of relations between the Community and Latin 
America 
(85/C 330/06) 
On 12 April 1984 the Commission of the European Communities asked the Economic and 
Social Committee to deliver an opinion on the Commission's guidelines for the strengthening 
of relations between the Community and Latin America. 
The Section for External Relations, to which the matter had been referred, adopted its 
opinion on 10 September 1985 in the light of the report by Mrs Bredima. 
At its 230th plenary session (meeting of 31 October 1985), the Economic and Social Committee 
adopted the following opinion by a majority vote, with eight votes against and seven 
abstentions. 
1. The Committee applauds the fact that most Latin 
American countries have recently made great strides 
towards democracy and hopes that the remaining auth­
oritarian regimes will shortly follow in their footsteps. 
These countries' move towards political and economic 
democracy and their regional approach to their econ­
omic problems lead the Committee to endorse the Com­
mission's call for closer ties between Latin America and 
the Community. The accession of Spain and Portugal 
highlights the importance of this. 2. The Committee agrees with the Commission com­
munication that relations between the EEC and Latin 
America should be situated within an overall context 
on three levels, regional, sub-regional and bilateral, and 
welcomes the agreements which have been or are being 
concluded with this end in view. However, the Commit­
tee regrets that the agreements concluded with Mexico, 
Brazil and the countries of the Andean Pact have had 
little effect on the development of those countries, and 
hopes that they will be effectively implemented. It urges 
that negotiations be started or continued with other 
countries in which democracy has advanced, in particu­
lar Argentina. 
20. 12. 85 Official Journal of the European Communities No C 330/25 
3. The Committee welcomes the recent EEC/Central 
America agreement. This agreement only partly rectifies 
Europe's lack of comprehension for this area — a lack 
of comprehension that has, inter alia contributed to the 
isolation of countries such as Nicaragua (a signatory 
of the agreement), which lies behind the measures 
taken by that country during the last few days. These 
measures involve the suppression of the right to strike 
and the freedom of the press, and the restriction of the 
free movement of citizens. The Committee trusts that 
they will be strongly condemned, as all continuing 
violations of human rights in Central America must be 
condemned and opposed. 
4. Any policy towards Latin America will have to 
take account of (a) the wide range of political, social 
and economic situations in the sub-continent, and (b) 
the diversity of development levels—some countries 
having a level of economic development close to that 
of the industrialized nations. An individual or regional 
rather than a global approach would therefore seem 
desirable. 
5. The fact remains that the entire sub-continent is 
potentially a huge market for Community exports, and 
the prospects for expansion warrant widespread interest 
on both sides of the Atlantic. All efforts to promote 
trade must therefore be encouraged. 
6. Wider trade, coupled with reciprocal investment 
and cultural exchanges between the two blocs, will help 
boost economic growth, holding out the prospect of a 
tangible increase in prosperity for one and all, although 
the nature of that growth will differ from country to 
country. 
7. The Committee realizes that, despite a slight 
improvement in recent months, the debt burden of the 
latin American countries continues to be a structural 
obstacle and to place an intolerable strain on their 
development potential. This state of affairs, which is 
encouraged by sometimes imprudent international 
financing, is aggravated by a vast outflow of capital, 
the result firstly of imprudent investment programmes 
neglecting the (albeit cheap) workforce. The situation 
is further complicated by unforeseeable circumstances 
such as the international recession, an overvalued dollar 
which in the last five years has doubled in value against 
the stable European currencies, and exorbitant interest 
rates. from complete collapse. The Committee realizes that 
many factors are involved, and that taxpayers in the 
creditor countries cannot and must not be made to pay 
for the imprudence of the lenders and of those who 
support the devaluation of national currencies on the 
exchange market at a rate which exceeds that of dom­
estic inflation. 
7.2. To achieve a lasting improvement in the situ­
ation of these countries, the Committee argues for more 
action, under the aegis of the IMF and the World Bank, 
to reschedule debts. This would enable them to continue 
getting back on a sound economic footing and generate 
the funds required to service their debts. These adjust­
ments should be backed up by a multilateral monitoring 
system to ensure that reductions in real wages and 
adjustment of trade balances do not also weaken the 
production structure of the debtor countries and prod­
uce a disturbing reduction in domestic demand which 
would hit the poorest population groups. 
7.3. In some cases specific measures such as post­
ponement of debts may be needed for the poorer 
countries and to aid the leaders of newly fledged demo­
cracies who have inherited crippling debts from their 
predecessors. A detailed country-by-country and case-
by-case analysis is needed of the origin of the debt 
(creditors, debtors and items financed). Appropriate 
solutions can then be sought bearing in mind the com­
mitments made and the economic and social prospects 
of the projects. 
7.4. The Committee stresses the disastrous effect 
which a threat to unilaterally suspend debt-servicing 
would inevitably have on the indebted countries. 
8. On the trade front, there seems to be little scope 
for the Community to grant further trade concessions 
to either industrial or agricultural products. Yet it is 
not sufficient for these countries to run a surplus in their 
trade with the Community. Multilateral international 
trade agreements could be used as a basis for setting 
up mechanisms to stabilize farm product prices and 
market shares. This would improve export earnings 
and increase production in deficit countries. 
7.1. The level of indebtedness is now such that 
serious action must be taken to save these countries 8.1. The ability of these countries to service their 
debt, like all schemes to boost their economic growth 
and create new jobs, presupposes that they secure new 
No C 330/26 Official Journal of the European Communities 20. 12. 85 
markets. A fair balance between debt servicing and 
export earnings would help these countries to pursue 
their development policies. 
8.2. Community-Latin America trade relations must 
therefore be given fresh momentum. In connection with 
the attendant easing of restraints, the parties concerned 
would be willing to adopt a more liberal stance involv­
ing, for instance: 
— greater reciprocity in customs arrangements, par­
ticularly on the part of some NICs, 
— abolition of obstacles to freedom to provide services 
(insurance,.shipping, etc.), 
— trade promotion drives for new markets in third 
countries. 
8.3. The Committee feels that use of the ECU as the 
monetary unit in contracts signed with Latin American 
countries would give them greater stability. 
8.4. At all events, Latin American regional inte­
gration, which deserves the Community's support, can­
not be used as a pretext for reinforcing barriers to trade 
with other countries. 
8.5. Latin American countries argue that they suffer 
discrimination compared to the ACP States. In fact this 
is only true of a limited number of products (e.g. sugar). 
The ACP States do not export the same products as 
Latin America. Furthermore, tariff preferences (where 
they exist) are not large enough to affect trade flows. 
The Committee would, however, point out that some 
countries do not make full use of the potential already 
offered by the generalized preferences system. 
9. On development cooperation, the funds available 
for Community programmes to assist 'non-associated 
countries' are inevitably restricted. Care must therefore 
be taken to avoid encouraging over-optimism and the 
long-term goal must be cooperation, as opposed to aid. 
Such cooperation should focus on improving 
and stepping up investment—with job creation in 
mind—and on training as many people as possible, 
perhaps using the guidelines produced for ACP 
countries. for investment. Reference should be made to Article 42 
of the final act of Bogota (*), which stresses the case for 
improving the investment climate in Latin America in 
order to offer better guarantees to Community inves­
tors, promote joint enterprises, and make the movement 
of capital and services easier for Community firms. 
9.2. Certain conditions in these countries are unpal­
atable, e.g. inflation rates (sometimes running into three 
figures), and the consequences of restrictive monetary 
policies (exchange controls, ban on dividend exports) 
resulting from the country's indebtedness. Similarly, in 
some countries there is excessive red-tape and irregular­
ities within the national administrations; this has a 
serious effect both on the climate for investment and 
on trade and development in these countries. 
9.3. As regards the risks involved in investments, the 
Community should help the Latin American countries 
to set up an international institutional framework for 
protection against non-commercial risks. Bilateral 
agreements should provide for the free movement of 
capital in order to avoid the difficulties which some­
times hamper repatriation of funds. 
9.4. For its part, the Community should strive to 
conclude cooperation agreements with all those Latin 
American countries or groups of countries which are 
willing to agree in advance on a legal framework for 
investment offering adequate political security to Com­
munity investors. 
9.5. The Committee generally endorses the principles 
involved in the Commission approach to financial 
development assistance for Latin America. However, 
it believes that the financial problems can be greatly 
alleviated by measures to encourage inward flows of 
private venture capital. The Community can encourage 
such flows by incorporating appropriate arrangements 
for the free movement of capital (e.g. free repatriation 
of capital) in future economic cooperation agreements 
with the Latin American countries. 
10. The Committee also feels that, in the context of 
industrial cooperation with the Latin American 
countries, the Community should pursue the removal 
of institutional obstacles to joint ventures, such as the 
insistence that the foreign shareholders should be in a 
9.1. The Committee feels that Latin American 
countries should endeavour to improve arrangements (*) Fifth EEC/Latin America inter-parliamentary conference, 
held in Bogota, 25 to 28 January 1981. 
20. 12. 85 Official Journal of the European Communities No C 330/27 
minority, or that they should shed the bulk of their 
shares over a period of time. 
11. Latin American countries have limited scope for 
exporting their farm produce to the Community. The 
Committee feels that as part of regional cooperation it 
would be desirable to organize farm production on a 
complementary basis to enable individual Latin Amer­
ican countries to use their own food products to offset 
food shortages in neighbouring countries. 
11.1. The Community could provide the required 
know-how to achieve this objective through joint ven­
tures and cooperation in rural development. 
11.2. These remarks also apply to the fishing indus­
try, and are particularly relevant as the coasts of Latin 
America are rich in fish. 
11.3. The Community could encourage industrial­
ization in Latin America and division of labour between 
these countries, possibly on a regional basis, for exam­
ple by scrapping old ships to provide low quality steel 
suitable for use in projects in Latin American countries. 
This would also help eliminate ships which do not meet 
safety standards, and improve sea transport safety. 
Joint ventures between European and Latin American 
shipowners could be dovetailed to this action. 
12. The Committee urges the Governments of those 
Latin American countries which are regularly hit by 
crippling famines to improve their agricultural policies, 
and pending this, to apply to the international com­
munity for food aid. Such aid could rescue the poor of 
Latin America from the high food prices caused by an 
inadequate domestic supply. 
13. The Community—perhaps via the Economic and 
Social Committee—could offer Latin American 
countries its experience of participation between indus­
try, workers and professional organizations in econ­
omic activity. 
14. The Committee feels that there are at least three 
good reasons for an in-depth examination of the pros­
pects for cultural cooperation, in the broadest sense of 
the term, between the Community and Latin America 
in addition to the present cultural exchanges. Firstly, 
the Committee welcomes the ratification by the Inter-Parliamentary Conference in June 1985 of the decision 
to set up a Euro-Latin American Institute to serve as 
an instrument for cultural, political, economic, scien­
tific and technological cooperation between the two 
regions. Secondly, when Spain and Portugal join the 
EEC, the Community will benefit from the long-stand­
ing ties between these countries and Latin America. 
Finally, most Latin Americans are of Mediterranean 
origin and share the European cultural background. 
15. The Committee feels that the accession of Spain 
and Portugal will provide a fresh impetus for trade, 
economic and political relations, and cooperation with 
the countries of Latin America. It will provide a better 
developed institutional framework, enabling traditional 
exports from these countries to the Community to 
continue, and fostering greater economic and financial 
cooperation. 
16. The Committee stresses that the political insta­
bility in Latin American countries often goes hand in 
hand with a poor economic and social situation. In all 
its agreements with these countries, the Community 
should therefore seek to include clauses on (a) minimum 
social standards for work and (b) human rights. This 
would help the ratification and implementation of the 
ILO Conventions signed by many Latin American 
countries. The Community will have to take a firm 
stand on breaches of human and trade union rights 
(particularly by curbing economic relations with 
countries that flagrantly and systematically violate such 
rights). 
17. The Committee considers that regular contacts 
between socio-economic interest groups in Latin Amer­
ica (at continental or regional level) and the EEC could 
do much to improve relations between the two sides. 
The ESC could be a vehicle for such contacts. In this 
connection, there should be collaboration between the 
ESC and the Euro-Latin American Institute so that 
seminars could be held between EEC and Latin Amer­
ican groupings, focussing on cultural, economic, tech­
nological, social and trade union issues. 
18. Community cooperation with the Latin Amer­
ican countries must take heed of local conditions. The 
No C 330/28 Official Journal of the European Communities 20. 12. 85 
aim must be to help solve socio-economic prob­
lems—first and foremost in Central America—and to 
assist in easing these countries' dependence on the Unit­
ed States and other third countries. The Committee 
feels that the strengthening of relations between the 
Community and Latin America presupposes a political 
commitment to this on the part of the Community. The Committee hopes that this commitment will rapidly be 
translated into appropriate action. The Community 
must use its influence in international forums so that the 
substantial socio-economic difficulties of the countries 
concerned, especially unemployment, can be tackled as 
effectively as possible. 
Done at Brussels, 31 October 1985. 
The Chairman 
of the Economic and Social Committee 
Gerd MUHR 
APPENDIX 
to the opinion of the Economic and Social Committee 
Defeated amendment 
The following amendment, drawn up on the basis of the Section opinion and tabled in accordance with the 
Rules of Procedure, was defeated during the discussion: 
Delete point 7.4. 
Result of the vote 
For: 31, Against: 38, Abstentions: 13.